ex10-7.htm


    EXHIBIT
      10.7

    


    


    NATIONAL
      PENN BANCSHARES, INC. CAPITAL ACCUMULATION PLAN

    


    (Amended
      and Restated Effective January 1, 1997)

    (Revised
      2001)

    


    Amendment
      No. 15

    


    


    National
      Penn Bancshares, Inc. (the "Company") adopted the National Penn Bancshares,
      Inc.
      Capital Accumulation Plan (Amended and Restated Effective January 1,
      1997)(Revised 2001)(the "Plan") for the benefit of certain of its Employees
      (as
      defined in the Plan) and its subsidiaries' Employees. The Company subsequently
      amended the Plan by Amendment Nos. 1-14.

    


    The
      Company hereby amends the Plan effective as of January 1, 2006, to reflect
      changes in regulations under sections 401(k) and 402(g) of the Internal Revenue
      Code of 1986, as amended, that are applicable to the Plan for the Plan Year
      beginning on that date.

    


    1.  Subsection
      4(b)(i) is amended to read as follows:

    


    "(i)                       Exclusion
      Limit.  The maximum amount of contribution which any Member may
      make in any calendar year under subsection 4(a) is $15,000 for 2006 and an
      increased annual amount thereafter resulting from cost of living adjustments,
      if
      any, pursuant to the Code. In addition, if a Member will attain age 50 on or
      before the last day of the Plan Year, the Member may make a "catch-up"
      contribution permitted by section 414(v) of the Code.  The maximum
      amount of catch-up contribution shall be $5,000 for 2006 and an increased annual
      amount thereafter resulting from cost of living adjustments, if any, pursuant
      to
      the Code. The elective contribution limits shall be reduced by the amount of
      elective deferrals by such Member under all other plans, contracts or
      arrangements of any Participating Company or Related Entity  If the
      contribution under subsection 4(a) for a Member for any calendar year exceeds
      the applicable limit, the Committee shall direct the Trustee to distribute
      the
      excess amount (plus any income and minus any loss allocable to such amount
      for
      the calendar year and the gap period from the end of the plan Year to the date
      of distribution determined under the Plan's method for determining income
      allocable to excess deferrals established in accordance with Reg. Sec.
      1.402(g)-1(e)(5)(ii)) to the Member not later than the April 15th following
      the
      close of such calendar year. If (A) a Member participates in another plan which
      includes a qualified cash or deferred arrangement, (B) such Member contributes
      in the aggregate more than the exclusion limit under the Plan and the
      corresponding provisions of the other plan and (C) the Member notifies the
      Committee not later than March 1st following
      the
      close of such calendar year of the portion of the excess the Member has
      allocated to this Plan, then the Committee may direct the Trustee to distribute
      to the Member not later than April 15th  following
      the close of  such calendar year  the excess amount (plus
      any income and minus any loss allocable to such amount for the calendar year
      and
      the gap period from the end of the Plan Year to the date of distribution
      determined under the Plan's method for determining income allocable to excess
      deferrals established in accordance with Reg. Sec. 1.402(g)-1(e)(5)(ii)). A
      Member shall be deemed to have given the notification described in (C) above
      if
      the excess results from contributions solely to this Plan or plans sponsored
      by
      Related Entities."

    


    


    
      	
                     
                2.  

            	
              Subsection
                4(f)(ii) is amended to read as
                follows:

            


    

    


    "(ii)                      QNEC
      or Refund.  If the relationship of the "actual deferral
      percentages" does not satisfy subsection 4(f)(i) for any Plan Year, the
      Participating Companies may make "qualified nonelective contributions" (within
      the meaning of the regulations promulgated under section 401(k) of the Code)
      in
      an equal dollar amount for all or a class of eligible "nonhighly compensated
      employees". 

     

     

     

    
      
        
        

      

      
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    However,
      for purposes of testing, "disproportionate contributions", as defined below,
      shall be disregarded. A contribution is "disproportionate" to the extent it
      exceeds the greater of 5% of "compensation" or the Plan's "representative
      contribution rate" multiplied by "compensation".  The "representative
      contribution rate" is the lowest "applicable contribution rate" of any
      "nonhighly compensated employee" in a group that consists of half of all
      eligible "nonhighly compensated employees" for the Plan Year or, if greater,
      the
      lowest "applicable contribution rate" of any eligible "nonhighly compensated
      employee" in the group of all eligible "nonhighly compensated employees" for
      the
      Plan Year and who is employed by a Participating Company on the last day of
      the
      Plan Year. The "applicable contribution rate" is a fraction, the numerator
      of
      which is the sum of the "qualified matching contributions" and "qualified
      nonelective contributions" (both within the meaning of regulations under section
      401(k) of the Code) made for a "nonhighly compensated employee" and the
      denominator of which is his "compensation".  Such contributions shall
      be (A) treated for purposes of subsection 4(f) as contributions made by a Member
      under subsection 4(a) for the Plan Year for which they are made, (B) 100%
      nonforfeitable, (C) not subject to distribution for hardship under Section
      10
      and (D) accounted for as a subaccount of the Member's Salary Reduction
      Account.  If the Participating Companies do not make such
      contributions or such contributions do not result in satisfaction of subsection
      4(f)(i), then the Administrator shall direct the Trustee to distribute the
      "excess contribution" (as defined below) for such Plan Year (plus any income
      and
      minus any loss allocable thereto (A) for the Plan Year in which the
      contributions were made and (B) for the gap period from the end of the Plan
      Year
      to the date selected, which date is not more than seven days before the date
      distribution is made, using the "alternative method" of allocating Plan Year
      and
      gap period income as set forth in Reg. Sec. 1.401(k)-2(b)(2)(iv)(E) under
      section 401(k) of the Code) within twelve months after the close of the Plan
      Year to the "highly compensated employees" on the basis of the amount of
      contributions attributable to each until the "excess contribution" is
      eliminated.  The portion of the "excess contribution" attributable to
      a "highly compensated employee" is determined by reducing the dollar amount
      of
      contributions paid over to the Fund on behalf of the "highly compensated
      employees", starting with the highest dollar amount of such contributions,
      until
      the "excess contribution" is eliminated.  The amount of "excess
      contributions" to be distributed shall be reduced by excess deferrals previously
      distributed for the taxable year ending in the same Plan Year and excess
      deferrals to be distributed for a taxable year shall be reduced by excess
      contributions previously distributed for the Plan Year beginning in such taxable
      year.  Any refund made to a Member in accordance with this subsection
      shall be drawn from his Salary Reduction Account."

    


    3.
      The
      first sentence of subsection 4(g)(ii) is amended to read as
      follows:

    


    "If
      the
      relationship of the "actual contribution percentages" does not satisfy
      subsection 4(g)(i) for any Plan Year, then the Administrator shall direct the
      Trustee to distribute the "excess aggregate contribution" (as defined below)
      for
      such Plan Year (plus any income and minus any loss allocable thereto (A) for
      the
      Plan Year in which the contributions were made and (B) for the gap period from
      the end of the Plan Year to the date selected, which date is not more than
      seven
      days before the date distribution is made, using the "alternative method" of
      allocating Plan Year and gap period  income as set forth in Reg. Sec.
      1.401(m)-2(b)(2)(iv)(E) under section 401(m) of the Code) within twelve months
      after the close of the Plan Year to the "highly compensated employees" on the
      basis of the amount of contributions attributable to each until the "excess
      aggregate contribution" is eliminated."

    


    
      	
              4.  

            	
              Subsection
                8(d)(iii)(B) is deleted.

            


    

    


    
      	
              5.  

            	
              Subsection
                10(d)(i) is amended to read as
                follows:

            


    

    


    "
      A
      distribution shall be deemed to be made on account of an immediate and heavy
      financial need of the Member if the distribution is on account of (i) medical
      expenses described in section 213(d) of the Code incurred or to be incurred
      by
      the Member, the Member's spouse or any dependent of the Member; (ii) purchase
      (excluding mortgage payments) of a principal residence for the Member; (iii)
      payment of tuition and related educational fees, including room and board
      expenses, for the next twelve months of post-secondary education for the Member,
      the Member's spouse, child or any dependent of the Member; (iv) the need to
      prevent the eviction of the Member from his principal residence or
      foreclosure on the mortgage of the Member's principal residence; (v) payments
      for burial or funeral expenses for the Member's deceased parent, spouse,
      children or dependents; or (vi) expenses for the repair of damage to the
      Member's principal residence that would qualify for the casualty deduction
      under
      section 165 of the Code (determined without regard to whether the loss exceeds
      10% of adjusted gross income. For purposes of this subsection, "dependent of
      the
      Member" means a dependent as defined in section 152 of the Code without regard
      to sections 152(b)(1), (b)(2) and (d)(1)(B)."

     

     

    
      
        
        

      

      
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    Executed
      this 4th day of October, 2006.

    
      	 	 
	
              Attest:

            	
              NATIONAL
                PENN BANCSHARES, INC.

            
	 	 
	
              By:  /s/
                Donna L. Wentzel

            	
              By:  /s/
                Earl Houseknecht

            
	
                      Senior
                Vice President-HR

            	 


    

     

     

     

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