Document:

exhibit103.htm

     

    
      

      

    

    Exhibit
      10.3

     

     

    
      FORM
        OF

      PERFORMANCE
        SHARE AWARD CANCELLATION AGREEMENT

       

      This
        Performance Share Award Cancellation Agreement (this “Agreement” is made as of
        January 28, 2008 between ___________________ (the “Recipient”) and KNBT Bancorp,
        Inc. (the “Company”). 

       

      WHEREAS,
        the
        Recipient was granted on [date],
        2006
        a performance share award (the “Award”) consisting of  _____shares of
        common stock, par value $.01 per share ("Common Stock"), of the Company pursuant
        to the 2004 Recognition and Retention Plan and Trust Agreement (the
“Plan”); 

       

      WHEREAS,
        the
        Company has entered into the Agreement and Plan of Merger by and between
        National Penn Bancshares, Inc. (“National Penn”) and the Company dated as of
        September 6, 2007 (the “Merger Agreement”), whereby the Company will be merged
        with and into National Penn (the “Merger”); 

       

      WHEREAS,
the
        earning of the Award is subject to the achievement of specified performance
        targets of the Company with respect to the Company’s financial performance for
        the fiscal year ended December 31, 2008 (the “Performance
        Targets”); 

       

      WHEREAS,
the
        Merger is expected to be completed on February 1, 2008; 

       

      WHEREAS,
        the
        earning of the Award is not accelerated upon completion of the Merger;
        and 

       

      WHEREAS,
        in
        light of the pending Merger and the likelihood of achieving the Performance
        Targets, the parties to this Agreement desire that the Award be
        cancelled. 

       

      NOW,
        THEREFORE, IT
        IS AGREED, that the Award be and is hereby canceled as of the date
        hereof. The Recipient acknowledges that the Recipient shall have no claims
        or
        rights against the Company or National Penn under or in respect of the Award.
        The Recipient has surrendered to the Company the original of the Performance
        Share Award Agreement representing the Award.  Whether or not the
        Merger Agreement is terminated, this Agreement will remain in full force
        and
        effect. 

       

      IN
        WITNESS
        WHEREOF, the undersigned has caused this Agreement to be executed as of
        the date first written above. 

       

              KNBT
        BANCORP,
        INC. 

       

              By:      
        _________________________________ 

              Scott
        V.
        Fainor 

              President
        and Chief
        Executive Officer 

       

              By:      
        _________________________________ 

              Recipientexhibit104.htm

     

    
      

      

    

    Exhibit
      10.4

     

     

    
      FORM
        OF

      AMENDMENT
        NO. 1

      COMPENSATORY
        STOCK OPTION AGREEMENTS

      2004
        STOCK OPTION PLAN

       

       

      This
        Amendment No. 1 (the “Amendment”) to the Compensatory Stock Option Agreement
        described below is made as of January 28, 2008 between                
        (the “Optionee”) and KNBT Bancorp, Inc. (the “Company”).

       

      WHEREAS,
        pursuant to the terms of the 2004 Stock Option Plan (the “Plan”) a compensatory
        stock option (the “Options”) covering            
        shares of common stock of the Company was granted to the Optionee on              ,
        200   ;

       

      WHEREAS,
        the
        Compensatory Stock Option Agreement (the “Agreement’) reflecting the terms under
        which the Option was granted provided in Section 2 thereof that accelerated
        vesting of the Option would not occur in the event of a Change in Control
        (as
        such term is defined in the Plan) of the Company notwithstanding the provisions
        of Section 8.03(b) of the Plan;

       

      WHEREAS,
        the
        Company has entered into the Agreement and Plan of Merger by and between
        National Penn Bancshares, Inc. (“National Penn”) and the Company dated as of
        September 6, 2007 (the “Merger Agreement”), whereby the Company will be merged
        with and into National Penn (the “Merger”);

       

      WHEREAS,
        the
        Merger will constitute a Change in Control of the Company for purposes of
        the
        Plan; and

       

      WHEREAS,
        the
        Company and National Penn have agreed that the Option should be amended to
        provide the vesting thereof will accelerate upon completion of the Merger
        consistent with the terms of the Plan.

       

      NOW
        THEREFORE, IT IS
        AGREED, that notwithstanding anything to the contrary contained in the
        Agreement, the Option shall become immediately vested and exercisable in
        full in
        the event of a Change in Control (as such term is defined in the Plan) of
        the
        Company in accordance with the terms of the Plan, it being understood that
        the
        Effective Time (as such term is defined in the Merger Agreement) of the Merger
        will constitute a Change in Control.

       

      IN
        WITNESS
        WHEREOF, the undersigned has caused this Amendment to be executed as of
        the date first written above.

       

                  
        KNBT BANCORP, INC.

       

                    By:   ________________________________ 

                  
        Scott V. Fainor

                  
        President and Chief Executive Officer

       

                    By:   _______________________________

                   OptioneeEXHIBIT 10.1

     

    Exhibit
      10.1

     

    
      SALES
        AGREEMENT

       

      

       This
        agreement is entered into this 31st day of January, 2008
        (the
“Agreement”) by and between MBA Holdings, Inc., a Nevada corporation (the
“Seller”), and Cactus Family Investments, LLC, an Arizona limited liability
        company (the “Buyer”).

       

      WHEREAS,
        Seller desires to sell all of its ownership in one of its wholly-owned
        subsidiaries, Mechanical Breakdown Administrators, Incorporated,  a
        Delaware corporation (“MBA”); and

      

       WHEREAS,
        Buyer desires to purchase MBA from Seller.

      

       In
        consideration of the mutual promises and covenants set forth below, the parties
        hereto agree as follows:

       

      
        	
              	
                1.

              	
                Assets
                  Sold.  In exchange for the Purchase Price described below,
                  Seller hereby sells, assigns and transfers to Buyer all of the
                  Seller’s
                  right, title and interest in 100% of the outstanding capital stock
                  of
                  MBA.

              

      

       

      
        	
              	
                2.

              	
                Purchase
                  Price.  Upon the execution of this Agreement, Buyer shall
                  deliver to Seller at the offices of Seller a document discharging
                  and
                  releasing Three Hundred Thousand Dollars ($300,000) of debt owed
                  by Seller
                  to Buyer as the payment of the consideration for the sale of MBA
                  to Buyer
                  (the “Purchase Price”). The form of the document discharging and releasing
                  Seller from this debt is set forth as Exhibit A to this
                  Agreement.

              

      

       

      
        	
              	
                3.

              	
                Assets
                  and Liabilities.  The parties hereto agree and understand that
                  all of the assets and all of the liabilities of MBA, wherever situated,
                  known and unknown, existing now or in the future, will be transferred
                  to
                  and assumed by Buyer as a matter of law upon the execution of this
                  Agreement by the parties, without recourse by Buyer to or against
                  Seller.

              

      

      

      
        	
              	
                4.

              	
                Seller’s
                  Representations.  Seller hereby represents and warrants to Buyer
                  as follows:

              

      

       

      
        	
              	
                (a)

              	
                Seller
                  has valid title to 100% of the issued and outstanding capital stock
                  of
                  MBA, and to the best of the knowledge of Seller, MBA has validly
                  formed
                  and is in good standing as of the date of this
                  agreement.

              

      

       

      
        	
              	
                (b)

              	
                Since
                  Seller’s Board of Directors have approved the execution of this Agreement
                  and the transaction contemplated herein, Seller has full authority
                  to
                  sell, assign and transfer MBA to
                  Buyer.

              

      

       

      
        	
              	
                5.

              	
                Buyer’s
                  Representations.  Buyer hereby represents and warrants to Seller
                  as follows:

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
              	
                (a)

              	
                Buyer
                  has evaluated the high risks of purchasing MBA, including the capital
                  stock thereof which represents 100% of the ownership in MBA (the
                  “Shares”);

              

      

       

      
        	
              	
                (b)

              	
                Buyer
                  is owned by an officer and Director of Seller for the past several
                  years
                  and is, therefore, fully aware of the profit and loss potential
                  of
                  MBA;

              

      

       

      
        	
              	
                (c)

              	
                In
                  making the decision to purchase MBA including the Shares, Buyer
                  has relied
                  solely upon independent investigations made by or on behalf of
                  Buyer;

              

      

       

      
        	
              	
                (d)

              	
                The
                  Shares, when acquired by Buyer, will be acquired in good faith
                  solely for
                  Buyer’s own account, for investment purposes only, and will not be
                  purchased with a view to, or for, the resale, distribution, subdivision
                  or
                  fractionalization thereof;

              

      

       

      
        	
              	
                (e)

              	
                Buyer,
                  understands htat the Shares have not been registered under the
                  Securities
                  Act of 1933, as amended (the “Act”), and agrees that the Shares may not be
                  sold, offered for sale, transferred, pledged, hypothecated or otherwise
                  disposed of except in compliance with the Act. Buyer understands
                  that the
                  legal consequences of the foregoing mean that Buyer must bear the
                  economic
                  risk of Buyer’s investment in the Shares for an indefinite period of time.
                  Buyer further understands that, if Buyer desires to sell or transfer
                  all
                  or any part of the Shares, when acquired, Buyer may require counsel
                  to
                  provide a legal opinion that the transfer may be made without registration
                  under the Act;

              

      

       

      
        	
              	
                (f)

              	
                Buyer
                  understands no federal or state agency has made any finding or
                  determination as to the fairness of an investment in the MBA or
                  the
                  Shares;

              

      

       

      
        	
              	
                6.

              	
                Litigation
                  and Arbitration.  Any controversy or claim arising out of or
                  relating to this Agreement shall be settled by arbitration in the
                  Phoenix
                  metropolitan area in accordance with the then governing rules of
                  the
                  American Arbitration Association. The party to whom the arbitrator
                  or
                  arbitration panel makes an award shall be entitled to receive as
                  part of
                  the reward the reasonable cost of its attorney fees and litigation
                  expenses.  Judgment upon the award rendered in the arbitration
                  may be enforced in court described in Paragraph 8 below of this
                  Agreement.

              

      

       

      
        	
              	
                7.

              	
                Assignment.  Rights
                  and obligations of a party to this Agreement may not be assigned
                  or
                  transferred without the other party’s prior written consent
                  thereto.

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      
        	
              	
                8.

              	
                Governing
                  Law and Venue.  This Agreement shall be governed by and
                  interpreted in accordance with the laws of the State of Arizona,
                  United
                  States of America. The parties hereby expressly agree that the
                  proper
                  venue for any claim or cause of action by the parties shall be
                  the
                  Superior Court for the District of Maricopa County, Arizona and
                  that each
                  party upon execution of this Agreement consents to the service
                  of process
                  from such court.

              

      

       

      
        	
              	
                9.

              	
                Modification.  No
                  modification or amendment of this Agreement shall be valid unless
                  it is in
                  writing and signed by both parties
                  hereto.

              

      

       

      
        	
              	
                10.

              	
                Complete
                  Agreement. This Agreement constitutes the entire agreement between
                  the
                  parties hereto and supersedes all prior agreements and understandings
                  between the parties hereto.

              

      

       

      
        	
              	
                11.

              	
                Waiver.
                  The waiver by either party of a breach of any term of this Agreement
                  shall
                  not operate as, or be construed as, a waiver of any subsequent
                  breach.

              

      

       

      
        	
              	
                12.

              	
                Headings.  The
                  headings in this Agreement are inserted for convenience only and
                  shall not
                  be considered in interpreting the provisions
                  hereof.

              

      

       

      
        	
              	
                13.

              	
                Counterparts
                  And Facsimile Signatures.  This Agreement may be executed in two
                  or more counterparts, each of which shall be deemed an original
                  but all of
                  which together shall constitute one and the same instrument. Facsimile
                  signatures shall be valid and
                  enforceable.

              

      

       

      IN
        WITNESS WHEREOF, the parties have executed this Agreement on January 31,
        2008.

      
        
          	 	 	 
	 	M.B.A.
                  Holdings, Inc.
	 
 	 
 	 
 
	 	By:  	/s/ 
Judy
                  K.
                  Brotherson
	 	
                  

                
	 	
                  
                    Judy
                      K. Brotherson,
                      President

                  

                

        

      

    

    
       

      
        
          	 	 	 
	 	CACTUS
                  FAMILY INVESTMENTS, LLC
	 
 	 
 	 
 
	 	By:  	/s/ 
Gaylen Brotherson
	 	
                  

                
	 	
                  
                    Gaylen
                      Brotherson, Manager

                  

                

        

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      

      EXHIBIT
        A

       

      DISCHARGE
        AND RELEASE

       

      

      Cactus
        Family Investments, LLC an Arizona limited liability company (“Cactus”), hereby
        discharges and releases MBA Holdings, Inc., a Nevada corporation (“MBAH”), from
        Three Hundred Thousand Dollars ($300,000) of debt owed to Cactus from cash
        loans
        to MBAH and interest due thereon totaling approximately $123,964.22 and rent
        due
        to Cactus from MBAH and interest thereon totaling approximately $176,035.78.
        Any
        and all outstanding notes that cover these amounts made by MBAH and delivered
        to
        Cactus for loans and accrued debt made by Cactus to MBAH shall be
        marked  “Paid in Full” and dated by Cactus January 31, 2008 and
        returned to MBAH.

      
         

        
          
            	 	 	 
	 	CACTUS
                    FAMILY INVESTMENTS, LLC
	 
 	 
 	 
 
	 	By:  	/s/ 
Gaylen Brotherson
	 	
                    

                  
	 	
                    
                      Gaylen
                        Brotherson,
                        Manager

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