UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.       )


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Prudential Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
 
 
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December 30, 2014


January 8, 2016


Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of Prudential Bancorp, Inc.  The meeting will be held at the Holiday Inn – Philadelphia Stadium,Prudential Savings Bank's main office located at 900 Packer1834 West Oregon Avenue, Philadelphia, Pennsylvania, on Monday,Tuesday, February 9, 201516, 2016 at 11:00 a.m., Eastern Time.

The Board of Directors unanimously recommends a vote "FOR" election of our twothree nominees for director for a three-year term expiring in 2019 and one nominee for a two-year term expiring in 2018, "FOR" the approvalnon-binding resolution to approve the compensation of the Prudential Bancorp, Inc. 2014 Stock Incentive Planour named executive officers and "FOR" ratification of the appointment of S.R. Snodgrass, P.C. as our independent registered public accounting firm for the fiscal year ending September 30, 2015.2016.  Each of these matters is more fully described in the accompanying materials.

It is very important that you be represented at the annual meeting regardless of the number of shares you own or whether you are able to attend the meeting in person.  We urge you to mark, sign, and date your proxy card today and return it in the envelope provided or vote over the Internet or by telephone, if available, even if you plan to attend the annual meeting.  This will not prevent you from voting in person, but will ensure that your vote is counted if you are unable to attend.

Your continued support of and interest in Prudential Bancorp, Inc. is sincerely appreciated.

Very truly yours,
Thomas A. Vento
Chairman, President and Chief Executive Officer
                                                                                                       
                                                                                                            Joseph R. Corrato
                                    President and Chief Executive Officer

 
PRUDENTIAL BANCORP, INC.
1834 West Oregon Avenue
Philadelphia, Pennsylvania 19145
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME
11:00 a.m., Eastern Time, Monday,Tuesday, February 9, 201516, 2016
PLACE
Holiday Inn - Philadelphia StadiumPrudential Savings Bank
900 Packer1834 West Oregon Avenue
Philadelphia, Pennsylvania
ITEMS OF BUSINESS
  
(1)To elect twothree directors for a three-year term and one director for a two-year term and in each case until
           their successors are elected and qualified;
(2)To approveadopt a non-binding resolution approving the Prudential Bancorp, Inc. 2014 Stock Incentive Plan;compensation of our named executive officers;
(3)To ratify the appointment of S.R. Snodgrass, P.C. as our independent registered public accounting firm for
           the fiscal
year ending September 30, 2015;2016; and
(4)To transact such other business as may properly come before the meeting or at any adjournment thereof. 
We are not
aware of any other such business.
RECORD DATE
Holders of Prudential Bancorp common stock of record at the close of business on December 19, 201418, 2015 are entitled to vote at the meeting.
ANNUAL REPORT
Our 20142015 Annual Report to Shareholders is enclosed but is not a part of the proxy solicitation materials.
 
PROXY VOTING
  
It is important that your shares be represented and voted at the meeting.  You are urged to vote your shares by completing and returning the proxy card sent to you.  Most shareholders can also vote their shares over the Internet or by telephone.  If Internet or telephone voting is available to you, voting instructions are printed on your proxy card or voting instruction form.  You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement.
 
 
BY ORDER OF THE BOARD OF DIRECTORS
Philadelphia, Pennsylvania
December 30, 2014
January 8, 2016
 
TABLE OF CONTENTS
 Page
About the Annual Meeting of Shareholders 
1
Information with Respect to Nominees for Director, Continuing Directors and Executive Officers3
Election of Directors (Proposal One)                                                                        
3
Members of the Board of Directors Continuing in Office  
56
Committees and Meetings of the Board of Directors                                                                  
7
Board Leadership Structure                                                           
8
Board's Role in Risk Oversight                                                     
8
Directors' Attendance at Annual Meetings                                                                                      
8
Directors' Compensation                                                          
8
Compensation Committee Interlocks and Insider Participation               
9
Director Nominations                               
9
Executive Officers Who Are Not Also Directors                                      
 10
Report of the Audit Committee                                                              
 11
Management Compensation                                         
 1211
Compensation Discussion and Analysis
 11
Compensation Policies and Practices as They Relate to Management
 21
Report of the Compensation Committee
 22
Summary Compensation Table                                                           
 1223
Narrative to SummaryEquity Compensation TablePlans                                               
 1224
Outstanding Equity Awards at Fiscal Year-End
 13
Employment and Change in Control Agreements                                                     
 1326
Potential Payments upon Termination of Employment or a Change in Control
 27
Benefit Plans                         
 1430
Related Party Transactions                                
 1531
Proposal to ApproveAdopt a Non-Binding Resolution Approving the Prudential Bancorp, Inc. 2014 Stock Incentive PlanCompensation of our Named Executive Officers (Proposal Two)      
 1633
Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management 2234
Section 16(a) Beneficial Ownership Reporting Compliance                                           
 2436
Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal Three) 2437
Audit Fees                                       
 2437
Shareholder Proposals, Nominations and Communications with the Board of Directors 2538
Annual Reports                                                                                   
 2638
Other Matters  
 26
Appendix A – Prudential Bancorp, Inc. 2014 Stock Incentive Plan
   A-1
 MEETING DIRECTIONS 39
 
MEETING DIRECTIONS
From Points North and East:From Points West:From Points South:
Take I-76 West toward Camden/
Philadelphia
Take exit 350 – Seventh Street
     toward Packer Avenue349 PA 611
Turn right on PackerBroad Street
Turn left on West Oregon Avenue
End at 900 Packer1834 West Oregon Avenue
Take I-76 East/Schuykill Expressway  East
Take exit 350 – Seventh Street toward
     Packer347B Oregon/Passyunk Avenue
Turn slight right on PackerWest Oregon Avenue
End at 900 Packer1834 West Oregon Avenue
Take I-95 North
Take exit 17-SR611 North/S. Broad13 PA 291, keep left to take PA
291 East ramp (Penrose Avenue)
Turn left on South 20th Street toward Pattison Ave.
Turn right on PackerWest Oregon Avenue
End at 900 Packer1834 West Oregon Avenue
 
PROXY STATEMENT
OF
PRUDENTIAL BANCORP, INC.

_____________________


ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

General.  This proxy statement is furnished to holders of common stock of Prudential Bancorp, Inc., referred to as the "Company" or "Prudential Bancorp," the parent holding company of Prudential Savings Bank.Bank, referred to as "Prudential Savings" or the "Bank."  Our Board of Directors is soliciting proxies to be used at the Annual Meeting of Shareholders to be held at the Holiday Inn – Philadelphia Stadium,main office of Prudential Savings Bank, located at 900 Packer1834 West Oregon Avenue, Philadelphia, Pennsylvania, on Monday,Tuesday, February 9, 201516, 2016 at 11:00 a.m., Eastern Time, and any adjournment thereof, for the purposes set forth in the attached Notice of Annual Meeting of Shareholders.  This proxy statement is first being mailed to shareholders on or about December 30, 2014.January 8, 2016.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on February 9, 2015.16, 2016.  This proxy statement and our 20142015 Annual Report on Form10-KForm 10-K are available through our website at www.prudentialsavingsbank.com under the "Investor Relations" Quick Link.

What is the purpose of the annual meeting?

At our annual meeting, shareholders will act upon the matters outlined in the attached notice of meeting consisting of the proposals to:

·●elect twothree directors for a three-year term expiring in 2019 and one director for a two-year term ending in 2018;
·●approvaladopt a non-binding resolution approving the compensation of the Prudential Bancorp, Inc. 2014 Stock Incentive Plan;our named executive officers; and
·●ratify the appointment of S.R. Snodgrass, P.C. as our independent registered public accounting firm for the fiscal year ending September 30, 2015.2016.

In addition, management may report on the performance of Prudential Bancorp and respond to questions from shareholders.

Who is entitled to vote?

Only our shareholders of record as of the close of business on the record date for the annual meeting, December 19, 2014,18, 2015, are entitled to vote at the meeting. On the record date, we had 9,366,9098,397,625 shares of common stock issued and outstanding and no other class of equity securities outstanding.  For each issued and outstanding share of common stock you own on the record date, you will be entitled to one vote on each matter to be voted on at the meeting, in person or by proxy.

How do I submit my proxy?

After you have carefully read this proxy statement, indicate on your proxy form how you want your shares to be voted.  Then sign, date and mail your proxy form in the enclosed prepaid return envelope as soon as possible.  You may also vote over the Internet or by telephone by following the instructions on your proxy card or voting instruction form. This will enable your shares to be represented and voted at the annual meeting.
 
1
If my shares are held in "street name" by my broker, could my broker automatically vote my shares?

Your broker may not vote on the election of directors or approvalthe proposal to adopt the non-binding resolution approving the compensation of the Prudential Bancorp, Inc. 2014 Stock Incentive Planour named executive officers if you do not furnish instructions for each of such proposals.  You should use the voting instruction form or broker card provided by the institution that holds your shares to instruct your broker to vote your shares or else your shares will be considered "broker non-votes."

Broker non-votes are shares held by brokers or nominees as to which voting instructions have not been received from the beneficial owners or the persons entitled to vote those shares and the broker or nominee does not have discretionary voting power under rules applicable to broker-dealers. Under these rules, proposal one, the election of directors, and proposal two, the approvaladoption of the Prudential Bancorp, Inc. 2014 Stock Incentive Plan,non-binding resolution approving the compensation of our named executive officers, are not items on which brokerage firms may vote in their discretion on behalf of their clients if such clients have not furnished voting instructions.

Your broker may vote in his or her discretion on the ratification of the appointment of our independent registered public accounting firm if you do not furnish instructions.

Can I attend the meeting and vote my shares in person?

All shareholders are invited to attend the annual meeting.  Shareholders of record can vote in person at the annual meeting.  If your shares are held in "street name," then you are not the shareholder of record and you must ask your broker or other nominee about how you can vote at the annual meeting.

Can I change my vote after I return my proxy card?

Yes.  If you are a shareholder of record, there are three ways you can change your vote or revoke your proxy after you have sent in your proxy card.

First, you may complete and submit a new proxy card or vote over the Internet or by telephone before the annual meeting.  Any earlier proxies will be revoked automatically.
●First, you may complete and submit a new proxy card or vote over the Internet or by telephone before the annual meeting.  Any earlier proxies will be revoked automatically.

Second, you may send a written notice to our Corporate Secretary, Ms. Regina Wilson, Prudential Bancorp, Inc., 1834 West Oregon Avenue, Philadelphia, Pennsylvania 19145, in advance of the annual meeting stating that you would like to revoke your proxy.
●Second, you may send a written notice to our Corporate Secretary, Ms. Regina Wilson, Prudential Bancorp, Inc., 1834 West Oregon Avenue, Philadelphia, Pennsylvania 19145, in advance of the annual meeting stating that you would like to revoke your proxy.

Third, you may attend the annual meeting and vote in person.  Any earlier proxy will be revoked.  However, attending the annual meeting without voting in person will not revoke your proxy.
●Third, you may attend the annual meeting and vote in person.  Any earlier proxy will be revoked.  However, attending the annual meeting without voting in person will not revoke your proxy.

If your shares are held in street name and you have instructed a broker or other nominee to vote your shares, you must follow directions you receive from your broker or other nominee on how to change your vote.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of a majority of votes that all shareholders are entitled to cast on a particular matter will constitute a quorum.  Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of votes considered to be present at the meeting.
 

2
What are the Board of Directors' recommendations?

The recommendations of the Board of Directors are set forth under the description of each proposal in this proxy statement.  In summary, the Board of Directors recommends that you vote FOR the nominees for director described herein, FOR approval of the Prudential Bancorp, Inc. 2014 Stock Incentive Plannon-binding resolution to approve the compensation of our named executive officers and FOR ratification of the appointment of S.R. Snodgrass, P.C. as our independent registered public accounting firm for the fiscal year ending September 30, 2015.2016.

The proxy solicited hereby, if properly signed and returned to us and not revoked prior to its use, will be voted in accordance with your instructions.  If no contrary instructions are given, each proxy signed and received will be voted in the manner recommended by the Board of Directors and, upon the transaction of such other business as may properly come before the meeting, in accordance with the best judgment of the persons appointed as proxies. Proxies solicited hereby may be exercised only at the annual meeting and any adjournment of the annual meeting and will not be used for any other meeting.

What vote is required to approve each item?

The election of directors will be determined by a plurality of the votes cast at the annual meeting.  The twofour nominees for director receiving the most "For" votes will be elected directors for a three-year term expiring in 2019, with respect to the three nominees for the three-year term, and a director for a two-year term expiring in 2018, with respect to the one nominee for the two-year term, and until their successors are elected and qualified.  The affirmative vote of a majority of the votes cast by shareholders entitled to vote at the annual meeting is required for approval of the proposals to approveadopt the Prudential Bancorp, Inc. 2014 Stock Incentive Plannon-binding resolution approving the compensation of our named executive officers and to ratify the appointment of S.R. Snodgrass, P.C. as our independent registered public accounting firm for the fiscal year ending September 30, 2015.2016. Under the Pennsylvania Business Corporation Law, abstentions and broker non-votes do not constitute votes cast and will not affect the vote required for the proposals to approve the 2014 Stock Incentive Plan and to ratify the appointment of the independent registered public accounting firm.

INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS

Election of Directors (Proposal One)

Our Articles of Incorporation provide that the Board of Directors shall be divided into three classes as nearly equal in number as possible.  The directors are elected by our shareholders for staggered terms and until their successors are elected and qualified.  OneGenerally, one class is elected annually. At this annual meeting, you will be asked to elect twothree directors for a three-year term expiring in 2019 and one director for a two-year ending in 2018, and until their successors are elected and qualified.qualified in order to comply with the requirement set forth in the Articles that the classes be nearly equal in number as possible.  The need for the re-balancing of the classes was the result of the retirement of a director who was serving in the class of directors whose terms ended in 2018.

Our Nominating and Corporate Governance Committee has recommended the re-election of Messrs. VentoBalka, Fanelli, Pollack and HosierMiller as directors.  No director is related to any other director or executive officer by blood, marriage or adoption.  Shareholders are not permitted to use cumulative voting for the election of directors.  Our Board of Directors has determined that Messrs. Fanelli, Hosier, Miller, Mulcahy and Pollack are independent directors as defined in the Nasdaq Stock Market listing standards.

3
Unless otherwise directed, each proxy signed and returned by a shareholder will be voted for the election of the nominees for director listed below.  If any person named as a nominee should be unable or unwilling to stand for election at the time of the annual meeting, the proxies will nominate and vote for any replacement nominee or nominees recommended by our Board of Directors.  At this time, the Board of Directors knows of no reason why either of the nominees may not be able to serve as a director if elected.

3
Mr. Dennis Pollack was initially appointed to the Board of Directors in the class of directors whose term expires at thethis annual meeting of shareholders to be held in 2016 pursuant to an agreement entered into on August 29, 2014 with Seidman and Associates L.L.C., Seidman Investment Partnership, L.P., Seidman Investment Partnership II, L.P., Seidman Investment Partnership III, L.P., LSBK06-08, Broad Park Investors, CBPS, L.L.C., 2514 Multi-Strategy Fund, L.P., Veteri Place Corporation, Ms. Sonia Seidman, Mr. Lawrence B. Seidman and Mr. Pollack (collectively, the "Seidman Group"). Pursuant to the Agreement, Mr. Pollack was also appointed to the Board of Directors of Prudential Savings Bank for a similar term. Mr. Pollack's nomination to be re-elected to the Board of Directors was not pursuant to any arrangement or agreement.

During the term of the Agreement, which is scheduled to continue through the date of the Prudential Bancorp's Annual Meetingthis annual meeting of Shareholdersshareholders held in 2016, the Seidman Group will not, among other things, solicit proxies in opposition to any recommendations or proposals of Prudential Bancorp's Board of Directors, initiate or solicit shareholder proposals or seek to place any additional representatives on our Board of Directors other than Mr. Pollack (or any replacement director), oppose any proposal or director nomination submitted by the Board of Directors to our shareholders, vote for any nominee to our Board of Directors other than those nominated or supported by the Board of Directors, seek to exercise any control or influence over the management of Prudential Bancorp or the Boards of Directors of Prudential Bancorp or Prudential Savings Bank (although nothing in the Agreement prevents Mr. Pollack, from expressing his views to other members of the Board at duly convened meetings of the Boards of Directors), propose or seek to effect a merger or sale of Prudential Bancorp or initiate litigation against Prudential Bancorp. In addition, during the term of the Agreement, the Seidman Group has agreed to vote in favor of the Board of Directors' nominees for election or re-election as directors of Prudential Bancorp. The Seidman Group agreed also to vote in favor of the Prudential Bancorp, Inc. 2014 Stock Incentive Plan.
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4
The following tables present information concerning our nominees for director and our continuing directors, all of whom also serve as directors of Prudential Savings Bank.  For Messrs.Mr. Balka, and Vento, the indicated period of service as a director includes service as a director of Prudential Savings Bank prior to the organization of the predecessor to Prudential Bancorp in 2004. Ages are reflected as of September 30, 2014.2015.

Nominees for Director for Three-Year Terms Expiring in 20182019

Name
Age and Position with Prudential Bancorp and
Principal Occupation During the Past Five Years
Director
Since
Thomas A. Vento
Director.  Chairman of the Board of Prudential Bancorp and Prudential Savings Bank since January 1, 2013.  President and Chief Executive Officer of Prudential Bancorp since 2004; President of Prudential Savings Bank since 1992 and President and Chief Executive Officer since 1993.
Mr. Vento's service to Prudential Savings Bank in various management capacities and as President since 1992 provide him with significant management expertise as well as extensive knowledge of the local market area for financial institutions which he brings to the Board of Directors. Age 80.
1992
John C. Hosier
Director.  Commercial Lines Account Executive with Montgomery Insurance Services, Inc., Media, Pennsylvania since 1986, and Commercial Lines Manager of its affiliate, Allman and Company, Inc., Fort Washington, Pennsylvania since 2007, two full-service insurance agencies.
Mr. Hosier brings significant commercial business experience as well as knowledge of the local insurance market to the Board of Directors. Age 50.
2009

The Board of Directors recommends that you vote FOR election of
our nominees for director.

Members of the Board of Directors Continuing in Office

Directors Whose Terms Expire in 2016
Name
Age and Position with Prudential Bancorp and
Principal Occupation During the Past Five Years
Director
Since
Jerome R. Balka, Esq.
Director.  SolicitorGeneral Counsel of Prudential Savings Bank.Savings.  Partner, Reger, Rizzo & Darnall LLP, a law firm, Philadelphia, Pennsylvania, since April 2015; previously partner at Balka & Balka, a law firm, Philadelphia, Pennsylvania. Former presidentPresident of Constitution Abstract Co., Inc., a title insurance agency,company, Philadelphia, Pennsylvania, from September 2009 to November 2012.
 
Mr. Balka serves as Prudential Savings Bank'sSavings' solicitor and brings substantial legal expertise, particularly with respect to real estate transactions, to the Board of Directors. Age 85.86.
2000
 
5
Directors Whose Terms Expire in 2016 (continued)
Name
A. J. Fanelli
Director.  Self-employed owner of a public accounting practice, Philadelphia, Pennsylvania.
 
Mr. Fanelli brings substantial accounting knowledge to the Board of Directors as Chairman of the Audit Committee. Age and Position with Prudential Bancorp and
Principal Occupation During the Past Five Years78.
Director
Since
2005
Dennis Pollack
Director. Chairman of the Board, Presilient Worldwide, Denver, Colorado, an information technology managed backup and infrastructure service provider, since 2011;2011. Director, SI Financial Group, Inc. Willimantic, Connecticut, and its wholly owned subsidiary, Savings Institute Bank and Trust Company, since February 2015; previously served as a director of TF Financial, Inc., Newtown, Pennsylvania, from January 2012 until October 2014;2013; also served as Chief Operating Officer of Paulson & Co., New York, New York, a hedge fund, from 2003-2006 and as President and Chief Executive Officer of the Connecticut Bank of Commerce from 1997-2000 as well as The Savings Bank of Rockland County from 1989-1996.
 
Mr. Pollack brings to the Board the benefit of his substantial experience as president, chief executive officer and director of community banking organizations as well as significant knowledge of community bank lending. Age 64.
65.
2014
A. J. Fanelli
Nominee for Director for Two-Year Term Expiring in 2018
Bruce E. Miller
Director. Self-employed ownerPresident, Imaging Management Associates, operator of a public accounting practice,five magnetic resonance imaging centers located in Philadelphia, Pennsylvania.Pennsylvania and Chester and Delaware Counties, Pennsylvania since 2000.
 
Mr. FanelliMiller brings substantial accounting knowledgesignificant business experience to the Board as a result of Directorshis successful operation of a number of small businesses as Chairmanwell as extensive knowledge of the Audit Committee.local market area in which the Bank operates. Age 77.54.
20052013
The Board of Directors recommends that you vote FOR election of
our nominees for director.
5
Members of the Board of Directors Continuing in Office

Name
Directors Whose Terms Expire in 2017
 
Age and Position with Prudential Bancorp and
Principal Occupation During the Past Five Years
Director
Since
Joseph R. Corrato
Director. President of Prudential Bancorp and Prudential Savings since July 1, 2015 and President and Chief Executive Officer of Prudential Bancorp and Prudential Savings since October 1, 2015; previously, Executive Vice President and Chief Financial Officer of Prudential Bancorp sincefrom 2004 until June 30, 2015 and of Prudential Savings Bank since 1997.from 1997 until June 30, 2015.  Mr. Corrato joined Prudential Savings Bank in 1978 and served in a variety of positions including Treasurer and Controller prior to becoming Executive Vice President in 1997.
 
Mr. Corrato brings the benefit to the Board of Directors of both his extensive financial knowledge as well as his significant management expertise developed through his service with Prudential Savings Bank for more than 30 years.  Age 53.
54.
2011
Bruce E. Miller
Director. Owner of six magnetic resonance imaging centers located in Philadelphia, Pennsylvania and Delaware County, Pennsylvania since 2000; Managing Member, Chester County Open MRI, LLC, since January 2014.
Mr. Miller brings significant business experience to the Board as a result of his successful operation of a number of small businesses as well as extensive knowledge of the local market area in which the Bank operates. Age 53.
2013
Francis V. Mulcahy
Director.  Residential real estate appraiser and broker, Media, Pennsylvania.
 
Mr. Mulcahy brings substantial knowledge of the local real estate market to the Board of Directors. Age 81.82.
2005

Name
Directors Whose Terms Expire in 2018
Age and Position with Prudential Bancorp and
Principal Occupation During the Past Five Years
Director
Since
John C. Hosier
Director.  Commercial Lines Account Executive with Montgomery Insurance Services, Inc., Media, Pennsylvania since 1986, and Commercial Lines Manager of its affiliate, Allman and Company, Inc., Fort Washington, Pennsylvania since 2007, two full-service insurance agencies.
Mr. Hosier brings significant commercial business experience as well as knowledge of the local insurance market to the Board of Directors. Age 51.
2009
 
 
 

6
Committees and Meetings of the Board of Directors

During the fiscal year ended September 30, 2014,2015, the Board of Directors of Prudential Bancorp met 1517 times, including special meetings. No director of Prudential Bancorp attended fewer than 75% of the aggregate of the total number of Board meetings held during the period for which he has been a director and the total number of meetings held by all committees of the Board on which he served during the periods that he served.

Membership on Certain Board Committees.  The Board of Directors of Prudential Bancorp has established an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.  Each of the committees operates in accordance with a written charter which is available on our website at www.prudentialsavingsbank.com.  The following table sets forth the membership of such committees as of the date of this proxy statement.

Directors
 
Nominating
and Corporate
Governance
Compensation
 
Compensation
Audit
A. J. Fanelli
 ** * **        **
John C. Hosier
 * * *
Bruce E. Miller
 * * *
Francis V. Mulcahy
 * **  ** *
Dennis Pollack
     *
___________________
*        Member
**      Chairman

Audit Committee.  The Audit Committee reviews with management and the independent registered public accounting firm the systems of internal control, reviews the annual financial statements, including the Annual Report on Form 10-K, and monitors Prudential Bancorp's adherence in accounting and financial reporting to generally accepted accounting principles.  The Audit Committee is comprised of five directors, each of whom is an independent director as defined in the Nasdaq Stock Market listing standards and the rules and regulations of the Securities and Exchange Commission.  The Board of Directors has determined that none of the members of the Audit Committee meet the definition of Audit Committee financial expert, as such term is defined in the rules of the Securities and Exchange Commission.  However, we believe it is important to note that while no one individual member of the Audit Committee has been determined to meet the technical requirements to be an Audit Committee financial expert, each of the members has had significant involvement in financial matters. The Audit Committee met eight11 times in fiscal 2014.2015.

Compensation Committee.  It is the responsibility of the Compensation Committee of the Board of Directors to, among other things, oversee Prudential Bancorp's compensation and incentive arrangements for management.  No member of the Compensation Committee is a current or former officer or employee of Prudential Bancorp, Prudential Savings Bank or any subsidiary and all members are independent as defined in the Nasdaq Stock Market listing standards.  Each of the members is independent as defined in the Nasdaq Stock Market listing standards.  The Compensation Committee held nineeight meetings in fiscal 20142015 to consider management compensation matters.

Nominating and Corporate Governance Committee.  The Nominating and Corporate Governance Committee reviews and makes nominations for the Board of Directors, which are then sent to the full Board of Directors for their ratification.  Each of the members is independent as defined in the Nasdaq Stock Market listing standards.  The Nominating and Corporate Governance Committee met twiceonce in fiscal 2014.2015.
 
 
 
7
Board Leadership Structure

Mr. VentoJoseph R. Corrato serves as the Chairman, President and Chief Executive Officer of Prudential Bancorp as well as Prudential Savings Bank.  The Board of Directors of Prudential Bancorp has determined that the appointment of our President and Chief Executive Officer and Mr. Bruce E. Miller serves as Chairman of the Board.  The board of directors has determined that that separation of the offices of Chairman of the Board and President enhances board independence and oversight.  Further, the separation of the Chairman of the Board of Prudential Bancorp promotes a unity of vision for Prudential Bancorp as it continues to implement its strategic goals.  In addition,permits the President and Chief Executive Officer isto better focus on his responsibilities on managing the director most familiar withdaily operations of the Company, enhancing shareholder value and expanding and strengthening our business and operations and is best situatedfranchise while allowing the Chairman to lead discussions on important matters affecting the businessboard of Prudential Bancorp. By combiningdirectors in its fundamental role of providing independent oversight and advice to management.  Mr. Miller is an independent director under the President and Chief Executive Officer and Chairman positions, the Board believes there is a firm link between management and the Board which promotes the development and implementation of our corporate strategy and goals. The Board is awarerules of the potential conflicts that may arise when an insider chairs the Board, but believes these will be limited by existing safeguards which include the fact that as a bank holding company, the operations of Prudential Bancorp are highly regulated.Nasdaq Stock Market.

Board's Role in Risk Oversight

Risk is inherent with every business, particularly financial institutions. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputational risk.  Management is responsible for the day-to-day management of the risks that Prudential Bancorp faces, while the Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management.  In its risk oversight role, the Board of Directors ensures that the risk management processes designed and implemented by management are adequate and functioning as designed.

TwoOne of our current senior executive officers, Messrs.Mr. Corrato, and Vento, serve on our Board of Directors.  Other members of our senior management regularly attend meetings of the Board of Directors and are available to address any questions or concerns raised by the Board of Directors on risk management or other matters.  Prudential Savings Bank has established an Asset-Liability Committee, a Loan Quality Committee and an Investment Committee composed of members of senior management, including Messrs. Corrato and Vento.Mr. Corrato.  The independent directors work together to provide strong, independent oversight of Prudential Bancorp's management and affairs.

Directors' Attendance at Annual Meetings

Directors are expected to attend the Annual Meeting of Shareholders absent a valid reason for not doing so. All but one of our directors, (other than Mr. Pollack who was nothad a director at such time)valid reason, attended the Annual Meeting of Shareholders held in February 2014.2015.

Directors' Compensation

The following table sets forth certain information regarding the compensation paid to our non-employee directors during fiscal year 2014.2015.
 
Name 
Fees Earned or Paid in Cash
  
Stock
Awards
  
Option
Awards(1)
  All Other Compensation(2)  Total 
Jerome R. Balka, Esq. $35,997  $--  $--  $131, 974  $167,971 
A. J. Fanelli                                          
  62,200   --   --   --   62,200 
John C. Hosier                                          
  54,900   --   --   --   54,900 
Bruce E. Miller                                          
  51,300   --   62,321   --   113,621 
Francis V. Mulcahy                                          
  60,600   --   --   --   60,600 
Dennis Pollack (3)                                          
  --   --   --   --   -- 
(footnotes on following page)
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Name 
Fees Earned or
Paid in Cash
  
Stock
Awards(1)
  
Option
Awards(1)
  All Other Compensation(2)  Total 
Jerome R. Balka, Esq. $39,400  $122,300  $137,400  $38,863  $337,963 
A. J. Fanelli                                          
  69,200   122,300   137,400   --   328,900 
John C. Hosier                                          
  61,900   122,300   137,400   --   321,600 
Bruce E. Miller                                          
  60,100   122,300   137,400   --   319,800 
Francis V. Mulcahy                                          
  67,600   122,300   137,400   --   327,300 
Dennis Pollack                                          
  39,550   122,300   137,400   --   299,250 
__________________
(1)Represents the aggregate grant date fair value of the restricted stock and options granted to non-employee directors pursuant to the 2014 Stock Incentive Plan ("2014 SIP"). Each non-employee director was granted 10,000 shares of restricted stock and options to purchase 13,34530,000 shares granted to Mr. Miller withof common stock at an exercise price of $10.68$12.23 per share. The optionoptions and restricted stock vests pro rata over five years commencing on the first anniversary of the date of grant on January 6, 2014.February 18, 2015.

(2)Represents for Mr. Balka his annual retainer of $60,375 as solicitor of Prudential Savings Bank and $71,599$38,863 paid to him for additional legal services.services provided to the Bank.

(3)Mr. Pollack was appointed to the Board in November 2014 and thus did not receive any compensation during fiscal 2014.

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We do not pay separate compensation to directors for their service on the Board of Directors of Prudential Bancorp.  For fiscal 2014,2015, members of Prudential Savings Bank'sSavings' Board of Directors received an annual retainer of $25,200.$28,200.  Members also received $2,100$2,350 per special meeting attended.  For fiscal 2014,2015, members of the Audit Committee, Executive Committee (other than Messrs. Corrato and Vento)Mr. Corrato) and the Compensation Committee received fees of $900 per meeting attended.  As solicitor of Prudential Savings Bank, in fiscal 2014 Mr. Balka received an annual retainer of $60,375 as well as fees earned for providing additional legal services.  He also received the normal meeting fee for service on the Executive Committee and the normal annual Board retainer of $25,200.  For fiscal 2015, Mr. Balka will no longer receive an annual retainer.  As Chairman of the Audit Committee, Mr. Fanelli received an annual retainer of $10,000 in fiscal 2014,2015, which will remain the same for fiscal 2015.2016. As Chairman of the Compensation Committee, Mr. Mulcahy received an annual retainer of $7,500 in fiscal 20142015 and will receive the same amount in fiscal 2015.2016. Board fees are subject to periodic adjustment by the Board of Directors.  For fiscal 2015,2016, the annual retainer, and special meeting fees will increase to $28,200 and $2,350, respectively; committee meeting fees will remain the same as for fiscal 2015.

Compensation Committee Interlocks and Insider Participation

Determinations regarding compensation of our President and Chief Executive Officer, our senior management and our employees are reviewed and approved by Prudential Bancorp's Compensation Committee.  Messrs. Fanelli, Hosier, Miller and Mulcahy, who is the Committee's Chairman, currently serve as members of the Compensation Committee.

No person who served as a member of the Compensation Committee during fiscal 20142015 was a current or former officer or employee of Prudential Bancorp or Prudential Savings Bank or engaged in certain transactions with Prudential Bancorp or Prudential Savings Bank required to be disclosed by regulations of the Securities and Exchange Commission.  Additionally, there were no Compensation Committee "interlocks" during fiscal 2014,2015, which generally means that no executive officer of Prudential Bancorp served as a director or member of the compensation committee of another entity, one of whose executive officers served as a director or member of Prudential Bancorp's Compensation Committee.

Director Nominations

Recommendations for nominations of persons to serve as directors of Prudential Bancorp are made by the Nominating and Corporate Governance Committee of the Board of Directors and are approved by the entire Board.  The Board of Directors adopted a written charter of the Nominating and Corporate Governance Committee which is available on our website at www.prudentialsavingsbank.com.  The charter sets forth certain criteria the committee may consider when recommending individuals for nomination including:

·●ensuring that the Board of Directors, as a whole, is diverse by considering:

oindividuals with various and relevant career experience;

orelevant technical skills;

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oindustry knowledge and experience;

ofinancial expertise (including expertise that could qualify a director as a "financial expert," as that term is defined by the rules of the Securities and Exchange Commission);

olocal or community ties; and

·●minimum individual qualifications, including:

ostrength of character;

omature judgment;

ofamiliarity with our business and industry;

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oindependence of thought; and

oan ability to work collegially.

The committee also may consider the extent to which the candidate would fill a present need on the Board of Directors.

The Nominating and Corporate Governance Committee will also consider candidates for director suggested by other directors, as well as our management and shareholders.  A shareholder who desires to recommend a prospective nominee for the Board should notify our Secretary or any member of the Nominating and Corporate Governance Committee in writing with whatever supporting material the shareholder considers appropriate.  Any shareholder wishing to make a nomination must follow our procedures for shareholder nominations, which are described under "Shareholder Proposals, Nominations and Communications with the Board of Directors."

Executive Officers Who Are Not Also Directors

Set forth below is certain information with respect to current executive officers of Prudential Bancorp and its subsidiaries who are not directors.  Ages are reflected as of September 30, 2014.2015.

NameAge and Principal Occupation During the Past Five Years
 
Salvatore Fratanduono
Senior Vice President and Chief Lending Officer of Prudential Savings Bank since February 2013. Prior thereto, Mr. Fratanduono served as Vice President - Lending of Prudential Savings Bank from 2001 to February 2013. Age 51.
Jeffrey T. Hanuscin
Vice President and Controller of Prudential Bancorp since June 2013 and Prudential Savings Bank since May 2013.  Prior thereto, Mr. Hanuscin served as Senior Vice President, Chief Financial Officer and Treasurer of Nova Bank, Berwyn, Pennsylvania from April 2008 to October 2011. Age 50.
51.
Anthony V. MigliorinoExecutive Vice President and Chief Operating Officer of Prudential Savings since September 2015; from July 2015 until September 2015 served as Senior Vice President-Retail Business Development Officer. From September 2000 to September 2014, Mr. Migliorino served in various positions at Sterling National Bank, New York, New York, including Senior Vice President of Branch Banking. Prior to 2000, Mr. Migliorino served as a senior officer at several financial institutions including Stissing National Bank, Pine Plains, New York and Savings Bank of Rockland County, Spring Valley, New York.
Jack E. RothkopfSenior Vice President, Chief Financial Officer and Treasurer of Prudential Bancorp and Prudential Savings since June 2015 and Prudential Savings since April 2013; Senior Vice President and Treasurer of Prudential Bancorp sincefrom June 2013 until June 2016 and of Prudential Savings Bank sincefrom April 2013;2013 until June 2015; from January 2006 to April 2013, served as Vice President and Controller.  Prior thereto, Mr. Rothkopf served as Assistant Vice President of Popular Financial Holdings, Marlton, New Jersey from October 2000 to January 2006.  Age 51.52.
Douglas J.R. SmithSenior Vice President and Chief Lending Officer of Prudential Savings since August 2015; previously served as Executive Vice President and Chief Credit Officer of Noah Bank, Elkins Park, Pennsylvania from June 2011 until January 2015; prior to June 2011, served as Executive Vice President and Chief Credit Officer, Royal Bank America, Narberth, Pennsylvania, from December 2007 until June 2011; prior thereto served as Senior Vice President-Chief Lending Officer of First Penn Bank, Philadelphia, Pennsylvania, from November 2005 until December 2007; between 1981 and 2005, served either as the Chief Lending Officer or Chief Credit Officer at several insured depository institutions.  Age 68.

 
 
 
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REPORT OF THE AUDIT COMMITTEE

The Audit Committee has reviewed and discussed Prudential Bancorp's audited financial statements with management.  The Audit Committee has discussed with Prudential Bancorp's independent registered public accounting firm, S.R. Snodgrass, P.C., the matters required to be discussed by the Statement on Auditing Standards ("SAS") No. 61, "Communication with Audit Committees" (AICPA, Professional Standards, Vol. 1. AU Section 380), as amended by SAS No. 90, "Audit Committee Communications" as adopted by the Public Company Accounting Oversight Board in Rule 3526.  The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding S.R. Snodgrass, P.C.'s communications with the Audit Committee concerning independence and has discussed with S.R. Snodgrass, P.C., their independence.  Based on the review and discussions referred to above in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in Prudential Bancorp's Annual Report on Form 10-K for fiscal year 20142015 for filing with the Securities and Exchange Commission.

Members of the Audit Committee
A. J. Fanelli, Chairman
John C. Hosier
Bruce E. Miller
Francis V. Mulcahy
Dennis Pollack


MANAGEMENT COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Philosophy and Program.  Our compensation philosophy is to provide compensation to our executive officers that is competitive in the marketplace and provides elements of both reward and retention in order to attract and retain qualified and experienced officers.  The compensation of our executive officers, including the various components of such compensation, is determined by our Compensation Committee.  The Committee consists solely of non-employee directors who meet all applicable requirements to be independent of management.  In addition, the Committee in the past has used one or more independent outside consulting firms that provide information regarding the compensation paid by a developed peer group, as described below.

When setting the compensation of our executive officers, the Committee generally targets compensation which is comparable with our peer group with respect to each of our components of compensation.  The compensation we provide to our executive officers primarily consists of the following:

●annual base salary,

●annual cash bonuses,

●periodic grants of stock options and restricted stock awards, and

 
 
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●other forms of compensation as approved by the Board of Directors, as appropriate, consisting principally of participation in employee tax-qualified retirement plans including a defined benefit retirement plan, a profit-sharing plan and employee stock ownership plan, and, medical, dental, life and related insurance programs.

Since our mutual holding company reorganization in 2005 and our second-step conversion to a fully public holding company in 2013, we have implemented various stock option, restricted stock and stock incentive plans in order to more closely align the interests of our directors and executive officers with our shareholders.  Each of these plans were approved by our shareholders.  Grants of stock options and grants of restricted stock to our executive officers and directors are made periodically both as a reward for past service as well as to provide an incentive for future performance.

We also provide all of our employees, including our executive officers, with tax-qualified retirement benefits through an employee stock ownership plan (the "ESOP"), a profit sharing 401(k) plan and a defined benefit retirement plan. We also offer various fringe benefits to all of our employees, including our executive officers, on a non-discriminatory basis, including group policies for medical, dental, life, disability and accidental death insurance.  Certain of our executive officers are provided automobiles. In addition, we have entered into split dollar life insurance agreements with our executive officers. The Committee believes such benefits are appropriate and assist such officers in fulfilling their employment obligations.

Independent Compensation Committee.  The Committee, composed entirely of independent directors, administers the Company's executive compensation program.  The members of the Committee, Messrs. Francis V. Mulcahy (Chairman), A.J. Fanelli, John C. Hosier and Bruce E. Miller, meet all of the independence requirements under applicable laws and regulations, including the listing requirements of the Nasdaq Stock Market. None of the members is a current or former officer or employee of the Company or any of its subsidiaries or has any separate business relationship with the Company. The role of the Committee is to oversee the Company's compensation and benefit plans and policies, administer its stock benefit plans (including reviewing and approving equity grants to executive officers) and review and approve annually all compensation decisions relating to executive officers, including those for the President and Chief Executive Officer, the Chief Financial Officer and the other executive officers named in the Summary Compensation Table (the "named executive officers").

The Compensation Committee is committed to high standards of corporate governance, as embraced most notably in the Sarbanes-Oxley Act of 2002 and the various regulations implementing that statute. The Compensation Committee's Charter reflects the foregoing responsibilities and commitment, and the Committee and the Board periodically review and revise the Charter. The full text of the Compensation Committee Charter is available on our website at www.prudential savingsbank.com under the "Investor Relations" tab. The Committee's membership is determined by the Board. The Committee held eight meetings in fiscal 2015.

The Compensation Committee adheres to sound governance principles and practices. The Committee has typically exercised exclusive authority over the compensation paid to Company executives, including not only the amount and type of awards granted to executives under our stock option and restricted stock plans, but also on the issues of executive salaries, bonuses, retirement and severance arrangements, and other benefits. As a matter of philosophy, the Company and the Committee have been committed to creating a compensatory structure for executives that is simple and readily comprehensible to investors. The types of compensation we offer our executives remain within the traditional categories: salary, short and long-term incentive compensation (discretionary cash bonus and stock-based awards), standard executive benefits, and retirement and severance benefits. The Company does not provide executives with excessive or exotic perquisites. It also does not make loans to executives or their families or families' businesses, other than those made in the ordinary course of the Bank's business and on substantially the same terms as those prevailing at the time for comparable transactions with other persons in accordance with applicable federal banking regulations. We do not permit our executives to receive any income or gain from affiliated transactions or arrangements with the Company, a major concern addressed by recent corporate governance laws and regulations.
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The Committee recognizes the importance of maintaining sound principles for the development and administration of compensation and benefit programs, and has taken steps in recent periods to enhance the Committee's ability to effectively carry out its responsibilities as well as enhance the link between executive pay and performance. Examples of actions that the Committee has taken include (i) aligning compensation structures based on targeting average competitive pay of peer groups, and (ii) aligning the relative mix of stock options and restricted stock awards to increase the importance of long-term incentives.

General Compensation Philosophy. The Committee believes that compensation paid to executive officers should be closely aligned with the performance of the Company on both a short-term and long-term basis, and that such compensation should assist the Company in attracting and retaining key executives critical to its long-term success. The compensation of executive officers is structured to ensure that a significant portion of an executive's compensation will be directly related to the Company's corporate performance and other factors that directly and indirectly influence shareholder value.  To that end, it is the view of the Board that the total compensation program for executive officers should consist of the following:

●Salaries;
●Annual cash bonus awards;
●Long-term incentive compensation consisting of a mixture of stock options and restricted stock awards; and
●Certain other benefits.

The overriding philosophy in setting corporate goals is to both create an executive compensation program that will attract, motivate and retain qualified and experienced officers as well as to ensure that the interests of senior management are aligned with the interests of shareholders. The Compensation Committee reviews the overall compensation of each named executive officer to determine the appropriateness of the level of overall compensation as well as the amount for each element of that compensation based upon the performance of the individual employee and the performance of the Company. The Company is rewarding the executives in each element and in total compensation based upon industry metrics gathered for the Compensation Committee by an independent outside consultant, Meyer-Chatfield Compensation Advisors ("Meyer-Chatfield").  In addition, during fiscal 2015, in connection with the development and adoption of a new omnibus equity compensation plan, the Compensation Committee engaged Meridian Compensation Partners, LLC ("Meridian").  The Compensation Committee generally intends to set total compensation levels at within a range of between 85% and 115% of the 75th percentile (based upon a review of the particular executive and his or her respective performance) as compared to the peer group in the compensation report. In addition, the Compensation Committee considered Meridian's review of grant levels of equity awards under the 2014 SIP in connection with the initial grants thereunder made in February 2015. Meridian's review analyzed equity grant practices at institutions that had recently undergone second-step mutual holding company conversions. The equity grant practices that have developed with regard to institutions that have undergone mutual-to-stock conversions are unique and in large part a function of the regulatory framework in which the stock benefit plans adopted by these institutions must be developed and operate. The Committee believes that, over time, the financial performance of the Company is reflected in the value of its stock and that internal results, such as financial performance, and external results, such as stock price, ultimately move in a complementary fashion.

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The financial performance of the Company on a period-to-period basis is the major factor considered by the Compensation Committee when it determines salary adjustments and discretionary cash bonuses. The Committee uses these elements of compensation to incentivize executives to achieve continuous, near-term results. Executives' stock-based compensation, on the other hand, is focused on achievement of long-term success. As is true of most publicly traded entities, the Company's stock performance fluctuates over time, typically more so than does our financial performance.  However, over time, the Committee believes that the return to shareholders investing in our stock, including dividend payout, is a good indicator of corporate performance. Stock-based awards are thus a way to link executive compensation to long-term performance.

In fiscal 2015, the Company granted stock options and restricted stock award to employees and executive officers which vest pro rata over five years pursuant to the 2014 SIP which was structured to comply with regulatory requirements governing stock benefit plans adopted by recently converted institutions. This structure reinforces the executive's incentive to seek long-term growth in stock value through strong corporate performance. In addition, the Company has never re-priced stock options downward or exchanged new lower priced options for outstanding higher priced options.

In determining the overall amounts and types of executive compensation, the Committee weighs personal factors as well, including commitment, leadership, teamwork and community involvement. We also consider executive compensation practices of our competitors and peers.

The Role of the Compensation Consultants. For fiscal 2015, the Company engaged Meyer-Chatfield, an independent executive compensation consulting firm, to assist the Compensation Committee in setting executive compensation levels. In addition, the Compensation Committee also engaged Meridian to assist in the development of the 2014 SIP, to review and analyze equity grant practices of other institutions that had undergone second-step mutual-to-stock conversions with respect to the initial plans adopted subsequent to the completion of the conversion, and to assist in determining the level of the initial grants under the 2014 SIP. Neither Meyer-Chatfield nor Meridian provided any other services to the Company and worked with the Company's management only on matters for which the Compensation Committee is responsible. Meyer-Chatfield was engaged to review our total compensation practices, including base salary, total cash compensation (salary plus bonus), long-term incentive compensation and total direct compensation, to compare it with a group of bank and thrift institutions similar in size and financial performance to the Company and to make recommendations regarding executive compensation. The Committee considered Meyer-Chatfield's review of compensation levels in establishing the compensation amounts for fiscal 2015 for the named executive officers in September 2014. The Compensation Committee considered Meridian's review of grant levels of equity awards under the 2014 SIP in connection with the initial grants thereunder made in February 2015.

 
 
 
 
 
 
 
 
 
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11The Role of Peer Companies and Benchmarking.  Peer group benchmarking was used as one factor by the Compensation Committee in making compensation decisions for fiscal 2015 at the September 2014 meeting.  With the assistance of Meyer-Chatfield, the Compensation Committee identified a group of peer companies to use for compensation comparison purposes.  In determining the peer group with Meyer-Chatfield's assistance, the Compensation Committee selected 28 publicly-traded bank and thrift holding companies located throughout Pennsylvania, New York, New Jersey and Maryland with assets between $267 million and $1.1 billion. The peer group used in September 2014 was as follows:

1st Constitution Bancorp
Fox Chase Bancorp, Inc.
Alliance Bancorp, Inc. of PennsylvaniaGreene County Bancorp, Inc. (MHC)
Bancorp of New Jersey, Inc.Harleysville Savings Financial Corporation
BCS Bancorp, Inc.Malvern Bancorp, Inc.
Carver Bancorp, Inc.Mid Penn Bancorp ,Inc.
CC FNB Bancorp, Inc.Norwood Financial Corp.
Citizens Financial Services, Inc.Parke Bancorp , Inc.
Colonial Financial Services, Inc.Polonia Bancorp, Inc.
DNB Financial CorporationQNB Bancorp, Inc.
Dimeco, Inc.Republic First Bancorp, Inc.
Embassy Bancorp, Inc.Stewardship Financial Corporation
ENB Financial Corp.TF Financial Corporation
Fidelity D&D Bancorp, Inc.Two River Bancorp
First Keystone CorporationUnity Bancorp, Inc.

The Compensation Committee considers information developed by Meyer-Chatfield from the public peer group, published survey date and other relevant information making its compensation determinations for executive officers. The Compensation Committee uses information drawn from the public peer group in making base salary determinations that are commensurate with the Company's compensation program objectives. However, the Compensation Committee does not set compensation components to meet specific benchmarks but does seek to have compensation levels full within the targeted ranges.

Role of Executive Officers and Management.  The Chief Executive Officer provides recommendations to the Compensation Committee on matters of compensation philosophy, plan design and the general guidelines for executive officer compensation.  These recommendations are then considered by the Committee. The Chief Executive Officer attends certain Committee meetings but is not present for the executive sessions or for any discussion of his own compensation.

Tax Deductibility of Pay. Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), places a limit of $1.0 million on the amount of compensation that the Company may deduct in any one year with respect to each of its five most highly paid executive officers. There is an exception to the $1.0 million limitation for performance-based compensation meeting certain requirements. Stock options are performance-based compensation meeting those requirements and, as such, are fully deductible. Service-based only restricted stock awards are not considered performance-based compensation under Section 162(m) of the Code.

To date, Section 162(m) has not affected the ability of the Company to deduct the expense of the executive compensation paid. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Committee has not adopted a policy requiring all compensation to be deductible.

Base Salaries. We provide named executive officers and other employees with a base salary to compensate them competitively for services rendered during the year. Base salary ranges for named executive officers are determined for each employee based on his or her position and responsibility, performance and compensation levels paid by our peers to executives in similar positions. The Compensation Committee targets base salaries to fall within a range of 85% to 115% of the market median (50th percentile) and structures incentive and total compensation to fall within a range of 85% to 115% of the 75th percentile of market. Merit increases normally take effect in October of each year, the beginning of the Company's fiscal year.
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During its review of base salaries for executives, the Compensation Committee primarily considers:
 
MANAGEMENT COMPENSATION●the financial condition and results of operations of the Company;
●individual performance of the executive;
●internal review of the executive's compensation, both individually and relative to other officers;
●Peer and market data; and
●qualifications and experience of the officer.

Base salaries are reviewed annually and adjusted from time to time to align salaries with market levels after taking into account individual responsibilities, performance, experience and overall compensation. For fiscal 2015, the Compensation Committee determined the salaries of senior and executive officers should increase by 0.0% to 4.0% with the base salary of the named executive officers Fratanduono, Rothkopf and Hanuscin being increased by 3.0%, 3.0% and 4.0%, respectively. Neither Mr. Vento's nor Mr. Corrato's base salaries were increased for fiscal 2015. In May 2015, the Company announced the impending retirement of the then President and Chief Executive Officer, Thomas A. Vento, and the appointment of his successor, Joseph R. Corrato, the then Executive Vice President and Chief Financial Officer.  Pursuant to Mr. Vento's transition to retirement, Mr. Corrato assumed the Presidency on July 1, 2015 and became the Chief Executive Officer on October 1, 2015.  In view of Mr. Corrato's increased responsibilities, the Compensation Committee increased his salary by $12,000, effective July 1, 2015. In addition, in connection with Mr. Vento's transition to retirement, his base salary for service as an officer was reduced by 50% for the period July 1, 2015 to September 30, 2015 and ceased as of October 1, 2015; subsequent to September 30, 2015, he was compensated in his role as Chairman of the Board of the boards of directors of the Company and the Bank.  Mr. Vento retired from the boards of directors of the Company and the Bank in December 2015.  In addition, Mr. Fratanduono resigned effective July 1, 2015.

Bonuses.  Traditionally a discretionary cash bonus for eligible employees, including executive officers, has been determined on an annual basis and generally paid in December of each year for the prior fiscal year ended September 30th.  The amount of the aggregate bonus pool was based on the Committee's assessment of the Company's overall performance while the individual bonus awards were based on salary and length of service with a service multiplier ranging from .5 to 4.0 based on length of employment and position. Due to the Company's performance in fiscal 2015, the Compensation Committee determined to not award any bonuses. In addition, in September 2015, the Compensation Committee adopted the structure of a more formal bonus plan which is performance-based. The purpose of the plan is to enhance performance consistent with the Bank's corporate strategic goals. The plan's focus will be on both the achievement of near-term performance results as well as the amount of progress obtained toward the achievement of the Bank's long-term objectives. The plan will be structured to strengthen the link between performance and pay by delivering bonuses based on measurable goals for the Bank and the individual participant.

Long-Term Compensation. The long-term incentive compensation portion of the Company's compensation program consists of grants of stock options and restricted stock awards under the Company's 2008 Stock Option Plan (the "2008 SOP"), the 2008 Recognition and Retention Plan (the "2008 RRP" and collectively (the "2008 Equity Plans") and the 2014 SIP (collectively, the "Equity Plans") These grants and awards are designed to provide incentives for long-term positive performance by the executive and other senior officers and to align their financial interests with those of the Company's shareholders by providing the opportunity to participate in any appreciation in the stock price of the Company's common stock which may occur after the date of grant of stock options or restricted stock awards.
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Under the Equity Plans, the Compensation Committee has discretion in determining grants of stock options and restricted stock awards to executive officers, including the timing, amounts and types of awards. The level of an individual's grants typically has been based in large on the officer's position within the organization, length of service and his or her individual performance.

The exercisability of options and the vesting of restricted stock awards generally depend upon the executive officer continuing to render services to the Company.  In addition, although not granted to date, the Company's 2008 RRP and 2014 SIP provide that stock awards may be made based upon specified performance goals. All options granted under the Company's stock option plans must have an exercise price at least equal to the market value of the common stock on the date of grant. Options may be exercised only for a limited period of time after the optionee's departure from the Company in most cases. Under the terms of the Equity Plans, the grants cannot vest more rapidly than 20% per year except in certain specified circumstance, such as the death or disability of the award holder or in the event of a change in control (as defined in the Equity Plans) of the Company. To date, all the awards have been granted with five year vesting schedules.

The Compensation Committee initially made grants of stock options and restricted stock awards to directors and officers, including executive officers, pursuant to the 2008 Equity Plans in January 2009. The awards were consistent with equity award practices at recently converted financial institutions. In setting the option and restricted stock grant levels, the Compensation Committee had the assistance of an independent compensation consultant. Until January 2013, no additional equity awards were made to executive officers. In January 2013, small grants of options and restricted stock awards were made to officers, including the executive officers, with no additional grants until February 2015 except for small grants to newly hired officers. The Compensation Committee granted stock options and restricted stock awards to directors and officers, including to each named executive officer, in February 2015 pursuant to the recently adopted 2014 SIP. Consistent with the practice used with respect to the 2008 Equity Plans, the Compensation Committee, with the assistance of Meridian, followed equity award practices for institutions that have recently undergone second-step conversions. This normally involves larger grants but ones which vest over a longer period (five years or more) than is typical with respect to companies that have developed a practice of annual equity grants. In awarding grants, one of the factors considered was the performance of the individual involved. All of the awards granted vest pro rata over five years starting on the first anniversary of the grant with 20% per year vesting thereafter on each subsequent anniversary date. The grants complied with the regulatory framework imposed on such plans by the regulations governing mutual-to-stock conversions.

The named executive officers were granted the following number of stock options in February 2015, primarily under the 2014 SIP: Mr. Vento, 110,000 shares, Mr. Corrato, 75,000 shares, Messrs. Fratanduono and Rothkopf, 50,000 shares each, and Mr. Hanuscin, 10,000 shares. Under the Company's 2014 SIP, the Compensation Committee is also authorized to grant share awards, which are a right to receive a distribution of shares of common stock. Shares of common stock granted pursuant to a share award are in the form of restricted stock which vests upon such terms and conditions as established by the Committee.  The Committee determines which officers and key employees will be granted share awards, the number of shares subject to each share award, whether the share award is contingent upon achievement of certain performance goals and the performance goals, if any, required to be met in connection with a share award.  In February 2015, the Company granted 60,000 shares of restricted stock to Mr. Vento, 30,000 shares of restricted stock to Mr. Corrato, 15,000 shares to each of Messrs. Fratanduono and Rothkopf and 5,000 shares to Mr. Hanuscin. The restricted stock vests at the rate of 20% per year starting the first anniversary of the grant. As noted above with regard to the options grants, the grants of restricted stock reflected not only the equity grant practice that has developed with respect to recently converted institutions but also the regulatory construct in which such practices must operate. As a result of Mr. Fratanduono's resignation effective July 1, 2015, all of the options and restricted stock awards granted to him in February 2015 were forfeited (as well as all unvested options and restricted stock awards granted to him under the 2008 Equity Plans).
17
Additional Components of Executive Compensation.  The Bank has also entered into employment agreements with Messrs. Corrato and Rothkopf and a change-in-control severance agreement with Mr. Hanuscin. The Bank has entered into employment agreements and change-in-control agreements with other officers as well. Mr. Vento had an employment agreement with the Bank which was superseded by his entry into a retirement and transition agreement in May 2015 in connection with the announcement of his impending retirement. Mr. Fratanduono also had an employment agreement which was terminated upon his resignation effective July 1, 2015. The purpose of the employment and change in control severance agreements is to retain for the benefit of the Bank (and indirectly the Company) the talents of highly skilled officers who are integral to the development and implementation of the Bank's business.  Such agreements, as discussed below, provide for termination benefits in the event of such executives' termination or in the event of the occurrence of certain events.  The severance payments provided by the agreements are intended to align the executive officers' and the shareholders' interests by enabling executive officers to consider corporate transactions that are in the best interests of the shareholders and other constituents of the Company without undue concern over whether the transactions may jeopardize the executive officers' own employment or impose financial hardship on him or her. The grounds under which severance payments are triggered in the employment and change in control agreements are similar to or the same as those included in many employment agreements for senior executive officers of comparable financial institutions.

Employment Agreements.  The Bank entered into amended and restated employment agreements in May 2013 with Messrs. Vento and Corrato as well as an employment agreement with Mr. Rothkopf. The Bank also entered into an amended and restated employment agreement in April 2014 with Mr. Fratanduono. As a result of the appointment of Mr. Rothkopf as the Company's and the Bank's Chief Financial Officer effective July 1, 2015, his employment agreement was amended and restated in June 2015 to reflect his additional responsibilities and to increase the severance benefits provided to him as described below. In addition, as a result of Mr. Vento's determination to retire, the Company, the Bank and Mr. Vento entered into a retirement and transition agreement in May 2015 that superseded his employment agreement. In connection with Mr. Vento's transition to retirement, Mr. Corrato was appointed President, effective July 1, 2015, and Chief Executive Officer, effective October 1, 2015. In connection with Mr. Corrato becoming Chief Executive Officer, he entered into an amended employment agreement effected October 1, 2015 which addressed the change in Mr. Corrato's responsibilities and increased the term of his employment agreement from two to three years. Also, as a result of Mr. Fratanduono's resignation, effective July 1, 2015, his employment agreement was terminated and of no further force and effect. In November 2015, both Mr. Corrato and Mr. Rothkopf entered into amendments to their employment agreements pursuant to which they voluntarily agreed to 20% and 10%, respectively, reductions in their base salaries as part of a management developed cost containment program being implemented by the Company.

The employment agreements have a term of three years, with respect to Mr. Corrato (previously it was for a two year term), and two years, with respect to Mr. Rothkopf with the initial terms expiring, if the agreements are not extended, on December 31, 2017 and December 31, 2016, respectively. The term is extended annually for one year on each December 31st starting December 31, 2015 unless either the Bank or the executive gives notice at least 30 days prior to the annual anniversary date that the agreement shall not be extended.  The agreements are automatically extended for one year upon a change in control. The terms of the employment agreements provide for an initial annual base salary, which is reviewed annually by the Compensation Committee Board of Directors.  The executives are also entitled to participate in the Company's benefit plans and programs and receive reimbursement for reasonable business expenses.  Each of the employment agreements is terminable with or without cause by the Bank. The executives have no right to compensation or other benefits pursuant to the employment agreements for any period after voluntary termination by the executive without good reason, as defined in the agreements and which includes a material change in the officer's position, salary or entities without the officer's consent, or termination by the Bank for cause, disability, retirement or death.
18
In the event that the executive terminates his employment because of failure to comply with any material provision of the employment agreement by the Bank or the employment agreement is terminated by the Bank other than for cause, disability, retirement or death, Messrs. Corrato and Rothkopf will be entitled to (i) the payment of two times their respective average annual cash compensation (salary and cash bonuses) based upon the five calendar years preceding the date of termination as cash severance, (ii) the maintenance until the earlier to occur of the passage of two years from the date of termination or until the executive's full time employment with another employer (which provides substantially similar benefits), of the executive's continued participation in all group insurance, life insurance, health, dental and accident insurance and disability insurance plans at no cost to the officer and (iii) a lump sum cash payment equal to the projected cost of providing the executive with benefits for two years pursuant to other employee benefit plans (excluding retirement plans and stock compensation plans) in which the executive was entitled to participate. In the event the executive's continued participation in any group insurance plan is barred or would trigger the payment of an excise tax under Section 4980D of the Code, or if any such group insurance plan is discontinued, then the Bank shall either (1) provide substantially similar benefits under an alternative plan or (2) pay a lump sum cash amount to the executive equal to the projected cost of providing continued coverage to the executive until the two-year anniversary of the executive's date of termination.

In the event that the executive's employment is terminated in connection with a change in control, as defined in the employment agreements, for other than cause, disability, retirement or death or the executive terminates his employment as a result of certain adverse actions which are taken with respect to the executive's employment (i.e., good reason) following a change in control, as defined, the executive will be entitled to a cash severance payment equal to three times (Mr. Corrato), or two times (Mr. Rothkopf) their respective average annual cash compensation, the maintenance, as described above, of the group insurance plans for three years (Mr. Corrato ) or two years (Mr. Rothkopf), respectively, or until the executive's full-time employment with another employer that provides similar benefits plus the aforementioned lump sum cash payment for the projected cost of providing the other employee benefits as noted above until the third anniversary (Mr. Corrato) or second anniversary (Mr. Rothkopf) of the executive's termination.

The employment agreements provide that in the event any of the payments to be made thereunder or otherwise upon termination of employment are deemed to constitute "parachute payments" within the meaning of Section 280G of the Code, then such payments and benefits received thereunder shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits being non-deductible by the Bank for federal income tax purposes.  Parachute payments generally are payments in excess of three times the base amount, which is defined to mean the recipient's average annual compensation from the employer includable in the recipient's gross income during the most recent five taxable years ending before the date on which a change in control of the employer occurred.  Recipients of parachute payments are subject to a 20% excise tax on the amount by which such payments exceed the base amount, in addition to regular income taxes, and payments in excess of the base amount are not deductible by the employer as compensation expense for federal income tax purposes.

The Bank has entered into employment agreements with certain other officers who are not deemed to be the executive officers. Such agreements are substantially identical to the agreement with Mr. Rothkopf. For a description of potential payments under the employment agreements in the event of a termination of Messrs. Corrato's and Rothkopf's employment, see "- Potential Payments Upon Termination of Employment or a Change in Control."

19
Change in Control Agreements.  The Bank entered into a change in control severance agreement in May 2015 with Mr. Hanuscin. The change in control agreement is intended to assist the Bank (and indirectly the Company) in maintaining a stable and competent management base. The change in control severance agreement has a term of two years with the initial term ending December 31, 2016 if the agreement is not extended. The term is extended annually for one year on each December 31st starting December 31, 2015 unless either the Bank or Mr. Hanuscin gives notice at least 30 days prior to the annual anniversary date that the agreement shall not be extended. The agreement automatically extends for one year upon a change in control.

Mr. Hanuscin's agreement provides that in the event of an involuntary termination of employment without cause and other than for retirement, death or disability following a change in control (including a termination by the executive for "good reason," which includes a material change in the executive's position, salary or duties without his consent), Mr. Hanuscin will be entitled to (i) the payment of one times his average annual cash compensation (salary and cash bonuses) based upon the five calendar years preceding the date of termination as cash severance, (ii) the maintenance until the earlier to occur of the passage of one year from the date of termination or until his full time employment with another employer (which provides substantially similar benefits) of the executive's continued participation in all group insurance, life insurance, health, dental and accident insurance and disability insurance plans at no cost to the officer and (iii) a lump sum cash payment equal to the projected cost of providing him with benefits for one year pursuant to other employee benefit plans (excluding retirement plans and stock compensation plans) in which he was entitled to participate. In the event his continued participation in any group insurance plan is barred or would trigger the payment of an excise tax under Section 4980D of the Code, or if any such group insurance plan is discontinued, then the Bank shall either (1) provide substantially similar benefits under an alternative plan or (2) pay a lump sum cash amount to him equal to the projected cost of providing continued coverage to him until the one-year anniversary of his date of termination.

The change in control severance agreement provides that in the event any of the payments to be made thereunder or otherwise upon termination of employment are deemed to constitute "parachute payments" within the meaning of Section 280G of the Code, then such payments and benefits received thereunder shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits being non-deductible by the Bank for federal income tax purposes.

The Bank has entered into a change in control severance agreement with one other officer who is not deemed to be an executive officer. Such agreement is substantially identical to the agreement with Mr. Hanuscin. In addition, in November 2015, the Bank entered into change in control severance agreements with Messrs. Migliorino and Smith, the recently appointed Executive Vice President and Chief Operating Officer and Senior Vice President and Chief Lending Officer, respectively, of Prudential Savings. The agreements are structured in the same manner as the agreement with Mr. Hanuscin other than the severance multiple with respect to Mr. Migliorino's agreement is two times and the benefits coverage is for two years. For a description of potential payments under the agreements in the event of a termination of Mr. Hanuscin's employment, see "- Potential Payments Upon Termination of Employment or a Change in Control."

Endorsement Split Dollar Agreements.  The Bank has purchased insurance policies on the lives of its executive officers named in the Summary Compensation Table as well as other officers, and has entered into Endorsement Split Dollar Agreements with each of those officers.  The policies are owned by the Bank.  Under the agreements with the named executive officers, upon an officer's death while he or she remains employed by the Bank, the officer's beneficiary will receive two times the officer's salary, other than Mr. Vento whose benefit totaled approximately $142,000 for fiscal 2015, as of the date of death.  Pursuant to the terms of the agreements, the Bank has elected generally to not extend such benefits after a termination of employment. As a result of Mr. Fratanduono's resignation, his benefit under this arrangement was terminated.  Such amounts will be funded from the receipt of the death benefits under the insurance policies on such officer's life in excess of the cash surrender value.  The Bank will receive the full cash surrender value, which is expected to reimburse the Bank in full for its life insurance investment as well as the remainder, if any, in excess of the net proceeds after payments to the officer's beneficiaries pursuant to the Endorsement Split Dollar Agreements.
20
The Endorsement Split Dollar Agreements may be terminated at any time by the Bank or the officer or by the Bank upon the officer's termination of service to Prudential Savings Bank.  Upon termination, the Bank may surrender the policy and collect the cash surrender value.

Retirement and Other Benefits.  The Company also provides all of its employees, including the named executive officers, with tax-qualified retirement benefits through three plans:   the Prudential Savings Bank Employees Saving and Profit Sharing Plan and Trust (the "401(k) Plan"), the ESOP and the Pentegra Defined Benefit Plan for Financial Institutions (the "Defined Benefit Plan"). All employees who meet the age and service requirements participate in the 401 (k) Plan, the ESOP and the Defined Benefit Plan on a non-discriminatory basis. The Company no longer provides a 401(k) match to employee contributions in light of the establishment of the ESOP. The ESOP purchased shares of the Company's common stock both in connection with the initial mutual holding company reorganization in 2005 as well as in connection with the second-step conversion in 2013. The ESOP provides all of our employees who meet the age and service requirements with a stake in the performance of the Company's common stock. The ESOP purchased the shares of common stock with the proceeds of two loans which will be paid back over 20 years.  As the loans are repaid, the shares are released and allocated to participants' accounts in accordance with the terms of the ESOP. The Defined Benefit Plan is a traditional retirement plan which provides for specified monthly benefit upon a participant's retirement calculated pursuant to a formula that takes into account the participant's highest five-year average earnings (as defined in the Defined Benefit Plan) multiplied by the number of the participant's years of benefit service.

The Company also offers various fringe benefits to all of its employees, including the named executive officers, including group policies for medical and dental insurance, life insurance and long-term disability. We provide individual and family medical and dental coverage to employees. We also provide all of our employees with life and accidental death and disability insurance at no cost to the employee. The President and Chief Executive Officer is provided an automobile. The Compensation Committee believes such benefit is appropriate and assists the President and Chief Executive Officer in fulfilling his employment obligations.

Results from the 2013 Annual Meeting Advisory Vote on Executive Compensation.  At our 2013 annual meeting of shareholders, we presented our first advisory vote on the compensation of our named executive officers, commonly known as a "say-on-pay" proposal.  The vote was not binding on the Company, the board of directors or the Compensation Committee.  A substantial majority of the votes cast on the proposal, approximately 88%, was   voted "FOR" the compensation of our named executive officers as disclosed in the proxy statement.   The Compensation Committee believes that this affirms the shareholders' support of the Company's compensation policies and practices.  The Compensation Committee will continue to consider the outcome of the Company's say-on-pay proposals when making future compensation decisions for the named executive officers. See "Proposal to Adopt a Non-Binding Resolution to Approve the Compensation of Our Named Executive Officers" beginning on page 33 for a discussion of this year's say-on-pay proposal.

Compensation Policies and Practices as They Relate to Risk Management

The Compensation Committee of the Board of Directors has reviewed the Company's policies and practices applicable to employees, including the Company's benefit plans, arrangements and agreements, and does not believe that they are reasonably likely to have a material adverse effect on the Company.  The Committee does not believe that the Company's policies and practices encourage officers or employees to take unnecessary or excessive risks or behavior focused on short-term results rather than the creation of long-term value.
21
Report of the Compensation Committee

We have reviewed and discussed with management the Compensation Discussion and Analysis disclosures to be included in the Company's Proxy Statement for the Annual Meeting of Shareholders to be held in February 2016 and filed with the SEC pursuant to Section 14(a) of the Securities Exchange Act of 1934.  Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in the Company's Proxy Statement.

Compensation Committee
Francis V. Mulcahy (Chairman)
A.J. Fanelli
John C. Hosier
Bruce E. Miller


22
Summary Compensation Table

The following table summarizes the total compensation paid by Prudential Savings Bank (including amounts deferred, if any, to future periods by the officers) for services rendered in all capacities during the fiscal years ended September 30, 2015, 2014 and 2013 to the principal executive officer, andthe persons who served as principal financial officer during fiscal 2015, the two other executive officers of Prudential Savings Bank during fiscal 20142015 whose total compensation exceeded $100,000 and an executive officer who resigned prior to September 30, 2015 but would have been included if he was still an executive officer as of such date, collectively referred to as our "named executive officers." Prudential BancorpThe Company has not paid separate cash compensation to our officers.

Name and Principal Position 
Fiscal
Year
  Salary  Bonus(1)  
Stock
 Awards(2)
  
Option
Awards(2)
  
All Other
Compensation(3)
  Total 
Thomas A. Vento
Chairman, President and
    Chief Executive Officer
  
2014
2013
  
$
 
343,105
333,111
  
$
 
22,361
20,326
  
$
 
--
45,711
  
$
 
--
63,999
  
$
 
68,714
(4)
71,851
 
$
 
434,180
534,998
 
Joseph R. Corrato
Executive Vice President and     Chief Financial Officer
  
2014
2013
   
213,632
207,409
   
13,923
12,656
   
--
29,000
   
--
42,525
   58,048
(4)
59,613
  
285,603
351,203
 
Salvatore Fratanduono
Senior Vice President and
    Chief Lending Officer
  
2014
2013
   
159,271
144,089
   
8,065
6,893
   
--
15,950
   
--
19,688
   
10,563
5,951
   
177,899
192,570
 
Name and Principal
Position
 
Fiscal
Year
  Salary  Bonus(1)  
Stock
Awards(2)
  
Option
Awards(2)
  
Change in
Pension Value
and Nonqualified Deferred Compensation Earnings(3)
  All Other Compensation(4)  Total 
                 
Joseph R. Corrato(5)
President and Chief
  Executive Officer
  
2015
2014
2013
  
$
 
 
235,382
213,632
207,409
  
$
 
 
--
13,923
12,656
  
$
 
 
366,900
--
29,000
  
$
 
 
343,500
--
42,525
  
$
 
 
202,000
144,000
--
  
$
 
 
65,471
76,641
77,563
(6)
 
 
 
$
 
 
1,213,253
448,196
369,153
 
                                 
Jeffrey T. Hanuscin
   Vice President/Controller
 
  
2015
2014
2013
 
 
(7)
  
120,120
114,583
36,667
   
--
3,000
839
   
61,150
--
37,674
   
50,380
--
35,982
   
15,000
4,000
--
   
11,978
100
--
   
258,628
121,683
111,162
 
                                 
Jack E. Rothkopf(5)
  Senior Vice President,
    Chief Financial
    Officer and Treasurer
  
2015
2014
2013
 
   
160,681
151,477
121,876
 
   
--
4,986
4,389
 
   
183,450
--
15,950
 
   
229,000
--
19,688
 
   
46,000
31,000
2,000
 
   
16,491
9,541
5,884
 
   
635,622
197,004
169,786
 
 
                                 
Salvatore Fratanduono(8)
Senior Vice President
  and Chief Lending Officer
  
2015
2014
2013
   
127,462
159,271
144,089
   
--
8,065
6,893
   
183,450
--
15,950
(9)
 
 
  
229,000
--
19,688
(9)
 
 
  
134,000
99,000
--
   
40,051
10,563
5,951
(10)
 
 
  
713,963
276,899
192,571
 
                                 
Thomas A. Vento(5)
Chairman
  
2015
2014
2013
   
315,842
343,105
333,111
   
--
22,361
20,326
   
733,800
--
45,711
   
503,800
--
63,999
   
286,000
1,000
--
   
69,993
80,459
83,611
(6)
 
 
  
1,909,435
446,925
546,758
 
___________________________________________
(1)Represents bonuses earned in each fiscal 2014year reflected but which were paid in the following fiscal year.  No bonuses were awarded to the named executive officers with respect to fiscal 2015.  Under the Prudential Savings Bank 2014 Bonus Program,bonus program, each named executive officer was eligible to receive a fixed proportionate allocation of the bonus pool for employees based on salary and length of service.

(2)Reflects the grant date fair value in accordance with FASB ASC Topic 718 for awards of restricted stock and stock options that were granted during the fiscal 2013.2013 and fiscal 2015. The valuationvaluations of the restricted stock awards isgranted in fiscal 2013 and fiscal 2015 are based on a grant date fair valuevalues of $7.25.$7.25 and $12.23, respectively, per share for grants made in fiscal 2013 and fiscal 2015. The assumptions used in valuing the stock option awards granted in fiscal 2013 and fiscal 2015 are set forth in Note 12 to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended September 30, 2014.2015.

(3)Represents the sum of the actuarial change in pension value in plan years 2012, 2013 and 2014 for Messrs. Vento, Corrato, Hanuscin, Rothkopf and Fratanduono pursuant to their participation in the Defined Benefit Plan, a multiple employer tax-qualified defined benefit plan. The amounts were substantially larger in fiscal 2014 due to the adoption of the new mortality table (RP-2014). In fiscal 2013, Messrs. Corrato, Fratanduono and Vento experienced declines in the present value of accrued benefits of $72,000, $38,000 and $162,000, respectively.
(4)Includes the fair market value on December 30, 201331, 2014 of the 1,547, 1,3661,922, 943, 1,293, 1,404 and 9522,150 shares allocated to the Employee Stock Ownership PlanESOP accounts of Messrs. Vento, Corrato, Hanuscin, Rothkopf, Fratanduono and Fratanduono,Vento, respectively, based on a value of $10.79$12.50 per share on December 31, 2013.2014.
(Footnotes continued on the following page)

23
____________________________
(4)(5)Effective July 1, 2015, Mr. Corrato was appointed President of the Company and Prudential Savings and subsequently on October 1, 2015, he was appointed as Chief Executive Officer of the Company and Prudential Savings. The appointment of Mr. Corrato reflected the implementation of the Company's succession plan in connection with the transition of Mr. Vento, the then Chairman, President and Chief Executive Officer, to retirement. Mr. Vento served as Chairman, President and Chief Executive Officer of the Company and Prudential Savings Bank until July 1, 2015, at which time he retired from his position as President. He subsequently retired from his position as Chief Executive Officer on September 30, 2015, remaining as the Chairman of the Board of the boards of directors of both the Company and Prudential Savings Bank until December 2015, when he fully retired from the boards of both the Company and the Bank.  In connection with Mr. Corrato's appointment as President, Mr. Rothkopf was appointed as the Company's and Prudential Savings' Chief Financial Officer, effective July 1, 2015.
(6)Includes for each of Messrs. Vento and Corrato an aggregate of $29,400$7,050 paid in fiscal 20142015 through February 2015 as board meeting fees, reimbursement of Mr. Vento's Philadelphia city wage taxes and the value of the use of automobiles by Messrs. Vento and Corrato of $13,800 and $15,213, respectively, and the provision of health insurance premiums for Messrs. Vento and Corrato.Corrato in the amount of $10,303 and $20,161, respectively.  In February 2015, the Board determined to cease paying directors fees to directors who also serve as salaried full-time officers. The value of the use of automobiles is based on depreciation, as well as insurance, fuel and maintenance expense.
(7)Mr. Hanuscin joined Prudential Savings in May 2013.
(8)Mr. Fratanduono resigned, effective as of July 1, 2015; he served as a consultant to Prudential Savings from July 1, 2015 until November 2015.
(9)As a result of Mr. Fratanduono's resignation, the restricted stock and stock options awarded him in fiscal 2015 were forfeited.
(10)Includes consulting fees totaling $22,500 paid to Mr. Fratanduono for the period of July 1, 2015 through September 30, 2015.

NarrativeEquity Compensation Plans

Grants of Plan-Based Awards for the Year Ended September 20, 2015.  The table below sets forth information regarding grants of awards pursuant to plans our executive officers named in the Summary Compensation Table during the fiscal year ended September 30, 2015.

Name  Grant Date 
All Other
 Stock
Awards:
Number of
Shares of
Stock or
Units(1)
  
All Other
Option
Awards:
Number of
Securities
Underlying
Options(2)
  
Exercise or
Base Price
of Option
Awards(3)
  
Grant Date
 Fair Value
of Stock and
Option
Awards(4)
 
           
Joseph R. Corrato 2/18/2015  30,000   --  $--  $366,900 
 2/18/2015  --   75,000   12.23   343,500 
                   
Jeffrey T. Hanuscin 2/18/2015  5,000   --   --   61,150 
                                        2/18/2015  --   11,000   12.23   50,380 
                   
Jack E. Rothkopf 2/18/2015  15,000   --   --   183,450 
 2/18/2015  --   50,000   12.23   229,000 
                   
Salvatore Fratanduono(5)
 2/18/2015  15,000   --   --   183,450 
  2/18/2015  --   50,000   12.23   229,000 
                   
Thomas A. Vento 2/18/2015  60,000   --   --   733,800 
 2/18/2015  --   110,000   12.23   503,800 
The Compensation Committee, upon review of Mr. Vento's performance and other factors, approved a base salary of $343,105 for Mr. Vento in fiscal 2014, which increased 3.0% from $333,111 in fiscal 2013.  In addition, the Compensation Committee approved base salaries for Messrs. Corrato and Fratanduono for fiscal 2014 of $213,632 and $159,271, respectively, reflecting increases of 3.0% and 10.5%, respectively.  The dollar amounts of their base salaries were generally determined by the Compensation Committee's review of the local market for chief executive officer, chief financial officer and chief lending officer compensation and were intended to ensure that Prudential Savings Bank remained competitive in attracting and retaining qualified senior executive officers.  The Compensation Committee approved the payment of bonuses with respect to fiscal 2014.  For fiscal 2014, a bonus pool of $175,000 was established in December 2014.  The bonus pool was distributed to all eligible employees, including Messrs. Vento, Corrato and Fratanduono, based on salary and length of service. No grants of equity compensation were made during fiscal 2014 to the executive officers. In addition, in fiscal 2014, Messrs. Vento and Corrato each received the use of an automobile to assist them in fulfilling their duties.___________________
(1)The restricted stock granted February 18, 2015 vests at the rate of 20% per year, starting February 18, 2016.
(2)The stock options granted vest at the rate of 20% per year, starting February 18, 2016.
(3)Based upon the fair market value of a share of Company common stock on the date of grant.
(4)The fair value of the restricted stock and/or stock options granted is computed in accordance with FASB ASC Topic 718.
(5)Mr. Fratanduono resigned, effective July 1, 2015. In accordance with the terms of the 2014 SIP pursuant to which the grants were made, all of the restricted stock and stock options granted to him on February 18, 2015 were forfeited.
 
 
 
1224
At the Annual Meeting of Shareholders of Prudential Bancorp held on February 11, 2013, Prudential Bancorp's shareholders recommended, on an advisory basis, that the future advisory votes on executive compensation should be held every three years.  Consistent with the shareholder recommendation, the Board of Directors of Prudential Bancorp determined that it will hold an advisory vote on executive compensation every three years. The next advisory vote on the compensation of the named executive officers will be presented at the annual meeting expected to be held in February 2016. Prudential Bancorp is required to hold shareholder advisory votes on the frequency interval every six years.

Outstanding Equity Awards at Fiscal Year-End

Year-End. The table below sets forth outstanding equity awards at September 30, 20142015 to our executive officers named in the Summary Compensation Table above, which grants were made in fiscal 2009, fiscal 2013 and fiscal 2013. The option2015. With respect to restricted stock and stock options granted prior to the completion of the second step conversion on October 9, 2013, the number of shares subject to the stock options and the stock awards andas well as the exercise price andof the stock awardsoptions have been adjusted to reflect the second step conversion completed on October 9, 2013.conversion.

 Stock Awards(1)
 Market Value
Option Awards(1)Number of Sharesof Shares or
 Number of Securities UnderlyingOptionor Units of StockUnits of Stock
 Unexercised OptionsExerciseExpirationThat Have NotThat Have Not
NameExercisableUnexercisablePriceDateVestedVested(2)
Thomas A. Vento  
106,764
3,836
(3)
 
  
--
15,347
(4) 
$
 
11.84
7.68
 
1/5/2019
1/5/2023
  
4,763
 
(4)
 
 
$
 
58,251
 
 
Joseph R. Corrato  
53,382
2,549
(3)
 
  
--
10,197
(4)  
11.84
7.68
 
1/5/2019
1/5/2023
  
3,021
 
(4)
 
  
36,947
 
 
Salvatore Fratanduono  
21,353
1,180
(3)
 
  
--
4,721
(4)  
11.84
7.68
 
1/5/2019
1/5/2023
  
1,662
 
(4)
 
  
20,326
 
 
                    Stock Awards(1)  
             Option Awards(1)       Market Value  
       Number of Securities         Number of    of Shares or  
       Underlying Unexercised       Option  Shares or Units    Units of Stock  
       Options    Exercise   Expiration  of Stock That    That Have  
 Name  Exercisable    Unexercisable    Price   Date  Have Not Vested    Not Vested(2)  
 Joseph R. Corrato  
53,382
5,098
--
 
(3)
(4)
 
 
  
--
7,648
75,000
 
(5)
 
 
$
 
 
 
11.84
7.68
12.23
 
 1/5/2019
1/5/2023
2/18/2025
  
2,266
30,000
 
 
(4)
(5)
 
 
 
$
 
 
 
32,653
432,300
 
 
 
                      
Jeffrey T. Hanuscin  
4,068
--
 
(6)
 
 
  
6,103
11,000
 
 
(4)(5)
 
  
9.66
12.23
 
 
6/19/2023
2/18/2025
  
2,210
5,000
 
(6)
(5)
 
  
31,846
72,050
 
 
                      
Jack E. Rothkopf  
18,683
2,360
--
 
(3)
(4)
 
 
  
--
3,541
50,000
 
 
 
(5)
 
  
11.84
7.68
12.23
 
 
1/5/2019
1/5/2023
2/18/2025
  
1,247
15,000
 
 
(4)
(5)
 
 
  
17,969
216,150
 
 
 
                      
Salvatore Fratanduono(6)  
21,353
2,360
(3)
(4)
  
--
--
   
11.84
7.68
 
1/1/2016(7)
1/1/2016(7)
        
                      
Thomas A. Vento  
  
106,764
7,672
--
 
(3)
(4)
 
 
  
--
11,511
110,000
 
   
11.84
7.68
12.23
 
 
1/5/2019
1/5/2023
2/18/2025
  
3,573
60,000
 
 
(4)
(5)
 
 
  
51,487
864,600
 
 
 
___________________
(1)Each of the option awards and stock awards outstanding as of October 9, 2013 was converted into an option award or stock award to purchase a number of shares of common stock of Prudential Bancorp equal to the product of the number of shares of common stock multiplied by the exchange ratio of 0.9442, rounded down to the nearest whole share. Each option after the exchange has an adjusted exercise price equal to the quotient obtained by dividing the option exercise price by the exchange ratio of 0.9442, rounded up to the nearest whole cent.

(2)Calculated by multiplying the closing market price per share of our common stock on September 30, 2014,2015, which was $12.23,$14.41, by the applicable number of shares of common stock underlying the named executive officer's unvested stock awards.

(3)Granted pursuant to our 2008 Stock Option Plan andSOP or 2008 Recognition and Retention Plan,RRP, as applicable, and vested at a rate of 20% per year commencing on January 5, 2010, becoming fully vested on January 5, 2014.

(4)Granted pursuant to our 2008 Stock Option Plan andSOP or 2008 Recognition and Retention Plan,RRP, as applicable, and vest at a rate of 20% per year commencing on January 5, 2014.
(5)Granted pursuant to our 2014 SIP and vest at a rate of 20% per year commencing on February 18, 2016.
(6)Mr. Fratanduono resigned effective July 1, 2015; all unvested restricted stock and stock options outstanding as of such date granted to him were forfeited.
(7)Mr. Fratanduono had six months from the effective date of his resignation to exercise the vested options.

25
Option Exercises and Stock Vested. The following table sets forth certain information with respect to restricted stock awards which vested for the named executive officers during the fiscal year ended September 30, 2015. No stock options were exercised by any of the named executive officers during the fiscal year.

  Stock Awards 
Name 
Number of Shares
Acquired On Vesting(1)
  
Value Realized On
Vesting(2)
 
     
Joseph R. Corrato  755  $9,264 
         
Jeffrey T. Hanuscin  736   10,620 
         
Jack E. Rothkopf  415   5,092 
         
Salvatore Fratanduono  415   5,092 
         
Thomas A. Vento  1,190   14,601 
_________________
(1)Does not reflect the sale or withholding of shares to satisfy income tax withholding obligations.
(2)Based upon the fair market value of a share of Company common stock on the date of exercise or vesting. Value is calculated by multiplying the number of shares of Company common stock that vested by the fair market value on the date of vesting.

Employment and Change-in-Control Agreements

Prudential Savings Bankhas entered into amended and restated employment agreements on May 20, 2013 with Messrs. VentoCorrato and Corrato as well as an employmentRothkopf and a change-in-control severance agreement with Mr. Rothkopf. Prudential SavingsHanuscin. For additional information, see "–Compensation and Analysis – Additional Components of Executive Compensation – Employment Agreements" and "–Change in Control Agreements." In addition, the Bank alsoin November 2015 entered into an amendedchange-in-control severance agreements with Messrs. Migliorino and restated employmentSmith. Such agreements are structured in the same manner as the agreement on April 16, 2014 with Mr. Fratanduono. The employment agreements have a term of three years,Hanuscin with respect to Mr. Vento, and two years, with respect to Messrs. Corrato, Fratanduono and Rothkopf.  The term is extended annually on each December 31st thereafter unless either Prudential Savings Bank or the executive gives notice at least 30 days prior to the annual anniversary datedifference being that the agreement shall not be extended.  The termswith Mr. Migliorino provides for a payment multiplier of the employment agreements provide for an initial annual base salary, which is reviewed annually by the Boardtwo rather than one and a benefit coverage period of Directors.  The executives are also entitled to participate in our benefit plans and programs and receive reimbursement for reasonable business expenses.  Each of the employment agreements is terminable with or without cause by Prudential Savings Bank. The executives have no right to compensation or other benefits pursuant to the employment agreements for any period after voluntary termination by the executive without good cause, as defined in the agreements, or termination by Prudential Savings Bank for cause, disability, retirement or death.two years rather than one.

 
 
13
In the event that the executive terminates his employment because26
Potential Payments upon Termination of failure to comply with any material provision of the employment agreement by Prudential Savings BankEmployment or the employment agreement is terminated by Prudential Savings Bank other than for cause, disability, retirement or death, the executive will be entitled to the payment of two (Messrs. Vento, Corrato and Fratanduono) and one (Mr. Rothkopf) times their respective average annual cash compensation (salary and cash bonuses) as cash severance and the maintenance until the earlier to occur of the passage of two years (Messrs. Vento, Corrato and Fratanduono) or one year (Mr. Rothkopf) or, until the executive's full time employment with another employer, of the executive's participationa Change in all employee benefit plans in which the executive was entitled to participate or similar plans, programs or arrangements if his continued participation is not permissible.Control

InThe following table describes the event that the executive'spotential payments to Joseph R. Corrato, President and Chief Executive Officer, upon an assumed termination of employment is terminated in connection withor a change in control as defined inof September 30, 2015.

Payments and Benefits 
Voluntary
Termination
  
Termination
for Cause
  
Involuntary
Termination
 Without Cause or
Termination by
 the Executive for
Good Reason
Absent a Change
in Control
  
Change in
Control With
Termination of
Employment
  
Death or
Disability
(j)
  Retirement 
             
Severance payments and benefits: (a)            
Cash severance (b) $--  $--  $416,210  $624,315  $--  $-- 
Medical and other insurance benefits (c)  --   --   61,403   92,105   --   -- 
Automobile expenses (d)  --   --   10,804   16,206   --   -- 
§280G cut-back (e)  --   --   --   (187,943)  --   -- 
                         
Equity awards: (f)                        
Unvested stock options (g)  --   --   --   214,971   214,971   -- 
Unvested restricted stock awards (h)  --   --   --   464,963   464,963   -- 
                         
Total payments and benefits (i) $--  $--  $488,417  $1,224,617  $679,924  $-- 

The following table describes the potential payments to Jack E. Rothkopf, Senior Vice President, Chief Financial Officer and Treasurer, upon an assumed termination of employment agreements, for other than cause, disability, retirement or death or the executive terminates his employment as a result of certain adverse actions which are taken with respect to the executive's employment following a change in control as defined,of September 30, 2015.

Payments and Benefits 
Voluntary
Termination
  
Termination
for Cause
  
Involuntary
Termination
Without Cause or
 Termination by
the Executive for
Good Reason
Absent a Change
in Control
  
Change in
Control With
Termination of
Employment
  
Death or
Disability
(j)
  Retirement 
             
Severance payments and benefits: (a)            
Cash severance (b) $--  $--  $252,581  $252,581  $--  $-- 
Medical and other insurance benefits (c)  --   --   1,533   1,533   --   -- 
Automobile expenses (d)  --   --   --       --   -- 
§280G cut-back (e)  --   --   --       --   -- 
                         
Equity awards: (f)                        
Unvested stock options (g)  --   --   --   132,831   132,831   -- 
Unvested restricted stock awards (h)  --   --   --   234,119   234,119   -- 
                         
Total payments and benefits (i) $--  $--  
$_ 254,114
  $621,064  $366,950  $-- 

(footnotes following the table on page 28)
27
The following table describes the potential payments to Jeffrey T. Hanuscin, Vice President and Controller, upon an assumed termination of employment or a change in control as of September 30, 2015.

Payments and Benefits
 
Voluntary
Termination
  
Termination
for Cause
  
Involuntary
Termination
Without Cause or
Termination by
the Executive for
Good Reason
Absent a Change
in Control
  
Change in
Control With
Termination of
Employment
  
Death or
Disability
(j)
  Retirement 
             
Severance payments and benefits: (a)            
Cash severance (b) $--  $--  $--  $108,555  $--  $-- 
Medical and other insurance benefits (c)  --   --   --   10,536   --   -- 
Automobile expenses (d)  --   --   --   --   --   -- 
§280G tax cut back (e)  --   --   --   --   --   -- 
                         
Equity awards: (f)                        
Unvested stock options (g)  --   --   --   49,430   49,430   -- 
Unvested restricted stock awards (h)  --   --   --   103,896   103,896   -- 
                         
Total payments and benefits (i) $--  $--  $--  $272,417  $153,326  $-- 

__________________________
(a)These severance payments and benefits are payable if the employment of Mr. Corrato or Mr. Rothkopf is terminated prior to a change in control either (i) by the Bank for any reason other than cause, disability, retirement or death or (ii) by Mr. Corrato or Mr. Rothkopf if the Bank takes certain adverse actions (a "good reason" termination). The severance payments and benefits are also payable if an executive's employment is terminated concurrently with or following a change in control if the termination of employment occurs during the term of Mr. Corrato's or Mr. Rothkopf's employment agreement or during the term of Mr. Hanuscin's severance agreement.
(b)If the employment of Mr. Corrato or Mr. Rothkopf is terminated prior to a change in control, represents a lump sum payment equal to two times the average of the executive's base salary and cash bonus received by the executive (excluding any deferred amounts) during the five calendar years preceding the year in which the date of termination occurs.  In the change in control column, represents a lump sum payment equal to three times for Mr. Corrato (two times for Mr. Rothkopf and one time for Mr. Hanuscin) the average of the executive's base salary and cash bonus received by the executive (excluding any deferred amounts) during the five calendar years preceding the year in which the date of termination occurs.
(c)If the employment of Mr. Corrato or Mr. Rothkopf is terminated prior to a change in control, represents the estimated present value cost of providing continued medical, dental, vision, life and accidental death and disability coverage to Messrs. Corrato and Rothkopf for an assumed additional 24 months at no cost to the executives.  In the change in control column, represents the estimated present value cost of providing continued medical, dental, vision, life and accidental death and disability coverage for 36 months for Mr. Corrato (24 months for Mr. Rothkopf and 12 months for Mr. Hanuscin) at no cost to the executives. The estimated costs assume the current insurance premiums with no increase in the annual premium costs.  The amounts have not been discounted to present value.
(d)Represents a lump sum cash payment equal to the estimated costs of paying automobile related expenses Mr. Corrato for an assumed 24 months (36 months if his employment is terminated concurrently with or following change in control), based on the amounts paid in calendar 2014.
(e)If the parachute amounts associated with the payments and benefits to Messrs. Corrato, Rothkopf and Hanuscin in the change in control column equal or exceed three times the executive's average taxable income for the five calendar years immediately preceding the year in which the change in control occurs, such payments and benefits in the event of a change of control will be reduced by the minimum amount necessary so that they do not trigger the 20% excise tax imposed by Sections 280G and 4999 of the Internal Revenue Code.  Based on the assumptions made, Mr. Corrato's severance payments and benefits would

(Footnotes continued on the following page)
28
__________________________
need to be reduced in order to avoid the 20% excise tax, and the amount of his estimated reduction is shown in the table.
(f)The vested stock options held by Messrs. Corrato, Rothkopf and Hanuscin had a value of approximately $171,501, $63,898 and $19,323, respectively, based on the September 30, 2015 closing price of $14.41 per share. Such value can be obtained in the event of termination due to voluntary termination, death, disability, retirement or cause only if the executive actually exercises the vested options in the manner provided for by the relevant option plan and subsequently sells the shares received for $14.41 per share. In the event of a termination of employment, each executive (or his or her estate in the event of death) will have the right to exercise vested stock options for the period specified in his or her option grant agreement. If the termination of employment occurs following a change in control, each executive can exercise the vested stock options for the remainder of the original ten-year term of the option.
(g)Represents the value of the unvested stock options held by Messrs. Corrato, Rothkopf and Hanuscin that had an exercise price below the September 30, 2015 closing price of $14.41 per share, based on the difference between the September 30, 2015 closing price and the per share exercise price of the unvested stock options.  All unvested stock options will become fully vested upon an executive's death, disability or upon a change in control.
(h)Represents the value of the unvested restricted stock awards held by Messrs. Corrato, Rothkopf and Hanuscin based on the September 30, 2015 closing price of $14.41 per share, excluding accumulated cash dividends, if any, on the unvested shares for each of the executives.  All unvested restricted stock awards will become fully vested upon an executive's death or disability or upon a change in control.
(i)Does not include the value of the vested benefits to be paid under our tax-qualified defined benefit pension plan, 401(k) plan and ESOP.  See the pension benefits table under "-Benefit Plans – Retirement Plan" below.  The ESOP provides that it will terminate upon a change in control, with the value of the unallocated ESOP shares held in the suspense account to first be used to repay the outstanding balance of the ESOP loan and with any remaining balance in the suspense account to then be allocated among the ESOP participants on a pro rata basis.  The above tables do not include any additional ESOP allocations that would be made upon a termination of the ESOP.  Also does not include the value of vested stock options set forth in Note (f) above, earned but unpaid salary, accrued but unused vacation leave and reimbursable expenses.
(j)If the employment of Mr. Corrato, Mr. Rothkopf or Mr. Hanuscin had terminated at September 30, 2015 due to death, his or her beneficiaries or estate would have received life insurance proceeds of approximately $551,264, $389,900 and $290,240, respectively. If the employment of Mr. Corrato, Mr. Rothkopf or Mr. Hanuscin had terminated at September 30, 2015 due to disability, they would have received disability benefits under our disability policy of $260,000, $260,000 and $241,000, respectively.

Effective July 1, 2015, Salvatore Fratanduono, the Senior Vice President and Chief Loan Officer, resigned and entered into a consulting agreement with Prudential Savings, which agreement superseded his employment agreement entered into previously.  Under the terms of the consulting agreement, Mr. Fratanduono was to receive $7,500 per month for providing consulting services during a one year period ending June 30, 2016, subject to earlier termination.  In addition, the Bank agreed to pay during the term of the consulting agreement Mr. Fratanduono's COBRA premiums for medical insurance.  Mr. Fratanduono was entitled to a cash severance payment equal to three times (Messrs. Vento and Corrato), two times (Mr. Fratanduono) and one times (Mr. Rothkopf) their respective average annual cash compensationhis vested benefits in the Bank's tax-qualified employee benefit plans consisting of the ESOP, the 401(k) plan and the Defined Benefit Plan but was no longer entitled to participate in any of the benefit plans or programs offered by the Company or Prudential Savings.  In addition, all unvested restricted stock awards and stock options granted to him were forfeited.  In November 2015, the consulting agreement was terminated with no further payments due Mr. Fratanduono thereunder.

Mr. Vento retired as President as of July 1, 2015 and as Chief Executive Officer as of September 30, 2015 pursuant to a transition agreement entered into between the Bank and Mr. Vento in May 2015.  In late December 2015, Mr. Vento resigned as Chairman of the Board of the boards of directors of the Company and the Bank and retired as a director from both boards of directors.  As part of his retirement, his transition agreement was superseded by a retirement agreement under which Mr. Vento was entitled to his vested benefits under the Bank's ESOP, 401(k) plan and the Defined Benefit Plan, the maintenance as described above,of a pre-existing split dollar agreement (the cost of which had previously been fully expensed) and the transfer of the Bank owned automobile used by Mr. Vento.  Mr. Vento is not entitled to participate in any of the employee benefit plans for three years, two yearsor programs offered by the Company or the Bank subsequent to September 30, 2015 and one year, respectively,no additional benefits vested or until the executive's full-time employment with another employer that provides similar benefits. Benefits under the employment agreements will be reducedaccrued subsequent to the extent necessary to ensure that the executives do not receive any "parachute payment" as such term is defined under Section 280Gdate.  No acceleration of the Internal Revenue Code.unvested restricted stock awards and stock options previously granted to him occurred.  Mr. Vento agreed to serve as a director emeritus until February 2020 without any cash compensation.

The agreement with Mr. Fratanduono was amended and restated in April 2014 primarily to revise the severance provisions, increasing the multiplier from one times to two times.

29
Benefit Plans

Retirement Plan.  Prudential Savings Bank participates in the Financial Institutions Retirement Fund, a multiple employer defined benefit plan intended to satisfy the tax-qualification requirements of Section 401(a) of the Internal Revenue Code.  Full-time employees become eligible to participate in the retirement plan upon the attainment of age 21 and the completion of one year of eligibility service.  For purposes of the retirement plan, a full-time employee earns one year of eligibility service when he completes 1,000 hours of service within a one-year eligibility computation period.  An employee's first eligibility computation period is the one-year period beginning on the employee's date of hire.  Subsequent eligibility computation periods begin on January 1 and end on December 31. In November 2015, the retirement plan was frozen such that no new participants can be added and existing participants will receive no further benefit service credit, compensation credit or other accrued benefit increases except for additional service credits which may affect a participant's vesting or early vesting retirement eligibility or as otherwise required by law to maintain the tax-qualified status of such plan.

The retirement plan provides for a monthly benefit upon a participant's retirement at or after the age of 65, or if later, the fifth anniversary of the participant's initial participation in the retirement plan (i.e., the participant's "normal retirement date").  A participant may also receive a benefit on his early retirement date, which is the date on which he attains age 45 and is partially or fully vested under the terms of the retirement plan.  Benefits received prior to a participant's normal retirement date are reduced by certain factors set forth in the retirement plan.  The retirement plan provides a benefit of 1.50% of a participant's highest 5-year average earnings, multiplied by the participant's years of benefit service. Earnings are defined as base salary, subject to an annual Internal Revenue Service limit of $260,000$265,000 on earnings for 2014.2015.  Annual benefits provided under the retirement plan also are subject to Internal Revenue Service limits, which vary by age and benefit payment type. Participants become fully vested in their benefits under the retirement plan upon the completion of five years of vesting service as well as upon the attainment of normal retirement age (age 65).

The table below shows the present value of accumulated benefits payable to Messrs. Corrato, Rothkopf, Hanuscin, Fratanduono and Vento, including the number of years of credited service, under the retirement plan determined using interest rate and mortality rate assumptions consistent with those used in our financial statements. No named executive officer received payments from the retirement plan during fiscal 2015.
 
Name Plan Name 
Number of
Years Credited
Service
  
Present Value of
Accumulated
Benefit(2)
  
Payments
During Last
Fiscal Year
 
Joseph R. Corrato 
Financial Institutions Retirement Fund(1)
  30  $1,005,000  $-- 
               
Jeffrey T. Hanuscin 
Financial Institutions Retirement Fund(1)
  1   19,000   -- 
               
Jack E. Rothkopf 
Financial Institutions Retirement Fund(1)
  9   147,000   -- 
               
Salvatore Fratanduono(3)
 
Financial Institutions Retirement Fund(1)
  30   600,000   -- 
               
Thomas A. Vento(4)
 
Financial Institutions Retirement Fund(1)
  57  ��1,941,000   
--
 
_____________________
(1)     A multiple employer tax-qualified defined benefit plan.
(2)     Reflects value as of September 30, 2015.
(3)     Mr. Fratanduono resigned, effective July 1, 2015. 
(4)     Mr. Vento retired effective September 30, 2015. His benefit is limited by Internal Revenue Service limits on annual compensation included in earnings.

1430

Endorsement Split Dollar Agreements.  Prudential Savings Bank purchased insurance policies on the lives of its executive officers named in the Summary Compensation Table above, and has entered into Endorsement Split Dollar Agreements with each of those officers.  The policies are owned by Prudential Savings Bank.Savings.  Under the agreements with the named executive officers, upon an officer's death while he or she remains employed by Prudential Savings, Bank, the officer's beneficiary will receive two times the officer's salary, other than Mr. Vento whose benefit totaled $141,853approximately $142,000 for 2014,fiscal 2015, as of the date of death.  Pursuant to the terms of the agreements, Prudential Savings Bank has generally elected to not extend such benefits after a termination of employment.  Such amounts will be funded from the receipt of the death benefits under the insurance policies on such officer's life in excess of the cash surrender value.  Prudential Savings Bank will receive the full cash surrender value, which is expected to reimburse Prudential Savings Bank in full for its life insurance investment as well as the remainder, if any, in excess of the net proceeds after payments to the officer's beneficiaries.

The Endorsement Split Dollar Agreements may be terminated at any time by Prudential Savings Bank or the officer or by Prudential Savings Bank upon the officer's termination of service to Prudential Savings Bank.  Upon termination, Prudential Savings Bank may surrender the policy and collect the cash surrender value.

Related Party Transactions

In accordance with applicable federal laws and regulations, Prudential Savings Bank offers mortgage loans to its directors, officers and employees as well as members of their immediate families for the financing of their primary residences and certain other loans.  These loans are made on substantially the same terms as those prevailing at the time for comparable loans with persons not related to Prudential Savings Bank except that Prudential Savings Bank provides for a reduced interest rate of one hundred basis points to all employees, officers and directors for a first mortgage on their primary residence and waives the origination fees, other than appraisal and document review fees. Other than as described below, it is the belief of management that these loans neither involve more than the normal risk of collectability nor present other unfavorable features.

The table below lists the outstanding loans made by Prudential Savings Bank to related persons, where the amount involved exceeds $120,000 and the interest rate was reduced and loan origination fee was waived.
 
    
Amounts Paid
During Year
Name
Year ended
September 30,
Largest Principal
Amount
 Outstanding
during Year
Amount
Outstanding at
Year-End
Principal     Amounts Paid 
 Amount Amount   During Year 
 Year ended Outstanding Outstanding at Interest
 Name September 30,During Year Year-End  PrincipalInterest  
Interest
Rate
 
Joseph R. Corrato  
20142015
2013
2014
  
$
 
235,446224,288
246,662
235,446
  
$
 
224,288212,790
235,446
224,288
  
$
 
11,15711,498
11,216
11,157
  
$
 
6,3396,024
6,643
6,339
   
2.7502,750
 2.7502,750
 %
 
%
John C. Hosier  
20142015
2013
396,433
404,975
2014
   
387,620
396,433
378,527
387,620
   
8,8139,692
8,542
8,813
   
12,2634,984
12,534
12,263
   
3.125
3.125
Salvatore Fratanduono
2014
2013
131,775
137,458
124,166
131,775
7,610
6,009
2,566
3,709
2.000
2.000
 
          (Table continued on following page) 
15
 
 Largest PrincipalAmounts Paid
 AmountAmountDuring Year
 Year EndedOutstandingOutstanding atInterest
NameSeptember 30,during YearYear-EndPrincipalInterestRate
Jack E. Rothkopf  
20142015
2013
2014
  
$
178,870
184,872
$
 
 
174,081
178,870
 
169,140
174,081
  
$
 
 
4,7894,941
6,003
4,789
  
$
 
 
5,5215,370
5,676
5,521
   
3.125
3.125
 
%
 
 
 
31

Two commercial mortgage loans and two lines of credit aggregating approximately $576,008$562,195 and $589,375,$560,375, at September 30, 20142015 and 2013,2014, respectively, were extended to a company in which Mr. Vento's daughter was a principal.  In addition, Prudential Savings Bank also extended a single-family residential mortgage loan which had a principal balance of approximately $154,002$150,573 and $157,300$154,002 at September 30, 20142015 and 2013,2014, respectively. All of the loans were restructured during fiscal 2013 and were current at September 30, 2014.2015. However, due to the payment history of the loan relationship, all five loans were classified as substandard and place on non-accrual as of September 30, 20142013 and 2013.2014.  The loans had been returned to accrual status as of September 30, 2015 due to the sufficiently long period of performance in accordance with their restructured terms. During fiscal 20142015 and 2013,2014, the highest aggregate principal balance of the five loans was approximately $746,675$730,009 and $756,638,$746,675, respectively, principal paid was approximately $16,665$17,241 and $16,203,$16,665, respectively, and interest paid was $34,272$33,792 and $57,743,$34,272, respectively.  The two commercial mortgage loans bear interest at 5.125% (for both 20142015 and 2013)2014), the residential loan bears interest at 3.0% (for both 20142015 and 2013)2014), and both lines of credit bear interest at 5.25%.  All five loans were made on substantially the same terms, including interest rate and collateral as loans with persons not related to Prudential Savings Bank.  Prudential SavingsSavings.  The Bank currently does not anticipate incurring any loss of principal or interest on the five loans.

PROPOSAL TO ADOPT THE PRUDENTIAL BANCORP, INC.
2014 STOCK INCENTIVE PLAN (PROPOSAL TWO)

Description of the Incentive Plan

The following description of the 2014 Stock Incentive Plan is a summary of its terms and is qualified in its entirety by reference to the 2014 Stock Incentive Plan, a copy of which is attached to this proxy statement as Appendix A.

General.  The Board of Directors has adopted the 2014 Stock Incentive Plan (the "Incentive Plan") which is designed to attract and retain qualified personnel in key positions, provide officers and key employees with a proprietary interest in Prudential Bancorp as an incentive to contribute to our success and reward key employees for outstanding performance.  The Incentive Plan is also designed to attract and retain qualified directors for Prudential Bancorp.  The Incentive Plan provides for the grant of incentive stock options intended to comply with the requirements of Section 422 of the Internal Revenue Code, non-qualified or compensatory stock options and share awards of restricted stock, which may be based upon performance goals. Share awards and stock options under the Incentive Plan will be available for grant to officers, key employees and directors of Prudential Bancorp and any subsidiaries.

Administration.  The Incentive Plan will be administered and interpreted by a committee of the Board of Directors that is comprised solely of two or more non-employee directors. Such committee currently is comprised of Messrs. Fanelli, Hosier, Miller and Mulcahy, who also currently serve as the Compensation Committee of the Board of Directors. The Board of Directors has engaged a third party independent consulting firm to assist the Committee in determining the appropriate level of grants.
 
 
 
 
16
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Stock Options.  Under the Incentive Plan, the Board of Directors or the committee will determine which officers, key employees and non-employee directors will be granted options, whether such options will be incentive or compensatory options (in the case of options granted to employees), the number of shares subject to each option, the exercise price of each option, whether such options may be exercised by delivering other shares of common stock and when such options become exercisable.  The per share exercise price of a stock option shall be at least equal to the fair market value of a share of common stock on the date the option is granted. In addition, except as provided in connection with a corporate transaction involving Prudential Bancorp (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding options may not be amended to reduce the exercise price of outstanding options or cancel, exchange, buyout or surrender outstanding options in exchange for cash, other awards or options with an exercise price that is less than the exercise price of the original options without prior shareholder approval.

All options granted to participants under the Incentive Plan shall become vested and exercisable at the rate, and subject to such limitations, as specified by the Board of Directors or the committee at the time of grants provided, however, the rate of vesting cannot be more rapid than 20% per year commencing one year from the date of grant.  Notwithstanding the foregoing, no vesting shall occur on or after a participant's employment or service with Prudential Bancorp is terminated for any reason other than his death, disability or a change in control.  Unless the committee or Board of Directors shall specifically state otherwise at the time an option is granted, all options granted to participants shall become vested and exercisable in full on the date an optionee terminates his employment or service with Prudential Bancorp or a subsidiary company because of his death or disability.  In addition, all stock options will become vested and exercisable in full upon a change in control of Prudential Bancorp, as defined in the Incentive Plan.

Each stock option or portion thereof shall be exercisable at any time on or after it vests and is exercisable until the earlier of ten years after its date of grant or six months after the date on which the participant's employment or service terminated, unless extended by the committee or the Board of Directors to a period not to exceed three years from such termination.  Unless stated otherwise at the time an option is granted (i) if a participant terminates his employment or service with Prudential Bancorp as a result of disability or retirement without having fully exercised his options, the optionee shall have three years following his termination due to disability or retirement to exercise such options, and (ii) if an optionee terminates his employment or service with Prudential Bancorp following a change in control of Prudential Bancorp without having fully exercised his options, the optionee shall have the right to exercise such options during the remainder of the original ten year term of the option.  However, failure to exercise incentive stock options within three months after the date on which the optionee's employment terminates will result in the option being treated as a compensatory stock option in the event that it is exercised.  If an optionee dies while serving as an employee or a non-employee director or terminates employment or service as a result of disability or retirement and dies without having fully exercised his options, the optionee's executors, administrators, legatees or distributees of his estate shall have the right to exercise such options during the one year period following his death, provided no option will be exercisable more than ten years from the date it was granted.

Stock options are non-transferable except by will or the laws of descent and distribution. Notwithstanding the foregoing, an optionee who holds non-qualified options may transfer such options to his or her spouse, lineal ascendants, lineal descendants, or to a duly established trust for the benefit of one or more of these individuals.  Options so transferred may thereafter be transferred only to the optionee who originally received the grant or to an individual or trust to whom the optionee could have initially transferred the option.  Options which are so transferred shall be exercisable by the transferee according to the same terms and conditions as applied to the optionee.
 

PROPOSAL TO ADOPT A NON-BINDING RESOLUTION TO APPROVE
THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
(PROPOSAL TWO)

17
Payment for shares purchased upon the exercise of options may be made (i) in cash or by check, (ii) by delivery of a properly executed exercise notice, together with irrevocable instructionsPursuant to a broker to sell the shares and then to properly deliver to Prudential Bancorp the amount of sale proceeds to pay the exercise price, all in accordance with applicable laws and regulations, (iii) at the discretionSection 951 of the board orDodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act"), the committee, by delivering shares of common stock (including shares acquired pursuant to the exercise of an option) equal in fair market value to the purchase priceproxy rules of the sharesSecurities and Exchange Commission were amended to be acquired pursuant torequire that not less frequently than once every three years, a proxy statement for an annual meeting of shareholders for which the option, (iv) at the discretionproxy solicitation rules of the board orSecurities and Exchange Commission require compensation disclosure must also include a separate resolution subject to shareholder vote to approve the committee, by withholding somecompensation of the shares of common stock which are being purchased upon exercise of an option, or (v) any combinationCompany's named executive officers disclosed in the proxy statement.

This proposal, commonly known as a "say on pay" proposal, requests shareholders to support the compensation of the foregoing.

Share Awards.  Undernamed executive officers as disclosed in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the Incentive Plan, the Board of Directors or the committee is authorized to grant share awards, which are a right to receive a distribution of shares of common stock. Shares of common stock granted pursuant to a share award will be in the form of restricted stock which shall vest upon such terms and conditions as established by the committee.  The board or the committee will determine which officers, and key employees and non-employee directors will be granted share awards, the number of shares subject to each share award, whether the share award is contingent upon achievement of certain performance goals and the performance goals, if any, required to be met in connection with a share award.

If the employment or service of a share award recipient is terminated before the share award is completely earned, the recipient will forfeit the right to any shares subject to the share award that has not been earned, except as set forth below. All shares subject to a share award held by a recipient whose employment or service with Prudential Bancorp or a subsidiary company terminates due to death or disability will be deemed fully earned as of the recipient's last day of employment or service.  In addition, all shares subject to a share award held by a recipient will be deemed to be fully earned as of the effective date of a change of control of Prudential Bancorp.

A recipient of a share award will not be entitled to receive any dividends declared on the common stock and will not be entitled to any voting rights with respect to an unvested share award until it vests.  Share awards are not transferable by the recipient and shares subject to a share award may only be earned by and paid to the recipient who was notified in writingoverall compensation of such award by the committee.officers as described on this proxy statement.

The committee may determine to make any share award a performance share award by making such award contingent upon the achievement of a performance goal, or any combination of performance goals.  If an award is so designated, the Committee must establish objectively determinable performance goals for the share award based on one or more of the business criteria set forthexecutive officers named in the Incentive Plan. Each performance share award willsummary compensation table and deemed to be evidenced by"named executive officers" are Joseph R. Corrato, Jack E. Rothkopf and Jeffrey T. Hanuscin as well as Thomas A. Vento, the former President and Chief Executive Officer, and Salvatore Fratanduono, a written agreement setting forthformer executive officer of Prudential Savings.  The proposal gives shareholders the performance goals applicableability to such award.  All determinations regardingvote on the achievementcompensation of our named executive officers as disclosed in this proxy statement through the following resolution:

"Resolved, that the compensation paid to the Company's named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby approved."

The shareholder vote on this proposal is not binding on the Company or the board of directors and cannot be construed as overruling any performance goal will bedecision made by the committee.  Toboard of directors.  However, the extent a performance share award is intended to be performance-based compensation within the meaningboard of Section 162(m)directors of the Internal Revenue Code, itCompany will be granted and administered to comply withreview the requirements of Section 162(m) of the Internal Revenue Code.  Notwithstanding anything to the contrary in the Incentive Plan, a recipient of a performance award shall have no rights as a shareholder until the shares of common stock covered by the performance share award are issued to the recipient according to the terms thereof.

Number of Shares Covered by the Incentive Plan.  A total of 999,800 shares of common stock have been reserved for future issuance pursuant to the Incentive Plan, which is equal to approximately 14.0% of the shares of common stock sold in the second step conversion offering completed in October 2013.  In connection with the offering 7,141,602 shares were sold and an additional 2,403,207 shares were issued in the related exchange to shareholders other than the mutual holding company. No more than 714,145 of the shares reserved under the Incentive Plan may be granted as options and no more than 285,655 shares may be granted as share awards.  These amounts equate to approximately 10.0% and 4.0% of the shares sold in the second-step conversion offering. In the event of a stock split, reverse stock split, subdivision, stock dividend or any other capital adjustment, the number of shares of common stock under the Incentive Plan, the number of shares to which any share award or stock option relates and the exercise price per share under any option shall be adjusted to reflect such increase or decrease in the total number of shares of common stock outstanding after such capital adjustment. In addition, any shares of common stock (i) tendered by an optionee or withheld by Prudential Bancorp in payment of the tax withholding obligation related to an option, (ii) tendered by an optionee or withheld by the Prudential Bancorp, to the extent permitted, as payment for the exercise price of an option, or (iii) reacquired by Prudential Bancorpvoting results on the open market or otherwise using cash proceeds from the exercise of an option granted pursuant to the Incentive Plan shall not be added to the aggregate number of shares of common stock available for issuance under the Incentive Plan.
18
Amendmentnon-binding resolution and Termination of the Incentive Plan; Revocation of Awards. The Board of Directors may at any time terminate or amend the Incentive Plan with respect to any shares of common stock as to which share awards or stock options have not been granted, subject to any required stockholder approval or any stockholder approval which the board may deem to be advisable. The Board of Directors may not, without the consent of the holder of a share award or stock option, alter or impair any share award or stock option previously granted or awarded under the Incentive Plan except as specifically authorized by the Incentive Plan.

The Board or the committee may by resolution immediately revoke, rescind and terminate any option or share award, or portion thereof, to the extent not yet vested and in the case of options, not yet exercised, previously granted or awarded under the Incentive Plan to an employee who is discharged from the employ of Prudential Bancorp or any subsidiary for cause, which, for purposes of the Incentive Plan,  shall mean termination because of the employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order.  In addition, the committee may specify in the awards granted to those optionees or recipients of share awards subject to the provisions of Section 304 of the Sarbanes-Oxley Act of 2002 such provisionstake them into consideration when making future decisions regarding recoupment as are deemed appropriate. Awards, or portions thereof, to the extent not yet vested and in the case of options, not yet exercised, previously granted or awarded to a non-employee director who is removed for cause pursuant to Prudential Bancorp's Articles of Incorporation or Bylaws or the constituent documents of the involved subsidiary on whose board he serves shall terminate as of the effective date of such removal.

Unless sooner terminated, the Incentive Plan shall continue in effect for a period of ten years from the date that the Incentive Plan is approved by shareholders.  Termination of the Incentive Plan shall not affect any previously granted share awards or stock options.

Awards to be Granted. Prudential Bancorp has not made any determination as to the timing or recipients of grants of share awards or stock options under the Incentive Plan. The Incentive Plan provides that grants to each employee and each non-employee director shall not exceed 25% and 5% of the number of shares of common stock available for each of options (714,145) or share awards (285,655) under the Incentive Plan, respectively.  Awards made to non-employee directors in the aggregate may not exceed 30% of each of the number of shares available under the Incentive Plan for options and share awards.

Awards Granted or Available Under Existing Plans.  As of the date hereof, awards covering 530,077 stock options and 38,115 unvested share awards were outstanding under Prudential Bancorp's existing 2008 stock benefit plans and only 3,737 shares remained available for the grant of options under the 2008 Stock Option Plan and no shares for restricted share awards under the 2008 Recognition and Retention Plan. The 2008 stock benefit plans will expire in November 2018, ten years from the date of their adoption by the Board of Directors.
19
Federal Income Tax Consequences. Set forth below is a summary of the federal income tax consequences under the Internal Revenue Code relating to awards which may be granted under the Incentive Plan.

Incentive Stock Options.  No taxable income is recognized by the optionee upon the grant or exercise of an incentive stock option that meets the requirements of Section 422 of the Internal Revenue Code.  However, the exercise of an incentive stock option may result in alternative minimum tax liability for the optionee.  If no disposition of shares issued to an optionee pursuant to the exercise of an incentive stock option is made by the optionee within two years from the date of grant or within one year after the date of exercise, then upon sale of such shares, any amount realized in excess of the exercise price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss, and no deduction will be allowed to Prudential Bancorp for federal income tax purposes.

If shares of common stock acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a "disqualifying disposition"), the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares on the date of exercise (or, if less, the amount realized on an arm's length sale of such shares) over the exercise price of the underlying options, and Prudential Bancorp will be entitled to deduct such amount.  Any gain realized from the shares in excess of the amount taxed as ordinary income will be taxed as capital gain and will not be deductible by Prudential Bancorp.

An incentive stock option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment, except in certain cases where the incentive stock option is exercised after the death or permanent and total disability of the optionee.  If an incentive stock option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a non-qualified stock option.

Non-qualified Stock Options.  No taxable income is recognized by the optionee at the time a non-qualified stock option is granted under the Incentive Plan.  Generally, on the date of exercise of a non-qualified stock option, ordinary income is recognized by the optionee in an amount equal to the difference between the exercise price and the fair market value of the shares on the date of exercise, and Prudential Bancorp receives a tax deduction for the same amount.  Upon disposition of the shares acquired, an optionee generally recognizes the appreciation or depreciation on the shares after the date of exercise as either short-term or long-term capital gain or loss depending on how long the shares have been held.  In general, common stock issued upon exercise of an option granted under the Incentive Plan will be transferable and not subject to a risk of forfeiture at the time issued.

Share Awards.  Upon the receipt of a share award, the holder will realize income for federal income tax purposes equal to the amount received and Prudential Bancorp will be entitled to a deduction for federal income tax purposes in the same amount. Pursuant to Section 83 of the Internal Revenue Code, recipients of share awards will recognize ordinary income in an amount equal to the fair market value of the shares of common stock granted to them at the time that the shares vest and become transferable.   A recipient of a share award may also elect, however, to accelerate the recognition of income with respect to his or her grant to the time when shares of common stock are first transferred to him or her, notwithstanding the vesting schedule of such awards.  Prudential Bancorp will be entitled to deduct as a compensation expense for tax purposes the same amounts recognized as income by recipients of share awards in the year in which such amounts are included in income.

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The above description of tax consequences under federal income tax law is necessarily general in nature and is not complete.  Moreover, statutory provisions are subject to change, as are their interpretations, and their application may vary in individual circumstances.  Finally, the consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws.

Accounting Treatment.  Prudential Bancorp will recognize the cost of employee services received in share-based payment transactions, including stock options, and measure the cost on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the share award or the stock option.   Prudential Bancorp will recognize compensation expense on share awards at the time of vesting.  The amount of compensation expense recognized for accounting purposes is based upon the fair market value of the common stock at the date of grant to recipients, rather than the fair market value at the time of vesting for tax purposes, unless the grants are performance based.   In such event, the fair market value on the date of vesting will be recognized as compensation expense.  The vesting of plan share awards will have the effect of increasing Prudential Bancorp's compensation expense and will be a factor in determining Prudential Bancorp's earnings per share on a fully diluted basis.

Shareholder Approval.  No share awards or stock options can be granted under the Incentive Plan unless the Incentive Plan is approved by shareholders.  Shareholder approval of the Incentive Plan will satisfy certain federal tax requirements applicable to incentive stock options.executive compensation.

The Board of Directors recommends that stockholdersyou vote FOR adoption"FOR" the non-binding resolution to approve the compensation of the
Prudential Bancorp, Inc. 2014 Stock Incentive Plan.

our named executive officers.
 
 
 
 
 
 
 
 
 
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BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth as of December 19, 2014,18, 2015, the voting record date, certain information as to the common stock beneficially owned by (i) each person or entity, including any "group" as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, who or which was known to us to be the beneficial owner of more than 5% of the issued and outstanding common stock, (ii) the directors of Prudential Bancorp, (iii) certain executive officers of Prudential Bancorp (including Prudential Savings Bank); and (iv) all directors and executive officers of Prudential Bancorp as a group.
 
Name of Beneficial
Owner or Number of
Persons in Group
 Amount and Nature of Beneficial Ownership as of December 19, 2014(1)  
Percent of
Common Stock(2)
  
Amount and Nature of
Beneficial Ownership as of
December 18, 2015(1)
  
Percent of
Common Stock(2)
 
Prudential Savings Bank Employee Stock Ownership Plan
1834 West Oregon Avenue
Philadelphia, Pennsylvania 19145
  697,302(3)  7.4%  
697,270
 
 
(3)
 
 
  
8.3
 
 
%
 
 
EJF Capital LLC
2107 Wilson Boulevard, Suite 410
Arlington, Virginia 22201
  494,146(4)  5.3%  
500,000
 
 
(4)
 
 
  
6.0
 
 
%
 
 
Firefly Value Partners, LP
601 West 26th Street
Suite 1520
New York, New York 10001
  
475,250
 
 
 
(5)
 
 
 
  
5.7
 
 
 
%
 
 
 
Warren A. Mackey
40 Worth Street, 10th Floor
New York, New York 10013
  871,204(5)  9.3%  
871,204
 
 
 
(6)
 
 
 
  
10.4
 
 
 
%
 
 
 
Maltese Capital Management LLC
150 East 52nd Street
30th Floor
New York, New York 10022
  
484,900
 
 
 
(7)
 
 
 
  
5.8
 
 
 
%
 
 
 
Lawrence B. Seidman
100 Misty Lane, 1st Floor
Parsippany, New Jersey 07054
  571,664(6)  6.1%  
702,598
 
 
 
(8)
 
 
 
  
8.4
 
 
 
%
 
 
 
Directors:
                
Jerome R. Balka, Esq.
  52,933(7)(8)  *   58,933(9)(10)  * 
Joseph R. Corrato
  94,992(7)(9)  1.0%  130,219(9)(11)  1.5%
A. J. Fanelli
  41,171(7)(10)  *   51,171(9)(12)  * 
John C. Hosier
  35,304(7)(11)  *   48,211(9)(13)  * 
Bruce E. Miller
  19,617(7)  *   36,750(9)  * 
Francis V. Mulcahy
  43,029(7)(12)  *   55,031(9)(14)  * 
Dennis Pollack
  11,500(13)      29,798(9)(15)  * 
Thomas A. Vento.
  191,414(7)(14)  2.0%
Other Named Executive Officer:        
Salvatore Fratanduono
  39,408(7)(15)  * 
        
Other Named Executive Officers (16):        
Jack E. Rothkopf
  13,329(9)(17)  * 
Jeffrey T. Hanuscin
  50,934(9)(18)  * 
All Directors and Executive Officers as a group (11 persons)  570,696(7)  5.9%   475,467(7)  5.5%
___________________
*              Represents less than one percent of Prudential Bancorp's outstanding common stock.

(1)Based upon filings made pursuant to the Securities Exchange Act of 1934 and information furnished by the respective individuals. In addition, due to share repurchases by the Company, the ownership percentages reflected in the filings may differ from the percentages reflected in the table above. Furthermore, share ownership reflected on Schedules 13D and 13G may differ from what is actually held by the reporting persons as of the voting record date due to changes in ownership which were not required to be reported prior to the voting record date. Under regulations promulgated pursuant to the Securities Exchange Act of 1934, shares of common stock are deemed to be beneficially owned by a person if he or she directly or indirectly has or shares (i) voting power, which includes the power to vote or to direct the voting of the shares, or (ii) investment power, which includes the power to dispose or to direct the disposition of the shares.  Unless otherwise indicated, the named beneficial owner has sole voting and dispositive power with respect to the shares.

(Footnotes continued on following pages)
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__________________
(2)Each beneficial owner's percentage ownership is determined by assuming that options held by such person (but not those held by any other person) and that are exercisable within 60 days of the voting record date have been exercised.

(3)As of December 19, 2014, 172,97518, 2015, 213,601 shares held in the Prudential Savings Bank Employee Stock Ownership Plan trust had been allocated to the accounts of participating employees.  Shares beneficially owned by the plan trustees, Messrs. Fanelli, Hosier and Mulcahy, do not include shares held in the trust.  Under the terms of the plan, the trustees vote all allocated shares in accordance with the instructions of the participating employees.  Any unallocated shares are generally required to be voted by the plan trustees in the same ratio on any matter as to those shares for which instructions are given by the participants.
(Footnotes continued on following page)
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_______________
(4)Based on a Schedule 13G13G/A filed with the SECSecurities and Exchange Commission on March 26, 2014February 13, 2015 by EJF Capital LLC ("EJF"), Emanuel J. Friedman, EJF Financial Services Fund, L.P. ("EJF Fund"), and EJF Financial Services GP ("EJF Fund GP"), LLC. EJF has shared voting and dispositive power with respect to all the shares. EJF Fund is the record owner of the shares. EJF Fund GP serves as the general partner and investment manager of EJF Fund and may be deemed to share beneficial ownership of the shares of common stock of which EJF Fund is the record owner. EJF is the sole member and manager of EJF Fund GP and may be deemed to share beneficial ownership of the shares of common stock of which such entity may share beneficial ownership. Emanuel J. Friedman is the controlling member of EJF and may be deemed to share beneficial ownership of the shares of common stock over which EJF may share beneficial ownership.

(5)Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 17, 2015 by Firefly Value Partners, LP ("Firefly Partners"), FBP GP, LLC ("FVPGP"), Firefly Management Company GP, LLC ("Firefly Management"), FVP Master Fund, L.P. ("FVP MasterFund"), Ryan Heslop and Ariel Warszawski. Firefly Partners is the investment manager of FVP Master Fund; FVP GP serves as the general partner of FVP Master Fund; and Firefly Management serves as general partner of Firefly Partners. Messrs. Heslop and Warszawski are the managing members of FVP GP and Firefly Management. FVP Master Fund directly owns the shares set forth in the Schedule 13G/A. Messrs. Heslop and Warszawski, Firefly Partners, Firefly Management and FVP GP may be deemed to share with FVP Master Fund both voting and dispositive power with respect to such shares.

(6)Based on a Schedule 13D/A filed with the SECSecurities and Exchange Commission on February 12, 2014 by Warren A. Mackey, Homestead Partners LP, a Delaware limited partnership, Arles Partners LP, a New York limited partnership, and Arles Advisors Inc., a New York corporation.  Arles Advisors is the general partner of Homestead Partners and Arles Partners.  The sole shareholder, director and executive officer of Arles Advisors is Warren A. Mackey.  By virtue of his position with Arles Advisors, Mr. Mackey has the shared investment discretion and voting authority with respect to the 838,676 shares owned by Homestead Partners and Arles Partners. Arles Advisors, as general partner of Homestead Partners and Arles Partners, may be deemed to beneficially own the 838,976 shares owned by these partnerships. Mr. Mackey individually has the sole investment discretion and voting authority with respect to the 32,228 shares held for himself.

(6)(7)Based on a Schedule 13G filed with the Securities and Exchange Commission on February 12, 2015 by Maltese Capital Management LLC ("Maltese Capital') and Terry Maltese, the managing member of Maltese Capital. Maltese Capital and Mr. Maltese may be deemed to share both voting and dispositive power with respect to the shares reported in the Schedule 13G.

(8)Based on a Schedule 13D/A filed on September 4, 2014August 17, 2015 by Lawrence B. Seidman, Seidman and Associates L.L.C. ("SAL"), Seidman Investment Partnership, L.P. ("SIP"), Seidman Investment Partnership II, L.P. ("SIPII"), Seidman Investment Partnership III, L.P. ("SIPIII"), LSBK06-08 ("LSBK"), Broad Park Investors ("Broad Park"), CBPS, L.L.C. ("CBPS"), JRBC I, LLC ("JRBC"), 2514 Multi-Strategy Fund, L.P. ("2514 MSF"), Veteri Place Corporation ("Veteri"), Sonia Seidman and Dennis Pollack (collectively, the "Seidman Group") aas well as a Form 34 filed by Mr. Pollack on November 19, 2014.June 3, 2015. Mr. Seidman (i) as the manager of SAL, may be deemed the beneficial owner of the 114,000139,347 shares owned by SAL, (ii) as the sole officer of Veteri, the corporate general partner of each of SIP and SIPII, may be deemed the beneficial owner of the 77,00093,972 shares owned by SIP and the 91,102130,619 shares owned by SIPII, (iii) as the managing member of JBRC I, LLC, the co-general partner of SIPIII, may be deemed the beneficial owner of the 18,000 shares owned by SIPIII, (iv) as the sole officer of Veteri, the Trading Advisor of LSBK and CBPS, may be deemed the beneficial owner of the 51,42659,426 shares owned by LSBK and the 54,00070,000 shares owned by CBPS, (v) as the investment manager for each of Broad Park and 2514 MSF, may be deemed the beneficial owner of the 56,00087,800 shares owned by Broad Park and the 52,00027,000 shares owned by 2514 MSF, and (vi) as the husband of Sonia Seidman, may be deemed the beneficial owner of the 46,636 shares owned by Sonia Seidman. Accordingly, Seidman may be deemed the beneficial owner of an aggregate of 560,164672,800 shares. In the foregoing capacities, Seidman has sole and exclusive investment discretion and voting authority with respect to all such shares.  Mr. Pollack individually has the sole investment discretion and voting authority with regard to the 11,50029,798 shares owned thereby included in the amount shown in the table.
(Footnotes continued on following page)
35

_______________________
(7)(9)
Includes shares held in trust by Prudential Bancorp's 2008 RRP or granted pursuant to the 2014 SIP which have been awarded to the directors and officers and stock options which have been granted to the directors and officers under Prudential Bancorp's Option Plan2008 SOP or under the 2014 SIP and which are exercisable within 60 days of the voting record date as follows:

Name RRP Shares  Stock Options  Restricted Stock  Stock Options 
Jerome R. Balka, Esq.  --   26,690   10,000   22,690 
Joseph R. Corrato  3,021   58,480   32,266   61,029 
A.J. Fanelli  --   26,690   10,000   26,690 
John C. Hosier  5,338   18,683   13,203   21,352 
Bruce E. Miller  4,271   8,007   13,204   13,345 
Francis V. Mulcahy  --   26,690   10,000   26,690 
Dennis Pollack  --   --   10,000   -- 
Thomas A. Vento  4,763   114,436 
Salvatore Fratanduono  1,662   23,713 
Jack E. Rothkopf  16,247   22,223 
Jeffrey T. Hanuscin  7,210   4,068 
All directors and executive officers as a group (11 persons)  23,663   326,466   122,130   202,087 

(8)(10)Includes 4,721 shares held in Mr. Balka's individual retirement account, 14,375 shares held jointly with Mr. Balka's spouse, 1,888 shares held in Mr. Balka's 401(k) Plan and 66 shares held by the estate of Helen Klara for whom Mr. Balka is guardian. Also includes 4,721 shares held by the Balka Grandchildren Trust and 472 shares held by the Danielle Thomas Revocable Trust, over which Mr. Balka disclaims beneficial ownership.

(9)(11)Includes 6,2157,037 shares (units) and 11,47713,399 shares allocated to Mr. Corrato's accounts in Prudential Savings Bank'sSavings' 401(k) Plan and Employee Stock Ownership Plan,ESOP, respectively, over which Mr. Corrato has voting power and 8082 shares held by Mr. Corrato as custodian for his son.

(10)(12)Includes 3,304 shares held jointly with Mr. Fanelli's spouse.

(11)(13)Includes 5,9466,018 shares held in Mr. Hosier's account in his 401(k) plan.
(Footnotes continued on following page)
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(12)(14)Includes 2,000 shares held jointly with Mr. Mulcahy's spouse and 2,832 shares held directly by Mr. Mulcahy's spouse.

(13)(15)Includes 1,50019,588 shares held in Mr. Pollack's individual retirement account. Mr. Pollack disclaims beneficial ownership of the 560,164672,800 shares owned by the Seidman Group excluding his shares.

(14)(16)Includes 22,143 shares held jointly with Mr. Vento's spouse. Includes 36,078 shares (units)Excludes Messrs. Vento and 13,994 shares allocated to Mr. Vento's accounts inFratanduono who are no longer officers and/or directors of Prudential Savings Bank's 401(k) Plan and Employee Stock Ownership Plan, respectively, over which Mr. Vento has voting power and 22,143 shares held jointly with Mr. Vento's spouse.Bancorp.

(15)(17)Includes 3,906637 shares (units)(units and 6,594944 shares allocated to Mr. Fratanduono's accountsHanuscin in Prudential Savings Bank's 401(k) Plan and Employee Stock Ownership Plan,the ESOP, respectively, over which Mr. FratanduonoHanuscin has voting power.

(18)Includes 6,337 shares allocated to Mr. Rothkopf's account in the ESOP over which Mr. Rothkopf has voting authority.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the officers and directors, and persons who own more than 10% of Prudential Bancorp's common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission.  Officers, directors and greater than 10% shareholders are required by regulation to furnish Prudential Bancorp with copies of all Section 16(a) forms they file.  We know of no person who owns 10% or more of our common stock.

Based solely on our review of the copies of such forms furnished to us, or written representations from our officers and directors, we believe that during, and with respect to, the fiscal year ended September 30, 2014,2015, our officers and directors complied in all respects with the reporting requirements promulgated under Section 16(a) of the Securities Exchange Act of 1934.

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RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL TWO)THREE)

The Audit Committee of the Board of Directors of Prudential Bancorp has appointed S.R. Snodgrass, P.C., an independent registered public accounting firm, to perform the audit of our financial statements for the year ending September 30, 2015,2016, and further directed that the appointment of S.R. Snodgrass as our auditors be submitted for ratification by the shareholders at the annual meeting.

We have been advised by S.R. Snodgrass that neither that firm nor any of its associates has any relationship with Prudential Bancorp or its subsidiaries other than the usual relationship that exists between an independent registered public accounting firm and its clients.  S.R. Snodgrass will have one or more representatives at the annual meeting who will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.

In determining whether to appoint S.R. Snodgrass as our independent registered public accounting firm, the Audit Committee considered whether the provision of services, other than auditing services, by S.R. Snodgrass is compatible with maintaining its independence.  In addition to performing auditing services, our independent registered public accounting firm reviewed our public filings.  The Audit Committee believes that S.R. Snodgrass's performance of these other services is compatible with maintaining the independent registered public accounting firm's independence.

Audit Fees

The following table sets forth the aggregate fees paid by us to S.R. Snodgrass for professional services in connection with the audit of Prudential Bancorp's consolidated financial statements for fiscal 20142015 and 20132014 and the fees paid by us to S.R. Snodgrass for audit-related services, tax services and all other services during fiscal 20142015 and 2013.2014.
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 Year Ended September 30,  Year Ended September 30, 
 2014  2013  2015  2014 
Audit fees (1)
 $161,257  $166,362  $169,858  $161,257 
Audit-related fees
  --   --   --   -- 
Tax fees (2)
  24,564   24,897   22,770   24,564 
All other fees
  --   --   --   -- 
Total
 $185,821  $191,259  $192,628  $185,821 
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(1)Audit fees consist of fees incurred in connection with the audit of our annual financial statements and the review of the interim financial statements included in our quarterly reports filed with the Securities and Exchange Commission, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits, consents and assistance with and review of documents filed with the Securities and Exchange Commission.

(2)Tax fees consist of compliance fees for the preparation of tax returns during fiscal 20142015 and 2013.2014.

The Audit Committee selects our independent registered public accounting firm and pre-approves all audit services to be provided by it to Prudential Bancorp.  The Audit Committee also reviews and pre-approves all audit-related and non-audit related services rendered by our independent registered public accounting firm in accordance with the Audit Committee's Charter.  In its review of these services and related fees and terms, the Audit Committee considers, among other things, the possible effect of the performance of such services on the independence of our independent registered public accounting firm.  The Audit Committee pre-approves certain audit-related services and certain non-audit related tax services which are specifically described by the Audit Committee on an annual basis and separately approves other individual engagements as necessary.  The Chairman of the Audit Committee has been delegated the authority to approve non-audit related services in lieu of the full Audit Committee.  On a quarterly basis, the Chairman of the Audit Committee presents any previously approved engagements to the full Audit Committee.

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Each new engagement of S.R. Snodgrass, P.C. was approved in advance by the Audit Committee or its Chairman, and none of those engagements made use of the de minimis exception to pre-approval contained in the Securities and Exchange Commission's rules.

The Board of Directors recommends that you vote FOR the ratification of the
appointment of S.R. Snodgrass, P.C. for the fiscal year ending September 30, 2015.2016.

SHAREHOLDER PROPOSALS, NOMINATIONS AND COMMUNICATIONS
WITH THE BOARD OF DIRECTORS

Shareholder Proposals.  Any proposal which a shareholder wishes to have included in the proxy materials of Prudential Bancorp relating to the next annual meeting of shareholders of Prudential Bancorp, which is expected to be held in February 2016,2017, must be received at the principal executive offices of Prudential Bancorp, 1834 West Oregon Avenue, Philadelphia, Pennsylvania 19145, Attention: Joseph R. Corrato, Executive Vice President and Chief FinancialExecutive Officer, no later than September 1, 2015.10, 2016.  If such proposal is in compliance with all of the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, it will be included in the proxy statement and set forth on the form of proxy issued for such annual meeting of shareholders.  It is urged that any such proposals be sent certified mail, return receipt requested. We did not receive any shareholder proposals for this annual meeting.

Shareholder proposals which are not submitted for inclusion in Prudential Bancorp's proxy materials pursuant to Rule 14a-8 may be brought before an annual meeting pursuant to Section 2.10 of Prudential Bancorp's Bylaws.  Notice of the proposal must be given in writing and delivered to, or mailed and received at, our principal executive offices by September 1, 2015.10, 2016.  The notice must include the information required by Section 2.10 of our Bylaws.

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Shareholder Nominations.  Our Bylaws provide that, subject to the rights of the holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, all nominations for election to the Board of Directors, other than those made by the Board or a committee thereof, shall be made by a shareholder who has complied with the notice and information requirements contained in Section 3.12 of our Bylaws.  Written notice of a shareholder nomination generally must be communicated to the attention of the Secretary and either delivered to, or mailed and received at, our principal executive offices not later than, with respect to an annual meeting of shareholders, 120 days prior to the anniversary date of the mailing of proxy materials by us in connection with the immediately preceding annual meeting of shareholders or, in the case of the 20162017 annual meeting, by September 1, 2015.10, 2016.  We did not receive any shareholder nominations for this annual meeting.

Other Shareholder Communications.  Shareholders who wish to communicate with the Board may do so by sending written communications addressed to the Board of Directors of Prudential Bancorp, Inc., c/o Regina Wilson, Corporate Secretary, at 1834 West Oregon Avenue, Philadelphia, Pennsylvania 19145.  Ms. Wilson will forward such communications to the director or directors to whom they are addressed.

ANNUAL REPORTS

A copy of Prudential Bancorp's Annual Report to Shareholders, which includes the Annual Report on Form 10-K for the year ended September 30, 2014,2015, accompanies this proxy statement.  Such Annual Report is not part of the proxy solicitation materials.

Upon receipt of a written request, we will furnish to any shareholder a copy of the exhibits to the Annual Report on Form 10-K.  Such written requests should be directed to Mr. Joseph R. Corrato, Executive Vice President and Chief FinancialExecutive Officer, Prudential Bancorp, Inc., 1834 West Oregon Avenue, Philadelphia, Pennsylvania 19145.

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OTHER MATTERS

Management is not aware of any business to come before the annual meeting other than the matters described above in this proxy statement.  However, if any other matters should properly come before the meeting, it is intended that the proxies solicited hereby will be voted with respect to those other matters in accordance with the judgment of the persons voting the proxies.

Solicitation of Proxies.  The cost of the solicitation of proxies will be borne by Prudential Bancorp.  Prudential Bancorp has retained Georgeson, Inc., a professional proxy solicitation firm, to assist in the solicitation of proxies. The fee arrangement with such firm is $6,000 plus reimbursement for out of pocket expenses. Prudential Bancorp will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending the proxy materials to the beneficial owners of Prudential Bancorp's common stock.  In addition to solicitations by mail, directors, officers and employees of Prudential Bancorp may solicit proxies personally or by telephone without additional compensation.
 
 
 
 
 
 
 
 
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APPENDIX A
 
 
PRUDENTIAL BANCORP, INC.
2014 STOCK INCENTIVE PLAN

ARTICLE I
ESTABLISHMENT OF THE PLAN

Prudential Bancorp, Inc. (the "Corporation") hereby establishes this 2014 Stock Incentive Plan (the "Plan") upon the terms and conditions hereinafter stated.

ARTICLE II
PURPOSE OF THE PLAN

The purpose of this Plan is to improve the growth and profitability of the Corporation and its Subsidiary Companies by providing Employees and Non-Employee Directors with a proprietary interest in the Corporation as an incentive to contribute to the success of the Corporation and its Subsidiary Companies, and rewarding Employees and Non-Employee Directors for outstanding performance.  All Incentive Stock Options issued under this Plan are intended to comply with the requirements of Section 422 of the Code and the regulations thereunder, and all provisions hereunder shall be read, interpreted and applied with that purpose in mind.


ARTICLE III

DEFINITIONS

3.01"Award" means an Option or Share Award granted pursuant to the terms of this Plan.

3.02"Bank" means Prudential Savings Bank, the wholly owned subsidiary of the Corporation.

3.03"Beneficiary" means the person or persons designated by a Recipient or Optionee to receive any benefits payable under the Plan in the event of such Recipient's death.  Such person or persons shall be designated in writing on forms provided for this purpose by the Committee and may be changed from time to time by similar written notice to the Committee.  In the absence of a written designation, the Beneficiary shall be the Recipient's surviving spouse, if any, or if none, his estate.

3.04"Board" means the Board of Directors of the Corporation.

3.05"Change in Control" means a change in the ownership of the Corporation or the Bank, a change in the effective control of the Corporation or the Bank or a change in the ownership of a substantial portion of the assets of the Corporation or the Bank, in each case as provided under Section 409A of the Code and the regulations thereunder.

3.06"Code" means the Internal Revenue Code of 1986, as amended.

3.07"Committee" means a committee of two or more directors appointed by the Board pursuant to Article IV hereof.

3.08"Common Stock" means shares of the common stock, $0.01 par value per share, of the Corporation.

3.09"Disability" means in the case of any Optionee or Recipient that the Optionee or Recipient: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Corporation or the Bank (or would have received such benefits for at least three months if he had been eligible to participate in such plan).  If the determination of Disability relates to an Incentive Stock Option, Disability means Permanent and Total Disability as defined in Section 22(e)(3) of the Code.  In the event of a dispute, the determination of whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.

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3.10"Effective Date" means the date upon which the approval of this Plan by both the Board and the shareholders of the Corporation has been obtained.

3.11"Employee" means any person who is employed by the Corporation or a Subsidiary Company, including an Officer of the Corporation or a Subsidiary Company, but not including directors who are not also Officers of or otherwise employed by the Corporation or a Subsidiary Company.

3.12"Exchange Act" means the Securities Exchange Act of 1934, as amended.

3.13"Exercise Price" means the price at which a share of Common Stock may be purchased by an Optionee pursuant to an Option.

3.14"Fair Market Value" shall be equal to the fair market value per share of the Corporation's Common Stock on the date an Award is granted.  For purposes hereof, the Fair Market Value of a share of Common Stock shall be the closing sale price of a share of Common Stock on the date in question (or, if such day is not a trading day in the U.S. markets, on the nearest preceding trading day), as reported on the principal exchange on which the Common Stock is listed or national quotation system in which such shares are then traded, or if no such closing prices are reported, the mean between the high bid and low asked prices that day on the principal market or national quotation system then in use.  Notwithstanding the foregoing, if the Common Stock is not readily tradable on an established securities market for purposes of Section 409A of the Code, then the Fair Market Value shall be determined by means of a reasonable valuation method that takes into consideration all available information material to the value of the Corporation and that otherwise satisfies the requirements applicable under Section 409A of the Code and the regulations thereunder.

3.15"Incentive Stock Option" means any Option granted under this Plan which the Board intends (at the time it is granted) to be an incentive stock option within the meaning of Section 422 of the Code or any successor thereto.

3.16"Non-Employee Director" means a member of the Board of the Corporation or Board of Directors of the Bank, including an advisory director or a director emeritus of the Board of the Corporation and/or Board of Directors of any Subsidiary Company or a former Officer or Employee of the Corporation and/or any Subsidiary Company serving as a Director or as an advisory or emeritus director, who is not an Officer or Employee of the Corporation or any Subsidiary Company.

3.17"Non‑Qualified Option" means any Option granted under this Plan which is not an Incentive Stock Option.
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3.18"Offering" means the offering of Common Stock to the public completed in 2013 in connection with the second-step conversion of Prudential Mutual Holding Company.

3.19"Officer" means an Employee whose position in the Corporation or Subsidiary Company is that of a corporate officer, as determined by the Board.

3.20"Option" means a right granted under this Plan to purchase Common Stock.

3.21"Optionee" means an Employee or Non-Employee Director or former Employee or Non-Employee Director to whom an Option is granted under the Plan.

3.22"Performance Share Award" means a Share Award granted to a Recipient pursuant to Section 9.06 of the Plan.

3.23"Performance Goal" means an objective for the Corporation or any Subsidiary Company or any unit thereof or any Employee of the foregoing that may be established by the Committee for a Performance Share Award to become vested, earned or exercisable.  The establishment of Performance Goals is intended to make the applicable Performance Share Awards "performance based" compensation within the meaning of Section 162(m) of the Code, and the Performance Goals shall be based on one or more of the following criteria:

·net income or net income per share (before or after taxes, diluted or not diluted (with respect to per share net income) and whether or not excluding specific items, including but not limited to stock-based or other compensation expense);
·return measures (including, but not limited to, total shareholders' return, return on average assets, return on average shareholders' equity, return of investment and cash return on tangible equity);
·net interest income and net interest income on a tax-equivalent basis;
·net interest margin and net interest margin on a tax-equivalent basis;
·net non-interest expense to average assets;
·interest sensitivity gap levels;
·expense targets, efficiency ratio or other expense measures;
·levels or growth of assets or loans (in total or with respect to specific categories);
·levels or growth of deposits (in total or with respect to specific categories of deposit accounts);
·loan origination volume;
·market share;
·levels and values of securities investments;
·asset quality levels;
·business expansion or consolidation performance;
·strategic plan development and implementation;
·share price;
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·regulatory compliance and capital levels;
·financial ratings;
·achievement of balance sheet or income statement objectives, or other financial, accounting or quantitative objectives established by the Committee; and
·any combination of the foregoing.

Performance goals with respect to the foregoing criteria may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index, that the Committee deems appropriate.  Any member of a comparator group or an index that disappears during a measurement period shall be disregarded for the entire measurement period.  Performance Goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion).

3.24"Recipient" means an Employee or Non-Employee Director who receives a Share Award or Performance Share Award under the Plan.

3.25"Retirement" means:

(a)a termination of employment which constitutes a "retirement" at the "normal retirement age" or later under the Bank's 401(k) Plan or such other qualified pension benefit plan maintained by the Corporation or a Subsidiary Company as may be designated by the Board or the Committee, or, if no such plan is applicable, which would constitute "retirement" under the Bank's 401(k) Plan, if such individual were a participant in that plan provided, however, that the provisions of this subsection (a) will not apply as long as an Optionee continues to serve as a Non-Employee Director, including service as an advisory director or a director emeritus.

(b)With respect to Non-Employee Directors, retirement means retirement from service on the Board of Directors of the Corporation or a Subsidiary Company or any successors thereto (including service as an advisory director or a director emeritus to the Corporation or any Subsidiary Company) after reaching normal retirement age as established by the Corporation.

3.26"Share Award" means a right granted under this Plan to receive a distribution of shares of Common Stock upon completion of the service and other requirements described in Article IX and includes Performance Share Awards.

3.27"Subsidiary Companies" means those subsidiaries of the Corporation, including the Bank, which meet the definition of "subsidiary corporations" set forth in Section 424(f) of the Code, at the time of granting of the Award in question.

ARTICLE IV
ADMINISTRATION OF THE PLAN

4.01Duties of the Committee.  The Plan shall be administered and interpreted by the Committee, as appointed from time to time by the Board pursuant to Section 4.02.  The Committee shall have the authority to adopt, amend and rescind such rules, regulations and procedures as, in its opinion, may be advisable in the administration of the Plan, including, without limitation, rules, regulations and procedures which (i) deal with satisfaction of an Optionee's tax withholding obligation pursuant to Article XIII hereof, (ii) include arrangements to facilitate the Optionee's ability to borrow funds for payment of the exercise or purchase price of an Award, if applicable, from securities brokers and dealers, and (iii) include arrangements which provide for the payment of some or all of such exercise or purchase price by delivery of previously owned shares of Common Stock or other property and/or by withholding some of the shares of Common Stock which are being acquired.  The interpretation and construction by the Committee of any provisions of this Plan, any rule, regulation or procedure adopted by it pursuant hereto or of any Award shall be final and binding in the absence of action by the Board.
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4.02Appointment and Operation of the Committee. The members of the Committee shall be appointed by, and will serve at the pleasure of, the Board.  The Board from time to time may remove members from, or add members to, the Committee, provided the Committee shall continue to consist of two or more members of the Board, each of whom shall be a Non-Employee Director, as defined in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor thereto.  In addition, each member of the Committee shall be an (i) "outside director" within the meaning of Section 162(m) of the Code and regulations thereunder at such times as is required under such regulations and (ii) an "independent director" as such term is defined in Rule 5605(a)(2) of the Marketplace Rules of the Nasdaq Stock Market or any successor thereto.  The Committee shall act by vote or written consent of a majority of its members.  Subject to the express provisions and limitations of the Plan, the Committee may adopt such rules, regulations and procedures as it deems appropriate for the conduct of its affairs.  It may appoint one of its members to be chairman and any person, whether or not a member, to be its secretary or agent.  The Committee shall report its actions and decisions to the Board at appropriate times but in no event less than one time per calendar year.

4.03Revocation for Misconduct.  The Board or the Committee may by resolution immediately revoke, rescind and terminate any Award, or portion thereof, to the extent not yet vested and in the case of Options, not yet exercised, previously granted or awarded under this Plan to an Employee who is discharged from the employ of the Corporation or a Subsidiary Company for cause, which, for purposes hereof, shall mean termination because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order.  In addition, the Committee may specify in the Awards granted to those Optionees or Recipients subject to the provisions of Section 304 of the Sarbanes-Oxley Act of 2002 such provisions regarding recoupment as are deemed appropriate. Awards, or portions thereof, to the extent not yet vested and in the case of Options, not yet exercised, previously granted or awarded to a Non-Employee Director who is removed for cause pursuant to the Corporation's Articles of Incorporation or Bylaws or the constituent documents of such Subsidiary Company on whose board he serves shall terminate as of the effective date of such removal.

4.04Limitation on Liability.  Neither the members of the Board nor any member of the Committee shall be liable for any action or determination made in good faith with respect to this Plan, any rule, regulation or procedure adopted by it pursuant hereto or any Awards granted under it.  If a member of the Board or the Committee is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of anything done or not done by him in such capacity under or with respect to the Plan, the Corporation shall, subject to the requirements of applicable laws and regulations, indemnify such member against all liabilities and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in the best interests of the Corporation and its Subsidiary Companies and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
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4.05Compliance with Laws and Regulations.  All Awards granted hereunder shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.  The Corporation shall not be required to issue or deliver any certificates for shares of Common Stock prior to the completion of any registration or qualification of or obtaining of consents or approvals with respect to such shares under any federal or state law or any rule or regulation of any government body, which the Corporation shall, in its sole discretion, determine to be necessary or advisable.  Moreover, no Option may be exercised if such exercise would be contrary to applicable laws and regulations.

4.06Restrictions on Transfer.  The Corporation may place a legend upon any certificate representing shares acquired pursuant to an Award granted hereunder noting that the transfer of such shares may be restricted by applicable laws and regulations.

4.07No Deferral of Compensation Under Section 409A of the Code.  All Awards granted under the Plan are designed to not constitute a deferral of compensation for purposes of Section 409A of the Code.  Notwithstanding any other provision in this Plan to the contrary, all of the terms and conditions of any Options granted under this Plan shall be designed to satisfy the exemption for stock options set forth in the regulations issued under Section 409A of the Code.  Both this Plan and the terms of all Options granted hereunder shall be interpreted in a manner that requires compliance with all of the requirements of the exemption for stock options set forth in the regulations issued under Section 409A of the Code.  No Optionee shall be permitted to defer the recognition of income beyond the exercise date of a Non-Qualified Option or beyond the date that the Common Stock received upon the exercise of an Incentive Stock Option is sold.  No Recipient shall be permitted to defer the recognition of income beyond the date a Share Award shall be deemed earned pursuant to Article IX of this Plan.

ARTICLE V
ELIGIBILITY

Awards may be granted to such Employees and Non-Employee Directors of the Corporation and its Subsidiary Companies as may be designated from time to time by the Board or the Committee.  Awards may not be granted to individuals who are not Employees or Non-Employee Directors of either the Corporation or its Subsidiary Companies.  Non-Employee Directors shall not be eligible to receive Incentive Stock Options under the Plan.

ARTICLE VI
COMMON STOCK COVERED BY THE PLAN

6.01Number of Shares.  The aggregate number of shares of Common Stock which may be issued pursuant to this Plan, subject to adjustment as provided in Article X, shall be 999,800.  None of such shares shall be the subject of more than one Award at any time, but if (i) an Option as to any shares is surrendered before exercise, or expires or terminates for any reason without having been exercised in full, or for any reason ceases to be exercisable or (ii) a Share Award as to any shares is surrendered before becoming fully vested, or expires or terminates for any reason without vesting in full, the number of shares covered thereby which shall not have vested shall again become available for grant under the Plan as if no Award had been previously granted with respect to such shares. Any shares of Common Stock (i) tendered by an Optionee or withheld by the Corporation in payment of the tax withholding obligation related to an Option, (ii) tendered by an Optionee or withheld by the Corporation, to the extent permitted pursuant to Section 8.07, as payment for the exercise price of an Option, or (iii) reacquired by the Corporation on the open market or otherwise using cash proceeds from the exercise of an Option granted pursuant to the Plan shall not be added to the aggregate number of shares of Common Stock available for issuance under the Plan as set forth in this Section 6.01.

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6.02Source of Shares.  The shares of Common Stock issued under the Plan may be authorized but unissued shares, treasury shares or shares purchased by the Corporation on the open market or from private sources for use under the Plan.

ARTICLE VII
DETERMINATION OF AWARDS, NUMBER OF SHARES, ETC.

7.01Determination of Awards.  The Committee shall, in its discretion, determine from time to time which Employees and Non-Employee Directors will be granted Awards under the Plan, the number of shares of Common Stock subject to each Award, whether each Option will be an Incentive Stock Option or a Non‑Qualified Option and the Exercise Price of an Option and whether a Share Award will be a Performance Share Award.  In making all such determinations, there shall be taken into account the duties, responsibilities and performance of each Optionee or Recipient, his present and potential contributions to the growth and success of the Corporation, his salary and such other factors deemed relevant to accomplishing the purposes of the Plan.

7.02Limitation on Share Awards and Options.  Notwithstanding anything contained in this Plan to the contrary, the maximum number of shares of Common Stock to which Share Awards may be issued under this Plan shall be 285,655 shares, or 28.57% of the total shares available for issuance under this Plan, subject to adjustment to the extent provided by Article X hereof. In addition, notwithstanding anything contained in this Plan to the contrary, the maximum number of shares of Common Stock to which Options may be issued under this Plan shall be 714,145 shares or 71.43% of the total shares available for issuance under this Plan, subject to adjustment to the extent provided by Article X hereof.

7.03Maximum Awards.  Notwithstanding anything contained in this Plan to the contrary, the maximum number of shares of Common Stock to which Options or Share Awards may be granted to any individual Employee and any non-Employee Director shall not exceed 25% and 5%, respectively, of the number of shares of Common Stock initially available under the Plan for each of Option or Share Awards, as applicable, as established by Section 7.02 hereof, subject to adjustment as provided in Article X hereof.  Options and Share Awards to Non-Employee Directors in the aggregate may not exceed 30% of each of the number of shares initially available under this Plan for Options and Share Awards, respectively, as established by Section 7.02 hereof, subject to adjustment as provided in Article X hereof.

ARTICLE VIII
OPTIONS

Each Option granted hereunder shall be on the following terms and conditions:

8.01Stock Option Agreement.  The proper Officers on behalf of the Corporation and each Optionee shall execute a stock option agreement (the "Option Agreement") which shall set forth the total number of shares of Common Stock to which it pertains, the exercise price, whether it is a Non‑Qualified Option or an Incentive Stock Option, and such other terms, conditions, restrictions and privileges as the Board or the Committee in each instance shall deem appropriate, provided they are not inconsistent with the terms, conditions and provisions of this Plan.  Each Optionee shall receive a copy of his executed Option Agreement.  Any Option granted with the intention that it will be an Incentive Stock Option but which fails to satisfy a requirement for Incentive Stock Options shall continue to be valid and shall be treated as a Non-Qualified Option.
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8.02Option Exercise Price.
(a)Incentive Stock Options.  The per share price at which the subject Common Stock may be purchased upon exercise of an Incentive Stock Option shall be no less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock at the time such Incentive Stock Option is granted, except as provided in Section 8.09(b), and subject to any applicable adjustment pursuant to Article X hereof.

(b)Non‑Qualified Options.  The per share price at which the subject Common Stock may be purchased upon exercise of a Non‑Qualified Option shall be established by the Committee at the time of grant, but in no event shall be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock at the time such Non‑Qualified Option is granted, and subject to any applicable adjustment pursuant to Article X hereof.

(c)Prohibition on Repricing.  Except as provided in Section 10.01 hereof in connection with a corporate transaction involving the Corporation (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding Options may not be amended to reduce the exercise price of outstanding Options or cancel, exchange, buyout or surrender outstanding Options in exchange for cash, other Awards or Options with an exercise price that is less than the exercise price of the original Options without prior shareholder approval.

8.03Vesting and Exercise of Options.

(a)General Rule.  Incentive Stock Options and Non‑Qualified Options shall become vested and exercisable at the rate, to the extent and subject to such limitations as may be specified by the Board or the Committee and the right to exercise shall be cumulative; provided, however, such rate shall be no more rapid than twenty percent (20%) per year, commencing one year from the date of grant.  Notwithstanding the foregoing, except as provided in Section 8.03(b) hereof, no vesting shall occur on or after an Optionee's employment or service as a Non-Employee Director (which, for purposes hereof, shall include service as an advisory director or director emeritus) with the Corporation and all Subsidiary Companies is terminated for any reason other than his death, Disability or a Change in Control.  Service as an advisory director or director emeritus shall constitute service for purposes of vesting of an Option.  In determining the number of shares of Common Stock with respect to which Options are vested and/or exercisable, fractional shares will be rounded up to the nearest whole number if the fraction is 0.5 or higher, and down if it is less.

(b)Accelerated Vesting.  Unless the Committee or Board shall specifically state otherwise at the time an Option is granted, all Options granted under this Plan shall become vested and exercisable in full on the date an Optionee terminates his employment with the Corporation or a Subsidiary Company or service as a Non-Employee Director (which, for purposes hereof, shall include service as an advisory director or director emeritus) because of his death or Disability.  In addition, all outstanding Options shall become immediately vested and exercisable in full as of the effective date of a Change in Control.

8.04Duration of Options.

(a)General Rule.  Except as provided in Sections 8.04(b) and 8.09, each Option or portion thereof shall be exercisable at any time on or after it vests and remain exercisable until the earlier of (i) ten (10) years after its date of grant or (ii) six (6) months after the date on which the Employee or Non-Employee Director ceases to be employed by or serve the Corporation and all Subsidiary Companies, or any successor thereto, unless the Board or the Committee in its discretion decides at the time of grant to extend such six-month period in clause (ii) to a period not exceeding three (3) years.  In the event an Incentive Stock Option is not exercised within 90 days of the effective date of termination of the Optionee's status as an employee, the tax treatment accorded Incentive Stock Options by the Code may not be available.  In addition, the accelerated vesting of Incentive Stock Options provided by Section 8.04 may result in all or a portion of such Incentive Stock Options no longer qualifying as Incentive Stock Options.

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(b)Exceptions.  Unless the Board or the Committee shall specifically state otherwise at the time an Option is granted, if an Employee or Non-Employee Director terminates his employment or service as a director (including service as an advisory director or directory emeritus) with the Corporation or a Subsidiary Company as a result of Disability or Retirement without having fully exercised his Options, the Employee or Non-Employee Director shall have the right to exercise such Options following his termination due to Disability or Retirement until three (3) years following the date of termination of employment or service as a Non-Employee Director due to Disability or Retirement, subject to the last sentence of this Section 8.04(b).

Unless the Board or the Committee shall specifically state otherwise at the time an Option is granted, if an Employee or Non-Employee Director terminates his employment or service with the Corporation or a Subsidiary Company following a Change in Control without having fully exercised his Options, the Optionee shall have the right to exercise such Options during the remainder of the original ten (10) year term (or five (5) year term for Options subject to Section 8.09(b) hereof) of the Option from the date of grant.

If an Optionee dies while in the employ or service of the Corporation or a Subsidiary Company or terminates employment or service with the Corporation or a Subsidiary Company as a result of Disability or Retirement and dies without having fully exercised his Options, the executors, administrators, legatees or distributees of his estate shall have the right, during the one (1) year period following his death, to exercise such Options.

In no event, however, shall any Option be exercisable more than ten (10) years (five (5) years for Options subject to Section 8.09(b) hereof) from the date it was granted.

8.05Nonassignability.  Options shall not be transferable by an Optionee except by will or the laws of descent or distribution, and during an Optionee's lifetime shall be exercisable only by such Optionee or the Optionee's guardian or legal representative.  Notwithstanding the foregoing, or any other provision of this Plan, an Optionee who holds Non-Qualified Options may transfer such Options to his or her spouse, lineal ascendants, lineal descendants, or to a duly established trust for the benefit of one or more of these individuals.  Options so transferred may thereafter be transferred only to the Optionee who originally received the grant or to an individual or trust to whom the Optionee could have initially transferred the Option pursuant to this Section 8.05.  Options which are transferred pursuant to this Section 8.05 shall be exercisable by the transferee according to the same terms and conditions as applied to the Optionee.

8.06Manner of Exercise.  Options may be exercised in part or in whole and at one time or from time to time.  The procedures for exercise shall be set forth in the written Option Agreement provided for in Section 8.01 above.

8.07Payment for Shares.  Payment in full of the purchase price for shares of Common Stock purchased pursuant to the exercise of any Option shall be made to the Corporation upon exercise of the Option.  All shares sold under the Plan shall be fully paid and nonassessable.  Payment for shares may be made by the Optionee (i) in cash or by check, (ii) by delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to sell the shares and then to properly deliver to the Corporation the amount of sale proceeds to pay the exercise price, all in accordance with applicable laws and regulations and Financial Accounting Standards Board ASC Topic 718, or any successor thereto, (iii) at the discretion of the Board or the Committee, by delivering shares of Common Stock (including shares acquired pursuant to the exercise of an Option) equal in Fair Market Value to the purchase price of the shares to be acquired pursuant to the Option, (iv) at the discretion of the Board or the Committee, by withholding some of the shares of Common Stock which are being purchased upon exercise of an Option, or (v) any combination of the foregoing.
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8.08Voting and Dividend Rights.  No Optionee shall have any voting or dividend rights or other rights of a shareholder in respect of any shares of Common Stock covered by an Option prior to the time that his name is recorded on the Corporation's shareholder ledger as the holder of record of such shares acquired pursuant to an exercise of an Option.

8.09Additional Terms Applicable to Incentive Stock Options.  All Options issued under the Plan as Incentive Stock Options will be subject, in addition to the terms detailed in Sections 8.01 to 8.08 above, to those contained in this Section 8.09.

(a)Amount Limitation. Notwithstanding any contrary provisions contained elsewhere in this Plan and as long as required by Section 422 of the Code, the aggregate Fair Market Value, determined as of the time an Incentive Stock Option is granted, of the Common Stock with respect to which Incentive Stock Options under this Plan, together with stock options that satisfy the requirements of Section 422 of the Code under any other stock option plan or plans maintained by the Corporation (or any parent or Subsidiary Company), that are exercisable for the first time by the Optionee during any calendar year shall not exceed $100,000.

(b)Limitation on Ten Percent Shareholders.  The price at which shares of Common Stock may be purchased upon exercise of an Incentive Stock Option granted to an individual who, at the time such Incentive Stock Option is granted, owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes of stock issued to shareholders of the Corporation or any Subsidiary Company, shall be no less than one hundred and ten percent (110%) of the Fair Market Value of a share of the Common Stock of the Corporation at the time of grant, and such Incentive Stock Option shall by its terms not be exercisable after the earlier of the date determined under Section 8.04 or the expiration of five (5) years from the date such Incentive Stock Option is granted.

(c)Notice of Disposition; Withholding; Escrow.  An Optionee shall immediately notify the Corporation in writing of any sale, transfer, assignment or other disposition (or action constituting a disqualifying disposition within the meaning of Section 421 of the Code) of any shares of Common Stock acquired through exercise of an Incentive Stock Option, within two (2) years after the grant of such Incentive Stock Option or within one (1) year after the acquisition of such shares, setting forth the date and manner of disposition, the number of shares disposed of and the price at which such shares were disposed of.  The Corporation shall be entitled to withhold from any compensation or other payments then or thereafter due to the Optionee such amounts as may be necessary to satisfy any withholding requirements of federal or state law or regulation and, further, to collect from the Optionee any additional amounts which may be required for such purpose.  The Committee may, in its discretion, require shares of Common Stock acquired by an Optionee upon exercise of an Incentive Stock Option to be held in an escrow arrangement for the purpose of enabling compliance with the provisions of this Section 8.09(c).
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ARTICLE IX
SHARE AWARDS

9.01Share Award Notice.  As promptly as practicable after the granting of a Share Award pursuant to the terms hereof, the Board or the Committee shall notify the Recipient in writing (the "Share Award Agreement") of the grant of the Share Award, the number of shares covered by the Share Award, whether the Share Award is a Performance Share Award and the terms upon which the shares subject to the Share Award shall be distributed to the Recipient.  The Board or the Committee shall maintain records as to all grants of Share Awards and Performance Share Awards under the Plan.

9.02Earning Plan Shares; Forfeitures.

(a)General Rules.  Subject to the terms hereof, Share Awards granted hereunder shall be earned at the rate and to the extent as may be specified by the Committee at the date of grant thereof; provided, however, such awards shall not be earned at a rate more rapid than twenty percent (20%) of the aggregate number of shares covered by the Award as of each anniversary date of the date of grant of the Share Award.  If the employment of an Employee or service as a Non-Employee Director (including, for purposes hereof, service as an advisory director or director emeritus) is terminated before the Share Award has been completely earned for any reason (except as specifically provided in subsections (b) and (c) below), the Recipient shall forfeit the right to any shares subject to the Share Award which have not theretofore been earned.  Service as an advisory director or director emeritus shall constitute service for purposes of vesting of a Share Award.  In the event of a forfeiture of the right to any shares subject to a Share Award, such forfeited shares shall become available for grant pursuant to Articles VI and VII as if no Share Award had been previously granted with respect to such shares.  No fractional shares shall be distributed pursuant to this Plan.

(b)Exception for Termination Due to Death or Disability. Notwithstanding the general rule contained in Section 9.02(a), all shares subject to a Share Award held by a Recipient whose employment or service (including, for purposes hereof, service as an advisory director or a director emeritus) with the Corporation or any Subsidiary Company terminates due to death or Disability shall be deemed fully earned as of the Recipient's last day of employment or service with the Corporation or any Subsidiary Company and shall be distributed as soon as practicable thereafter.

(c)Exception for a Change in Control.  Notwithstanding the general rule contained in Section 9.02(a), all shares subject to a Share Award held by a Recipient shall be deemed to be fully earned as of the effective date of a Change in Control.  Notwithstanding anything to the contrary herein, any Performance Goal related to a Performance Share Award shall be deemed satisfied as of the date of a Change in Control.

9.03Dividends and Voting.  A Recipient shall not be entitled to receive any cash dividends declared on the Common Stock with respect to any unvested Share Award.  A Recipient shall not be entitled to any voting rights with respect to any unvested Share Award which has not yet been earned and distributed to him pursuant to Section 9.04.

9.04Distribution of Plan Shares.

(a)Timing of Distributions:  General Rule.  Subject to the provisions of Section 9.06 hereof, shares shall be distributed to the Recipient or his Beneficiary, as the case may be, as soon as practicable after they have been earned.

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(b)Form of Distributions.  All shares shall be distributed in the form of Common Stock.  One share of Common Stock shall be given for each share earned and distributable.

(c)Restrictions on Selling of Plan Shares.  Share Awards may not be sold, assigned, pledged or otherwise disposed of prior to the time that they are earned and distributed pursuant to the terms of this Plan.  Upon distribution, the Board or the Committee may require the Recipient or his Beneficiary, as the case may be, to agree not to sell or otherwise dispose of his distributed shares except in accordance with all then applicable federal and state securities laws, and the Board or the Committee may cause a legend to be placed on the stock certificate(s) representing the distributed shares in order to restrict the transfer of the distributed shares for such period of time or under such circumstances as the Board or the Committee, upon the advice of counsel, may deem appropriate.

9.05Rights of Recipients.  Notwithstanding anything to the contrary herein, a Participant who receives a Share Award payable in Common Stock shall have no rights as a shareholder until the Common Stock is issued pursuant to the terms of the Share Award Agreement.

9.06Performance Awards.

(a)Designation of Performance Share Awards.  The Committee may determine to make any Share Award a Performance Share Award by making such Share Award contingent upon the achievement of a Performance Goal or any combination of Performance Goals.  Each Performance Share Award shall be evidenced by a written Share Award Agreement, which shall set forth the Performance Goals applicable to the Performance Share Award, the maximum amounts payable and such other terms and conditions as are applicable to the Performance Share Award.  To the extent that a Performance Share Award is intended to be performance-based compensation within the meaning of Section 162(m) of the Code, such Performance Share Award shall be granted and administered to comply with the requirements of Section 162(m) of the Code, except to the extent the Committee exercises positive discretion as is permitted under applicable law for purposes of an exception under Section 162(m) of the Code.

(b)Timing of Grants.  Any Performance Share Award shall be made not later than 90 days after the start of the period for which the Performance Share Award relates and shall be made prior to the completion of 25% of such period.  All determinations regarding the achievement of any Performance Goals will be made by the Committee. The Committee may not increase during a year the amount of a Performance Share Award that would otherwise be payable upon achievement of the Performance Goals but may reduce or eliminate the payments as provided for in the Share Award Agreement.

(c)Restrictions on Grants.  Nothing contained in the Plan will be deemed in any way to limit or restrict the Committee from making any Award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

(d)Earning of Performance Share Awards.  Each Performance Share Award shall be earned, vested and payable only upon the achievement of Performance Goals established by the Committee based upon one or more of the criteria set forth in Section 3.23 of this Plan, together with the satisfaction of any other conditions, such as continued employment, as the Committee may determine to be appropriate; provided, however, that the Committee may provide, either in connection with the grant thereof or by amendment thereafter, that achievement of such Performance Goals will be waived, in whole or in part, upon (i) the termination of employment of a Recipient by reason of death or Disability, or (ii) the occurrence of a Change in Control. Achievement of a Performance Goal shall be substantially uncertain at the time the Performance Goal is established.

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(e)       Inclusions and Exclusions from Performance Criteria; Adjustment.  The Committee may provide in any Performance Award, at the time the Performance Goals are established, that any evaluation of performance shall exclude or otherwise objectively adjust for any of the following events that occurs during a performance period: (i) asset write-downs or impairment charges; (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (iv) accruals for reorganization and restructuring programs; (v) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30; (vi) extraordinary nonrecurring items as described in management's discussion and analysis of financial condition and results of operations appearing in the Company's annual report to shareholders for the applicable year; or (vii) acquisitions or divestitures. Such inclusions or exclusions shall be prescribed in a form that meets the requirements of Section 162(m) of the Code for deductibility.  If a Recipient is promoted, demoted or transferred to a different business unit during a performance period, the Committee may determine that the specified Performance Goal or applicable performance period are no longer applicable; in such situation, the Committee may change or eliminate the Performance Goal or change the applicable performance period.

(f)Distribution.    No Performance Share Award or portion thereof that is subject to the attainment or satisfaction of a condition of a Performance Goal shall be distributed or considered to be earned or vested until the Committee certifies in writing that the conditions or Performance Goal to which the distribution, earning or vesting of such Performance Share Award is subject have been achieved.

(g)Effect of a Change in Control.Unless otherwise provided in the Share Award Agreement, upon the occurrence of a Change in Control, the target payout opportunities attainable under outstanding Performance Share Awards shall be deemed to have been fully earned as of the effective date of the Change in Control.

9.07.Nontransferable. Share Awards and Performance Share Awards and rights to shares shall not be transferable by a Recipient, and during the lifetime of the Recipient, shares which are the subject of Share Awards may only be earned by and paid to a Recipient who was notified in writing of a Share Award by the Committee pursuant to Section 9.01.  No Recipient or Beneficiary shall have any right in or claim to any assets of the Plan nor shall the Corporation or any Subsidiary Company be subject to any claim for benefits hereunder.

ARTICLE X
ADJUSTMENTS FOR CAPITAL CHANGES

10.01General Adjustments.  The aggregate number of shares of Common Stock available for issuance under this Plan, the maximum number of shares to which Share Awards may be issued, the number of shares to which any outstanding Award relates, the maximum number of shares that can be covered by Awards to any person, and the exercise price per share of Common Stock under any outstanding Option shall be proportionately adjusted for any increase or decrease in the total number of outstanding shares of Common Stock issued subsequent to the Effective Date of this Plan resulting from a split, subdivision or consolidation of shares or any other capital adjustment, the payment of a stock dividend, or other increase or decrease in such shares effected without receipt or payment of consideration by the Corporation.

10.02Adjustments for Mergers and Other Corporate Transactions.  If, upon a merger, consolidation, reorganization, liquidation, recapitalization or the like of the Corporation, the shares of the Corporation's Common Stock shall be exchanged for other securities of the Corporation or of another corporation, each Award shall be converted, subject to the conditions herein stated, into the right to purchase or acquire such number of shares of Common Stock or amount of other securities of the Corporation or such other corporation as were exchangeable for the number of shares of Common Stock of the Corporation which such Optionees or Recipients would have been entitled to purchase or acquire except for such action, and appropriate adjustments shall be made to the per share exercise price of outstanding Options, provided that in each case the number of shares or other securities subject to the substituted or assumed stock options and the exercise price thereof shall be determined in a manner that satisfies the requirements of Treasury Regulation §1.424‑1 and the regulations issued under Section 409A of the Code so that the substituted or assumed option is not deemed to be a modification of the outstanding Options. Notwithstanding any provision to the contrary herein, the term of any Option granted hereunder and the property which the Optionee shall receive upon the exercise or termination thereof shall be subject to and be governed by the provisions regarding the treatment of any such Options set forth in the definitive agreement entered into by the Corporation with respect to a Change in Control to the extent such Options remain outstanding and unexercised upon consummation of the transactions contemplated by such definitive agreement.
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ARTICLE XI
AMENDMENT AND TERMINATION OF THE PLAN

The Board may, by resolution, at any time terminate or amend the Plan with respect to any shares of Common Stock as to which Awards have not been granted, subject to any required shareholder approval or any shareholder approval which the Board may deem to be advisable for any reason, such as for the purpose of obtaining or retaining any statutory or regulatory benefits under tax, securities or other laws or satisfying any applicable stock exchange listing requirements.  The Board may not, without the consent of the holder of an Award, alter or impair any Award previously granted or awarded under this Plan except as specifically authorized herein.

ARTICLE XII
EMPLOYMENT AND SERVICE RIGHTS

Neither this Plan nor the grant of any Awards hereunder nor any action taken by the Committee or the Board in connection with the Plan shall create any right on the part of any Employee or Non-Employee Director to continue in such capacity.

ARTICLE XIII
WITHHOLDING

13.01Tax Withholding.  The Corporation may withhold from any cash payment made under this Plan sufficient amounts to cover any applicable withholding and employment taxes, and if the amount of such cash payment is insufficient, the Corporation may require the Optionee or Recipient to pay to the Corporation the amount required to be withheld as a condition to delivering the shares acquired pursuant to an Award.  The Corporation also may withhold or collect amounts with respect to a disqualifying disposition of shares of Common Stock acquired pursuant to exercise of an Incentive Stock Option, as provided in Section 8.09(c).

13.02Methods of Tax Withholding.  The Board or the Committee is authorized to adopt rules, regulations or procedures which provide for the satisfaction of an Optionee's or Recipient's tax withholding obligation by the retention of shares of Common Stock to which the Optionee or Recipient would otherwise be entitled pursuant to an Award and/or by the Optionee's delivery of previously-owned shares of Common Stock or other property.

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ARTICLE XIV
EFFECTIVE DATE OF THE PLAN; TERM

14.01Effective Date of the Plan.  This Plan shall become effective on the Effective Date, and Awards may be granted hereunder no earlier than the date that this Plan is approved by shareholders of the Corporation and no later than the termination of the Plan, provided this Plan is approved by shareholders of the Corporation pursuant to Article XV hereof.

14.02Term of the Plan.  Unless sooner terminated, this Plan shall remain in effect for a period of ten (10) years ending on the tenth anniversary of the Effective Date.  Termination of the Plan shall not affect any Awards previously granted and such Awards shall remain valid and in effect until they have been fully exercised or earned, are surrendered or by their terms expire or are forfeited. Notwithstanding the foregoing, no Incentive Stock Option may be granted more than ten (10) years after the adoption of the Plan by the Board.

ARTICLE XV
SHAREHOLDER APPROVAL

The Corporation shall submit this Plan to shareholders for approval at a meeting of shareholders of the Corporation held within twelve (12) months following the Effective Date in order to meet the requirements of (i) Section 422 of the Code and regulations thereunder, and (ii) Section 162(m) of the Code and regulations thereunder.

ARTICLE XVI
MISCELLANEOUS

16.01Governing Law.  To the extent not governed by federal law, this Plan shall be construed under the laws of the Commonwealth of Pennsylvania.

16.02Pronouns.  Wherever appropriate, the masculine pronoun shall include the feminine pronoun, and the singular shall include the plural.
 
 
 
 
 
 
 
 
 
 
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December 30, 2014

To:Participants in the Prudential Savings Bank Employee Stock Ownership Plan (the "ESOP") and/or Employees' Savings & Profit Sharing Plan (the "401(k) Plan")

Re:Instructions for voting shares of Prudential Bancorp, Inc.

As described in the enclosed materials, proxies are being solicited in connection with the proposals to be considered at the upcoming Annual Meeting of Shareholders of Prudential Bancorp, Inc.  We hope you will take advantage of the opportunity to direct the manner in which shares of common stock of Prudential Bancorp allocated to your account(s) in the Prudential Savings Bank ESOP and/or 401(k) Plan will be voted.

Enclosed with this letter is the Proxy Statement, which describes the matters to be voted upon, the Annual Report to Shareholders, and a Voting Instruction Card.  After you have reviewed the Proxy Statement, we urge you to vote your allocated shares held in the ESOP and/or 401(k) Plan by marking, dating, signing and returning the enclosed Voting Instruction Card in the envelope provided.  In order to be effective, your Voting Instruction Card must be received by Computershare Shareholder Services no later than February 4, 2015.  Computer Shareholder Services will tabulate the votes for the purpose of having those shares voted by the Trustees.

We urge each of you to vote, as a means of participating in the governance of the affairs of Prudential Bancorp.  If your voting instructions are not received, the shares allocated to your ESOP and/or 401(k) Plan account(s) generally will not be voted by the Trustees.  While I hope that you will vote in the manner recommended by the Board of Directors, the most important thing is that you vote in whatever manner you deem appropriate.  Please take a moment to do so.

Please note that the enclosed material relates only to those shares which have been allocated to you in your accounts under the ESOP and/or 401(k) Plan.  If you also own shares of Prudential Bancorp common stock outside of the ESOP and/or 401(k) Plan, you should receive other voting material for those shares owned by you individually.  Please return all your voting material so that all your shares may be voted.

Sincerely,
Thomas A. Vento
Chairman, President and Chief Executive Officer
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