UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 
 FORM 10-K/A
 Amendment No. 2
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-26366
 ROYAL BANCSHARES OF PENNSYLVANIA, INC.
  Pennsylvania
    
    23-2812193(State of other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 732 Montgomery Avenue, Narberth, Pennsylvania
    
    19072(Address of principal executive offices)
    
    (Zip Code)
 (610) 668-4700  (Issuers telephone number, including area code)
 (Former name, former address and former year, if changed since last report)
  Name of Each Exchange on Which Registered
    
    Title of Each ClassThe NASDAQ Stock Market, LLC
    
    Class A Common Stock ($2.00 par value)
  Name of Each Exchange on Which Registered
    
    Title of Each ClassNone
    
    Class B Common Stock ($0.10 par value)
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   Documents Incorporated by Reference




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TABLE OF CONTENTS  ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF REGISTRANT AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULESSIGNATURES EXPLANATORY NOTE
  K
  
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF REGISTRANT AND CORPORATE GOVERNANCE
  Beneficial
Ownership  Compliance     Based on a review of forms received from certain reporting persons, or written
representations from reporting persons that no Form 5 filings were required from those persons,
the Corporation believes that, during the period from January 1, 2008 through December 31,
2008, its officers and directors were in compliance with all filing requirements applicable to
them, except as follows: Director Richards did not timely file his Form 3 upon his election to the
Board in May 2007 (which would have reflected the ownership of 2,350) shares of the
Corporations common stock at the time of election).   Director Goldstein did not timely file his
Form 3 upon his election to the Board in August 2007 (which would have reflected the
ownership of 1,520 shares of the Corporations common stock at the time of election) and failed
to timely file seven Form 4 reports to list twelve transactions involving the purchase of an
aggregate of 4,487 shares of the Corporations common stock during 2008.  Director Bradley did
not timely file his Form 3 upon his election to the Board in December 2008 (which would have
reflected the ownership of no shares of the Corporations common stock at the time of election)
and failed to timely file two Form 4 reports to list five transactions involving the purchase of an
aggregate of 20,000 shares of the Corporations common stock shortly after his election, which
Form 4 reports were filed approximately one week late
 2




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ITEM 11. EXECUTIVE COMPENSATION
  
 II. Executive Compensation Program Objectives
 
 1. Compensation Objectives
   a)
    
    support its business plan and strategy by clearly setting forth what is expected of
executives with respect to financial results and goals and by rewarding achievement of said
results and goals;b)
    
    allow for recruiting and retaining executive talent; andc)
    
    align management performance and their interests with the interests of the
Corporations shareholders.
 3




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Bryn Mawr Bank Corporation
    
    First Chester County Corporation
    
    Willow Financial Bancorp, Inc.Republic First Bancorp, Inc.
    
    VIST Financial Corp.
    
    Omega Financial CorporationESB Financial Corporation
    
    Pennsylvania Commerce Bancorp
    
    Univest Corporation of Penna.Sandy Spring Bancorp, Inc.
    
    KNBT Bancorp, Inc.
    
    WSFS Financial CorporationHarleysville National Corporation
    
    Sterling Financial Corporation
    
    Sun Bancorp, Inc.Community Banks, Inc.
    
    National Penn Bancshares, Inc.
 th
 
 2. Intent of Program Design
  a)
    
    a base salary;b)
    
    a performance-based bonus program, paid in cash, that generally comprises a higher
percentage of total cash compensation than the Corporations peers;c)
    
    periodic (generally annually) grants of long-term, equity-based compensation. This is
comprised generally of stock option grants, however, a portion of this element may be paid
in the form of restricted stock and other types of long-term, equity-based components
(subject to Committee approval). Awards of restricted stock will be generally
performance-based, requiring the achievement of specific goals; andd)
    
    a Supplemental Executive Retirement Plan.
  4




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3. Elements of Compensation
 Base Salary
   a)
    
    the requirements and responsibilities of the position along with, if available, salary
norms for executives in comparable positions at peers;b)
    
    the expertise of the individual executive;c)
    
    market competition for services of similar executives;d)
    
    the advice from Mosteller and Associates, and any other third-party advisor to the
Committee; ande)
    
    the recommendations of the Chief Executive Officer (except with respects to his own
compensation).
  Employment
Agreements
  5




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Performance-Based Bonus Program
      Long-term Incentive Compensation (Equity-based Plan)
  6




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##### 



In 2008, consistent with the Committees practice in prior years, the Compensation
Committee requested management to propose the amount and value of stock options to be
granted to Tier 1 executive employees and Tier 2 employees. Upon review of the proposal
submitted by management, the Compensation Committee met with its outside compensation
consultant, Mosteller and Associates, to review the proposed option grants. The Committee,
considering the advice of its compensation consultant, concluded that a larger benefit
should be accorded to Tier 2 employees as an added incentive to drive the Banks future
performance back to historically high levels. The Committee requested the consultant to
prepare a recommendation which reduced Tier 1 executive options by 30%, reduced the
non-employee director options by 15% and increased the options to be awarded to Tier 2 by
the proportionate difference. The Committee accepted the consultants recommendation, which
included such reductions, and, based on the Committees recommendation, the Board approved
the grants as modified
  7




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Supplemental Executive Retirement Plan (SERP)
 Retirement Plans
 Benefits and perquisites
 Summary Compensation Table
 
 4. Impact of Current Treasury Programs and New Federal Legislation on Executive Compensation
   8




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##### 




    
    Bonuses and Incentive Compensation: The Corporation will generally be
prohibited from paying or accruing certain bonus, retention award or incentive
compensation to certain highly compensated employees. This restriction applies to
the Corporations five most highly compensated employees (or such higher number as
the Secretary of the Treasury may determine is in the public interest), which
technically may restrict such compensation to employees other than the
Corporations senior executive officers. Until Treasury issues its guidance in the
matter, however, it is not clear precisely which employees of the Corporation while
Treasury holds the Corporations Series A Preferred Stock will be precluded from
receiving bonuses and incentive compensation other than in the form of restricted
stock. The ARRA exempts bonus payments that are required under a written contract
executed on or before February 11, 2009. The statute also permits bonus, retention
or incentive compensation paid to subject employees in the form of restricted stock
provided that the restricted stock does not fully vest during the period in which
Treasury retains its investment and the amount of restricted stock granted is not
greater than 1/3 of the total amount of annual compensation of the employee
receiving the restricted stock.
    
    Severance Payments: The TARP Capital Purchase Program previously imposed
limitations on the ability of the Corporation to make golden parachute payments
to the Corporations top five senior executive officers. A golden parachute payment
was previously defined under Treasurys regulations as a payment on account of an
involuntary departure of the executive officer from the Corporation in an amount
equal to or more than three times the last annual salary received by the executive
prior to termination. The ARRA expands the application of the golden parachute
limitations to the next five most highly compensated employees of the Corporation.
The ARRA also broadened the meaning of the term golden parachute payment to
include any payment for departure from a company for any reason, except for
payments for services performed or benefits accrued.
    
    Clawbacks: The TARP Capital Purchase Program previously required
recipients to recover any bonus, retention award, or incentive compensation paid
to any one of its top five senior executive officers based on statements of
earnings, revenues, gains, or other
criteria that are later found to be materially inaccurate. The ARRA expands these
 9




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##### 



clawback requirements rule to apply not only to the senior executive officers, but
also to the next 20 most highly compensated employees of the Corporation.
Furthermore, the ARRA requires the Secretary of the Treasury to review bonuses,
retention awards and other compensation paid to the senior executive officers and
the next 20 most highly compensated employees to determine whether such payments
were consistent with the purposes of the EESA, the ARRA, and TARP Capital Purchase
Program and in the public interest.
 
    
    Anti-Manipulation. The ARRA prohibits any compensation plan that would
encourage manipulation of reported earnings to enhance the compensation of any of
the Corporations employees.
  
    
    The Corporations Chief Executive Officer and Chief Financial Officer will be
required to provide a written certification to the SEC of compliance with the
executive compensation restrictions described in TARP, as modified by the ARRA.
    
    The Board must enact a company-wide policy regarding excessive or luxury
expenditures. This includes policies on entertainment, events, office and facility
renovations, air and other travel and other activities or events that are not
reasonable expenditures for staff development, reasonable performance incentives or
other similar measures conducted in the normal course of business.
    
    For years in which Treasury owns shares of the Series A Preferred Stock, the
Corporation may not claim a deduction on compensation paid to a senior executive
officer in excess of the $500,000 compensation deduction limit of Section 162(m)(5)
of the Internal Revenue Code. Moreover, the exception contained in Section 162(m)
of the Code for performance-based pay not counting against this limit, will not be
available.
    
    For years in which Treasury owns shares of the Series A Preferred Stock, the
Corporation is required to submit a proposal allowing our shareholders to cast an
advisory vote on the compensation paid to our named executive officers pursuant to
the policies and programs described in the Compensation Discussion and Analysis and
disclosed in the tables and narrative disclosure included in this Proxy statement.
  10




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III. Director Compensation
 Director Compensation Table The Corporation determines director compensation based on an analysis conducted by
management and the Compensation Committee, and focusing on the director compensation
practices of the Corporations peers.  Although the Corporation deviates from prevailing practice
among the peer companies reviewed by paying director fees and other compensation to executive
officers who are also board members, such director fees and other compensation are considered
as part of the total compensation payable to such officers, determined in the manner described
above, and not as additional compensation.
 
 IV. Tables and other narrative disclosures
 
 Summary Compensation Table
 Change In Pension Valueand NonqualifiedStock
    
    Option
    
    Non-Equity Incentive
    
    Deferred Compensation
    
    All OtherName and Principal
    
    
    
    
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Plan Compensation
    
    Earnings
    
    Compensation
    
    TotalPosition
    
    Year
    
    ($)
    
    ($) (1)
    
    ($)
    
    ($) (2)
    
    ($)
    
    ($) (3)
    
    ($) (4)
    
    ($)Joseph P. Campbell
    
    
    2008
    
    
    
    403,520
    
    
    
    
    
    
    
    
    
    
    
    136,568
    
    
    
    
    
    
    
    316,967
    
    
    
    2,171,518
    
    
    
    3,028,573Former President and
CEO
    
    
    2007
    
    
    
    403,520
    
    
    
    10,612
    
    
    
    1,686
    
    
    
    173,439
    
    
    
    
    
    
    
    96,402
    
    
    
    57,345
    
    
    
    743,0042006
    
    
    
    385,000
    
    
    
    346,970
    
    
    
    
    
    
    
    194,214
    
    
    
    
    
    
    
    127,369
    
    
    
    52,845
    
    
    
    1,106,398Robert A. Kuehl
    
    
    2008
    
    
    
    93,462
    
    
    
    
    
    
    
    
    
    
    
    593
    
    
    
    
    
    
    
    
    
    
    
    4,800
    
    
    
    98,855Principal Financial
OfficerChief Financial OfficerJames McSwiggan
    
    
    2008
    
    
    
    256,750
    
    
    
    
    
    
    
    
    
    
    
    48,709
    
    
    
    
    
    
    
    (15,927
    )
    
    
    48,250
    
    
    
    337,782President and COO
    
    
    2007
    
    
    
    256,750
    
    
    
    5,170
    
    
    
    737
    
    
    
    62,815
    
    
    
    
    
    
    
    54,661
    
    
    
    53,500
    
    
    
    433,6332006
    
    
    
    245,000
    
    
    
    169,037
    
    
    
    
    
    
    
    72,070
    
    
    
    
    
    
    
    128,392
    
    
    
    47,000
    
    
    
    661,499Robert R. Tabas
    
    
    2008
    
    
    
    214,750
    
    
    
    
    
    
    
    
    
    
    
    40,785
    
    
    
    
    
    
    
    3,818
    
    
    
    48,250
    
    
    
    307,603Principal Executive
Officer
    
    
    2007
    
    
    
    214,750
    
    
    
    3,809
    
    
    
    617
    
    
    
    52,297
    
    
    
    
    
    
    
    38,761
    
    
    
    44,500
    
    
    
    354,734Chairman and CEO
    
    
    2006
    
    
    
    205,000
    
    
    
    124,553
    
    
    
    
    
    
    
    59,201
    
    
    
    
    
    
    
    86,668
    
    
    
    44,500
    
    
    
    519,922Murray Stempel III
    
    
    2008
    
    
    
    183,560
    
    
    
    
    
    
    
    
    
    
    
    33,776
    
    
    
    
    
    
    
    (5,483
    )
    
    
    48,250
    
    
    
    260,103Vice Chairman
    
    
    2007
    
    
    
    183,560
    
    
    
    3,673
    
    
    
    517
    
    
    
    43,522
    
    
    
    
    
    
    
    38,666
    
    
    
    53,500
    
    
    
    323,4382006
    
    
    
    175,000
    
    
    
    120,105
    
    
    
    
    
    
    
    48,245
    
    
    
    
    
    
    
    90,911
    
    
    
    45,750
    
    
    
    480,011Gregg J. Wagner
    
    
    2008
    
    
    
    43,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    44,550Former CFO
    
    
    2007
    
    
    
    124,519
    
    
    
    
    
    
    
    449
    
    
    
    1,568
    
    
    
    
    
    
    
    
    
    
    
    3,300
    
    
    
    129,836
 
 (1)
    
    The bonus payments to the above named executive officers are performance based and tied to
goals set by the Compensation Committee.(2)
    
    The amounts in this column reflect the dollar amount of compensation expense recognized for
stock option awards for financial statement reporting purposes for the fiscal years ended
December 31, 2008, December 31, 2007 and December 31, 2006 in accordance with FAS 123(R). Because
compensation is recognized as stock options vest, the compensation expense for 2008 includes
amounts for awards granted in 2008 as well as from earlier years, the compensation expense for 2007
includes amounts for awards granted in 2007 as well as from earlier years, and the compensation
expense for 2006 includes amounts for awards granted in 2006 as well as from earlier years. The
assumptions used in the calculation of these amounts for awards granted in 2006, 2007 and 2008 are
included in Note L Stock Option Plans in the Notes to Consolidated Financial Statements
included within the Corporations Annual Report on Form 10-K for the fiscal year ended December 31,
2008. The assumptions used in the calculation for these amounts for awards granted in 2003, 2004
and 2005 are included in Note A Summary of Significant Accounting Policies  Stock Option Plans
in the Notes to Consolidated Financial Statements included within the Corporations Annual Report
on Form 10-K/A for the fiscal year ended December 31, 2005.(3)
    
    The Corporations non-qualified deferred compensation plan provides retirement benefits that
are based upon years of service and the employees compensation. The reduction in value reflects
the lack of a bonus in 2008. See Note M within the Annual Report on 10-K.(4)
    
    Please see the table below for a breakdown of the terms and amounts comprising All Other
Compensation. 11




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All
Other Compensation Summary Compensation Table
  401 (k)Automobile
    
    Employer
    
    Director
    
    Club dues
    
    OtherName and Principal
    
    
    
    
    
    Benefit
    
    Contribution
    
    Fees
    
    Allowance
    
    Compensation
    
    TotalPosition
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($) (1)
    
    ($)Joseph P. Campbell
    
    
    2008
    
    
    
    15,538
    
    
    
    2,500
    
    
    
    28,750
    
    
    
    5,000
    
    
    
    2,119,730
    
    
    
    2,171,518Former President and CEO
    
    
    2007
    
    
    
    15,845
    
    
    
    2,500
    
    
    
    34,000
    
    
    
    5,000
    
    
    
    
    
    
    
    57,3452006
    
    
    
    15,845
    
    
    
    2,500
    
    
    
    29,500
    
    
    
    5,000
    
    
    
    
    
    
    
    52,845Robert A. Kuehl
    
    
    2008
    
    
    
    2,400
    
    
    
    1,500
    
    
    
    
    
    
    
    
    
    
    
    900
    
    
    
    4,800Principal Financial
OfficerChief Financial OfficerJames McSwiggan
    
    
    2008
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    28,750
    
    
    
    5,000
    
    
    
    
    
    
    
    48,250President and COO
    
    
    2007
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    34,000
    
    
    
    5,000
    
    
    
    
    
    
    
    53,5002006
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    27,500
    
    
    
    5,000
    
    
    
    
    
    
    
    47,000Robert R. Tabas
    
    
    2008
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    28,750
    
    
    
    5,000
    
    
    
    
    
    
    
    48,250Principal Executive
Officer
    
    
    2007
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    25,000
    
    
    
    5,000
    
    
    
    
    
    
    
    44,500Chairman and CEO
    
    
    2006
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    25,000
    
    
    
    5,000
    
    
    
    
    
    
    
    44,500Murray Stempel III
    
    
    2008
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    28,750
    
    
    
    5,000
    
    
    
    
    
    
    
    48,250Vice Chairman
    
    
    2007
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    34,000
    
    
    
    5,000
    
    
    
    
    
    
    
    53,5002006
    
    
    
    12,000
    
    
    
    2,500
    
    
    
    26,250
    
    
    
    5,000
    
    
    
    
    
    
    
    45,750Gregg J. Wagner
    
    
    2008
    
    
    
    600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    800Former CFO
    
    
    2007
    
    
    
    2,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    900
    
    
    
    3,300
 12




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(1)
    
    The Other Compensation for Mr. Campbell reflects a payment made as part of a separation
agreement related to his resignation and retirement effective December 24, 2008. For Mr. Kuehl and
Mr. Wagner the Other Compensation reflects fees received for
attending Board of Directors meetings. Mr. Campbells employment agreement provided for a rolling three-year term, which
automatically renewed on a daily basis absent notice of non-renewal by either party. In the
event of notice of non-renewal, the contract continued through the end of the three-year
term. Accordingly, the employment agreement could be terminated by the Company, in the
absence of cause, only upon three years prior notice. Given the Companys desire to
effect management changes prior to expiration of this three-year period, the Company opted
to negotiate Mr. Campbells earlier retirement substantially on the basis of the terms
included in the employment agreement. The lump-sum cash payment of $2,119,730 represents
the consideration payable to Mr. Campbell in exchange for his agreement to cancel the
employment contract and is based on the amounts which would have been payable to Mr.
Campbell under the terms of the contract if his employment had been involuntarily terminated
without cause.  
 Grants of Plan-Based Awards-2008
    13




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All Other StockAwards
    
    All Other Options
    
    Exercise or
    
    Grant DateEstimated future payouts under
    
    Estimated future payouts under
    
    Number of
    
    Awards Number
    
    Base Price
    
    Fair Valuenon-equity incentive plan awards
    
    equity incentive plan awards

    
    Shares of Stock
    
    of Securities
    
    Options
    
    of stock andName and Principal
    
    Grant
    
    Threshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    or Units
    
    Underlying Options
    
    Awards
    
    Option AwardsPosition
    
    Date
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    (#)
    
    (#)
    
    ($/Sh)
    
    ($)Joseph P. Campbell
    
    
    10/7/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Former President and CEORobert A. Kuehl
    
    
    10/7/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,500
    
    
    
    4.50
    
    
    
    15,600Principal Finanical Officer
Chief Financial OfficerJames McSwiggan
    
    
    10/7/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,150
    
    
    
    4.50
    
    
    
    26,760President and COORobert R. Tabas
    
    
    10/7/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,350
    
    
    
    4.50
    
    
    
    22,440Principal Executive Officer
Chairman and CEOMurray Stempel III
    
    
    10/7/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,800
    
    
    
    4.50
    
    
    
    18,720Vice Chairman
 
 Outstanding Equity Awards Table
  14




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##### 



Option Awards
    
    Stock AwardsEquity Incentive Plan
    
    
    
    
    
    
    
    
    
    Number of
    
    Market ValueNumber of Securities
    
    Number of Securities
    
    Awards Number of
    
    Options
    
    
    
    
    
    Shares or Units
    
    of Shares orUnderlying
    
    Underlying
    
    Securities Underlying
    
    Exercise
    
    
    
    
    
    of Stock That
    
    Units of StockName and Principal
    
    Unexercised Options
    
    Unexercised Options
    
    Unexercised
    
    Price
    
    Option
    
    Have Not
    
    That Have NotPosition
    
    (#) Exercisable
    
    (#) Unexercisable
    
    Unearned Options (#)
    
    ($)
    
    Expiration Date
    
    Vested (#)
    
    Vested ($)Joseph P. Campbell
    
    
    4,666
    
    
    
    0
    
    
    
    0
    
    
    $
    10.57
    
    
    
    4/19/09
    
    
    
    0
    
    
    
    09,577
    
    
    
    0
    
    
    
    0
    
    
    $
    11.72
    
    
    
    4/19/10
    
    
    
    0
    
    
    
    028,896
    
    
    
    0
    
    
    
    0
    
    
    $
    11.90
    
    
    
    4/19/11
    
    
    
    0
    
    
    
    027,258
    
    
    
    0
    
    
    
    0
    
    
    $
    17.91
    
    
    
    4/19/12
    
    
    
    0
    
    
    
    027,419
    
    
    
    0
    
    
    
    0
    
    
    $
    18.27
    
    
    
    4/21/13
    
    
    
    0
    
    
    
    057,727
    
    
    
    0
    
    
    
    0
    
    
    $
    22.38
    
    
    
    4/22/14
    
    
    
    0
    
    
    
    037,110
    
    
    
    24,740
    
    
    
    0
    
    
    $
    21.88
    
    
    
    6/16/15
    
    
    
    0
    
    
    
    012,128
    
    
    
    18,190
    
    
    
    0
    
    
    $
    21.78
    
    
    
    6/29/16
    
    
    
    0
    
    
    
    03,000
    
    
    
    12,000
    
    
    
    0
    
    
    $
    20.08
    
    
    
    7/29/17
    
    
    
    5,000
    
    
    $
    57,150Robert A. Kuehl
    
    
    0
    
    
    
    6,500
    
    
    
    0
    
    
    $
    4.50
    
    
    
    10/7/18
    
    
    
    0
    
    
    $
    James McSwiggan
    
    
    12,591
    
    
    
    0
    
    
    
    0
    
    
    $
    17.91
    
    
    
    4/19/12
    
    
    
    0
    
    
    
    011,344
    
    
    
    0
    
    
    
    0
    
    
    $
    18.27
    
    
    
    4/21/13
    
    
    
    0
    
    
    
    024,700
    
    
    
    0
    
    
    
    0
    
    
    $
    22.38
    
    
    
    4/22/14
    
    
    
    0
    
    
    
    06,678
    
    
    
    4,452
    
    
    
    0
    
    
    $
    21.88
    
    
    
    6/16/15
    
    
    
    0
    
    
    
    05,690
    
    
    
    8,535
    
    
    
    0
    
    
    $
    21.78
    
    
    
    6/29/16
    
    
    
    0
    
    
    
    01,311
    
    
    
    5,243
    
    
    
    0
    
    
    $
    20.08
    
    
    
    7/29/17
    
    
    
    2,185
    
    
    $
    24,9750
    
    
    
    11,150
    
    
    
    0
    
    
    $
    4.50
    
    
    
    10/7/18
    
    
    
    0
    
    
    
    0Robert R. Tabas
    
    
    3,336
    
    
    
    0
    
    
    
    0
    
    
    $
    10.57
    
    
    
    4/19/09
    
    
    
    0
    
    
    
    03,102
    
    
    
    0
    
    
    
    0
    
    
    $
    11.72
    
    
    
    4/19/10
    
    
    
    0
    
    
    
    010,588
    
    
    
    0
    
    
    
    0
    
    
    $
    11.90
    
    
    
    4/19/11
    
    
    
    0
    
    
    
    09,920
    
    
    
    0
    
    
    
    0
    
    
    $
    17.91
    
    
    
    4/19/12
    
    
    
    0
    
    
    
    09,497
    
    
    
    0
    
    
    
    0
    
    
    $
    18.27
    
    
    
    4/21/13
    
    
    
    0
    
    
    
    020,679
    
    
    
    0
    
    
    
    0
    
    
    $
    22.38
    
    
    
    4/22/14
    
    
    
    0
    
    
    
    05,600
    
    
    
    3,733
    
    
    
    0
    
    
    $
    21.88
    
    
    
    6/16/15
    
    
    
    0
    
    
    
    04,760
    
    
    
    7,141
    
    
    
    0
    
    
    $
    21.78
    
    
    
    6/16/15
    
    
    
    0
    
    
    
    01,097
    
    
    
    4,389
    
    
    
    0
    
    
    $
    20.08
    
    
    
    7/29/17
    
    
    
    1,829
    
    
    $
    20,9050
    
    
    
    9,350
    
    
    
    
    
    
    $
    4.50
    
    
    
    10/7/18
    
    
    
    0
    
    
    
    0Murray Stempel III
    
    
    2,123
    
    
    
    0
    
    
    
    0
    
    
    $
    10.57
    
    
    
    4/19/09
    
    
    
    0
    
    
    
    02,173
    
    
    
    0
    
    
    
    0
    
    
    $
    11.72
    
    
    
    4/19/10
    
    
    
    0
    
    
    
    08,013
    
    
    
    0
    
    
    
    0
    
    
    $
    11.90
    
    
    
    4/19/11
    
    
    
    0
    
    
    
    07,629
    
    
    
    0
    
    
    
    0
    
    
    $
    17.91
    
    
    
    4/19/12
    
    
    
    0
    
    
    
    07,914
    
    
    
    0
    
    
    
    0
    
    
    $
    18.27
    
    
    
    4/21/13
    
    
    
    0
    
    
    
    017,231
    
    
    
    0
    
    
    
    0
    
    
    $
    22.38
    
    
    
    4/22/14
    
    
    
    0
    
    
    
    04,668
    
    
    
    3,111
    
    
    
    0
    
    
    $
    21.88
    
    
    
    6/16/15
    
    
    
    0
    
    
    
    04,064
    
    
    
    6,096
    
    
    
    0
    
    
    $
    21.78
    
    
    
    6/29/16
    
    
    
    0
    
    
    
    0920
    
    
    
    3,680
    
    
    
    0
    
    
    $
    20.08
    
    
    
    7/29/17
    
    
    
    1,533
    
    
    $
    17,5220
    
    
    
    7,800
    
    
    
    0
    
    
    $
    4.50
    
    
    
    10/7/18
    
    
    
    0
    
    
    
    0
 
 Option Exercises and Stock Vested Table
  
 Retirement Plans
  15




---



##### 



Summary Compensation Table
 Class
    
    Annual Cap
    
    Percentage of Base
    
    Percentage of BonusGroup 1
    
    $185,000 Base component
    
    
    50
    %
    
    
    25
    %$80,000 Bonus componentGroup 2
    
    $50,000 Base component
    
    
    35
    %
    
    
    0
    %Group 3
    
    $20,000 Base component
    
    
    20
    %
    
    
    0
    %
   16




---



##### 



Non-Qualified Deferred Compensation
   Summary
Compensation Table
     17




---



##### 



Non-Qualified Deferred Compensation Table
 Present Value of
    
    PaymentsName and Principal
    
    
    
    Number of Years
    
    Accumulated
    
    During LastPosition
    
    Plan Name
    
    Credited Service (#)
    
    Benefit ($)
    
    Fiscal Year ($)Joseph P. Campbell
    
    Royal Bank America
    
    
    16
    (1)
    
    $
    3,903,548
    
    
    $
    Supplemental Executive Retirement PlanRobert A. Kuehl
    
    Royal Bank America
    
    
    
    
    
    $
    
    
    
    $
    Principal Financial Officer
    
    Supplemental Executive Retirement PlanJames McSwiggan
    
    Royal Bank America
    
    
    16
    
    
    $
    1,437,432
    
    
    $
    Supplemental Executive Retirement PlanRobert R. Tabas
    
    Royal Bank America
    
    
    21
    
    
    $
    1,114,800
    
    
    $
    Principal Executive Officer
    
    Supplemental Executive Retirement PlanMurray Stempel III
    
    Royal Bank America
    
    
    14
    
    
    $
    1,026,265
    
    
    $
    Supplemental Executive Retirement Plan
 
 (1)
    
    Mr. Campbell retired effective December 24, 2008 and will receive annual payments of $347,000
commencing January 1, 2010.   
 Other Potential Post-Employment Payments
   Employment Contracts
  18




---



##### 



Joseph P. Campbell:
    19




---



##### 



James J. McSwiggan:
 20




---



##### 



Robert R. Tabas:
 Murray Stempel, III:
 21




---



##### 



Robert A. Kuehl:
 
 Termination and Change in Control Provisions
     22




---



##### 



23




---



##### 



24




---



##### 



Involuntary Termination Not ForCause OR Voluntary TerminationFor Good Reason (1)Following aChange of
    
    Absent a Change
    
    Change ofControl
    
    of Control
    
    ControlJames McSwiggan (6)
    
    Severance
    
    $
    0
    
    
    $
    1,280,944
    
    
    $
    1,280,944President and
    
    Welfare benefits continuation (2)(7)
    
    $
    0
    
    
    $
    44,316
    
    
    $
    44,316Chief Operating Officer
    
    Enhanced SERP benefit (5)
    
    $
    0
    
    
    $
    0
    
    
    $
    419,215Value of accelerated stock options (3)
    
    $
    0
    
    
    $
    0
    
    
    $
    0Value of accelerated restricted stock (4)
    
    $
    7,276
    
    
    $
    0
    
    
    $
    7,276Potential excise tax gross-up
    
    $
    0
    
    
    $
    0
    
    
    $
    594,279Total
    
    $
    7,276
    
    
    $
    1,325,260
    
    
    $
    2,346,030Robert Tabas (6)
    
    Severance
    
    $
    0
    
    
    $
    600,650
    
    
    $
    600,650Chairman and
    
    Welfare benefits continuation (2)(7)
    
    $
    0
    
    
    $
    29,782
    
    
    $
    29,782Chief Executive Officer
    
    Enhanced SERP benefit (5)
    
    $
    0
    
    
    $
    0
    
    
    $
    297,266Value of accelerated stock options (3)
    
    $
    0
    
    
    $
    0
    
    
    $
    0Value of accelerated restricted stock (4)
    
    $
    6,091
    
    
    $
    0
    
    
    $
    6,091Potential excise tax gross-up
    
    $
    0
    
    
    $
    0
    
    
    $
    0Total
    
    $
    6,091
    
    
    $
    630,433
    
    
    $
    933,790Murray Stempel, III (6)
    
    Severance
    
    $
    0
    
    
    $
    535,196
    
    
    $
    535,196Vice Chairman
    
    Welfare benefits continuation (2)(7)
    
    $
    0
    
    
    $
    29,782
    
    
    $
    29,782Enhanced SERP benefit (5)
    
    $
    0
    
    
    $
    0
    
    
    $
    333,289Value of accelerated stock options (3)
    
    $
    0
    
    
    $
    0
    
    
    $
    0Value of accelerated restricted stock (4)
    
    $
    5,105
    
    
    $
    0
    
    
    $
    5,105Potential excise tax gross-up
    
    $
    0
    
    
    $
    0
    
    
    $
    0Total
    
    $
    5,105
    
    
    $
    564,979
    
    
    $
    903,373Robert Kuehl (6)
    
    Severance
    
    $
    0
    
    
    $
    0
    
    
    $
    334,163Chief Financial Officer
    
    Welfare benefits continuation
    
    $
    0
    
    
    $
    0
    
    
    $
    0Value of accelerated stock options (3)
    
    $
    0
    
    
    $
    0
    
    
    $
    0Value of accelerated restricted stock
    
    $
    0
    
    
    $
    0
    
    
    $
    0Potential reduction due to applicationof Code Section 280G
    
    $
    0
    
    
    $
    0
    
    
    $
    2Total
    
    $
    0
    
    
    $
    0
    
    
    $
    334,165
 
 (1)
    
    For severance and welfare benefits continuation payment calculation, and time and form of such
payments, see Employment Contracts.(2)
    
    Calculated as the present value of $15,144 per year. Assumes no increase in the cost of welfare
benefits. Assumes no tax on welfare benefits.(3)
    
    All unvested stock options were underwater as of December 31, 2008.(4)
    
    Upon the executives disability, death, or retirement, restricted stock may vest on a pro-rata
basis if certain performance goals are satisfied.(5)
    
    For purposes of calculating each executives enhanced SERP benefit, if the executive is
terminated involuntarily without Cause or voluntarily for Good Reason following a Change of
Control, then the executive will be deemed to have remained employed until the earlier to occur of:
(a) the executives death; or (b) the executives attaining age 60. For details regarding the SERP,
including amount of benefit upon termination of employment, see Retirement Plans. Each executive
would also be entitled to a similar amount upon a termination for disability at any time.(6)
    
    On February 20, 2009, we sold preferred stock to the Treasury under the Capital Purchase
Program. As a result, pursuant to Section 111 of the EESA, we are prohibited from making any
payments to our Named Executive Officers and any of our next five most highly compensated employees
for a separation from service (except for payments for services performed or benefits accrued)
during the period in which any obligation arising from such sale
remains outstanding. Accordingly, based upon current Treasury
Department guidance and subject to future guidance,
we are currently prohibited from making any of the payments set forth in the above
table.(7)
    
    Each executive, except for Mr. Kuehl, are entitled to medical insurance benefits upon
retirement, commencing with the later of the date of retirement or age 60, and continuing until the
earlier of the date the executive is eligible for Medicaid or age 65. 25




---



##### 



ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  10.15
    
    Employment Agreement, dated June 1, 2008, between the Company, Royal Bank
America and Robert A. Kuehl.31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer3l.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer32.1
    
    Section 1350 Certification of Principal Executive Officer.32.2
    
    Section 1350 Certification of Principal Financial Officer.
 26




---



##### 



SIGNATURES
  ROYAL BANCSHARES OF PENNSYLVANIA, INC./s/ Robert R. TabasRobert R. TabasChairman and Chief Executive Officer 
(Principal Executive Officer)  27