Unassociated Document


    EXHIBIT
      10.1

     

     

    FIRST
      AMENDMENT TO

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

     

    This
      First Amendment to Amended and
      Restated Employment Agreement (this “Amendment”) is entered into on
      September 6, 2007, but is made effective as set forth in Section 7 below, by
      and
      among Keystone Nazareth Bank & Trust Company (“KNBT Bank”), KNBT
      Bancorp, Inc. (“KNBT”), National Penn Bank (“NPBank”), National
      Penn Bancshares, Inc. (“NPB” and together with NPBank, the
“Employer”), and Scott V. Fainor (the “Executive”).

     

    BACKGROUND

    


    1.  KNBT
      is a Pennsylvania
      business corporation, and KNBT Bank is a Pennsylvania chartered savings bank
      and
      wholly-owned subsidiary of KNBT.

    


    2.  The
      Executive is
      presently employed by each of KNBT and KNBT Bank as its President and Chief
      Executive Officer pursuant to an Amended and Restated Employment Agreement,
      dated December 28, 2006 (the “Employment Agreement”).

    


    3.  On
      September 6, 2007, NPB
      and KNBT entered into an Agreement (the “Merger Agreement”) providing,
      among other things, for the merger of KNBT with and into NPB (the
“Merger”), to be followed by the Bank Merger (as defined in the Merger
      Agreement).

    


    4.  It
      is the desire of the
      boards of directors of NPB and NPBank that the Executive continue the
      Executive’s employment from and after the Effective Time (as defined in the
      Merger Agreement), on the terms and conditions set forth in the Employment
      Agreement, as amended by this Amendment, in order that the experience the
      Executive has gained throughout the Executive’s career and the management
      ability the Executive has demonstrated will continue to be available to NPB
      and
      NPBank.  The Executive is willing to continue such employment on the
      terms and conditions set forth in the Employment Agreement, as amended by this
      Amendment.

    


     

    AGREEMENT

     

    NOW
      THEREFORE, for good and valuable consideration the receipt and sufficiency
      of
      which are hereby acknowledged, and intending to be legally bound hereby, the
      parties agree as follows:

     

    
      	
              1.  

            	
              Definitions.

            


    

     

    
      	
               

            	
              a.

            	
              All
                references to the “Bank,” the “Company” and the “Employer” in the
                Employment Agreement shall be amended as
                follows:

            


    

     

    
      	
               

            	
              i.

            	
              “Bank”
                shall mean NPBank;

            


    

     

    
      	
               

            	
              ii.

            	
              “Company”
                shall mean NPB; and

            


    

     

    
      	
               

            	
              iii.

            	
              “Employer”
                shall mean collectively NPBank and
                NPB;

            


    

     

    in
      each
      case, as defined in the introductory paragraph of this Amendment.  All
      references to the “Effective Time” in this Amendment shall mean the Effective
      Time as defined in the Merger Agreement.

     

    
      	
               

            	
              b.

            	
              All
                references to “the Agreement” or “this Agreement” contained in the
                Employment Agreement shall be deemed, for all purposes, to mean the
                Employment Agreement, as amended by this
                Amendment.

            


    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              c.

            	
              Capitalized
                terms used, but not otherwise defined, in this Amendment shall have
                the
                meanings ascribed to such terms in the Employment Agreement, as amended
                by
                this Amendment.

            


    

     

    
      	
              2.  

            	
              Duties.  The
                first sentence of Section 3(a) of the Employment Agreement shall
                be
                deleted in its entirety and replaced as
                follows:

            


    

     

    Throughout
      the Employment Period, the Executive shall serve as President and Chief
      Executive Officer of the Bank and Senior Executive Vice President and Chief
      Operating Officer of the Company, having such power, authority and
      responsibility and performing such duties as are prescribed by or under the
      Bylaws of each of the Bank and the Company and as are customarily associated
      with such positions.

     

    
      	
              3.  

            	
              Election
                to Bank’s Board of Directors.  Section 3(b) of the
                Employment Agreement shall be deleted in its entirety and replaced
                as
                follows:

            


    

     

    During
      the period of the Executive’s employment hereunder, the board of directors of
      the Company will cause the Company, as sole shareholder of the Bank, to elect
      and annually re-elect the Executive to the board of directors of the Bank
      (unless it believes such action would violate its fiduciary duties). Upon any
      termination of the Executive’s employment hereunder for any reason, including,
      without limitation, a termination without cause, the Executive will concurrently
      resign from the board of directors of the Bank and, should the Executive then
      be
      serving as a director of the Company or any direct or indirect subsidiary or
      affiliate of the Company or Bank, from all such boards as well.

     

    
      	
              4.  

            	
              Cash
                and Other Compensation.  Section 4(a) of the Employment
                Agreement shall be amended by adding the following sentence at the
                end
                thereof:

            


    

     

    Notwithstanding
      the foregoing, the parties acknowledge and agree that Executive’s Base Salary
      for the fiscal year beginning January 1, 2008 shall be determined by the
      Compensation Committee of KBNT’s board of directors, but in no event shall such
      Base Salary be less than $422,300 nor more than $443,415.

     

    
      	
              5.  

            	
              Working
                Facilities and Expenses.

            


    

     

    
      	
              a.  

            	
              The
                first sentence of Section 8 of the Employment Agreement shall be
                deleted
                in its entirety and replaced as
                follows:

            


    

     

    It
      is
      understood by the parties that the Executive’s principal place of employment
      shall be at the Employer’s office located at Reading and Philadelphia Avenues in
      Boyertown, Pennsylvania, or at such other location within a 25-mile radius
      of
      such office, or at such other location as the Employer and the Executive may
      mutually agree upon.

     

    
      	
              b.  

            	
              The
                last sentence of Section 8 of the Employment Agreement shall be deleted
                in
                its entirety and replaced as
                follows:

            


    

     

    The
      Employer shall reimburse the Executive for his ordinary and necessary business
      expenses attributable to the Employer’s business, including, without limitation,
      the Executive’s travel and entertainment expenses incurred in connection with
      the performance of his duties for the Employer under this Agreement, in each
      case upon presentation to the Employer of an itemized account of such expenses
      in such form as the Employer may reasonably require, with such reimbursement
      to
      be paid promptly by the Employer and in any event no later than March 15 of
      the
      year immediately following the year in which such expenses were
      incurred.  For the avoidance of doubt, except for (a) the automobile
      allowance payable to the Executive under Section 5(b) hereof and (b) tolls
      and
      parking expenses incurred in the ordinary course of business, the Executive
      shall not be entitled to reimbursement under the immediately preceding sentence
      for any expenses incurred for automobile travel, including, without limitation,
      mileage expense.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              6.  

            	
              Termination
                of Employment With Benefits.  Section 9(a)(i)(D) of the
                Employment Agreement shall be deleted in its entirety and replaced
                as
                follows:

            


    

     

    (D)  a
      change in the Executive’s principal place of employment by a distance in excess
      of 25 miles from the Employer’s office located at Reading and Philadelphia
      Avenues in Boyertown, Pennsylvania;

     

    
      	
              7.  

            	
              Payments
                Upon a Change of Control. Section 11(c) of the Employment Agreement
                shall be deleted in its entirety and replaced as
                follows:

            


    

     

    Upon
      the
      occurrence of the events specified in this Section 11(c), the Executive shall
      be
      entitled to receive certain payments at the times and in the amounts as
      follows:

     

    (i)           As
      a result of the change in control of KNBT Bancorp, Inc. (“KNBT”) and Keystone
      Nazareth Bank & Trust Company (“KNBT Bank”) resulting from the merger of
      KNBT with and into the Company, the Executive shall receive a lump sum payment
      as of the Effective Time in an amount equal to $740,503 (the “KNBT CIC
      Payment”) from KNBT or KNBT Bank.

     

    (ii)           The
      Executive shall receive a Severance Payment (defined below) from the Employer
      within ten (10) business days of the earliest to occur of the following events,
      if any:  (A) the termination of the Executive’s employment during the
      two-year period immediately following the Effective Time by the Employer other
      than for cause; (B) the termination of the Executive’s employment during the
      two-year period immediately following the Effective Time by the Executive
      pursuant to Section 9(a)(i) above; or (C) a Change in Control during the period
      of the Executive’s employment hereunder (each, a “Triggering
      Event”).  “Severance Payment” means a lump sum payment
      determined as follows:  (x) if the Triggering Event occurs during the
      one-year period immediately following the Effective Time, then the Severance
      Payment shall equal the KNBT CIC Payment; or (y) if the Triggering Event occurs
      after the one-year anniversary of the Effective Time, then the Severance Payment
      shall equal 1.5 times the Executive’s Base Amount (defined below);
provided, however, that in calculating the
      Executive’s Base Amount for purposes of this clause (y), any income related to
      the KNBT CIC Payment shall be excluded from such
      calculation.  “Base Amount” shall be equal to the Executive’s
      average annualized income from the Employer, KNBT, KNBT Bank and their
      predecessors includible in the Executive’s gross income (excluding any income
      resulting from the vesting of restricted stock or the exercise of non-qualified
      options on or prior to December 31, 2004) for the most recent five taxable
      years
      ending before the Triggering Event.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (iii)           The
      Executive shall not be entitled to receive any payments or benefits under
      Section 9 of this Agreement if he receives payments pursuant to Section
      11(c)(ii).

     

    
      	
              8.  

            	
              Effectiveness.  Sections
                1 through 3 and Sections 5 through 7 of this Amendment shall become
                effective as of the Effective Time.  The remainder of this
                Amendment shall become effective upon execution by the parties hereto
                as
                set forth herein.

            


    

     

    
      	
              9.  

            	
              Counterparts;
                Facsimiles.  This Amendment may be executed in any number of
                separate counterparts, all of which, when delivered, shall together
                constitute one and the same Amendment.  Facsimile signatures
                shall be considered original
                signatures.

            


    

     

    
      	
              10.  

            	
              Governing
                Law.  This Amendment shall be governed by and construed and
                enforced in accordance with the laws of the Commonwealth of Pennsylvania
                applicable to contracts entered into and to be performed entirely
                within
                the Commonwealth of Pennsylvania.

            


    

     

    
      	
              11.  

            	
              Conflicts;
                No Other Amendments.  To the extent that any term or
                provision of this Amendment is or may be deemed expressly inconsistent
                with any term or provision in the Employment Agreement, the terms
                and
                provisions hereof shall control.  Except as expressly amended by
                this Amendment, all of the terms, conditions and provisions of the
                Employment Agreement are hereby ratified and continue unchanged and
                remain
                in full force and effect.  Neither this Amendment nor the
                Employment Agreement shall be amended or otherwise changed except
                by
                another agreement signed by each party to this
                Amendment.

            


    

     

    


     

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      of Page Intentionally Left Blank]

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Amendment on the date and year
      first above written, to be effective as set forth above.

     

    


     

    
      	
              KNBT
                BANCORP, INC.

               

               

              By:     /s/
                Jeffrey P. Feather

              Name:  Jeffrey
                P.
                Feather

              Its:  Chairman
                of the
                Board

            	
              NATIONAL
                PENN BANCSHARES, INC.

               

               

              By:     /s/
                Glenn E. Moyer

              Name:  Glenn
                E.
                Moyer

              Its:  President
                and
                CEO

               

               

            
	
              KEYSTONE
                NAZARETH

              BANK
                & TRUST COMPANY

               

               

              By:      /s/
                Jeffrey P. Feather

              Name:  Jeffrey
                P.
                Feather

              Its:  Chairman
                of the
                Board

            	
              NATIONAL
                PENN BANK

               

               

               

              By:     /s/
                Glenn E. Moyer

              Name:  Glenn
                E.
                Moyer

              Its:  President
                and
                CEO

            
	
               

               

              EXECUTIVE:

               

               

              /s/
                Scott V.
                Fainor                                                                

              Scott
                V. Fainor