Beneficial Bancorp, Inc.
Beneficial Mutual Bancorp Inc (Form: DEF 14A, Received: 04/16/2010 16:59:22)


 
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GRAPHIC
 
April 16, 2010
 
Dear Stockholder:
 
You are cordially invited to attend the annual meeting of stockholders of Beneficial Mutual Bancorp, Inc.  The meeting will be held at The Down Town Club, Public Ledger Building, 150 South Independence Mall West, Philadelphia, Pennsylvania on Thursday, May 20, 2010, at 9:30 a.m., local time.
 
The notice of annual meeting and proxy statement appearing on the following pages describe the formal business to be transacted at the meeting.  Directors and officers of the Company, as well as representatives of Deloitte & Touche LLP, the Company’s independent registered public accounting firm, will be present to respond to appropriate questions from stockholders.
 
It is important that your shares are represented at this meeting, whether or not you attend the meeting in person and regardless of the number of shares you own.  To make sure your shares are represented, we urge you to vote via the Internet, by telephone or by completing and mailing the enclosed proxy card promptly.   If you attend the meeting, you may vote in person even if you have previously mailed a proxy card.
 
We look forward to seeing you at the meeting.
 
Sincerely,
 
GRAPHIC
Gerard P. Cuddy
President and Chief Executive Officer
 
 
 

 

 
GRAPHIC
 
510 Walnut Street
Philadelphia, Pennsylvania 19106
(215) 864-6000
 

 
NOTICE OF 2010 ANNUAL MEETING OF STOCKHOLDERS
 


TIME AND DATE
9:30 a.m., local time, on Thursday, May 20, 2010
     
PLACE
The Down Town Club
 
Public Ledger Building
 
150 South Independence Mall West
 
Philadelphia, Pennsylvania
     
ITEMS OF BUSINESS
(1)
To elect five directors to serve for a term of three years and one director to serve for a term of one year;
     
 
(2)
To ratify Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2010; and
     
 
(3)
To transact such other business as may properly come before the meeting and any adjournment or postponement thereof.
     
RECORD DATE
To vote, you must have been a stockholder at the close of business on April 1, 2010.
     
PROXY VOTING
It is important that your shares be represented and voted at the meeting.  You can vote your shares via the Internet, by telephone or by completing and returning the proxy card or voting instruction card sent to you.  You can revoke a proxy at any time before its exercise at the meeting by following the instructions in the proxy statement.
     
 
By Order of the Board of Directors,
     
  GRAPHIC
 
William J. Kline, Jr.
 
Corporate Secretary

Philadelphia, Pennsylvania
April 16, 2010

 
 

 
 
BENEFICIAL MUTUAL BANCORP, INC.
 

 
PROXY STATEMENT
 

 
  GENERAL INFORMATION
 
We are providing this proxy statement to you in connection with the solicitation of proxies by the Board of Directors of Beneficial Mutual Bancorp, Inc. for the 2010 annual meeting of stockholders and for any adjournment or postponement of the meeting.  In this proxy statement, we may also refer to Beneficial Mutual Bancorp, Inc. as “Beneficial Mutual Bancorp,” the “Company,” “we,” “our” or “us.”
 
Beneficial Mutual Bancorp is the holding company for Beneficial Bank, which has also operated under the name Beneficial Mutual Savings Bank.  In this proxy statement, we may also refer to Beneficial Bank as the “Bank.”
 
We are holding the 2010 annual meeting at The Down Town Club, Public Ledger Building, 150 South Independence Mall West, Philadelphia, Pennsylvania on Thursday, May 20, 2010 at 9:30 a.m., local time.
 
We intend to mail this proxy statement and the enclosed proxy card to stockholders of record beginning on or about April 16, 2010.
 
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 20, 2010
 
This proxy statement and the Company’s 2009 Annual Report to Stockholders are available at http://ir.thebeneficial.com/annuals.cfm .                                              .
 
On this website, the Company also posts the Company’s 2009 Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, including the Company’s 2009 audited consolidated financial statements.
 
INFORMATION ABOUT VOTING
 
Who Can Vote at the Meeting
 
You are entitled to vote your shares of Beneficial Mutual Bancorp common stock that you owned as of April 1, 2010.  As of the close of business on April 1, 2010, a total of 81,853,553 shares of Beneficial Mutual Bancorp common stock were outstanding, including 45,792,775 shares of common stock held by Beneficial Savings Bank MHC.  Each share of common stock has one vote.
 
The Company’s charter provides that, until July 13, 2012, record holders of the Company’s common stock, other than Beneficial Savings Bank MHC, who beneficially own, either directly or indirectly, in excess of 10% of the Company’s outstanding shares are not entitled to any vote with respect to those shares held in excess of the 10% limit.
 
 
 

 
 
Ownership of Shares; Attending the Meeting
 
You may own shares of Beneficial Mutual Bancorp in one of the following ways:
 
 
   ●
Directly in your name as the stockholder of record; or
 
 
   ●
Indirectly through a broker, bank or other holder of record in “street name.”
 
               If your shares are registered directly in your name, you are the holder of record of these shares and we are sending these proxy materials directly to you.  As the holder of record, you have the right to give your proxy directly to us or to vote in person at the meeting.
 
               If you hold your shares in street name, your broker, bank or other holder of record is sending these proxy materials to you.  As the beneficial owner, you have the right to direct your broker, bank or other holder of record how to vote by filling out a voting instruction form that accompanies your proxy materials.  Your broker, bank or other holder of record may allow you to provide voting instructions by telephone or by the Internet.  Please see the instruction form provided by your broker, bank or other holder of record that accompanies this proxy statement.  If you hold your shares in street name, you will need proof of ownership to be admitted to the meeting.  A recent brokerage statement or letter from a bank or broker are examples of proof of ownership.  If you want to vote your shares of Beneficial Mutual Bancorp common stock held in street name in person at the meeting, you must obtain a written proxy in your name from the broker, bank or other nominee who is the record holder of your shares.
 
Quorum and Vote Required
 
Quorum.   We will have a quorum and will be able to conduct the business of the annual meeting if the holders of a majority of the outstanding shares of common stock entitled to vote are present at the meeting, either in person or by proxy.
 
Votes Required for Proposals.   At this year’s annual meeting, stockholders will elect five directors to serve for a term of three years and one director to serve for a term of one year.  In voting on the election of directors, you may vote in favor of the nominees, withhold votes as to all nominees, or withhold votes as to specific nominees.  There is no cumulative voting for the election of directors.  Directors must be elected by a plurality of the votes cast at the annual meeting.  This means that the nominees receiving the greatest number of votes will be elected.
 
In voting on the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm, you may vote in favor of the proposal, vote against the proposal or abstain from voting.  To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2010, the affirmative vote of a majority of the shares represented at the annual meeting and entitled to vote at the annual meeting is required.
 
Effect of Not Casting Your Vote . If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election of directors. In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they deemed appropriate.
 
              Recent changes in regulation were made to take away the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Therefore, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf.  These are referred to as “broker non-votes.”  Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm. If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the annual meeting.
 
 
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How We Count Votes.   If you return valid proxy instructions or attend the meeting in person, we will count your shares to determine whether there is a quorum, even if you abstain from voting.  Broker non-votes also will be counted to determine the existence of a quorum.
 
In the election of directors, votes that are withheld will have no effect on the outcome of the election.
 
In counting votes on the proposal to ratify the appointment of the independent registered public accounting firm, abstentions will have the same effect as a vote against the proposal.
 
Because Beneficial Savings Bank MHC owns in excess of 50% of the outstanding shares of Beneficial Mutual Bancorp common stock, the votes it casts will ensure the presence of a quorum and determine the outcome of Proposal 1 (Election of Directors) and Proposal 2 (Ratification of Independent Registered Public Accounting Firm).
 
Voting by Proxy
 
The Company’s Board of Directors is sending you this proxy statement to request that you allow your shares of Company common stock to be represented at the annual meeting by the persons named in the enclosed proxy card.  All shares of Company common stock represented at the meeting by properly executed and dated proxies will be voted according to the instructions indicated on the proxy card.  If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Company’s Board of Directors.  The Board of Directors recommends that you vote:
 
 
   ●
FOR each of the nominees for director; and
 
 
   ●
FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm.
 
                If any matters not described in this proxy statement are properly presented at the annual meeting, the persons named in the proxy card will use their judgment to determine how to vote your shares.  This includes a motion to adjourn or postpone the annual meeting to solicit additional proxies.  If the annual meeting is postponed or adjourned, your shares of Company common stock may be voted by the persons named in the proxy card on the new meeting date, provided that the new meeting occurs within 30 days of the annual meeting date and you have not revoked your proxy.  The Company does not currently know of any other matters to be presented at the annual meeting.
 
                You may revoke your proxy at any time before the vote is taken at the annual meeting.  To revoke your proxy, you must either advise the Corporate Secretary of the Company in writing before your common stock has been voted at the annual meeting, deliver a later-dated proxy or attend the meeting and vote your shares in person.  Attendance at the annual meeting will not in itself constitute revocation of your proxy.
 
Instead of voting by mailing a proxy card, registered stockholders can vote their shares of Company common stock via the Internet or by telephone.  The Internet and telephone voting procedures are designed to authenticate stockholders’ identities, allow stockholders to provide their voting instructions and confirm that their instructions have been recorded properly.  Specific instructions for Internet and telephone voting are set forth on the enclosed proxy card.  The deadline for voting via the Internet or by telephone is 3:00 a.m., Eastern time, on Thursday, May 20, 2010.
 
 
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Participants in the Beneficial Mutual Savings Bank Employee Savings and Stock Ownership Plan and/or the Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan
 
                If you participate in the Beneficial Mutual Savings Bank Employee Savings and Stock Ownership Plan (the “KSOP”), you will receive a voting instruction card that reflects all shares you may direct the trustee to vote on your behalf under the KSOP.  Under the terms of the KSOP, all credited shares of Beneficial Mutual Bancorp common stock held by the KSOP trust are voted by the KSOP trustee, as directed by plan participants.  All shares of Company common stock held in the KSOP trust that have not been credited to participants’ accounts, and all credited shares for which no timely voting instructions are received, are voted by the KSOP trustee in the same proportion as shares for which the trustee has received timely voting instructions, subject to the exercise of its fiduciary duties.  If you participate in the Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan (the “Equity Incentive Plan”), you will also receive a voting instruction card for the purpose of directing the Equity Incentive Plan trustee how to vote the unvested shares of Company common stock awarded to you under the Equity Incentive Plan.   The deadline for returning your voting instruction cards is May 13, 2010.
 
CORPORATE GOVERNANCE AND BOARD MATTERS
 
Director Independence
 
The Company’s Board of Directors currently consists of fourteen members.  The Board of Directors has adopted a resolution decreasing the size of the Board to thirteen members effective immediately prior to the 2010 annual meeting of stockholders.   Each of the Company’s directors is independent under the listing requirements of the Nasdaq Stock Market, Inc., except for Mr. George W. Nise, whom we employed as President and Chief Executive Officer until January 1, 2007, and Mr. Gerard P. Cuddy, whom we currently employ as President and Chief Executive Officer.
 
Board Leadership Structure and Board’s Role in Risk Oversight
 
The Company’s Board of Directors endorses the view that one of its primary functions is to protect stockholders’ interests by providing independent oversight of management, including the Chief Executive Officer. However, the Board does not believe that mandating a particular structure, such as a separate Chairman and Chief Executive Officer, is necessary to achieve effective oversight. The Board of the Company is currently comprised of fourteen directors, twelve of whom are independent directors under the listing standards of the Nasdaq Stock Market. The Chairman of the Board has no greater nor lesser vote on matters considered by the Board than any other director, and the Chairman does not vote on any related party transaction. All directors of the Company, including the Chairman, are bound by fiduciary obligations, imposed by law, to serve the best interests of the stockholders. Accordingly, separating the offices of Chairman and Chief Executive Officer would not serve to enhance or diminish the fiduciary duties of any director of the Company.
 
                To further strengthen the regular oversight of the full Board, all various committees of the Board are comprised of independent directors. The Compensation Committee of the Board consists solely of independent directors. As detailed in its report and the Compensation Discussion and Analysis appearing elsewhere in this proxy statement, the Compensation Committee reviews and evaluates the performance of all executive officers of the Company, including the Chief Executive Officer and reports to the Board. In addition , the Audit Committee, which is comprised solely of independent directors, oversees the Company’s financial practices, regulatory compliance, accounting procedures and financial reporting functions.  In the opinion of the Board of Directors, an independent chairman does not add any value to this already effective process.
 
 
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Risk is inherent with every business, and how well a business manages risk can ultimately determine its success.  We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk.  Management is responsible for the day-to-day management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management.  In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.  To do this, the Chairman of the Board meets regularly with management to discuss strategy and the risks facing the Company.  Senior management also attends Board meetings and is available to address any questions or concerns raised by the Board on risk management and any other matters.
 
Corporate Governance Policies
 
The Board of Directors has adopted a corporate governance policy to govern certain activities, including: the duties and responsibilities of directors; the composition, responsibilities and operations of the Board of Directors; the establishment and operation of Board committees; succession planning; convening executive sessions of independent directors; the Board of Directors’ interaction with management and third parties; and the evaluation of the performance of the Board of Directors and of the President and Chief Executive Officer.
 
Committees of the Board of Directors
 
The following table identifies our standing committees and their members at December 31, 2009.  All members of each committee are independent in accordance with the listing requirements of the Nasdaq Stock Market, Inc.  Each committee operates under a written charter that is approved by the Board of Directors that governs its composition, responsibilities and operation.  Each committee reviews and reassesses the adequacy of its charter at least annually.  The charters of all three committees are available in the Corporate Governance portion of the Investor Relations section of our website ( www.thebeneficial.com ).

 
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Director
 
Audit
Committee
 
Compensation
Committee
 
Corporate
Governance
Committee
                   
Edward G. Boehne
          X        
Karen D. Buchholz
                   
Gerard P. Cuddy
                   
Frank A. Farnesi
    X *     X *      
Donald F. Gayhardt, Jr.
                     
Elizabeth H. Gemmill
    X               X *
Thomas F. Hayes
            X       X  
Charles Kahn, Jr.
            X          
Thomas J. Lewis
                    X  
Joseph J. McLaughlin
    X               X  
Michael J. Morris
    X                  
George W. Nise
                       
Donald F. O’Neill
    X               X  
Roy D. Yates
            X          
                         
Number of Meetings in 2009
    9       7       2  

* Denotes Chairperson
 
Audit Committee
 
                The Audit Committee assists the Board of Directors in its oversight of the Company’s accounting, auditing, internal control structure and financial reporting matters, the quality and integrity of the Company’s financial reports and the Company’s compliance with applicable laws and regulations.  The Committee is also responsible for engaging the Company’s independent registered public accounting firm and monitoring its conduct and independence.  The Board of Directors has designated Frank A. Farnesi as an audit committee financial expert under the rules of the Securities and Exchange Commission.  Mr. Farnesi is independent under the listing requirements of the Nasdaq Stock Market, Inc. applicable to audit committee members.
 
Compensation Committee
 
The Compensation Committee approves the compensation objectives for the Company and the Bank, establishes the compensation for the Company’s senior management and conducts the performance review of the President and Chief Executive Officer.  The Compensation Committee reviews all components of compensation, including salaries, cash incentive plans, long-term incentive plans and various employee benefit matters.  Decisions by the Compensation Committee with respect to the compensation of executive officers are approved by the full Board of Directors.  The Committee also assists the Board of Directors in evaluating potential candidates for executive positions.  See “Compensation Discussion and Analysis” for a discussion of the role of management and compensation consultants in determining and/or recommending the amount or form of executive compensation.
 
Corporate Governance Committee
 
                The Company’s Corporate Governance Committee assists the Board of Directors in: (i) identifying individuals qualified to become Board members, consistent with criteria approved by the Board; (ii) recommending to the Board the director nominees for the next annual meeting; (iii) implementing policies and practices relating to corporate governance, including implementation of and monitoring adherence to corporate governance guidelines; and (iv) recommending director nominees for each committee.
 
 
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Minimum Qualifications.   The Corporate Governance Committee has adopted a set of criteria that it considers when it selects individuals to be nominated for election to the Board of Directors.  A candidate must meet the eligibility requirements set forth in the Company’s Bylaws, which include a requirement that the candidate not have been subject to certain criminal or regulatory actions.  A candidate also must meet any qualification requirements set forth in any Board or committee governing documents.
 
If the candidate is deemed eligible for election to the Board of Directors, the Corporate Governance Committee will then evaluate the following criteria in selecting nominees:
 
 
Contributions to the range of talent, skill and expertise of the Board;
 
 
Financial, regulatory and business experience, knowledge of the banking and financial service industries, familiarity with the operations of public companies and ability to read and understand financial statements;
 
 
Familiarity with the Company’s market area and participation in and ties to local businesses and local civic, charitable and religious organizations;
 
 
Personal and professional integrity, honesty and reputation;
 
 
The ability to represent the best interests of the stockholders of the Company and the best interests of the institution;
 
 
The ability to devote sufficient time and energy to the performance of his or her duties;
 
 
Independence under applicable Securities and Exchange Commission and listing definitions; and
 
 
Current equity holdings in the Company.
 
The Corporate Governance Committee also will consider any other factors it deems relevant, including diversity, competition, size of the Board of Directors and regulatory disclosure obligations.  The Committee will also consider the extent to which the candidate helps the Board of Directors reflect the diversity of the Company’s shareholders, employees, customers and communities. The Committee also may consider the current composition and size of the Board of Directors, the balance of management and independent directors and the need for audit committee expertise.
 
With respect to nominating an existing director for re-election to the Board of Directors, the Corporate Governance Committee will consider and review an existing director’s Board and committee attendance and performance; length of Board service; the experience, skills and contributions that the existing director brings to the Board; and independence.
 
Director Nomination Process.   The process that the Corporate Governance Committee follows to identify and evaluate individuals to be nominated for election to the Board of Directors is as follows:
 
 
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For purposes of identifying nominees for the Board of Directors, the Corporate Governance Committee relies on personal contacts of the committee members and other members of the Board of Directors, as well as its knowledge of members of the communities served by the Bank.  The Corporate Governance Committee will also consider director candidates recommended by stockholders in accordance with the policy and procedures set forth below.  The Corporate Governance Committee has not previously used an independent search firm to identify nominees.
 
In evaluating potential nominees, the Corporate Governance Committee determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the criteria set forth above.  If such individual fulfills these criteria, the Corporate Governance Committee will conduct a check of the individual’s background and interview the candidate to further assess the qualities of the prospective nominee and the contributions he or she would make to the Board.
 
Considerations of Recommendations by Stockholders.   It is the policy of the Corporate Governance Committee of the Board of Directors of the Company to consider director candidates recommended by stockholders who appear to be qualified to serve on the Company’s Board of Directors.  The Corporate Governance Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Corporate Governance Committee does not perceive a need to increase the size of the Board of Directors.  To avoid the unnecessary use of the Corporate Governance Committee’s resources, the Corporate Governance Committee will consider only those director candidates recommended in accordance with the procedures set forth below.
 
Procedures to be Followed by Stockholders.   To submit a recommendation of a director candidate to the Corporate Governance Committee, a stockholder should submit the following information in writing, addressed to the Chairman of the Corporate Governance Committee, care of the Corporate Secretary, at the main office of the Company:
 
1.             The name of the person recommended as a director candidate;
 
 
2.
All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934;
 
 
3.
The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;
 
 
4.
As to the stockholder making the recommendation, the name and address of such stockholder as they appear on the Company’s books; provided, however, that if the stockholder is not a registered holder of the Company’s common stock, the stockholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of the Company’s common stock; and
 
 
5.
A statement disclosing whether such stockholder is acting with or on behalf of any other person and, if applicable, the identity of such person.
 
In order for a director candidate to be considered for nomination at the Company’s annual meeting of stockholders, the recommendation must be received by the Corporate Secretary of the Company at least 30 days before the date of the annual meeting.
 
 
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Director Compensation
 
The following table provides the compensation received by individuals who served as non-employee directors of the Company during the 2009 fiscal year.  The table excludes perquisites, which did not exceed $10,000 in the aggregate for any director.
 
Name
 
Fees
Paid in Cash
($)
   
Stock Awards
($)(1)
   
Option Awards
($)(2)
   
All Other
Compensation
($)(3)
   
Total
($)
 
Edward G. Boehne
  $ 54,600     $ 20,875     $ 14,700     $ 3,440     $ 93,615  
Karen D. Buchholz (4)  
    6,000                   210       6,210  
Frank A. Farnesi
    67,700       20,875       14,700       3,899       107,174  
Donald F. Gayhardt, Jr. (4)
    6,000                   210       6,210  
Elizabeth H. Gemmill
    55,800       20,875       14,700       3,482       94,857  
Thomas F. Hayes
    41,600       20,875       14,700       2,985       80,160  
Charles Kahn, Jr.
    53,700       20,875       14,700       3,409       92,684  
Thomas J. Lewis
    41,600       20,875       14,700       2,985       80,160  
Joseph J. McLaughlin
    48,900       20,875       14,700       3,241       87,716  
Michael J. Morris
    46,900       20,875       14,700       3,171       85,646  
George W. Nise
    50,900       20,875       14,700       3,922       90,397  
Donald F. O’Neill
    38,800       20,875       14,700       2,887       77,262  
Craig W. Yates (5)  
    23,134       20,875       14,700       2,339       61,048  
Roy D. Yates
    47,700       20,875       14,700       3,199       86,474  

(1)
Reflects the compensation expense recognized in accordance with FASB ASC Topic 718 on outstanding restricted stock awards for each director based upon the Company’s stock price of $8.35 as of the date of grant.  When shares become vested and are distributed from the trust in which they are held, the recipient will also receive an amount equal to accumulated cash and stock dividends (if any) paid with respect thereto, plus earnings thereon.  At December 31, 2009, the aggregate number of unvested restricted stock award shares held in trust was 30,500 for Mr. Nise and 22,500 for each of the other named directors with stock awards.
(2)
Reflects the compensation expense recorded in accordance with FASB ASC Topic 718 on outstanding stock option awards for each of the non-employee directors, based upon a fair value of $2.94 for each option using the Black-Scholes option pricing model.  For information on the assumptions used to compute fair value, see Note 18 to the Notes to the Financial Statements included in the Company’s Annual Report to Stockholders for the year ended December 31, 2009.  The actual value, if any, realized by a director from any option will depend on the extent to which the market value of the common stock exceeds the exercise price of the option on the date the option is exercised.  Accordingly, there is no assurance that the value realized by a director will be at or near the value estimated above.  The aggregate outstanding stock options at December 31, 2009 was 55,000 for each of the named directors with 2009 stock option awards.
(3)
These amounts represent the Philadelphia city wage tax that the directors incurred in connection with their Board and committee fees.  The Company pays the Philadelphia wage tax on behalf of its directors.
(4)
Karen D. Buchholz and Donald F. Gayhardt, Jr. were elected to the Board of Directors of the Company and the Bank on November 19, 2009.
(5)
Craig W. Yates’ term as a director of the Company and the Bank expired on May 20, 2009.
 
 
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Cash Retainer and Meetings Fees for Non-Employee Directors.   The following table sets forth the applicable retainers and fees that will be paid to non-employee directors for their service on the Bank’s Board of Directors during 2010.  Directors do not receive any additional fees for their service on the Boards of Directors of the Company or Beneficial Savings Bank MHC.
 
Annual Retainer                                                                                                 
  $ 20,000  
Fee per Board Meeting                                                                                                 
    1,000  
Annual Committee Chair Retainer:
       
Audit Committee                                                                                                 
    8,000  
Executive, Compensation and
Corporate Governance Committees                                                                                                 
    4,000  
Fee per Committee Meeting                                                                                                 
    1,000  
 
Stock-Based Deferral Plan.     The Beneficial Mutual Savings Bank Stock-Based Deferral Plan provides participants with a vehicle to defer compensation not yet earned and invest that compensation in our common stock.  Directors and our named executive officers are eligible to participate in the plan. Each participant’s deferral election must specify the amount of compensation that is being deferred and the timing of the distributions of the deferrals.  Participants may elect to receive distributions upon termination in a lump sum or installments over a period of one to five years.  Participants may also make a special change in control election.
 
2008 Equity Incentive Plan .  The Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan provides the company with a vehicle to award long term incentives designed to provide compensation opportunities based on the creation of shareholder value.  Our directors participate in the 2008 Equity Incentive Plan and have received grants of non-statutory stock options and restricted stock awards.  The non-statutory stock options and restricted stock awards granted under the plan vest at a rate of 20% per year beginning on the first anniversary of the date of grant.  With the exception of Ms. Buchholz and Mr. Gayhardt, each director was granted a non-statutory stock option for 5,000 shares of Beneficial Mutual Bancorp, Inc. common stock and a restricted stock award for 2,500 shares of Beneficial Mutual Bancorp, Inc. common stock in March 2009 and 2010.  Ms. Buchholz and Mr. Gayhardt were each granted a non-statutory stock option for 5,000 shares of Beneficial Mutual Bancorp, Inc. common stock and a restricted stock award for 2,500 shares of Beneficial Mutual Bancorp, Inc. common stock in March 2010.
 
Board and Committee Meetings
 
During the year ended December 31, 2009, the Board of Directors of the Company held 10 meetings.  No director attended fewer than 75% of the total meetings of the Company’s Board of Directors and the committees on which such individual served during fiscal 2009.
 
Director Attendance at the Annual Meeting of Stockholders
 
The Board of Directors encourages each director to attend the Company’s annual meeting of stockholders.  All of the Company’s directors attended the Company’s 2009 annual meeting of stockholders.
 
Code of Ethics and Business Conduct
 
Beneficial Mutual Bancorp has adopted a Code of Ethics and Business Conduct that is designed to ensure that the Company’s directors and employees meet the highest standards of ethical conduct.  The Code of Ethics and Business Conduct, which applies to all employees and directors, addresses conflicts of interest, the treatment of confidential information, general employee conduct and compliance with applicable laws, rules and regulations.  In addition, the Code of Ethics and Business Conduct is designed to deter wrongdoing and promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations.  A copy of the Code of Ethics and Business Conduct is available in the Corporate Governance portion of the Investor Relations section of our website ( www.thebeneficial.com ).
 
 
10

 
 
AUDIT-RELATED MATTERS
 
Report of the Audit Committee
 
                The Company’s management is responsible for the Company’s internal controls and financial reporting process.  The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements and issuing an opinion on the conformity of those financial statements with generally accepted accounting principles.  The independent registered public accounting firm is also responsible for issuing an attestation report on management’s assessment of the Company’s internal control over financial reporting.  The Audit Committee oversees the Company’s internal controls and financial reporting process on behalf of the Board of Directors and in accordance with the Audit Committee Charter.  The Charter is available in the Corporate Governance portion of the Investor Relations section of our website ( www.thebeneficial.com ). A copy can also be obtained from the Company’s Corporate Secretary.
 
In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm.  Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm.  The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 114 ( The Auditor’s Communication With Those Charged With Governance ), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, including the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of the disclosures in the financial statements.
 
In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the firm’s independence from the Company and its management.  In concluding that the registered public accounting firm is independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.
 
The Audit Committee discussed with the Company’s independent registered public accounting firm the overall scope and plans for their audit.  The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of the Company’s internal controls, and the overall quality of the Company’s financial reporting.
 
In performing all of these functions, the Audit Committee acts only in an oversight capacity.  In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in their report, express an opinion on the conformity of the Company’s financial statements to generally accepted accounting principles.  The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations.  Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards or that the Company’s independent registered public accounting firm is “independent.”
 
 
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In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 for filing with the Securities and Exchange Commission.  The Audit Committee also has approved, subject to stockholder ratification, the selection of the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.
 
Audit Committee of the Board of Directors of
Beneficial Mutual Bancorp, Inc.
Frank A. Farnesi, Chairman
Elizabeth H. Gemmill
Joseph J. McLaughlin
Michael J. Morris
Donald F. O’Neill
 
Audit Fees
 
Audit Fees.   The following table sets forth the fees billed to the Company for the fiscal years ended December 31, 2009 and 2008 by Deloitte & Touche LLP.
 
   
2009
   
2008
 
Audit Fees (1)  
  $ 479,500     $ 439,155  
Audit Related Fees
    84,199       2,000  
Tax Fees
           

 
(1)
Includes professional services rendered for the audit of the Company’s annual consolidated financial statements and review of consolidated financial statements included in Quarterly Reports on Form 10-Q, or services normally provided in connection with statutory and regulatory filings ( i.e., attest services required by the Federal Deposit Insurance Corporation Improvement Act or Section 404 of the Sarbanes-Oxley Act), including out-of-pocket expenses.  For 2009, $50,000 of the reported fees billed to the Company were for services performed for the year ended December 31, 2008.
 
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm.   The Audit Committee is responsible for appointing, setting the compensation and overseeing the work of the independent registered public accounting firm.  In accordance with its charter, the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent auditor.  Such approval process ensures that the external auditor does not provide any non-audit services to the Company that are prohibited by law or regulation.
 
In addition, the Audit Committee has established a policy regarding pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm.  Requests for services by the independent registered public accounting firm for compliance with the auditor services policy must be specific as to the particular services to be provided.  The request may be made with respect to either specific services or a type of service for predictable or recurring services.  During the year ended December 31, 2009, all services were approved, in advance, by the Audit Committee in compliance with these procedures.
 
 
12

 
 
REPORT OF THE COMPENSATION COMMITTEE
 
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis that is required by the rules established by the Securities and Exchange Commission.  Based on such review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.  See “Compensation Discussion and Analysis .
 
Compensation Committee of the Board of Directors of
Beneficial Mutual Bancorp, Inc.
Frank A. Farnesi, Chairman
Edward G. Boehne
Thomas F. Hayes
Charles Kahn, Jr.
Roy D. Yates
 
STOCK OWNERSHIP
 
                The following table provides information as of April 1, 2010 with respect to persons known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding shares of common stock.  A person may be considered to own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power.
 
Name and Address
   
Number of Shares
Owned
   
Percent of Common
Stock Outstanding
 
Beneficial Savings Bank MHC
510 Walnut Street
Philadelphia, Pennsylvania 19106
    45,792,775       55.9%  
                 
Wellington Management Co. LLP (1)
75 State Street
Boston, Massachusetts 02109
    6,019,128         7.4%  
 

(1)  Based solely on a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 12, 2010.
 
 
13

 
 
                The following table provides information about the shares of Company common stock that may be considered to be owned by each director of the Company, each executive officer named in “Executive Compensation—Summary Compensation Table” and by all directors and executive officers of the Company as a group as of April 1, 2010.  A person may be considered to own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power.  Unless otherwise indicated, each of the named individuals has sole voting and investment power with respect to the shares shown.
 
Name
 
 
Number of Shares
Owned (1)
   
Number of Shares That
May Be Acquired
Within 60 Days By
Exercising Options
   
Percent of
Common Stock
Outstanding (2)
 
Directors:
                 
Edward G. Boehne
      40,000       11,000        
Karen D. Buchholz
        2,500              
Gerard P. Cuddy
    155,954       43,000        
Frank A. Farnesi
      50,000       11,000        
Donald F. Gayhardt, Jr.
        2,500              
Elizabeth H. Gemmill
      48,000       11,000        
Thomas F. Hayes
      35,000       11,000        
Charles Kahn, Jr.
      62,500  (3)     11,000        
Thomas J. Lewis
      38,000       11,000        
Joseph J. McLaughlin
      40,000  (4)     11,000        
Michael J. Morris
      70,000  (5)     11,000        
George W. Nise
      91,222  (6)     11,000        
Donald F. O’Neill
      45,000       11,000        
Roy D. Yates
    661,983  (7)     11,000        
                         
Named Executive Officers Who Are Not Also Directors:
                       
Andrew J. Miller
      83,836       21,000        
Robert J. Bush
    110,858  (8)     21,000        
Denise Kassekert
      78,375       16,000        
                         
All Executive Officers, Directors and Director
    Nominees as a Group (17   persons)  
         1,615,728       222,000       2.0%  

* Represents less than 1% of the Company’s outstanding shares.
(1)
This column includes the following:
 
   
Shares of Unvested
Restricted Stock Held in
Trust Under the
Beneficial Mutual
Bancorp, Inc. 2008 Equity
Incentive Plan
   
Shares Held Under the Beneficial
Mutual Savings Bank Stock-Based
Deferral Plan
   
Shares Held or Allocated
Under the Beneficial Mutual
Savings Bank Employee
Savings and Stock
Ownership Plan
 
Mr. Boehne 
     24,500              
Ms. Buchholz                            
       2,500              
Mr. Cuddy                            
                 130,000             4,874  
Mr. Farnesi                            
                   24,500              
Mr. Gayhardt                            
                     2,500              
Ms. Gemmill                            
                   24,500              
Mr. Hayes
                   24,500       5,000        
Mr. Kahn                            
                   24,500              
Mr. Lewis                            
                   24,500              
Mr. McLaughlin                            
                   24,500              
Mr. Morris                            
                   24,500              
Mr. Nise                            
                   32,500       25,000        
Mr. O’Neill                            
                   24,500              
Mr. Yates                            
                   24,500              
Mr. Miller                            
                   66,000             15,786  
Mr. Bush                            
                   66,000             4,435  
Ms. Kassekert                            
                   66,000             5,375  
 
  (2)
Based on 81,853,553 shares of Company common stock outstanding and entitled to vote as of April 1, 2010.
  (3)
Includes 5,700 shares owned by Mr. Kahn’s spouse and 300 shares held by Mr. Kahn’s spouse as custodian for their grandchild.
  (4)
Includes 5,000 shares owned by Mr. McLaughlin’s spouse.
  (5)
Includes 15,000 shares held by a trust in which Mr. Morris is a beneficiary.
  (6)
Includes 15,000 shares held by Mr. Nise’s spouse.
  (7)
Includes 75,917 shares held by Mr. Yates’ children.
  (8)
Includes 10,423 shares held by Mr. Bush’s children.
 
 
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ITEMS TO BE VOTED ON BY STOCKHOLDERS
 
Item 1 — Election of Directors
 
The Company’s Board of Directors currently consists of fourteen members.  The Board of Directors has adopted a resolution decreasing the size of the Board to thirteen members effective immediately prior to the 2010 annual meeting of stockholders.   The Board is divided into three classes with three-year staggered terms, with approximately one-third of the directors elected each year.  The Board of Directors’ nominees for election this year, to serve for a three-year term or until their respective successors have been elected and qualified, are Edward G. Boehne, Karen D. Buchholz, Donald F. Gayhardt, Jr., Michael J. Morris and Roy D. Yates.  In addition, the Board of Directors’ nominees for election this year, to serve for a one-year term or until his respective successor has been elected and qualified, is Charles Kahn, Jr.  All of the nominees are currently directors of the Company and the Bank.  Donald F. O’Neill, a current director of the Company, has not been renominated to serve on the Board of Directors but will serve as Director Emeritus of the Company following the 2010 annual meeting of stockholders.
 
Unless you indicate on the proxy card that your shares should not be voted for certain nominees, the Board of Directors intends that the proxies solicited by it will be voted for the election of each of the Board’s nominees.  If any nominee is unable to serve, the persons named in the proxy card would vote your shares to approve the election of any substitute proposed by the Board of Directors.  At this time, we know of no reason why any nominee might be unable to serve.
 
The Board of Directors recommends that stockholders vote “FOR” the election of all of the nominees.
 
Information regarding the nominees for election at the annual meeting is provided below.  Unless otherwise stated, each individual has held his or her current occupation for the last five years.  The age indicated for each individual is as of December 31, 2009.  The indicated period of service as a director includes the period of service as a director of Beneficial Bank.
 
Nominees for Election as Directors
 
The nominees for election to serve for a three-year term are:
 
                 Edward G. Boehne   is a Senior Economic Advisor for Haverford Trust Company, an asset management company.  Age 69.  Trustee of Beneficial Bank since 2000 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since their formation.  He is also a director of Toll Brothers, Inc. (NYSE: TOL) and the privately held companies of Haverford Trust Company, Penn Mutual Life Insurance Company and AAA Mid-Atlantic.  Mr. Boehne also served as the President of the Federal Reserve Bank of Philadelphia.
 
                Mr. Boehne’s asset management background provides the Board of Directors with substantial management and leadership experience with respect to an industry that complements the financial services provided by the Bank.  In addition, as a director of a corporation listed on the New York Stock Exchange, Mr. Boehne offers the Board significant public company oversight experience.
 
Karen D. Buchholz is Vice President, Administration of Comcast Corp., one of the nation’s leading providers of entertainment, information and communications products and services.  Age 42.  Trustee of Beneficial Bank since 2009 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2009.
 
 
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As an executive of Comcast Corp., Ms. Buchholz provides the Board with extensive public company oversight and leadership experience.  In addition, Ms. Buchholz offers the Board of Directors significant business and management level experience from a setting outside of the financial services industry.
 
Donald F. Gayhardt, Jr. has served as the Chief Executive Officer of Music Training Center Holdings, LLC, a music education company, since May 2009.  Prior to that, Mr. Gayhardt was the President of Dollar Financial Corp., a financial services company located in Berwyn, Pennsylvania.  Age 45.  Trustee of Beneficial Bank since 2009 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2009.
 
Mr. Gayhardt’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which the Bank serves affords the Board valuable insight regarding the business and operation of the Bank.
 
                Michael J. Morris   is the retired President, Chief Executive Officer and Founder of both Transport International Pool Inc. and GE Modular Structures, each of which are transportation and building space companies.  Age 75.  Trustee of Beneficial Bank since 1989 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since their formation.  He is also a director of Met-Pro Corporation (NYSE: MPR) and the Tokio Marine Ltd. Companies Philadelphia Insurance Company and Philadelphia Indemnity Company.
 
Mr. Morris’ background provides the Board of Directors with substantial international business experience, entrepreneurial and business leadership skills, extensive Board experience and knowledge of finance, corporate governance and audit matters.  In addition, as a director of Met-Pro Corporation, Mr. Morris provides the Board of Directors with critical experience regarding public company oversight matters.
 
Roy D. Yates   is a Professor of Electrical and Computer Engineering at Rutgers University in Piscataway, New Jersey and is a former director of FMS Financial Corporation.  Age 47.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2007.
 
As a former director of FMS Financial Corporation, Mr. Yates provides the Board of Directors with critical experience regarding public company oversight matters.  In addition, Mr. Yates’ academic and engineering background provides the Board with experience from a setting outside of the financial services industry.
 
The nominee for election to serve for a one-year term is:
 
               Charles Kahn, Jr.   serves as the Executive Chairman of Kahn & Co., Inc., a real estate company.  Age 85.  Trustee of Beneficial Bank since 1974 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since their formation.
 
                Mr. Kahn’s background provides the Board of Directors with critical experience in real estate matters, which are essential to the business of the Bank.
 
 
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Directors Continuing in Office
 
                The following directors have terms ending in 2011:
 
                Gerard P. Cuddy   is our President and Chief Executive Officer, effective January 1, 2007, and also serves as the Chairman of the Board.  From May 2005 to November 2006, Mr. Cuddy was a senior lender at Commerce Bank and from 2002 to 2005, Mr. Cuddy served as a Senior Vice President of Fleet/Bank of America.  Prior to Mr. Cuddy’s service with Fleet/Bank of America, Mr. Cuddy held senior management positions with First Union National Bank and Citigroup.  Age 50.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2006.
 
                Mr. Cuddy’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which the Bank serves affords the Board valuable insight regarding the business and operation of the Bank.  Mr. Cuddy’s knowledge of all aspects of the Company’s and the Bank’s business and history, combined with his success and strategic vision, position him well to continue to serve as our President and Chief Executive Officer.
 
Frank A. Farnesi   is a retired partner of KPMG LLP.  Age 62.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2004.   He is also a director of RAIT Investment Trust (NYSE: RAS) and a Trustee of Immaculata University.
 
As a former partner with a certified public accounting firm, Mr. Farnesi provides the Board of Directors with critical experience regarding accounting and financial matters.
 
                Thomas J. Lewis   is the President and Chief Executive Officer of Thomas Jefferson University Hospitals, Inc.  Age 57.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2005.
 
                Mr. Lewis’ background offers the Board of Directors management and oversight experience, specifically within the region in which the Bank conducts its business.
 
George W. Nise   served as our President and Chief Executive Officer until his retirement effective January 1, 2007.  Age 67.  Trustee of Beneficial Bank since 2000 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since their formation.
 
Mr. Nise’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which the Bank serves affords the Board valuable insight regarding the business and operation of the Bank.
 
                The following directors have terms ending in 2012:
 
Elizabeth H. Gemmill   serves as the President of the Warwick Foundation, a private family foundation.  Age 64.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since 2005.  She is also a director of Universal Display Corporation (Nasdaq: PANL) and the Chairman of the Board of Directors of Philadelphia University.
 
As a director of Universal Display Corporation, Ms. Gemmill provides the Board of Directors with critical experience regarding public company oversight matters.  Ms. Gemmill also demonstrates a strong commitment to the Company’s local community in her role as President of the Warwick Foundation and as Chairman of the Board of Philadelphia University.
 
 
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Thomas F. Hayes   is the retired President of Philadelphia Gear Corporation, a power transmission company.  Age 87.  Trustee of Beneficial Bank since 1974 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since their formation.
 
Mr. Hayes’ background offers the Board of Directors substantial small company management experience, specifically within the region in which the Bank conducts its business, and provides the Board with valuable insight regarding the local business and consumer environment.
 
Joseph J. McLaughlin   retired as President of Beneficial Bank in 1993.  Age 81.  Trustee of Beneficial Bank since 1974 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp since their formation.
 
Mr. McLaughlin’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which the Bank serves affords the Board valuable insight regarding the business and operation of the Bank.
 
Item 2 — Ratification of Independent Registered Public Accounting Firm
 
The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP to be the Company’s independent registered public accounting firm for the 2010 fiscal year, subject to ratification by stockholders.  A representative of Deloitte & Touche LLP is expected to be present at the annual meeting to respond to appropriate questions from stockholders and will have the opportunity to make a statement should he or she desire to do so.
 
If the ratification of the appointment of the independent registered public accounting firm is not approved by a majority of the shares represented at the annual meeting and entitled to vote, other independent registered public accounting firms may be considered by the Audit Committee of the Board of Directors.
 
The Board of Directors recommends that stockholders vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the 2010 fiscal year.

 
18

 

COMPENSATION DISCUSSION AND ANALYSIS
 
Our Compensation Philosophy
 
The compensation philosophy for our named executive officers is founded on the premise that the success of Beneficial Mutual Bancorp, Inc. and its subsidiaries depends, in large part, on the dedication and commitment of the people we place in key operating positions to drive our business strategy.  We strive to satisfy the demands of our business model by providing our management team with incentives tied to the successful implementation of our corporate objectives.  However, we recognize that the Company operates in a competitive environment for talent.  Therefore, our approach to compensation considers a full range of compensation elements (base compensation, equity awards and short-term cash incentives) as we seek to attract and retain key personnel.
 
We ground our compensation philosophy on four basic principles:
 
 
Meeting the Demands of the Market – Our goal is to compensate our employees at competitive levels that position us as the employer of choice among our peers who provide similar financial services in the markets we serve.
 
 
Aligning with Stockholders – We use equity compensation as an additional component of our compensation mix to develop a culture of ownership among our named executive officers and to align their individual financial interests with the interests of our stockholders.
 
 
Performance – We believe that a significant amount of executive compensation should be performance-based.  Therefore, our compensation program is designed to reward superior performance and encourage our executive officers to feel accountable for the Company’s financial performance and their individual performance.  In order to achieve this, we have structured our short-term cash-based and equity programs to tie an executive’s compensation, in part, directly to Company and individual performance.
 
 
Reflecting our Business Philosophy – Our approach to compensation reflects our values and the way we do business in the communities we serve.
 
Elements Used to Implement Our Compensation Objectives
 
                The compensation program for our named executive officers currently relies on three primary elements: (i) base compensation; (ii) short-term, cash-based incentive compensation awards through our Management Incentive Plan; and (iii) equity compensation, including performance-based awards, through our 2008 Equity Incentive Plan.  Both the short-term, cash-based incentive program and our equity program place an emphasis on performance-based awards.  We believe that we can meet the objectives of our compensation philosophy by achieving a balance among these three elements that is competitive with our industry peers and creates appropriate incentives for our named executive officers.  To achieve the necessary balance, the Compensation Committee of our Board of Directors has worked closely with the compensation consulting firm of Pearl Meyer & Partners.  See “Role of Compensation Consultant” for a detailed description of the services provided by Pearl Meyer & Partners.
 
 
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Base Compensation.     The base salary of each named executive officer is reviewed on an annual basis in connection with the executive’s performance review.   Decisions regarding salary adjustments take into account an executive’s current base salary and the amounts paid to the executive’s peers within and outside Beneficial Mutual Bancorp, Inc.  Our goal is to maintain salary levels for the named executive officers at levels consistent with base pay received by those in comparable positions at our peers.  Therefore, in order to be competitive we target base salaries to be at the median level of our peers.  We obtain peer group information from a variety of sources, including survey data gathered by Pearl Meyer & Partners.  See “Peer Group Analysis” for information of the financial institutions used to benchmark base compensation levels.  We also evaluate salary levels at the time of promotion or other change in responsibilities or as a result of specific commitments we made when a specific officer was hired.  Individual performance and retention risk are also considered as part of our annual assessment.  See Executive Compensation―Summary Compensation Table for salaries paid to our named executive officers in 2009.
 
               Short-Term Cash-Based Incentive Compensation .   Our annual management incentive plan (“MIP”) is designed to recognize and reward our named executive officers for their contribution to our success.  The 2009 MIP measured both company performance and individual participant performance.  In 2009, the company performance measures were earnings per share and efficiency ratio targets, which are core measures of profitability and efficiency of resources.  The individual performance measures were specific to each participant’s job (e.g., strategic growth, lending growth, loan portfolio quality, loan loss experience and deposit growth).  The 2009 MIP provided each plan participant with a target cash incentive opportunity based on existing business, marketing and economic conditions, services offered by the Bank and its subsidiaries as of the date the plan was implemented and individual job responsibilities.  The target cash incentives for each participant are consistent with competitive market practices and reflect a percentage of each participant’s base salary.  The 2009 MIP threshold, target and stretch incentive opportunities for Mr. Cuddy were 20%, 40% and 60% of base salary, respectively and for the remaining named executive officers, the threshold, target and stretch incentive opportunities, as a percentage of base salary, were 12.5%, 25% and 37.5%, respectively.  See “ Executive Compensation – Grants of Plan-Based Awards – 2009 Management Incentive Plan ” for the dollar value of each executive’s potential incentive opportunity.
 
               The MIP is administered by the Compensation Committee with the assistance of the Human Resources Department.  The Compensation Committee has sole discretion to make adjustments to the Company and individual performance measures in the event of a change in market conditions, regulations or our business model.  In 2009, the Compensation Committee considered the one-time Federal Deposit Insurance Corporation assessment of 10 basis points in projecting the MIP earnings per share goal. The Finance Department is responsible for certifying the company performance measures.  Once the year end financial performance of the Company is determined, the Compensation Committee uses scorecards to evaluate each MIP participant’s performance and determines the payout under the plan.
 
               The following scorecards set forth the Compensation Committee’s assessment of each named executive officer in relation to the 2009 individual and company performance measures.  The scorecards list each performance goal and the weight given to the achievement of each goal.  The scorecards also illustrate the threshold, target and stretch levels and note the actual achievement of the performance measures and the corresponding 2009 MIP payouts.  All dollar amounts are in thousands, unless otherwise noted.
 
 
20

 
 
Gerard Cuddy     Performance Goals               Incentive Opportunity       Actual Achievement  
Performance Measures   Threshold     Target     Stretch     Weight     Threshold
Value
    Target
Value
    Stretch
Value
    Actual
Performance
    Actual
Payout
 
Earnings Per Share
  $ 0.16     $ 0.18     $ 0.21       50.0 %   $ 47,500     $ 95,000     $ 142,500     $ 0.22     $ 142,500  
Efficiency Ratio
    78.70 %     77.40 %     75.40 %     30.0       28,500       57,000       85,500       77.70 %     28,500  
Strategic Goal Execution
 
Committee discretion
      20.0       19,000       38,000       57,000               38,000  
                              100.0 %   $ 95,000     $ 190,000     $ 285,000    
Total Payout
    $ 209,000  
 
Robert Bush
    Performance Goals               Incentive Opportunity       Actual Achievement  
Performance Measures   Threshold     Target     Stretch     Weight     Threshold
Value
    Target
Value
    Stretch
Value
    Actual
Performance
    Actual
Payout
 
Earnings Per Share
  $ 0.16     $ 0.18     $ 0.21       30.0 %   $ 11,700     $ 23,400     $ 35,100     $ 0.22     $ 35,100  
Efficiency Ratio
    78.70 %     77.40 %     75.40 %     20.0       7,800       15,600       23,400       77.70 %     7,800  
Increase Pre-Tax Net
        Contributions to Company by   10%  (Beneficial Insurance Services)
  $ 962,000     $ 1.06   $ 1.22     20.0       7,800       15,600       23,400              
Retain 88% of Customers
       (Beneficial Insurance  Services)
    79.20 %     88 %     100 %     20.0       7,800       15,600       23,400       87 %     7,800  
Increase Pre-Tax Net Income by 30% for Beneficial Advisors)
  $ 108,000     $ 120,000     $ 130,000       10.0       3,900       7,800       11,700              
                              100.0 %   $ 39,000     $ 78,000     $ 117,000    
Total Payout
    $ 50,700  
 
Joseph Conners (1)     Performance Goals               Incentive Opportunity       Actual Achievement  
Performance Measures
  Threshold     Target     Stretch     Weight     Threshold
Value
    Target
Value
    Stretch
Value
    Actual
Performance
    Actual
Payout
 
Earnings Per Share
  $ 0.16     $ 0.18     $ 0 .21       50.0 %   $ 17,550     $ 35,100     $ 52,650     $ 0.22     $ 52,650  
Efficiency Ratio
    78.70 %     77.40 %     75.40 %     30.0       10,530       21,060       31,590       77.70 %     10,530  
Manage resources supported by Finance Department to
        $185m total assets per full time employee
  $ 167   $ 185   $ 214     10.0       3,510       7,020       10,530     $ 199.8     7,020  
Identify $1m in revenue  enhancements
  $ 900,000     $ 1,000,000     $ 1,150,000       10.0       3,510       7,020       10,530     $ 5.0 m     10,530  
                              100.0 %   $ 35,100     $ 70,200     $ 105,300    
Total Payout
    $ 80,730  
 

(1)         Mr. Conners left the Company and the Bank to pursue other opportunities effective March 31, 2010.
 
 
21

 
 
Andrew Miller
  Performance Goals             Incentive Opportunity     Actual Achievement  
Performance Measures
  Threshold     Target     Stretch     Weight     Threshold
Value
    Target
Value
    Stretch
Value
    Actual
Performance
    Actual
Payout
 
Earnings Per Share
  $ 0.16     $ 0.18     $ 0.22       30.0 %   $ 10,530     $ 21,060     $ 31,590     $ 0.22     $ 31,590  
Efficiency Ratio
    78.70 %     77.40 %     75.40 %     20.0       7,020       14,040       21,060       77.70 %     7,020  
Increase Loan Portfolio to $2.6 billion
  $ 2.4b     $ 2.6b     $ 3.00b       10.0       3,510       7,020       10,530     $ 2.80b       7,020  
Originate $858m in total loans
  $ 772m     $ 858m     $ 986m       10.0       3,510       7,020       10,530     $ 967m       7,020  
Originate $575m in commercial loans
  $ 518m     $ 575m     $ 661m       10.0       3,510       7,020       10,530              
Asset Quality: Net Losses Less Than 0.75%
    0.825 %     0.75 %     0.6375 %     10.0       3,510       7,020       10,530       0.24 %     10,530  
Asset quality ratios: Non-accrual Less Than 2.50%
    2.8750 %     2.50 %     2.1250 %     10.0       3,510       7,020       10,530       2.59 %     3,510  
                              100.0 %   $ 35,100     $ 70,200     $ 105,300    
Total Payout
    $ 66,690  
 
Denise Kassekert
  Performance Goals             Incentive Opportunity     Actual Achievement  
 
Performance Measures
  Threshold     Target     Stretch     Weight     Threshold
Value
    Target
Value
    Stretch
Value
    Actual
Performance
    Actual
Payout
 
Earnings Per Share
  $ 0.16     $ 0.18     $ 0.21       30.0 %   $ 9,375       18,750       28,125     $ 0.22     $ 28,125  
Efficiency Ratio
    78.70 %     77.4 %     75.40 %     20.0       6,250       12,500       18,750       77.70 %     6,250  
Increase Total Deposits by 11% to $3 Billion
  $ 2.70b     $ 3.06b     $ 3.45b       10.0       3,125       6,250       9,375     $ 3,509b       9,375  
Increase Checking Deposits from $761 million to $900 million
  $ 810m     $ 900m     $ 1,035b       20.0       6,250       12,500       18,750     $ 1,365b       18,750  
Increase Average Deposits per Branch to $40 Million
  $ 38m     $ 40m     $ 46m       20.0       6,250       12,500       18,750     $ 51.6m       18,750  
                              100.0 %   $ 31,250     $ 62,500     $ 93,750    
Total Payout
    $ 81,250  
 
 
22

 
 
Long-Term Equity-Based Compensation .   Equity incentives are among the most important elements of our named executive officer’s total compensation package in that they directly align the interests of our executives to the interests of our stockholders.  Our 2008 Equity Incentive Plan provides our Compensation Committee with a vehicle to award long term incentives designed to provide compensation opportunities based on the creation of shareholder value.  The Compensation Committee makes an annual determination as to who will receive equity awards, the type of awards, vesting conditions and level of the award.  Consistent with the Company’s pay for performance philosophy, equity awards granted to our named executive officers are in part performance-based.  Accordingly, the upside potential of our equity awards will not be realized by our name executive officers unless our performance improves over the vesting period of the awards.  See Executive Compensation―Grants of Plan-Based Awards for detailed information on the equity awards granted during the 2009 fiscal year.
 
Role of the Compensation Committee
 
                We rely on the Compensation Committee to develop the broad outline of our compensation program and to monitor the success of the program in achieving the objectives of our compensation philosophy.  The Compensation Committee is also responsible for the administration of our compensation programs and policies, including the administration of our cash- and stock-based incentive programs.
 
The Compensation Committee operates under a written charter that establishes its responsibilities.  The Compensation Committee and the Board of Directors review the charter periodically to ensure that the scope of the charter is consistent with the Compensation Committee’s expected role.  Under the charter, the Compensation Committee is charged with general responsibility for the oversight and administration of our compensation program.  The charter vests in the Compensation Committee the sole responsibility for determining the compensation of the Chief Executive Officer based on the Compensation Committee’s evaluation of his performance.  The charter also authorizes the Compensation Committee to engage consultants and other professionals without management approval to the extent deemed necessary to discharge its responsibilities.
 
During 2009, the Compensation Committee met seven (7) times, including three (3) executive sessions attended by Compensation Committee members only.  Pearl Meyer & Partners, our independent compensation consultant, was present or in person at three (3) of the meetings.   The current members of the Compensation Committee are Messrs. Frank A. Farnesi (Chairman), Charles Kahn, Jr., Edward G. Boehne, Roy D. Yates and Thomas F. Hayes.
 
Role of the Compensation Consultant
 
The Compensation Committee engaged Pearl Meyer & Partners, an independent compensation consultant, to provide compensation data and recommendations that can be used to develop compensation programs that support our strategies as a public company.  Pearl Meyer & Partners has provided consulting services in the areas of executive compensation, director compensation and short-term and long-term incentive plan design.  Pearl Meyer & Partners also helped the Compensation Committee create a peer group of institutions for purposes of benchmarking cash compensation for the Company’s named executive officers and directors.  See “Peer Group Analysi s .”
 
In January 2009, Pearl Meyer & Partners provided the Compensation Committee with a written report on Executive Total Compensation and Director Total Compensation.  Pearl Meyer & Partners presented an updated Executive Total Compensation report in November 2009.  The purpose of the reports was to assess the competitiveness of our total compensation programs and assist the Compensation Committee in making compensation decisions for our management going forward.  In addition to providing total compensation information for our named executive officers, the November 2009 report included data that compared our financial performance as of the third quarter of 2009 to our peer group with respect to several key financial measures.
 
 
23

 
 
Role of Management
 
                Our Chief Executive Officer, in conjunction with representatives of the Compensation Committee and the Human Resources Department, develops recommendations regarding the appropriate mix and level of compensation for our named executive officers.  The recommendations consider the objectives of our compensation philosophy and the range of compensation programs authorized by the Compensation Committee.  The Chief Executive Officer meets with the Compensation Committee to discuss the compensation recommendations for the other named executive officers.  Our Chief Executive Officer does not participate in Compensation Committee discussions relating to the determination of his compensation.
 
Peer Group Analysis
 
We firmly believe that the cornerstone of our compensation program is the maintenance of a competitive compensation program relative to the companies with whom we compete for talent.  Pearl Meyer & Partners created our peer group using data provided from SNL Financial.  Our peer group consists of 20 publicly-traded financial institutions ranging between $2.5 million and $9.0 billion in asset size.  These financial institutions are located predominately in the northeast region of the United States and have comparable operating characteristics and financial performance.  The following institutions make up our peer group:
 
Company Name
 
City
 
State
National Penn Bancshares, Inc.
 
Boyertown
 
PA
First Niagara Financial Group, Inc.
 
Lockport
 
NY
NewAlliance Bancshares, Inc.
 
New Haven
 
CT
F.N.B. Corporation
 
Hermitage
 
PA
Northwest Bancshares, Inc.
 
Warren
 
PA
Investors Bancorp, Inc. (MHC)
 
Short Hills
 
NJ
Provident Financial Services, Inc.
 
Jersey City
 
NJ
First Commonwealth Financial Corporation
 
Indiana
 
PA
NBT Bancorp Inc.
 
Norwich
 
NY
Community Bank System, Inc.
 
De Witt
 
NY
S&T Bancorp, Inc.
 
Indiana
 
PA
Harleysville National Corporation
 
Harleysville
 
PA
Dime Community Bancshares, Inc.
 
Brooklyn
 
NY
Flushing Financial  Corporation
 
Lake Success
 
NY
TrustCo Bank Corp NY
 
Glenville
 
NY
Sun Bancorp, Inc.
 
Vineland
 
NJ
WSFS Financial Corporation
 
Wilmington
 
DE
Provident New York Bancorp
 
Montebello
 
NY
Tompkins Financial Corporation
 
Ithaca
 
NY
Lakeland Bancorp, Inc.
 
Oak Ridge
 
NJ
 
 
24

 

Allocation Among Compensation Components
 
Under our present structure, base salary has represented the largest component of compensation for our named executive officers.  However, our use of short-term cash incentives and equity compensation reflects the growing importance of performance-based compensation in our overall compensation structure. The allocation of base salary and performance-based compensation (short-term cash incentives and equity awards) varies depending upon the role of a named executive officer in our organization and their results.
 
Employment and Management Agreements
 
                We maintain two year employment agreements with our named executive officers.  In addition to outlining the terms and conditions of employment, the employment agreements also ensure the stability of our management team by providing the executives with financial protection in the event a named executive officer is involuntarily terminated by Beneficial Mutual Savings Bank or Beneficial Mutual Bancorp for reasons other then cause (as defined in the employment agreements) or if a named executive officer is terminated in connection with a change in control.   See “Execu tive Compensation―Employment/Management Agreements and “—Potential Post-Termination Payments” for a detailed discussion of the terms of the employment agreements and the benefits provided upon termination of service.
 
                Beneficial Insurance Services, LLC (a subsidiary of Beneficial Bank) continues to maintain a Senior Management Agreement with Robert J. Bush. The agreement was entered into in 2005 in connection with the asset purchase agreement dated January 14, 2005 between Paul Hertel & Company and Beneficial Insurance Services, LLC.  Mr. Bush is an integral part of Paul Hertel & Company and Beneficial Insurance Services wanted to secure his services under a management agreement for the time period and under the terms described in the Senior Management Agreement.  See Executive Compensation―Employment/Management Agreements and ―Potential Post-Termination Payments for a detailed discussion of the terms of the management agreement and the benefits provided upon termination of service.
 
Tax and Accounting Considerations
 
In consultation with our advisors, we evaluate the tax and accounting treatment of each of our compensation programs at the time of adoption and on an annual basis to ensure an understanding of the financial impact of the program.  Our analysis includes a detailed review of recently adopted and pending changes in tax and accounting requirement.  As part of our review, we consider modifications and/or alternatives to existing programs to take advantage of favorable changes in the tax or accounting environment or to avoid adverse consequences.  To preserve maximum flexibility in the design and implementation of our compensation program, we have not adopted a formal policy that requires all compensation to be tax deductible.  However, to the greatest extent possible, it is our intent to structure our compensation programs in a tax efficient manner.  When making grants under the 2008 Equity Incentive Plan, the Compensation Committee considers the tax implications of the awards, therefore all stock options granted under our equity plan, since its implementation, have been non-statutory stock options.
 
Retirement Benefits; Employee Welfare Benefits
 
All of our named executive officers are eligible to participate in the tax-qualified retirement plans available to Beneficial Bank employees.  This includes the Beneficial Mutual Savings Bank Employee Savings and Stock Ownership Plan (“KSOP”) and for those executives employed by Beneficial Bank prior to June 30, 2008, the Employees’ Pension and Retirement Plan of Beneficial Mutual Savings Bank (“Pension Plan”).  The Pension Plan was frozen effective June 30, 2008 in connection with the restructuring of our retirement program. Our KSOP enables our named executive officers to supplement their retirement savings with elective deferral contributions that we match at specified levels.
 
 
25

 
 
The KSOP also provides for additional discretionary employer contributions based on a percentage of participant compensation, subject to the Internal Revenue Code contribution limits.
 
In addition to our tax-qualified retirement plans, we also maintain non-qualified arrangements for certain named executive officers. Messrs. Cuddy, Miller and Bush all participate in the Beneficial Mutual Savings Bank Supplemental Pension and Retirement Plan and Mr. Miller maintains a Salary Continuation Agreement with Beneficial Bank and participates in the Transition Credit Retirement Plan for Designated Employees.  See “ Executive Compensation – Pension Benefits – Supplemental Pension and Retirement Plan”  and “Executive Compensation – Pension Benefits – Salary Continuation Arrangements ” and “ Executive Compensation – Non-Qualified Deferred Compensation – Transition Credit Retirement Plan for Designated Employees” for a detailed description of these arrangements.   W e also provide our executives with a vehicle to defer a portion of their income on a non-tax-qualified basis through our cash and/or stock-based deferral plans  See “ Executive Compensation – Non-Qualified Deferred Compensation ” for a detailed description of these plans.
 
In addition to retirement programs, we provide our employees with coverage under medical, life insurance and disability plans on terms consistent with industry practice.
 
The Compensation Committee reviews our retirement programs on an annual basis with due consideration given to prevailing market practice, overall executive compensation philosophy and cost to Beneficial Bank.
 
Perquisites
 
                We   annually review the perquisites that we make available to our named executive officers. The primary perquisites for senior managers include an automobile allowance, computer and communications equipment and certain club dues.  See Footnote 4 to “Executive Compensation― Summary Compensation Table for detailed information on the perquisites provided to our named executive officers.
 
Director Compensation
 
Our outside directors are compensated through a combination of retainers, meeting fees and equity compensation.  See “ Corporate Governance and Board Matters – Director Compensation” for information on the cash compensation paid to our directors in 2009 and the non-statutory stock options and restricted stock awards granted to each director.  Directors who are also employees of Beneficial Mutual Bancorp do not receive additional compensation for service on the Board.  The level and mix of director compensation is revised by the Compensation Committee on a periodic basis to ensure consistency with the objectives of our overall compensation philosophy.
 
In addition, Beneficial Bank maintains the Trustee Emeritus Plan to ensure that the Bank and the Company will have the advice and expertise of certain members of the Board of Trustees of the Bank upon their retirement by continuing their services as Trustee Emeritus.  All trustees appointed by the Board will serve for an initial one year term.  The Board may extend the term of a Trustee Emeritus annually for an additional year.
 
 
26

 
 
Stock Compensation Grant and Award Practices; Timing Issues
 
Our Compensation Committee considers whether to make equity awards to officers and directors on an annual basis and in connection with new hires and promotions. The Compensation Committee considers the recommendations of our chief executive officer and other executive officers with respect to awards contemplated for their subordinates.  The Compensation Committee also consults with Pearl Meyer & Partners to insure our equity award program is competitive with our peer group .   The Compensation Committee is solely responsible for the development of the schedule of equity awards made to our chief executive officer and the other named executive officers.
 
As a general matter, the Compensation Committee’s process is independent of any consideration of the timing of the release of material non-public information, including with respect to the determination of grant dates or stock option exercise prices.  Similarly, we have never timed the release of material non-public information to affect the value of executive compensation.  In general, the release of such information reflects long-established timetables for the disclosure of material non-public information such as earnings reports or, with respect to other events reportable under federal securities laws, the applicable requirements of such laws with respect to timing of disclosure.  The Compensation Committee’s decisions are reviewed and ratified by the full Board of Directors.
 
The terms and conditions of each equity award are determined in accordance with the applicable provisions of our equity incentive plan.  The Compensation Committee has structured our current equity program to include the grant of non-statutory stock options, performance shares and restricted shares.  All director awards (non-statutory stock options and restricted stock awards) vest at a rate of 20% per year, beginning on the first anniversary date of the grant date of the award.  All options granted to our named executive officers vest at a rate of 20% per year commencing on the first anniversary of the grant date and  restricted stock awards vest over a 5 year period with 60% of the award vesting on the third anniversary and 20% of the award vesting each year thereafter.  All options and stock awards granted under the equity plan become 100% vested upon an award recipient’s death, disability or a change in control.   The performance share awards granted to our named executive officers vest upon the satisfaction of certain financial benchmarks determined by the Compensation Committee.   In the event we do not achieve the specified benchmarks within five years of the grant date of the performance shares, the performance requirement for vesting changes.  If neither performance benchmark is reached in year five of a performance share grant, all shares are forfeited.   All outstanding performance share awards contain performance criteria that requires the Company to achieve a return on average assets of not less than 1% within a five year measurement period.  If at the end of the five years we have not achieved the return on average assets target, the new benchmark for vesting purposes is attaining a return on average assets that is sufficient to put us in the top quartile of thrifts nationwide with assets between $1 billion and $10 billion based on return on average assets.  If we are in the top quartile, all performance shares vest.
 
In accordance with our equity plan, the Compensation Committee may grant stock options only at or above fair market value, which is defined as the closing sales price of our common stock on the Nasdaq Global Select Market on the date of grant.
 
Risk Management
 
We have implemented policies and procedures   designed to discourage our executives from taking unnecessary and excessive risks that would threaten the health and viability of Beneficial Mutual Bancorp, Inc. and its subsidiaries.   Compensation “clawback” provisions have been included in our equity award agreements and our management incentive plan.  These provisions give us the right to cancel or recoup awards in the event an employee alters, inflates or inappropriately manipulates the Company’s financial results or violates any other recognized ethical business standards.  In addition, our Compensation Committee has established procedures to insure an annual risk assessment is performed on our compensation and benefit plan programs with a focus on manipulation and fraud risks.
 
 
27

 
 
Stock Ownership Requirements
 
                We have not adopted formal stock ownership requirements for our named executive officers or Board members.  As a practical matter, our officers and directors are expected to hold meaningful interests in our stock, which they may accumulate through participation in our stock compensation programs and individual purchases.
 
Compensation for the Named Executive Officers in 2009
 
                Chief Executive Officer Compensation.     In determining Mr. Cuddy’s 2009 compensation, the Compensation Committee conducted a formal performance review and solicited input from all members of the Board of Directors.  In its review, the Compensation Committee assessed Mr. Cuddy’s performance based in part on the criteria set forth in his 2009 MIP scorecard, comments received from the Board members and Mr. Cuddy’s self assessment of his job performance.  The Compensation Committee noted that Mr. Cuddy exhibits strong leadership skills and is on target for achieving our strategic goals. Further, Mr. Cuddy continues to be a strong spokesperson for the Bank and works closely with our investors and financial analysts.  In light of the Compensation Committee’s assessment of Mr. Cuddy’s performance and in consideration the challenging economic times Mr. Cuddy’s base salary remained unchanged in 2009.  However, in November 2009, the Compensation Committee revisited Mr. Cuddy’s total compensation and in consideration of the compensation peer survey prepared and presented by Pearl Meyer & Partners, Mr. Cuddy received a 7.3% increase in his base salary effective January 1, 2010.   This adjustment to base salary puts Mr. Cuddy at the median level for base pay as compared to our peers and is in line with our overall philosophy on base pay for our named executive officers.
 
                Mr. Cuddy also received a cash incentive under the 2009 MIP.  See “ Executive Compensation – Summary Compensation Table ” for information on Mr. Cuddy’s 2009 MIP award.
 
                In addition to cash compensation, Mr. Cuddy was awarded stock options, restricted shares and performance grants on March 9, 2009 under the Company’s 2008 Equity Incentive Plan.  See “Executive Compensation― Grants of Plan-Bas ed Awards” for information on the equity awards made to Mr. Cuddy during the 2009 fiscal year.  The Compensation Committee also elected to amend and restate Mr. Cuddy’s employment agreement which extended the term of the agreement for an additional year so that the current term of the agreement continues to be two years.  See “Executive Compensation - Employment/ Management Agreements” for a detailed description of the agreement.
 
                We believe that Mr. Cuddy’s overall compensation structure is consistent with our objective to reward, align, motivate and challenge Mr. Cuddy to continue to lead our company successfully.
 
Compensation for Our Other Named Executive Officers.   In determining compensation for Messrs. Conners, Bush   and Miller and Ms. Kassekert the Compensation Committee reviewed the performance appraisals presented by Mr. Cuddy.  Based on the Company’s financial performance, each officer’s individual job performance and job responsibilities, as well as the survey data provided by Pearl Meyer & Partners, base salaries for Messrs. Conners, Bush and Miller remained unchanged in 2009 and Ms. Kassekert’s base salary was increased by 11.1%.  In addition, as a result of the satisfaction of certain individual and company performance goals, Messrs. Conners, Bush   and Miller and Ms. Kassekert each received a payout under the 2009 MIP.  See “Executive Compensation― Summary Compensation Table for the cash incentives awarded to each officer for the 2009 fiscal year.
 
 
28

 
 
In addition to cash compensation, the other named executive officers were awarded stock options, restricted shares and performance grants on March 9, 2009, under our 2008 Equity Incentive Plan .  See “Executive Compensation― Grants of Plan-Based Awards for information on the equity awards made during the 2009 fiscal year.  The Compensation Committee also elected to amend and restate each officer’s employment agreement which extended the term of the agreements for an additional year so that the current term of the agreements remain at two years.  See “Executive Compensation - Employment/ Management Agreements” for a detailed description of the agreements.
 
In addition to the equity awards granted under the our 2008 Equity Incentive Plan, Messrs. Miller and Conners each received credits in 2009 under the Beneficial Mutual Savings Bank Transition Credit Retirement Plan for Designated Employees.  See “ Executive Compensation – Non-Qualified Deferred Compensation ” for information on the credits received by Messrs. Miller and Conners under the Transition Credit Retirement Plan for Designated Employees.
 
The Compensation Committee believes that the compensation for our named executive officers is consistent with our compensation objectives and rewards the individuals for their contribution to the overall performance of Beneficial Bank and our C ompany.
 
 
29

 
 
EXECUTIVE COMPENSATION
 
Summary Compensation Table
 
The following table provides information concerning the total compensation awarded, earned or paid to the principal executive officer and principal financial officer of the Company and our three other most highly compensated executives.  These five officers are referred to as the “named executive officers” in this proxy statement.
 
Name and Principal Position
 
Year
    Salary       Bonus       Stock
Awards (1)
      Option
Awards (2)
      Non-Equity
Incentive
Plan
Compensation
      Change in
Pension Value
and
Nonqualified
Deferred
Compen-
sation
Earnings (3)
      All Other
Compen-
sation (4)
      Total  
Gerard P. Cuddy
 
2009
  $ 493,269     $     $ 125,250     $ 44,100     $ 209,000     $ 8,547     $ 74,922     $ 955,088  
President and Chief Executive
 
2008
    475,000             1,186,000       674,000       95,000       18,159       39,240       2,487,399  
Officer
 
2007
    425,000                         102,000             30,938       557,938  
                                                                     
Joseph F. Conners (6)
 
2009
    291,600             66,800       14,700       80,730       111,938       46,485       612,253  
Executive Vice President and
 
2008
    280,800       1,000       593,000       337,000       31,590       59,469       68,963       1,371,822  
Chief Financial Officer
 
2007
    269,519                         40,500       98,150       14,464       422,633  
                                                                     
Andrew J. Miller
 
2009
    291,600             66,800       14,700       66,690       116,895       47,286       603,971  
Executive Vice President and
 
2008
    280,800             593,000       337,000       45,630       72,536       69,035       1,398,001  
Chief Lending Officer
 
2007
    269,519                         40,500       96,522       14,626       421,167  
                                                                     
Robert J. Bush
 
2009
    337,920             66,800       14,700       50,700       6,954       24,408       501,482  
Executive Vice President
 
2008
    312,000       1,000       593,000       337,000       27,300       16,810       32,320       1,319,430  
   
2007
    280,957                         45,000       11,276       25,597       362,830  
                                                                     
Denise Kassekert
 
2009
    244,232             66,800       14,700       81,250             21,370       428,352  
Executive Vice President
 
2008
    192,000             593,000       252,750       45,000             9,526       1,092,276  
   
2007
    110,423  (5)                                         110,423  
 

(1)
Reflects the compensation expense recognized in accordance with FASB ASC Topic 718 on outstanding  restricted stock awards for each of the named executive officers.  The amounts were calculated based on the Company’s stock price as of the date of grant ($8.35 for 2009 restricted stock awards and $11.86 for 2008 restricted stock awards).  When shares become vested and are distributed from the trust in which they are held, the recipient will also receive an amount equal to accumulated cash and stock dividends (if any) paid with respect thereto, plus earnings thereon.
(2)
Reflects the compensation expense recognized in accordance with FASB ASC Topic 718  for outstanding stock option awards for each of the named executive officers based upon a fair value for each option using the Black-Scholes option pricing model ($2.94 for 2009 option awards and $3.37 for 2008 option awards).  The Company uses the Black-Scholes option pricing model to estimate its compensation cost for stock options awards.  For further information on the assumptions used to compute fair value, see Note 18 to the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.  The actual value, if any, realized by a named executive officer from any option will depend on the extent to which the market value of the common stock exceeds the exercise price of the option on the date the option is exercised. Accordingly, there is no assurance that the value realized by a named executive officer will be at or near the value estimated above.
(3)
Represents the actuarial change in pension value in the executives’ amounts during the years ended December 31, 2009, 2008 and 2007 under the Beneficial Mutual Savings Bank Employees’ Pension and Retirement Plan, the Beneficial Mutual Savings Bank Supplemental Pension and Retirement Plan and the life insurance portion of each executive’s salary continuation agreement.  See “Pension Benefits” below for a further discussion of these arrangements.
(4)
Details of the amounts reported in the “All Other Compensation” column for 2009 are provided in the table below.
 
   
Mr. Cuddy
   
Mr. Conners
   
Mr. Miller
   
Mr. Bush
   
Ms. Kassekert
 
Employer contributions to KSOP
  $ 33,330     $ 22,728     $ 23,290     $ 24,408     $ 21,370  
Income recognized under split-dollar  life insurance arrangements
          991       1,232              
Transition Credit Retirement Plan contribution
          22,766       22,764              
Perquisites
      41,592  (a)      (b)      (b)      (b)      (b)
 

                (a)      Includes the value of executive’s personal use of a company-owned automobile, a one time membership fee of $26,200 for a lifetime membership to the Union League of Philadelphia, as well as other club membership fees.
                (b)      Did not exceed $10,000.
(5)
While Ms. Kassekert’s base salary in 2007 was $174,000, the amount shown represents her partial year compensation from her start date on May 7, 2007.
(6)
Mr. Conners left the Company and the Bank to pursue other opportunities effective March 31, 2010.  All unvested equity awards were forfeited effective March 31, 2010.

 
30

 

  Employment/Management Agreements
 
The Company and the Bank maintain two year employment agreements with Gerard P. Cuddy, Andrew J. Miller,  Robert J. Bush and Denise Kassekert.  The employment agreements with Messrs. Cuddy, Miller and Bush were entered into effective January 7, 2008 and Ms. Kassekert entered into her agreement effective May 15, 2008.  The current base salaries under the employment agreements with Messrs. Cuddy, Miller and Bush are $510,000, $280,800 and $312,000, respectively.  Ms. Kassekert’s current base salary is $280,800.
 
In March 2009, each employment agreement was amended and restated in its entirety to permit the Company and the Bank, in their sole discretion, to renew the term of the agreements for an additional year (each year), in connection with the officer’s annual performance reviews, so that the term of the employment agreements remain at two years.  The employment agreements provide for, among other things, a minimum annual base salary, eligibility to participate in employee benefit plans and programs maintained by the Company and the Bank for the benefit of their employees, including discretionary bonuses, incentive compensation programs, participation in medical, dental, pension, profit sharing, retirement and stock-based compensation plans and certain fringe benefits applicable to executive personnel. The employment agreements also contain a provision that prohibits an executive from competing with the Company or the Bank in the event the executive’s employment is terminated  for reasons other than a change in control.
 
In addition to his employment agreement with the Company and the Bank, the Bank and Beneficial Insurance Services, LLC entered into a Senior Management Agreement with Robert J. Bush in connection with Beneficial Insurance Services, LLC’s acquisition of Paul Hertel & Co. in 2005.  The agreement provides that Mr. Bush is an at will employee of Beneficial Insurance Services, LLC and subject to non-compete and non-solicitation restrictions similar to those provided for in Mr. Bush’s employment agreement with the Company and the Bank.  The non-competition restrictions will expire two years following Mr. Bush’s termination of employment and the non-solicitation restrictions will expire five years following his termination of employment.
 
See “Potential Post-Termination Payments” for a discussion of the benefits and payments each executive may receive under the employment or management agreement upon termination of employment.
 
 
31

 

Grants of Plan Based Awards
 
2008 Equity Incentive Plan.   The following table provides information concerning all restricted stock and stock option awards granted to the named executive officers in 2009 under the Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan.  All stock options awarded in 2009 were granted as non-statutory stock options.
 
Name
 
Grant Date
 
Number of Shares
of Stock or
Units (1)
   
Number of Securities
Underlying
Options (2)
   
Exercise or
Base Price of
Option Awards
   
Grant Date Fair
Value of Stock
Awards and
Options (3)
 
                             
Gerard P. Cuddy                             
 
03/09/2009
    15,000       15,000     $ 8.35     $ 169,350  
Joseph F. Conners (4)
 
03/09/2009
    8,000       5,000       8.35       81,500  
Andrew J. Miller                             
 
03/09/2009
    8,000       5,000       8.35       81,500  
Robert J. Bush                             
 
03/09/2009
    8,000       5,000       8.35       81,500  
Denise Kassekert                             
 
03/09/2009
    8,000       5,000       8.35       81,500  
 

(1)
For Mr. Cuddy, restricted shares vest according to the following schedule: (1) 7,500 shares are subject to a three-year cliff vesting schedule whereby no shares vest on the first and second anniversaries of the award; 60% of the shares vest on the third anniversary of the award; and thereafter 20% of the shares each vest on the fourth and fifth anniversaries of the award; and (2) 7,500 shares will vest if certain specified performance requirements are met during the performance measurement period beginning with the twelve months ended December 31, 2010 and ending with the twelve months ended December 31, 2014.  For all other named executive officers, restricted shares vest according to the following schedule: (1) 4,000 shares are subject to a three-year cliff vesting schedule whereby no shares vest on the first and second anniversaries of the award; 60% of the shares vest on the third anniversary of the award; and thereafter 20% of the shares each vest on the fourth and fifth anniversaries of the award; and (2) 4,000 shares will vest if certain specified performance requirements are met during the performance measurement period beginning with the twelve months ended December 31, 2010 and ending with the twelve months ended December 31, 2014.
(2)
Options vest in five equal annual installments beginning on the first anniversary of the date of grant.
(3)
Sets forth the grant date fair value of stock and option awards calculated in accordance with FASB ASC Topic 718.  The grant date fair value of all stock awards is equal to the number of awards multiplied by $8.35, the closing price for the Company’s common stock on the date of grant.  The grant date fair value for option awards is equal to the number of options  multiplied by a fair value of $2.94, which was computed using the Black-Scholes option pricing model. For further information on the assumptions used to compute fair value, see Note 18 to the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
(4)
Mr. Conners left the Company and the Bank to pursue other opportunities effective March 31, 2010.  All unvested equity awards were forfeited effective March 31, 2010.
 
The Company maintains the 2008 Equity Incentive Plan to further its commitment to performance-based compensation and to provide participants with an opportunity to have an equity interest in the Company.  The plan is administered by the Company’s Compensation Committee.  The Compensation Committee has the authority to grant stock options, restricted stock awards and performance shares to officers and directors of the Company and the Bank.  Additional information on the Company’s 2008 Equity Incentive Plan is set forth in the “Compensation Discussion and Analysis” section of this proxy statement.
 
In March 2010, the Compensation Committee awarded Mr. Cuddy a non-statutory stock option for 15,000 shares of Beneficial Mutual Bancorp, Inc. common stock, a restricted stock award for 7,500 shares of Beneficial Mutual Bancorp, Inc. common stock and a performance share award for 7,500 shares of Beneficial Mutual Bancorp, Inc. common stock.  The other named executive officers each received a non-statutory stock option for 5,000 shares of Beneficial Mutual Bancorp, Inc. common stock, a restricted stock award for 4,000 shares of Beneficial Mutual Bancorp, Inc. common stock and a performance share award for 4,000 shares of Beneficial Mutual Bancorp, Inc common stock.  The March 2010 equity awards to the named executive officers vest under the same terms and conditions as the March 2009 equity awards.

 
32

 

Management Incentive Plan.   The following table sets forth the threshold, target and maximum award that may be earned by each named executive officer under our 2009 Management Incentive Plan.  See “Compensation Discussion and Analysis—Management Incentive Plan” for detailed information on the Company and individual performance measures that must be achieved in order for a named executive officer to receive an award under the plan.
 
       
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards (1)
 
Name
 
Date of
Corporate
Approval
 
Threshold
($)
   
Target
($)
   
Maximum
($)
 
                       
Gerard P. Cuddy
 
03/09/2009
  $ 95,000     $ 190,000     $ 285,000  
                             
Joseph F. Conners
 
03/09/2009
    35,100       70,200       105,300  
                             
Andrew J. Miller
 
03/09/2009
    35,100       70,200       105,300  
                             
Robert J. Bush
 
03/09/2009
    39,000       78,000       117,000  
                             
Denise Kassekert
 
03/09/2009
    31,250       62,500       93,750  


(1)
The “Summary Compensation Table” shows the actual awards earned by our named executive officers under the 2009 Management Incentive Plan.
 
The 2009 Management Incentive Plan is designed to recognize and reward executives for their individual and collective contributions to the success of the Bank.  The plan focuses on performance measures that are critical to the profitability and growth of the Bank. See “Compensation Discussion and Analysis—Management Incentive Plan” for detailed information on the plan and the Company and individual performance measures used by the Compensation Committee to determine payouts under the 2009 Management Incentive Plan.
 
 
33

 

Outstanding Equity Awards at Fiscal Year End
 
The following table provides information concerning unexercised options and stock awards that have not vested for each named executive officer outstanding as of December 31, 2009.
 
   
Number of
   
Number of
                     
   
Securities
   
Securities
                     
   
Underlying
   
Underlying
           
Number of
   
Market Value of
 
   
Unexercised
   
Unexercised
       
Option
 
Shares or Units
   
Shares or Units of
 
   
Options
   
Options
   
Option Exercise
 
Expiration
 
of Stock That
   
Stock That Have
 
Name
 
Exercisable
   
Unexercisable (1)
   
Price
 
Date
 
Have Not Vested
   
Not Vested (4)
 
                                           
Gerard P. Cuddy
    40,000       160,000     $ 11.86  
08/06/2018
    100,000  (2)   $ 984,000  
            15,000       8.35  
03/09/2019
    15,000  (3)     147,600  
Joseph F. Conners (5)
    20,000       80,000     $ 11.86  
08/06/2018
    50,000  (2)     492,000  
            5,000       8.35  
03/09/2019
    8,000  (3)     78,720  
Andrew J. Miller
    20,000       80,000     $ 11.86  
08/06/2018
    50,000  (2)     492,000  
            5,000       8.35  
03/09/2019
    8,000  (3)     78,720  
Robert J. Bush
    20,000       80,000     $ 11.86  
08/06/2018
    50,000  (2)     492,000