Document:

ex10-1.htm

    Exhibit 10.1

     

    

    

     

    NATIONAL
PENN BANCSHARES, INC.

    AND
NATIONAL PENN BANK

    LETTER
AGREEMENT

     

    

     

    January
27, 2010

    

    Glenn E.
Moyer

    National
Penn Bancshares, Inc.

    
      	
              Philadelphia
      and Reading Avenues,

              Boyertown,
      PA  19512

            

    

    
 

    Dear
Mr. Moyer:

    

    Reference is made to your Employment
Agreement with National Penn Bancshares, Inc., a Pennsylvania business
corporation (the “Company”), and
National Penn Bank, a national banking association (the “Bank”), dated
December 18, 2002, as amended by Amendatory Agreements dated May 25, 2005,
June 5, 2006, and December 10, 2008, and by the TARP Restriction Agreement by
and among you, the Company, an 
d the
Bank, dated November 20, 2009 (as amended, the “Prior
Agreement”).

    

    This letter agreement (the “Letter
Agreement”) sets forth the terms of your continued employment and consulting
arrangement with the Company, which will become effective if you choose by
signing it and delivering it to the Company.  Capitalized terms used
herein without definition shall have the meanings assigned to such terms under
the Prior Agreement.  Except as otherwise specifically incorporated by
reference into this Letter Agreement, the terms and conditions of the Prior
Agreement are hereby terminated and of no further force and effect.

    

    
      	
              1.

            	
              Position and
      Term.  You hereby agree to resign as President and Chief
      Executive Officer of the Company and Chairman of the Bank and to
      relinquish any seats you may hold on the Boards of Directors of such
      entities on January 27, 2010 and on such date, you will cease to be an
      executive officer of the Company.  You also agree to serve as
      the Special Advisor for the Company’s Chief Executive Officer (the “CEO”)
      for the period commencing on January 27, 2010 and ending on April 30, 2011
      (the “Employment Term”) and thereafter commencing on May 1, 2011, as a
      Consultant for the Company for the period commencing on May 1, 2011 and
      ending on December 31, 2011 (the “Consulting
  Term”).

            

    

    

    
      	
              2.

            	
              Duties.  During
      the Employment Term, your duties shall be to transition existing business
      relationships and provide such reasonable other services as the CEO shall
      require.  You shall report directly to the CEO and perform such
      other duties reasonably assigned to you by the CEO from time to
      time.  During the Consulting Term, you shall use your reasonable
      best

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              efforts
      to promote the interests of the Company and provide your personal advice
      and counsel to the Company, its subsidiaries and affiliates in connection
      with the business of the Company and its subsidiaries, including, but not
      limited to: (i) consulting with the Company regarding its operations and
      customer relationships and (ii) providing introductions to customers and
      providing personal services similar to those you were previously providing
      the Company.  During the Consulting Term, you will serve as a
      Consultant on a part-time basis but shall dedicate up to 10 hours per week
      to the Company.

            

    

    

    
      	
              3.

            	
              Base Salary.
      Your Base Salary shall remain unchanged for the 1st
      month of the Employment Term, but in consideration of your changed role
      within the Company, your Base Salary shall be reduced to $335,000,
      effective March 1, 2010 and for the remaining portion of the Employment
      Term.  During the Employment Term, your base salary shall be
      subject to all applicable withholding and deductions as required by
      law.  Effective May 1, 2011 and during the Consulting Term
      thereafter, the Company shall pay you a consulting fee of $10,000 per
      month.

            

    

    

    
      	
              4.

            	
              Health and Welfare
      Benefits.  You shall remain entitled to the benefits
      specified in Article 5(a) of the Prior Agreement during the
      Employment Term and Consulting Term until the earlier of the following to
      occur: (i) a termination under Sections 10, 11, 12, 13, and 14 of the
      Prior Agreement or (ii) the end of the Consulting
      Term.  Specifically, you shall remain entitled to participate in
      standard retirement benefits (during the Employment Term) and health and
      welfare benefits (including life insurance and long-term disability
      insurance coverage provided under Section 7(b) of the Prior Agreement at
      the level of coverage in effect on January 26, 2010) offered to executive
      employees generally, and under terms of plans pursuant to which benefits
      are provided.  The continuation of the health benefits under
      this Section shall not count toward the coverage period required by
      Section 4980B of the Internal Revenue Code of 1986, as amended (the
      “Code”) and Section 601 of the Employee Retirement Income Security Act of
      1974, as amended (collectively,
“COBRA”)

            

    

    

    
      	
              5.

            	
              Supplemental
      Retirement Benefits.  You shall be entitled to receive
      the Supplemental Retirement Benefit (“SERP”) payments
      described in Section 8 of the Prior Agreement, provided, however,
      that for purposes of calculating your SERP benefit, your “Average Monthly
      Salary Base” shall mean the total of your monthly Salary (as defined in
      Section 8(a)(3) of the Prior Agreement) from Employer for 60 months
      immediately preceding February 2010 divided by the number
    60.

            

    

    

    
      	
              6.

            	
              Other Benefits.
      The Company will reimburse you for reasonable legal fees associated with
      this Letter Agreement, up to $15,000 and for the following during
      Employment Term: (i) automobile allowance of no less than $850 per month,
      and (ii) reasonable Company-related expenses in accordance with Company
      policies.

            

    

    

    
      	
              7.

            	
              Executive Incentive
      Plan.  You shall receive deferral payouts pursuant to
      your account under the Executive Incentive Plan (the “EIP”), to the
      extent permissible under the U.S. Treasury’s Troubled Asset Relief Program
      (‘TARP”)
      and the EIP plan document.

            

    

    
      
        
           

        

         

      

      
        - 2
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                8.

              	
                TARP Restriction
      Agreement.  Notwithstanding anything herein to the
      contrary, the TARP Restriction Agreement shall remain in full force and
      effect until it terminates by its terms, provided, however, that neither
      your transition from your current employment to the employment
      relationship described herein nor the expiration of the Employment Term or
      the Consulting Term described herein shall give you the right to require
      the Company to execute the consulting agreement described in the TARP
      Restriction Agreement or the Exhibits thereto (with payments based on your
      salary in effect on January 26, 2010).  Notwithstanding anything
      herein to the contrary, if the TARP Compliance Period expires before you
      reach your 60th
      birthday, you shall continue to have the right to require the Company to
      enter into the consulting arrangement described in the TARP Restriction
      Agreement (and related Exhibits) if you are terminated by the Company
      without Cause before your 60th
      birthday.

              

      

    

    
 

    
      	
              9.

            	
              Noncompetition
      Agreement.  In consideration for entering into this
      Letter Agreement, you and the Company agree to enter into a noncompetition
      agreement, substantially in the form set forth as Exhibit A
      hereto (the “Noncompetition
      Agreement”), that shall run concurrently with Consulting Term and
      for a period of twelve (12) months from the earlier of the end of the
      Consulting Term or the date of the last payment
      thereunder.  Notwithstanding the preceding sentence, if the
      consulting arrangement described in the TARP Restriction Agreement is
      invoked (i.e., because the Company terminates your employment with the
      Company without Cause during the Employment Term), the noncompete period
      shall run during the Consulting Period under the TARP Restriction
      Agreement.

            

    

    

    
      	
              10.

            	
              Non-Disparagement.  You
      and the Company agree to refrain from performing any act, engaging in any
      conduct or course of action or making or publishing any statements,
      claims, allegations or assertions which have or may reasonably have the
      effect of demeaning the name or reputation of you or the Company or any of
      its Affiliates, or any of its or their employees, officers, directors,
      agents or advisors in their capacities as such or which adversely affects
      (or may reasonably be expected adversely to affect) the best interests
      (economic or otherwise) of any of them.  Nothing in this
      Section 10 shall preclude you or the Company from fulfilling any duty
      or obligation that you or it may have at law, from responding to any
      subpoena or official inquiry from any court or government agency,
      including providing truthful testimony, documents subpoenaed or requested
      or otherwise cooperating in good faith with any proceeding or
      investigation; or from taking any reasonable actions to enforce such
      rights under this Letter Agreement.

            

    

    

    
      	
              11.

            	
              Releases.  Payment
      of all benefits during the Employment Term shall be conditioned on your
      executing a release and waiver of claims in the form attached hereto as
      Exhibit B
      (the “Release”), and
      not revoking such Release within such specified time period contained
      therein.  Further, payment of any amounts during the Consulting
      Term shall be conditioned on your executing a subsequent release and
      waiver of claims on a similar form prescribed by the Company, which shall
      be provided to you at such time.

            

    

    

    
      	
              12.

            	
              Cause.  Notwithstanding
      anything herein to the contrary, if your conduct during the Employment
      Term or the Consulting Term results in Cause for the Company to terminate
      its employment or consulting relationship with you, then the Company shall
      owe you no further payments or benefits of any kind except as expressly
      required by law.

            

    

    
      
        
           

        

         

      

      
        - 3
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              13.

            	
              Coverage under
      Directors and Officers Liability Policy.  Neither the
      change in status under this Letter Agreement nor any subsequent
      termination of your employment with the Company and the Bank shall affect
      the your coverage under the Company’s directors and officers liability
      policy for acts or omissions by you which occurred in the course of your
      performance of your duties and responsibilities on behalf of the Company
      and the Bank, to the extent permitted and covered by such
      policy.

            

    

     

    
      	
              14.

            	
              Successors and
      Assigns.

            

    

     

    
      	
               
      

            	
              a.

            	
              During
      the Employment Term, National Penn will require any successor or assign
      (whether direct or indirect, by purchase, merger, consolidation or
      otherwise) to all or substantially all of its business and/or assets, by
      agreement in form and substance satisfactory to the Consultant, expressly,
      absolutely and unconditionally to assume and agree to perform this
      Agreement in the same manner and to the same extent that National Penn
      would be required to perform it if no such succession or assignment had
      taken place.  Any failure of National Penn to obtain such
      agreement prior to the effectiveness of any such succession or assignment
      shall be a material breach of this Letter
  Agreement.

            

    

     

    
      	
               
      

            	
              b.

            	
              This
      Letter Agreement and all your rights shall inure to the benefit of and be
      enforceable by the your personal or legal representatives, estate,
      executors, administrators, heirs and beneficiaries.  In the
      event of the your death, any amounts accrued and unpaid through the date
      of death shall be paid to the your estate, heirs and
      representatives.  Except as provided in this Section 12, no
      party may assign this Letter Agreement or any rights, interests, or
      obligations hereunder without the prior written approval of the other
      party.  Subject to the preceding sentence, this Letter Agreement
      shall be binding upon and shall inure to the benefit of the parties hereto
      and their respective successors and permitted
  assigns.

            

    

     

    
      	
              15.

            	
              Enforcement.  This
      Letter Agreement shall be construed, enforced and interpreted in
      accordance with and governed by the laws of the Commonwealth of
      Pennsylvania, without reference to its principles of conflict of laws,
      except to the extent that federal law shall be deemed to preempt such
      state laws.

            

    

     

    
      	
              16.

            	
              Amendment.  This
      Letter Agreement may be amended or modified at any time by a written
      instrument executed by the parties.

            

    

     

    
      	
              17.

            	
              Waiver.  Failure
      to insist upon strict compliance with any of the terms, covenants or
      conditions hereof shall not be deemed a waiver of such term, covenant or
      condition.  A waiver of any provision of this Letter Agreement
      must be made in writing, designated as a waiver, and signed by the party
      against whom its enforcement is sought.  Any waiver or
      relinquishment of any right or power hereunder at any one or more times
      shall not be deemed a waiver or relinquishment of such right or power at
      any other time or times.

            

    

     

    
      
        
           

        

         

      

      
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              18.

            	
              Counterparts.  This
      Letter Agreement may be executed in two or more counterparts, each of
      which shall be deemed an original, and all of which shall constitute one
      and the same Agreement.

            

    

     

    
      	
              19.

            	
              Headings and
      Construction.  The headings of sections in this Letter
      Agreement are for convenience of reference only and are not intended to
      qualify the meaning of any section.  Any reference to a section
      number shall refer to a section of this Letter Agreement, unless otherwise
      stated.

            

    

     

    
      	
              20.

            	
              Entire
      Agreement.  This instrument contains the entire agreement
      of the parties relating to the subject matter hereof, and supersedes in
      its entirety any and all prior agreements, understandings or
      representations relating to the subject matter
  hereof.

            

    

    

    

    If the provisions of this Letter
Agreement are acceptable to you, please indicate your agreement to the above by
signing in the space provided below.

    
 

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                NATIONAL
      PENN BANCSHARES, INC.

              
	 
      	 
      
	 
      	
                By: /s/ Scott V.
    Fainor

              
	 
      	
                Name: Scott
      Fainor

              
	 
      	
                Title:
      Senior Executive Vice President
      Chief Operating Officer

              
	 	 
	 
      	
                Acknowledged
      and agreed

              
	 
      	 
      
	 
      	
                NATIONAL
      PENN BANK

              
	 
      	 
      
	 
      	
                By:  /s/ Scott V.
      Fainor

              
	 
      	
                Name:  Scott
      Fainor

              
	 
      	
                Title:    President
      and

              
	 
      	
                Chief
      Executive Officer

              

      

    

     

    Agreed
and accepted as of the date first above written:

     

    

    
      	 
      
	
              
                 /s/  Glenn E.
      Moyer      

              

            
	
              Glenn
      E. Moyer

            

    

    

     

    
      
        
           

        

         

      

      
        - 5
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    EXHIBIT
A

    

    NATIONAL
PENN BANCSHARES, INC.

    NONCOMPETITION
AGREEMENT

    

    

    This NONCOMPETITION
AGREEMENT (this “Agreement”) is being entered into as of as
of  January __, 2010, by and between National Penn Bancshares, Inc., a
Pennsylvania corporation (“National Penn”), and Glenn E. Moyer (the
“Consultant”).

    

    RECITALS:

    WHEREAS, the Consultant
desires to provide the services described herein subject to the terms and
conditions set forth below:

    

    NOW THEREFORE, in
consideration of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:

    

    1.           Consultancy.  During
the period beginning on May 1, 2011 and ending on the earlier of December 31,
2011 or the date the Consultant elects by written notice to discontinue
providing consulting services (the “Consulting Term”), the Consultant shall
undertake to provide his personal advice and counsel to National Penn and its
subsidiaries and affiliates in connection with the business of National Penn and
its subsidiaries, and other duties pursuant to section 2 of the Letter Agreement
dated January __, 2010 by and among National Penn, National Penn Bank, and the
Consultant.

     

    2.           Non-Disclosure of Confidential
Information. Except in the course of performing the Consulting Services
hereunder, and in the pursuit of the business of National Penn or any of its
affiliates, the Consultant shall not, except as required by law, at any time
during or following the Consulting Term, disclose or use any confidential
information or proprietary data of National Penn or any of its affiliates or
predecessors, unless such confidential information or proprietary data become
publicly known through no fault of the Consultant.  Without limiting
the generality of the foregoing, the Consultant agrees that all information
concerning the identity of the customers of National Penn and its affiliates and
the relations of such entities with their customers is confidential
information.  This Section 2 shall survive the termination or
expiration of the Consulting Term.

     

    3.           Non-Competition
Provisions.  The Consultant agrees that during the Consulting
Term and for a period of twelve (12) months thereafter, the Consultant will not
(i) without the prior written consent of National Penn (which consent may be
given at National Penn’s discretion, but not unreasonably withheld), directly or
indirectly, engage in, become interested in, or become associated with, in the
capacity of employee, consultant, director, officer, owner, principal, agent,
trustee or in any other capacity whatsoever, any proprietorship, partnership,
corporation, enterprise or entity located within a fifty (50) mile radius from
Boyertown, PA, which proprietorship, partnership, corporation, enterprise or
other entity is competitive with any business carried on by National Penn or its
affiliates including but not limited to entities which lend money and take
deposits (in each case, a “Competing Business”), provided, however,
that

     

    
      
        
           

        

         

      

      
        - 6
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    this
provision shall not prohibit the Consultant from owning bonds, voting and
non-voting preferred stock or up to five percent (5%) of the outstanding common
stock of any Competing Business if such common stock is publicly traded, (ii)
solicit or induce, or cause others to solicit or induce, any employee of
National Penn or any of its affiliates to leave the employment of such entities,
or (iii) solicit (whether by mail, telephone, personal meeting or any other
means, excluding general solicitations of the public that are not based in whole
or in part on any list of customers of National Penn or any of its affiliates)
any customer of National Penn or any of its affiliates to transact business with
any other entity, or to reduce or refrain from doing any business with National
Penn or its subsidiaries, or interfere with or damage (or attempt to interfere
with or damage) any relationship between National Penn or its affiliates and any
such customers. This Section 3 shall survive the termination or expiration of
the Consulting Term in accordance with its terms.

     

    4.           Successors
and Assigns.

     

    (a)           During
the Employer Term and the Consulting Term, National Penn will require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of its business and/or
assets, by agreement in form and substance satisfactory to the Consultant,
expressly, absolutely and unconditionally to assume and agree to perform this
Agreement in the same manner and to the same extent that National Penn would be
required to perform it if no such succession or assignment had taken
place.  Any failure of National Penn to obtain such agreement prior to
the effectiveness of any such succession or assignment during the Consulting
Term shall be a material breach of this Agreement.

     

    (b)           This
Agreement and all rights of the Consultant shall inure to the benefit of and be
enforceable by the Consultant’s personal or legal representatives, estate,
executors, administrators, heirs and beneficiaries.  In the event of
the Consultant’s death, any amounts accrued and unpaid through the date of death
shall be paid to the Consultant’s estate, heirs and
representatives.  Except as provided in this Section 4, no party may
assign this Agreement or any rights, interests, or obligations hereunder without
the prior written approval of the other party.  Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.

     

    5.           Enforcement.  This
Agreement shall be construed, enforced and interpreted in accordance with and
governed by the laws of the Commonwealth of Pennsylvania, without reference to
its principles of conflict of laws, except to the extent that federal law shall
be deemed to preempt such state laws.

     

    6.           Amendment.  This
Agreement may be amended or modified at any time by a written instrument
executed by the parties.

     

    7.           Waiver. Failure to insist upon
strict compliance with any of the terms, covenants or conditions hereof shall
not be deemed a waiver of such term, covenant or condition.  A waiver
of any provision of this Agreement must be made in writing, designated as a
waiver, and signed by the party against whom its enforcement is
sought.  Any waiver or relinquishment of any right or power hereunder
at any one or more times shall not be deemed a waiver or relinquishment of such
right or power at any other time or times.

     

    
      
        
           

        

         

      

      
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    8.           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the same
Agreement.

     

    9.           Headings and
Construction.  The headings of sections in this Agreement are
for convenience of reference only and are not intended to qualify the meaning of
any section.  Any reference to a section number shall refer to a
section of this Agreement, unless otherwise stated.

     

    IN WITNESS WHEREOF, National
Penn has caused this Agreement to be executed by its duly authorized officer,
and the Consultant has signed this Agreement, all as of the date first written
above.

    
 

    
      
        	
                WITNESS:

              	______________________________________________________
	______________________________________________________	
                GLENN
      E. MOYER

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                NATIONAL
      PENN BANCSHARES, INC.

              
	 
      	 
      
	 
      	 
      
	 
      	______________________________________________________
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

    

    
      
        
           

        

         

      

      
        - 8
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    EXHIBIT
B

     

    

    NATIONAL
PENN BANCSHARES, INC.

    CONFIDENTIAL
RELEASE AND WAIVER OF CLAIMS AGREEMENT (“Release”)

    

    
      	
              1.

            	
              Release
      of Claims by Executive.  In exchange for the benefits
      described in paragraph 3, I, Glenn E. Moyer
      (“Executive”), hereby release and
      forever discharge National Penn Bancshares, Inc., a Pennsylvania
      corporation, its subsidiaries and affiliates (the “Company” or “National
      Penn”), any and all of their respective employee benefit plans, fringe
      benefit plans or programs, and any and all of their respective present and
      past officers, directors, shareholders, employees, agents and
      representatives, and the successors and assigns of each from any and all
      manner of claims, suits, demands, actions, causes of action,
      administrative claims, liability, claims for damages, class action claims
      or other claims made on my behalf whatsoever that I, my heirs,
      representatives, agents, successors, guardians, trustees or assigns ever
      had, have now or may have including, but not limited to, any claims
      arising from or relating to my employment with the Company, any pending
      applications for employment with the Company, or the termination of my
      employment with the Company including, but not limited to: Title VII of
      the Civil Rights Act of 1964 and the Civil Rights Act of 1991; the
      Americans With Disabilities Act; the Pennsylvania Human Relations Act; the
      Age Discrimination in Employment Act; the Older Workers Benefit Protection
      Act (“OWBPA”); the Family and Medical Leave Act; Sections 1981 through
      1988 of Title 42 of the United States Code; the Employee Retirement Income
      Security Act of 1974; and all other federal, state or local laws of a
      similar nature to any of the foregoing enumerated laws and any amendments
      to the foregoing statutes or any other federal, state or local law; any
      common law claim; breach of contract claim; claim for personal injury,
      wrongful discharge, public policy, negligence, infliction of emotional
      distress, whistleblower, retaliation, negligent hiring or retention, or
      any form of tort, whether negligent, reckless or intentional, and any
      claim for attorneys’ fees and costs, arising in law or equity, whether
      known, suspected or unknown, and however originating or existing, from the
      beginning of time to the date of my execution of this
    Release.

            

    

     

    In
addition, with the exception of unemployment and worker's compensation claims, I
waive any right to any individual monetary or economic recovery or equitable
relief against the Company in any administrative proceeding or in any action,
lawsuit, hearing or other proceeding instituted by any agency, person or entity,
from the beginning of time to the date of my execution of this
Release.  Notwithstanding the foregoing, this Release excludes
(A) the payment and/or benefit obligations of the Company under the Letter
Agreement and the Noncompetition Agreement, (B) any Claims the Executive
may have under any plans or programs not covered by the Letter Agreement or
Noncompetition Agreement in which the Executive participated and under which the
Executive has accrued and become entitled to a benefit, including, but not
limited to, the Company’s Executive Incentive Plan, Long-Term Incentive
Compensation Plan, Defined Benefit Pension Plan, or Defined Contribution
(401(k)) Capital Accumulation Plan (C) any indemnification or other rights
the Executive may have in accordance with the governing instruments of any
member of the Company or under any director and officer liability insurance
maintained by the Company or any such group member with respect to liabilities
arising as a result of the Executive’s service as an

     

    
      
        
           

        

         

      

      
        - 9
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    officer
and employee of the Company or any predecessor thereof, (D) the Employee’s
rights to any of his checking or savings accounts with the Company, and (E) any
rights which are not waivable by law.

     

    Notwithstanding
the foregoing, this Section shall not limit Executive’s right to challenge the
enforceability of the waiver and release contained herein under OWBPA with
respect to claims under the Age Discrimination in Employment Act or from filing
a charge of discrimination with the United States Equal Employment Opportunity
Commission (“EEOC”), but Executive will not be entitled to
any monetary or other relief from the EEOC or from any court, arbitrator or
other similar arbiter of disputes as a result of litigation brought on the basis
of or in connection with such charge except if and to the extent that the
release and waiver contained in this Section is held to be invalid or
unenforceable (in which event, National Penn will be entitled to restitution or
set off for the amounts paid to Executive hereunder, as and to the extent
determined by the court).  Executive acknowledges and agrees that, but
for providing this waiver and release, Executive would not be receiving the
amounts being provided to Executive under paragraph 3 of this
Release.

    

    
      	
              2.

            	
              Release
      of Claims by Company.  In consideration of the general
      release and other covenants of the Executive herein, and after
      consultation with counsel, the Company for itself and on behalf of each of
      its majority owned subsidiaries and affiliated companies and each of their
      officers, employees, directors, shareholders, and agents (collectively,
      the “Company Releasors”), hereby irrevocably and unconditionally releases
      and forever discharges the Executive and each of the Executive’s heirs,
      executors, administrators, representatives, agents, successors and assigns
      (collectively, the “Executive Releasees”), from any and all known Claims
      (but only to the extent of such known Claims) that the Company Releasors
      had, may have had or now has against the Executive Releasees, as of the
      date of this Release Agreement by the Company, arising out of or relating
      to the Executive’s employment relationship, or the termination of that
      relationship, with the Company, including, but not limited to, any Claim
      arising under any Federal, state, local, or foreign
      law.  Anything to the contrary notwithstanding in this Release
      Agreement, nothing herein shall release the Executive Releasees from any
      claims or damages based on (i) any Claims (or further Claims) unknown to
      the Company Releasors as of the date of this Release Agreement, (ii) any
      Claims that arise after the date of this Release Agreement, or (iii) any
      right the Company may have to obtain contribution as permitted by law in
      the event of entry of judgment against the Company as a result of any act
      or failure to act for which the Executive and the Company are jointly
      liable.

            

    

     

    

    
      	
              3.

            	
              Release
      Consideration.  In consideration for my execution of this
      Release, the Company agrees to make payments to me and/or make benefits
      available to me pursuant to the Letter Agreement, dated January __, 2010,
      entered into between National Penn, National Penn Bank, and Executive (the
      “Letter Agreement”), at the time and in the form set forth in the Letter
      Agreement.

            

    

     

    I
acknowledge that in the absence of my execution of this Release, I would not be
entitled to certain of the benefits described in this paragraph 2.  I
acknowledge further that such benefits are adequate and satisfactory
consideration to me for entering into this Release.

     

    
      
        
           

        

         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    4.      Successors
and Assigns.  The Company’s rights under this Release shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Company.  I shall not be entitled to assign any of my rights or
obligations under this Release.

     

    
      	
              5.

            	
              Governing
      Law.  This Release is made and entered into in the
      accordance with the laws of the Commonwealth of Pennsylvania and shall in
      all respects be interpreted, enforced and governed under the laws of the
      Commonwealth of Pennsylvania.

            

    

     

    
      	
              6.

            	
              Entire
      Agreement.  This Release contains the entire agreement of
      the parties with respect to the subject matter hereof and merges all prior
      negotiations, agreements and understandings, if any.  No
      modification, release, discharge or waiver of any provision of this
      Release shall be of any force or effect unless made in writing and signed
      by me and the Company and specifically identified as a modification,
      release or discharge of this Release.  If any term, clause or
      provision of this Release shall for any reason be adjudged invalid,
      unenforceable or void, the same shall not impair or invalidate any of the
      other provisions of this Release, all of which shall be performed in
      accordance with their respective
terms.

            

    

     

    
      	
              7.

            	
              Acknowledgments.  By
      signing this Release, I acknowledge and agree
  that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              I
      have carefully read and understood all of the provisions and terms of this
      Release;

            

    

     

    
      	
               
      

            	
              (b)

            	
              I
      have signed this Release knowingly and
  voluntarily;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Company has advised me in writing to consult with counsel prior to signing
      this Release;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Company has provided me at least twenty-one (21) days (“Consideration
      Period”) to consider this Release and I have not been pressured or coerced
      to waive this Consideration Period;

            

    

     

    
      	
               
      

            	
              (e)

            	
              I
      understand that I have seven (7) days (“Revocation Period”) after I sign
      this Release to elect to revoke the Release and acknowledge that I have
      not been pressured or coerced to waive this Revocation
    Period;

            

    

     

    
      	
               
      

            	
              (f)

            	
              I
      understand that this Release is made in compromise of any disputed claims
      in order to avoid the expense and inconvenience of litigation and does not
      constitute an admission of liability by the Company with regard to the
      violation of any law, statute, regulation, or
  ordinance;

            

    

     

    
      	
               
      

            	
              (g)

            	
              In
      signing this Release, I have not relied on any representations or
      statements, whether oral or written, other than the express language
      contained herein; and

            

    

     

    
      	
               
      

            	
              (h)

            	
              I
      acknowledge that I have had the right to negotiate over the terms of this
      Release and that this Release shall not be construed as drafted solely by
      the Company; rather, this Release shall be construed as mutually agreed
      upon terms which were the product of good faith and arms length
      negotiations between equal parties,
and

            

    

     

    
      
        
           

        

         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              this
      Release is not unconscionable, unfair, the product of unfair bargaining
      power or a contract of adhesion.

            

    

     

    Any
notice of revocation must be addressed and timely delivered to the Director of
Human Resources of the Company.

     

    I HAVE
CAREFULLY READ THIS ENTIRE RELEASE.  I UNDERSTAND THAT BY SIGNING THIS
RELEASE, I AM WAIVING ALL CLAIMS AGAINST THE COMPANY RELATING TO MY EMPLOYMENT
WITH THE COMPANY AND THE TERMINATION OF MY EMPLOYMENT WITH THE
COMPANY.

     

    

    IN WITNESS WHEREOF, and intending to be
legally bound hereby, I have executed the foregoing Release effective this ___
day of ___________________, _____.

    

     

    
      
 

      
        
          	
                  WITNESS:

                	______________________________________________________
	______________________________________________________	
                  GLENN
      E. MOYER

                
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                  NATIONAL
      PENN BANCSHARES, INC.

                
	 
      	 
      
	 
      	 
      
	 
      	______________________________________________________
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

      

- 12
-ex10-2.htm

    Exhibit 10.2

     

    

    AMENDMENT TO EMPLOYMENT
AGREEMENT

     

    This
AMENDMENT TO EMPLOYMENT
AGREEMENT (the “Amendatory Agreement”) is dated January 27, 2010, between
NATIONAL PENN BANCSHARES,
INC., a Pennsylvania business corporation (the “Company”), NATIONAL PENN BANK, a national
banking association (“Bank”), and SCOTT V. FAINOR
(“Executive”).

     

    BACKGROUND

     

    1. 
Executive was employed as the President and Chief Executive Officer of each of
KNBT Bancorp, Inc. (“KNBT”) and Keystone Nazareth Bank & Trust Company
(“KNBT Bank”) pursuant to an Amended and Restated Employment Agreement, dated
December 28, 2006 (the “Prior Agreement”).

    

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

    

    3.  Pursuant
to the First Amendment to the Prior Agreement between the Company, the Bank,
KNBT and KNBT Bank and the Executive effective September 6, 2007, Executive
became employed by the Company as Senior Executive Vice President and Chief
Operating Officer and by the Bank as the President and Chief Executive
Officer.

    
 

    4.  Thereafter,
the Company, the Bank, KNBT and KNBT Bank entered into that certain Amended and
Restated Employment Agreement dated January 28, 2008, which superseded as of the
Effective Time (as defined in the Merger Agreement), any and all agreements
relating to the employment matters between the Company, the Bank, KNBT, KNBT
Bank and Executive (the “Agreement”).

     

    5. 
The Company, Bank and Executive desire to amend the Agreement as hereinafter set
forth.

    

    AGREEMENT

     

    NOW, THEREFORE, in
consideration of the mutual promises contained herein, and each intending to be
legally bound, the Company, Bank and Executive agree to amend the Agreement as
follows:

     

    1.           Background.  The matters set
forth in the “Background” section of this Amendatory Agreement are incorporated
by reference herein.

     

    2.           Amendment.  The
first sentence of Section 3(a) is hereby deleted in its entirety and replaced
with the following:

     

    Throughout
the Employment Period, the Executive shall serve as the President and the Chief
Executive Officer of the Company and as the President and Chief
Executive

    

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Officer
of the Bank, having such power, authority and responsibility and performing such
duties as are prescribed by or under the Bylaws of each of the Company and the
Bank and as are customarily associated with such positions. 

    

    3.           Amendment. Section 3(b) is hereby
amended to read in its entirety 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).  On January 27, 2010, the Board
of Directors of the Company shall elect the Executive as a director of the
Company.  Thereafter, during the period of the Executive’s employment
hereunder, the Board of Directors of the Company shall nominate the Executive
for election to the Board of Directors of the Company, for successive terms
(unless it believes such action would violate its fiduciary duties) and shall
recommend his election to the shareholders of the Company, subject to the
fiduciary duties of the Board of Directors of the Company.  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 Boards of Directors of the Company and the Bank and, should the
Executive then be serving as a director of any direct or indirect subsidiary or
affiliate of the Company or Bank, from all such boards as well.

     

    4.           Amendment.  The first sentence of
Section 4(a) is hereby deleted in its entirety and replaced with the
following:

     

    In
consideration for the services to be rendered by the Executive hereunder, the
Employer shall pay to him a salary of Five Hundred Forty Thousand dollars
($540,000) annually (“Base Salary”). 

    

    5.           Amendment.  The
following new Section 29 is hereby added to the Agreement:

    

    29.  RESTRICTED
STOCK AWARD.  The Compensation Committee of the Board of Directors of
the Company shall award the Executive, on January 28, 2010, 54,000 (or such
lesser number as may be permissible under the Troubled Asset Relief Program –
“TARP”) restricted shares of common stock of the Company, which shares shall be
subject to forfeiture only if the Executive’s employment with the Company and
Bank shall terminate before the expiration of the TARP compliance
period.  This award will be made under the Company’s Long-Term
Incentive Compensation Plan and evidenced by a separate written agreement
containing such other terms and conditions as are customarily included by the
Company in such award agreements, all consistent with this Section
29.

     

    6.           Ratification.  As amended
hereby, the Agreement is hereby ratified, confirmed and approved.

     

    7.           Governing
Law.  This Amendatory
Agreement shall be governed by and construed in accordance with the domestic
internal law of the Commonwealth of Pennsylvania. 

    

    
      
        
          
             

          

           

        

        
          - 2
-

          
            

          

        

        
           

        

      

    

    

     

    IN WITNESS WHEREOF, the
parties hereto have executed this Amendment on the date first above
written. 

     

     

    
      	
               NATIONAL PENN BANCSHARES,
      INC.

               

               

            	
              NATIONAL
      PENN BANK

            
	
              By:  /s/  Thomas
      A. Beaver

              Name:  Thomas
      A. Beaver

              Title:   
      Chairman

               

               

               

            	
              By:  /s/  Thomas
      A. Beaver

              Name:  Thomas
      A. Beaver

              Title:     Chairman   

                      

            
	 
      	 
      
	
              Witness: 
      /s/  H.
      Anderson Ellsworth

            	
                      /s/  Scott
      V. Fainor

                      Scott
      V. Fainor

            

    

    

     

     

     

     

    - 3 -

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