ex10-1.htm


    EXHIBIT
10.1


    


    NATIONAL PENN BANCSHARES,
INC.

    


    EMPLOYEE STOCK PURCHASE
PLAN

    


    (As
amended and restated,

    effective
October 22, 2008)

    


    The following constitutes the
provisions of the Employee Stock Purchase Plan (the "Plan") of National Penn
Bancshares, Inc. (the "Company").

    


    1.           Purpose.  The
purpose of the Plan is to provide employees of the Company and its Subsidiaries
with an opportunity to purchase Common Stock of the Company.  It is
the Company's intention to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Code.  Accordingly, the provisions of
the Plan shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.

    


    2.           Definitions.

    


    (a)           "Board" means the
Board of Directors of the Company.

    


    (b)           "Code" means the
Internal Revenue Code of 1986, as amended.

    


    (c)           "Common Stock" means
the Company's common stock, without par value.

    


    (d)           "Compensation" means
all regular straight-time gross earnings excluding payments for overtime,
incentive compensation, incentive payments, bonuses, commissions and other
compensation.  For Employees paid on a commissions only basis,
"straight-time gross earnings" means commissions paid.

    


    (e)           "Continuous Status as an
Employee" means the absence of any interruption or termination of service
as an Employee.  Continuous Status as an Employee shall not be
considered interrupted in the case of a leave of absence agreed to in writing by
the Company, provided that such leave is for a period of not more than 90 days
or re-employment upon the expiration of such leave is guaranteed by contract or
statute.

    


    (f)           "Contributions" means
all amounts credited to the account of a participant pursuant to the
Plan.

    


    (g)           "Employee" means any
person employed by the Company or one of its Subsidiaries, including any officer
of the Company or of one of its Subsidiaries.

    


    (h)           "Exchange Act" means
the Securities Exchange Act of 1934, as amended.

    


    (i)           "Offering Date" means
the first business day of each Offering Period of the Plan.

    


     

     

    
      
         

      

      
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    (j)           "Offering Period"
means a period of three (3) months beginning on January 1, April 1, July 1 or
October 1 of each year.

    


    (k)           "Purchase Date" means
the last day of each Offering Period of the Plan.

    


    (l)           "Subsidiary" means a
corporation of which not less than fifty percent (50%) of the voting shares are
held by the Company or a Subsidiary, whether or not such corporation now exists
or is hereafter organized or acquired by the Company or a
Subsidiary.

    


    3.           Eligibility.

    


    (a)           Any
person who has been continuously employed as an Employee for at least three (3)
months prior to the Offering Date of a given Offering Period shall be eligible
to participate in such Offering Period under the Plan, subject to the
requirements of Section 5(a) and the limitations imposed by Section 423(b) of
the Code.

    


    (b)           No
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any Subsidiary, or (ii) which permits his or her rights to
purchase stock under all employee stock purchase plans (described in Section 423
of the Code) of the Company and its Subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) of Fair Market Value (as defined
in Section 7(b) below) of such stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any
time.

    


    4.           Offering
Periods.  The Plan shall be implemented by a series of Offering
Periods, with a new Offering Period commencing on January 1, April 1, July 1 and
October 1 of each year.  The Plan shall continue until terminated in
accordance with Section 19 hereof.

    


    5.           Participation.  An
eligible Employee may become a participant in the Plan by completing a
subscription agreement on the form provided by the Company and filing it with
the Company prior to the applicable Offering Date, unless a later time for
filing the subscription agreement is set by the Board for all eligible Employees
with respect to a given offering.  The subscription agreement shall
set forth the percentage of the participant's Compensation (which shall be not
less than one percent (1%) and not more than ten percent (10%)) to be paid as
Contributions pursuant to the Plan.

    


    6.           Method of Payment of
Contributions.

    


    (a)           The
participant shall elect to have payroll deductions made on each payday during an
Offering Period in an amount not less than one percent (1%) and not more than
ten percent (10%) of such participant's Compensation on each such payday;
provided that the aggregate of such payroll deductions during an Offering Period
shall not exceed ten percent (10%) of the participant's aggregate Compensation
during such Offering Period.  All payroll deductions made by a
participant shall be credited to his or her account under the Plan.  A
participant may not make any additional payments into such account.

     

     

    
      
         

      

      
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    (b)           Payroll
deductions shall commence on the first payroll following the Offering Date and
shall end on the last payroll paid on or prior to the Purchase Date of the
offering to which the subscription agreement is applicable, unless sooner
terminated by the participant as provided in Section 10.

    


    (c)           A
participant may discontinue his or her participation in the Plan as provided in
Section 10, or, on one occasion only during an Offering Period, may increase or
decrease the rate of his or her Contributions during such Offering Period,
without withdrawing from the Plan, by completing and filing with the Company a
new subscription agreement within the ten (10) day period immediately preceding
the beginning of any month during the Offering Period.  The change in
rate shall be effective as of the beginning of the month following the date of
filing of the new subscription agreement and shall comply with the limits as
provided in Section 6(a).

    


    (d)           To
the extent necessary to comply with Section 423(b)(8) of the Code and Section
3(b) herein, a participant's payroll deductions may be decreased to zero percent
(0%) at such time, during any Offering Period which is scheduled to end during
the current calendar year, that the aggregate of all payroll deductions
accumulated with respect to such Offering Period and any other Offering Period
ending within the same calendar year equals $25,000.  Payroll
deductions shall recommence at the rate provided in such participant's
subscription agreement at the beginning of the first Offering Period which is
scheduled to end in the following calendar year, unless terminated by the
participant as provided in Section 10.

    


    7.           Grant of
Option.

    


    (a)           On
the Offering Date of each Offering Period, each eligible Employee participating
in such Offering Period shall be granted an option to purchase, on the Purchase
Date of such Offering Period, the number of shares of Common Stock determined by
dividing such Employee's Contributions accumulated prior to such Purchase Date
and retained in the participant's account as of the Purchase Date by ninety
percent (90%) of the Fair Market Value (as defined below) of a share of Common
Stock on the Purchase Date; provided, however, that the maximum number of shares
an Employee may purchase in any one calendar year shall be determined at the
Offering Date by dividing $25,000 by the Fair Market Value of a share of Common
Stock on the Offering Date, and provided further that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 12
hereof.

    


    (b)           The
option price per share of the shares offered in a given Offering Period shall be
ninety percent (90%) of the Fair Market Value (as defined below) of a share of
Common Stock on the Purchase Date.  The “Fair Market Value” of a share
of Common Stock on a given date shall be determined as follows, unless a
different method of calculation is required by applicable law:

    


    (i)           Based
on the closing sale price of a share of Common Stock on the given date, as
reported on the GLOBAL SELECT MARKET tier of the Nasdaq Stock Market (“Nasdaq”)
(or on such other stock exchange on which the Common Stock may be
listed);

     

     

    
      
         

      

      
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    (ii)           If
no closing sale price is reported on the given date, then based on the closing
sale price of a share of Common Stock on the last preceding date on which there
was a sale, as reported on Nasdaq (or on such other stock exchange on which the
Common Stock may be listed); or

    


    (iii)           If
the Common Stock is not listed on Nasdaq or on a stock exchange, by the Board or
the Committee (as defined in Section 13 below), as applicable, in its sole
discretion.

    


    8.           Exercise of
Option.  Unless a participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase of shares will be
exercised automatically on the Purchase Date of the Offering Period, and the
maximum number of full and fractional shares subject to option will be purchased
for him or her at the applicable option price with the accumulated Contributions
in his or her account.  The shares purchased upon exercise of an
option hereunder shall be deemed to be transferred to the participant on the
Purchase Date.  During his or her lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

    


    9.           Stock Certificates; Cash
Balances; Dividend Reinvestment.

    


    (a)           Stock
certificates will not be issued to participants for shares purchased on the
Purchase Date.  Shares purchased for a participant on a Purchase Date
shall be held in an account for such participant under the Plan, and all rights
accruing to an owner of record of such shares (including voting rights) shall
belong to the participant for whose account such shares are held.  A
participant may file a written election with the Company to withdraw some or all
of the shares of Common Stock held in his or her account, in which case a stock
certificate will be issued to such participant for such withdrawn
shares.

    


    (b)           Each
participant in the Plan shall be deemed to have authorized the collection and
accumulation of all dividends paid on shares held in his or her account and the
application of such dividends to the purchase of additional full and fractional
shares of Common Stock as of the dividend payment date.  The purchase
price of shares of Common Stock pursuant to this Section 9(b) will be equal to
the Fair Market Value of such shares on such dividend payment date (without any
discount); provided, however, that the purchase price of shares of Common Stock
pursuant to this Section 9(b) will be equal to ninety percent (90%) of the Fair
Market Value of such shares on such dividend payment date for the period
commencing on the effective date hereof and ending on the first to occur of (i)
December 31, 2009 or (ii) the receipt by The Bank of New York Mellon after the
effective date hereof of Fifty Million Dollars ($50,000,000) of voluntary cash
contributions in accordance with Section 6 of the Company’s Amended and Restated
Dividend Reinvestment and Stock Purchase Plan.

    


    10.           Withdrawal; Termination of
Employment.

    


    (a)           A
participant may withdraw all, but not less than all, of the Contributions
credited to his or her account under the Plan at any time prior to the Purchase
Date of an Offering Period by giving written notice to the
Company.  All of such participant's Contributions credited to his or
her account will be paid to him or her promptly after receipt of such notice of
withdrawal, and his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares will be made
during the Offering Period.

     

     

    
      
         

      

      
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    (b)           Upon
termination of a participant's Continuous Status as an Employee prior to the
Purchase Date of an Offering Period for any reason, including retirement or
death, the Contributions credited to his or her account prior to the Purchase
Date will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 14, and his or her option will
automatically be terminated.

    


    (c)           A
participant who withdraws from an Offering Period will not be eligible to
participate again in the Plan until the first anniversary of the Purchase Date
of the Offering Period during which such participant withdrew from the
Plan.  The Board or the Committee (as defined in Section 13 below) may
waive the non-participation period in its sole discretion.  A
participant's withdrawal from an Offering Period will not have any effect upon
his or her eligibility to participate in any similar plan which may hereafter be
adopted by the Company.

    


    11.           No
Interest.  No interest shall accrue on the Contributions of a
participant in the Plan.

    


    12.           Stock.

    


    (a)           The
maximum number of shares of Common Stock which shall be made available for sale
under the Plan shall be 1,000,000 shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 18.  If the total
number of shares which would otherwise be subject to options granted pursuant to
Section 7(a) hereof on the Offering Date of an Offering Period exceeds the
number of shares then available under the Plan (after deduction of all shares
for which options have been exercised or are then outstanding), the Company
shall make a pro rata allocation of the shares remaining available for option
grant in as uniform a manner as shall be practicable and as it shall determine
to be equitable.  Any amounts remaining in an Employee's account not
applied to the purchase of Common Stock pursuant to this Section 12 shall be
refunded on or promptly after the Purchase Date.  In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Employee affected thereby and shall similarly
reduce the rate of Contributions, if necessary.

    


    (b)           No
participant will have any interest or voting rights in any shares covered by his
or her option until such option has been exercised.

    


    13.           Administration.  The
Board, or a committee named by the Board (the “Committee”), shall supervise and
administer the Plan and shall have full power to (i) adopt, amend and rescind
any rules deemed desirable and appropriate for the administration of the Plan
and not inconsistent with the Plan, (ii) construe and interpret the Plan, and
(iii) make all other determinations necessary or advisable for the
administration of the Plan.  The Board or the Committee may engage a
firm or entity to administer the Plan, subject to the Board's or the Committee's
control and authority.

     

     

    
      
         

      

      
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    14.           Designation of
Beneficiary.

    


    (a)           A
participant may file with the Company a written designation of a beneficiary who
is to receive any shares and/or cash, if any, from the participant's account
under the Plan upon such participant's death.

    


    (b)           Such
designation of beneficiary may be changed by the participant at any time by
written notice.  Upon the death of a participant and in the absence of
a beneficiary validly designated under the Plan who is living at the time of
such participant's death, the Company shall deliver such shares and/or cash to
the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its sole discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

    


    15.           Transferability.  Neither
Contributions credited to a participant's account nor any rights with regard to
the exercise of an option or to receive shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 14 hereof) by the
participant.  Any such attempt at assignment, transfer, pledge or
other disposition shall be without effect, except that the Company may treat
such act as an election to withdraw funds in accordance with Section
10.

    


    16.           Use of
Funds.  All Contributions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.

    


    17.           Reports.  Individual
accounts will be maintained for each participant in the
Plan.  Statements of account will be given to participating Employees
promptly following the Purchase Date, which statements will set forth the
amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.

    


    18.           Adjustments Upon Changes in
Capitalization; Corporate Transactions.

    


    (a)           Subject
to any required action by the shareholders of the Company, the number of shares
of Common Stock covered by each option under the Plan which has not yet been
exercised and the number of shares of Common Stock which have been authorized
for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock affected without
receipt of consideration by the Company.

    


    (b)           Upon
a proposed dissolution or liquidation of the Company, the Offering Period will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board.

     

     

    
      
         

      

      
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    (c)           Upon
a sale of all or substantially all of the assets of the Company or the merger of
the Company with or into another corporation, each option under the Plan shall
be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by
setting a new Purchase Date (the "New Purchase Date").  If the Board
shortens the Offering Period then in progress in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
each participant in writing, at least ten (10) days prior to the New Purchase
Date, that the Purchase Date for his or her option has been changed to the New
Purchase Date and that his or her option will be exercised automatically on the
New Purchase Date, unless prior to such date he or she has withdrawn from the
Offering Period as provided in Section 10.  For purposes of this
Section 18, an option granted under the Plan shall be deemed to be assumed if,
following the sale of assets or merger, the option confers the right to
purchase, for each share of option stock subject to the option immediately prior
to the sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by holders of
Common Stock for each share of Common Stock held on the effective date of the
transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if such consideration received
in the sale of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the Board
may, with the consent of the successor corporation and the participant, provide
for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent, equal in Fair Market
Value to the per share consideration received by holders of Common Stock in the
sale of assets or merger.

    


    (d)           The
Board may, if it so determines in the exercise of its sole discretion, also make
provision for adjusting the Reserves, as well as the price per share of Common
Stock covered by each outstanding option, if the Company effects one or more
reorganizations, recapitalizations, rights offerings or other increases or
reductions of shares of its outstanding Common Stock, or if the Company is
consolidated with or merged into any other corporation.

    


    19.           Amendment or
Termination.

    


    (a)           The
Board may at any time terminate or amend the Plan.  Except as provided
in Section 18, no such termination may affect options previously granted, nor
may an amendment make any change in any option theretofore granted which
adversely affects the rights of any participant.  In addition, to the
extent, if any, necessary to comply with Section 423 of the Code (or any
successor provision) or any other applicable law or regulation, the Company
shall obtain shareholder approval in such a manner and to such a degree as so
required.

    


    (b)           Without
shareholder consent and without regard to whether any participant rights may be
considered to have been adversely affected, the Board (or the Committee) shall
be entitled to permit payroll withholding in excess of the amount designated by
a participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from such participant's
Compensation, and establish such other limitations or procedures as the Board
(or the Committee) determines in its sole discretion advisable which are
consistent with the Plan.

     

     

    
      
         

      

      
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    20.           Notices.  All
subscription agreements, designations, notices or other communications by a
participant to the Company under or in connection with the Plan shall be deemed
to have been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the receipt
thereof.

    


    21.           Conditions Upon Issuance of
Shares.

    


    (a)           Shares
shall not be issued with respect to an option unless the exercise of such option
and the issuance and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of Nasdaq or any
stock exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

    


    (b)           As
a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.

    


    22.           Effective Date; Term of
Plan.  The Plan was originally approved by the Board on
December 18, 1996 and approved by the shareholders of the Company on April 22,
1997.  The Plan, as amended and restated herein effective October 22,
2008, shall continue in effect for a term through June 30, 2017, unless sooner
terminated under Section 19.

    


    23.           Section
16.  With respect to persons subject to Section 16 of the
Exchange Act, this Plan is intended to be a "tax-conditioned plan" within the
meaning of Rule 16b-3(c) and to otherwise comply with all applicable conditions
of Rule 16b-3 (or any successor rule) under the Exchange
Act.  Accordingly, the provisions of the Plan shall be construed in a
manner consistent with the requirements of Rule 16b-3(c).

    


    24.           Captions.  All
section captions in this Plan are for convenience of reference
only.

     

     

     

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