Common use of ESOP Matters Clause in Contracts

ESOP Matters. (a) The ESOP Trust was validly authorized and established in accordance with all applicable laws, regulations, and rulings. The ESOP Trust is a trust duly formed in accordance with the laws of the Commonwealth of Pennsylvania. The ESOP Trustee has been duly appointed by TF Financial to serve as the trustee of the ESOP Trust. (b) Except as set forth in Section 3.30(b) of the TF Financial Disclosure Schedule, the ESOP is now and has been at all times since its inception, in form, an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the IRC and Section 407(d)(6) of ERISA, which, in form, qualifies under Section 401(a) of the IRC. The ESOP Trust is now and has at all times since inception been, qualified under Section 501(a) of the IRC. The shares of TF Financial Common Stock held by the ESOP Trust constitute “employer securities,” as defined in Section 409(l) of the IRC, and “qualifying employer securities”, as defined in Section 407(d)(5) of ERISA. (c) Since January 1, 2011, the ESOP complies, and has been administered and operated in compliance, in all material respects, in accordance with its terms and all provisions of applicable Law. Since January 1, 2011, all amendments and actions required to bring the ESOP into conformity in all material respects with all of the applicable provisions of the IRC, ERISA and other applicable laws have been made or taken except to the extent that such amendments or actions are not required by law to be made or taken until a date after the Effective Date and as disclosed on Section 3.30(c) of the TF Financial Disclosure Schedule. Since January 1, 2011, no individual who has performed services for TF Financial has been improperly excluded from participation in the ESOP. As of the Closing Date, neither TF Financial nor any participant in the ESOP is or may be subject to liability by reason of Section 4979A of the IRC. (d) Neither TF Financial nor any “party in interest” or “disqualified person” with respect to the ESOP has engaged in a non-exempt “prohibited transaction” within the meaning of Section 4975 of the IRC or Section 406 of ERISA. No fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of the ESOP. The transactions contemplated by this Agreement and all prior transactions involving the ESOP, do not constitute transactions which would subject any such party to either a civil penalty assessed pursuant to part 502(i) of ERISA or the tax or penalty on prohibited transactions imposed by Section 4975 of the Code. (e) Except as disclosed on Section 3.30(e) of the TF Financial Disclosure Schedule, there is no existing indebtedness of the ESOP, the ESOP Trust or TF Financial relating to the ESOP. (f) Section 3.30(f) of the TF Financial Disclosure Schedule sets forth any documents that provide for indemnification of the ESOP Trustee and all other fiduciaries of the ESOP or such fiduciaries’ financial advisors in connection with any prior transactions involving the ESOP or the Contemplated Transactions. (g) Except as set forth in Section 3.30(g) of the TF Financial Disclosure Schedule, TF Financial has made available to National Penn the ESOP and the trust agreement (the “ESOP Organizational Documents”), as well as true and complete copies of ESOP contributions and allocation schedules for the last five years of contributions, ESOP voting procedures, account diversification documentation, distribution forms and notices, committee and trustee minutes and consents, and nondiscrimination tests for the last five years. (h) As of the Effective Date, with respect to the ESOP, (i) the ESOP Trustee and TF Financial will have properly discharged their respective duties under the Plan, the IRC, and other applicable law regarding the ESOP participants’ rights to consider, vote upon or otherwise instruct the ESOP Trustee on the transactions contemplated hereby; and (ii) the ESOP Trustee and TF Financial will have properly discharged their respective fiduciary duties with respect to all material aspects of the establishment and operation of the ESOP, including but not limited to, valuing the TF Financial Common Stock and making participant distributions. (i) No shares of TF Financial Common Stock owned by the ESOP were acquired by the ESOP in a transaction pursuant to Section 1042 of the IRC. All TF Financial contributions to the ESOP were deductible under Section 404 of the IRC for the year made. Except as disclosed on Section 3.30(i) of the TF Financial Disclosure Schedule, none of the shares of TF Financial Common Stock held by the ESOP were acquired with the proceeds of any loan made or guaranteed by the seller of such securities, TF Financial or any ERISA Affiliate of TF Financial. (j) Since January 1, 2011, TF Financial and the ESOP have complied with the voting requirements of Section 409(e) of the IRC. Neither the execution, delivery and performance of this Agreement and any ancillary documents, nor the consummation of the Contemplated Transactions will conflict with, result in a breach of or constitute a default under or violate any provision of the ESOP or ESOP Trust, or any other agreement to which the ESOP is a party, including, without limitation, any loan agreement or any provision of articles of incorporation or bylaws of TF Financial. There is no pending or threatened claims against TF Financial by the ESOP, or the ESOP Trustee, and no claims pending, or to the Knowledge of TF Financial, threatened claims against the ESOP, the ESOP Trustee or TF Financial with respect to the ESOP by any of its participants. To the Knowledge of TF Financial, neither the ESOP nor the ESOP participants have any basis for any claim against TF Financial or the ESOP Trustee.

ESOP Matters. (a) The ESOP Trust was validly authorized and established in accordance with all applicable laws, regulations, and rulings. The ESOP Trust is a trust duly formed in accordance with the laws of the Commonwealth of Pennsylvania. The ESOP Trustee has been duly appointed by TF Financial the Company to serve as the trustee of the ESOP Trust. (b) Except as set forth in Section 3.30(b) ESOP. The Trustee is independent of the TF Financial Disclosure ScheduleCompany, and is a trust company or national bank that has agreed to serve as the independent, third-party fiduciary for purposes of the transactions contemplated by this Agreement. The ESOP is now and has been at all times since its inception, in form, an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the IRC Tax Code and Section 407(d)(6) of ERISA, which, in form, qualifies under Section 401(a) of the IRCTax Code. The ESOP Trust Seller is now and has at all times since inception been, qualified under Section 501(a) of the IRCTax Code. The shares of TF Financial Common Stock Shares held by the ESOP Trust Seller constitute “employer securities,” as defined in Section 409(l) of the IRCTax Code, and “qualifying employer securities”, ,” as defined in Section 407(d)(5) of ERISA. (cb) Since January 1, 2011, the The ESOP complies, and has been administered and operated in compliance, in all material respects, in accordance with its terms and all provisions of applicable LawLegal Requirements. Since January 1, 2011, all All amendments and actions required to bring the ESOP into conformity conformity, in all material respects respects, with all of the applicable provisions of the IRCTax Code, ERISA and other applicable laws Legal Requirements have been made or taken except to the extent that such amendments or actions are not required by law to be made or taken until a date after the Effective Closing Date and as all of which are disclosed on Schedule 4.24(b). The ESOP complies in all respects with Section 3.30(c409(p) of the TF Financial Disclosure Schedule. Since January 1Tax Code and, 2011, no individual who has performed services for TF Financial has been improperly excluded from participation in the ESOP. As as of the Closing Date, neither TF Financial the Company nor any participant in the ESOP is or may reasonably be expected to be subject to liability Liability by reason of Section 4979A of the IRCTax Code. (dc) Neither TF Financial the Company nor any “party in interest” or “disqualified person” with respect to the ESOP has engaged in a non-exempt “prohibited transaction” within the meaning of Section 4975 of the IRC Tax Code or Section 406 of ERISA. No fiduciary has any liability Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of the ESOP. The transactions contemplated by this Agreement and all prior transactions involving the ESOP, do not constitute transactions which would subject any such party to either a civil penalty assessed pursuant to part 502(i) of ERISA or the tax or penalty on prohibited transactions imposed by Section 4975 of the CodeSeller. (ed) Except as disclosed on Section 3.30(e) of for the TF Financial Disclosure ScheduleOutstanding ESOP Indebtedness, there is no existing indebtedness Debt of the ESOP, Seller or the ESOP Trust or TF Financial Company relating to the ESOP. (fe) Section 3.30(fSchedule 4.24(e) of the TF Financial Disclosure Schedule sets forth a list of any documents that provide for indemnification of the ESOP Trustee and all other fiduciaries of the ESOP or such fiduciaries’ financial advisors in connection with any prior transactions involving the ESOP or the Contemplated Transactionstransactions contemplated hereby. (f) The Company has made available to Buyer true, correct and complete copies of the ESOP Documents. (g) Except as set forth in Section 3.30(g) of the TF Financial Disclosure ScheduleSeller has received, TF Financial has and made available to National Penn the ESOP and the trust agreement (the “ESOP Organizational Documents”)Buyer a true, as well as true correct and complete copies of ESOP contributions and allocation schedules for the last five years of contributions, ESOP voting procedures, account diversification documentation, distribution forms and notices, committee and trustee minutes and consents, and nondiscrimination tests for the last five years. (h) As of the Effective Date, with respect to the ESOP, (i) the ESOP Trustee and TF Financial will have properly discharged their respective duties under the Plan, the IRC, and other applicable law regarding the ESOP participants’ rights to consider, vote upon or otherwise instruct the ESOP Trustee on the transactions contemplated hereby; and (ii) the ESOP Trustee and TF Financial will have properly discharged their respective fiduciary duties with respect to all material aspects of the establishment and operation of the ESOP, including but not limited to, valuing the TF Financial Common Stock and making participant distributions. (i) No shares of TF Financial Common Stock owned by the ESOP were acquired by the ESOP in a transaction pursuant to Section 1042 of the IRC. All TF Financial contributions to the ESOP were deductible under Section 404 of the IRC for the year made. Except as disclosed on Section 3.30(i) of the TF Financial Disclosure Schedule, none of the shares of TF Financial Common Stock held by the ESOP were acquired with the proceeds of any loan made or guaranteed by the seller of such securities, TF Financial or any ERISA Affiliate of TF Financial. (j) Since January 1, 2011, TF Financial and the ESOP have complied with the voting requirements of Section 409(e) of the IRC. Neither the execution, delivery and performance of this Agreement and any ancillary documents, nor the consummation of the Contemplated Transactions will conflict with, result in a breach of or constitute a default under or violate any provision copy of the ESOP or ESOP Trust, or any other agreement to which the ESOP is a party, including, without limitation, any loan agreement or any provision of articles of incorporation or bylaws of TF Financial. There is no pending or threatened claims against TF Financial by the ESOP, or the ESOP Trustee, and no claims pending, or to the Knowledge of TF Financial, threatened claims against the ESOP, the ESOP Trustee or TF Financial with respect to the ESOP by any of its participants. To the Knowledge of TF Financial, neither the ESOP nor the ESOP participants have any basis for any claim against TF Financial or the ESOP TrusteeOpinion.

ESOP Matters. Notwithstanding any provisions in this Agreement to the contrary: (a) The ESOP Trust was validly authorized and established in accordance with all applicable laws, regulations, and rulingsLaws. The ESOP Trust is a trust duly formed in accordance with the laws Trustee and all other fiduciaries of the Commonwealth of Pennsylvania. The ESOP Trustee has have been duly appointed by TF Financial to serve as the trustee of the ESOP TrustCompany. (b) Except as set forth in Section 3.30(b) of the TF Financial Disclosure Schedule, the The ESOP is now now, and has been at all times since its inception, in form, constituted an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the IRC Code and Section 407(d)(6) of ERISA, which, in form, qualifies under Section 401(a) of the IRC. The ESOP was validly authorized and established pursuant to applicable Law. The Trust is now and has at all times since inception been, qualified under Section 501(a) a trust duly formed in accordance with the laws of the IRCCommonwealth of Massachusetts, except to the extent preempted by Federal law. The shares of TF Financial Common Stock held owned by the ESOP Trust constitute are “employer securities,” (as that term is defined in Section Code § 409(l)) of the IRC, and “qualifying employer securities”, ” (as defined in ERISA § 407(d)(5)). (c) The IRS has issued, and the ESOP is entitled to rely upon, a current favorable determination letter with respect to the tax-qualified status of the ESOP under Sections 401(a) and 4975(c)(7) of the Code. Any transaction to which the ESOP was at any time a party involving the purchase, sale, or exchange of any security complied with the applicable requirements of ERISA and the Code, including Section 407(d)(53(18) of ERISA. (cd) Since January 1, 2011, the The ESOP complies, has complied, and has been administered and operated in material compliance, in all material respects, in accordance with its terms and all provisions of applicable Law, including ERISA and the Code. Since January 1, 2011, all All amendments and actions required to bring the ESOP into conformity in all material respects with all of the applicable provisions of the IRCCode, ERISA ERISA, and other applicable laws Laws have been made or taken except to the extent that such amendments or actions are not required by law to be made or taken until a date after the Effective Date and as disclosed on taken. The ESOP complies in all respects with Section 3.30(c409(p) of the TF Financial Disclosure Schedule. Since January 1Code, 2011, no individual who has performed services for TF Financial there has been improperly excluded from participation in the ESOP. As no violation at any time of Code Section 409(p), and, as of the Closing DateClosing, neither TF Financial the Company nor any participant in the ESOP Participant is or may be subject to liability any Liability by reason of Section 4979A of the IRCCode. (de) Neither TF Financial Except as set forth in Schedule 2.33(e), neither the Company nor any “party in interest” or “disqualified person” with respect to the ESOP has engaged in a non-exempt “prohibited transactiontrans-action” within the meaning of Section 4975 of the IRC Code or Section 406 of ERISAERISA that is not exempt under Section 4975 of the Code or Section 408 of ERISA and there has been no such “prohibited transaction” that has occurred with respect to the ESOP for which an exemption is not applicable. No fiduciary has any liability Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of the ESOP. The transactions contemplated by this Agreement and all prior transactions involving the ESOP, do not constitute transactions which would subject any such party to either a civil penalty assessed pursuant to part 502(i) of ERISA or the tax or penalty on prohibited transactions imposed by Section 4975 of the Code. (e) Except as disclosed on Section 3.30(e) of the TF Financial Disclosure Schedule, there is no existing indebtedness of the ESOP, the ESOP Trust or TF Financial relating to the ESOP. (f) Section 3.30(fExcept as set forth in Schedule 2.33(f), the ESOP has no existing indebtedness relating to its prior acquisition(s) of common stock of the TF Financial Disclosure Company. (g) Schedule 2.33(g) sets forth any documents that provide for indemnification of the ESOP Trustee and all other fiduciaries of the ESOP or such fiduciaries’ financial advisors in connection with any prior transactions involving the ESOP or the Contemplated Transactions. (g) Except as set forth in Section 3.30(g) of the TF Financial Disclosure Schedule, TF Financial has made available to National Penn the ESOP and the trust agreement (the “ESOP Organizational Documents”), as well as true and complete copies of ESOP contributions and allocation schedules for the last five years of contributions, ESOP voting procedures, account diversification documentation, distribution forms and notices, committee and trustee minutes and consents, and nondiscrimination tests for the last five years. (h) As of the Effective Date, with respect to the ESOP, (i) the ESOP Trustee and TF Financial will have properly discharged their respective duties under the Plan, the IRC, and other applicable law regarding the ESOP participants’ rights to consider, vote upon or otherwise instruct the ESOP Trustee on the transactions contemplated hereby; and (ii) the ESOP Trustee and TF Financial will have properly discharged their respective fiduciary duties with respect to all material aspects of the establishment and operation of the ESOP, including but not limited to, valuing the TF Financial Common Stock and making participant distributions.[Reserved] (i) No shares [Reserved] (j) In addition to the ESOP Amendments, the Company and the Trustee, prior to the Closing Date, but effective in all respects as of TF Financial Common the Closing, further amended the Plan and/or the Trust to not permit distributions to ESOP Participants of 15% of their ESOP account balances until the date that the foregoing favorable determination of the IRS has been received by the Company and the ESOP except to the extent required by the Code. The remaining 85% of the ESOP account balances will be distributed to Participants as soon as administratively practicable post-Closing. (k) [Reserved] (l) Under the terms of the Plan and applicable Law, the Trustee is responsible for making the decision for the ESOP to sell the Stock owned by the ESOP were acquired by the ESOP in a transaction pursuant Trust to Section 1042 of the IRC. All TF Financial contributions to the ESOP were deductible under Section 404 of the IRC for the year made. Except as disclosed on Section 3.30(i) of the TF Financial Disclosure SchedulePurchaser, none of the shares of TF Financial Common Stock held by the ESOP were acquired with the proceeds of any loan made or guaranteed by the seller of such securities, TF Financial or any ERISA Affiliate of TF Financial. (j) Since January 1, 2011, TF Financial and the ESOP have complied with the voting requirements of Section 409(e) of the IRC. Neither the execution, delivery and performance of this Agreement and any ancillary documents, nor the consummation of the Contemplated Transactions will conflict with, result Trustee is not required to seek binding instructions or directions from participants in a breach of or constitute a default under or violate any provision of the ESOP or ESOP Trust, or any other agreement to which the ESOP is a party, including, without limitation, any loan agreement or any provision of articles of incorporation or bylaws of TF Financial. There is no pending or threatened claims against TF Financial by the ESOP, or the ESOP Trustee, and no claims pending, or to the Knowledge of TF Financial, threatened claims against the ESOP, the ESOP Trustee or TF Financial Person with respect to the ESOP by any of its participants. To the Knowledge of TF Financial, neither the ESOP nor the ESOP participants have any basis for any claim against TF Financial or the ESOP Trusteesuch decision.

ESOP Matters. (ai) The ESOP Trust was validly authorized and established in accordance with all applicable laws, regulations, and rulings. The ESOP Trust is a trust duly formed in accordance with the laws of the Commonwealth State of PennsylvaniaMaine. The ESOP Trustee has been duly appointed by TF Financial the Company to serve as the trustee of the ESOP Trust. (bii) Except as set forth in Section 3.30(b5.03(bb)(ii) of the TF Financial Company’s Disclosure Schedule, the ESOP is now and has been at all times since its inception, in form, an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the IRC Code and Section 407(d)(6) of ERISA, which, in form, qualifies under Section 401(a) of the IRCCode. The ESOP Trust is now and has at all times since inception been, qualified under Section 501(a) of the IRCCode. The shares of TF Financial Company Common Stock held by the ESOP Trust constitute “employer securities,” as defined in Section 409(l) of the IRCCode, and “qualifying employer securities”, ,” as defined in Section 407(d)(5) of ERISA. (ciii) Since January 1, 2011, the ESOP complies, and has been administered and operated in compliance, in all material respects, in accordance with its terms and all provisions of applicable Law. Since January 1, 2011, all amendments and actions required to bring the ESOP into conformity in all material respects with all of the applicable provisions of the IRCCode, ERISA and other applicable laws have been made or taken except to the extent that such amendments or actions are not required by law to be made or taken until a date after the Effective Date Time and as disclosed on Section 3.30(c5.03(bb)(iii) of the TF Financial Company’s Disclosure Schedule. Since January 1, 2011, no individual who has performed services for TF Financial the Company has been improperly excluded from participation in the ESOP. As of the Closing Date, neither TF Financial the Company nor any participant in the ESOP is or may be subject to liability by reason of Section 4979A of the IRCCode. (div) Neither TF Financial the Company nor any “party in interest” or “disqualified person” with respect to the ESOP has engaged in a non-exempt nonexempt “prohibited transaction” within the meaning of Section 4975 of the IRC Code or Section 406 of ERISA. No fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of the ESOP. The transactions contemplated by this Agreement and all prior transactions involving the ESOP, do not constitute transactions which would subject any such party to either a civil penalty assessed pursuant to part 502(i) of ERISA or the tax or penalty on prohibited transactions imposed by Section 4975 of the Code. (ev) Except as disclosed on Section 3.30(e5.03(bb)(v) of the TF Financial Company’s Disclosure Schedule, there is no existing indebtedness of the ESOP, the ESOP Trust or TF Financial the Company relating to the ESOP. (fvi) Section 3.30(f5.03(bb)(vi) of the TF Financial Company’s Disclosure Schedule sets forth any documents that provide for indemnification of the ESOP Trustee and all other fiduciaries of the ESOP or such fiduciaries’ financial advisors in connection with any prior transactions involving the ESOP or the Contemplated TransactionsTransaction. (gvii) Except as set forth in Section 3.30(g5.03(bb)(vii) of the TF Financial Company’s Disclosure Schedule, TF Financial the Company has made available to National Penn Parent the ESOP and the trust agreement (the “ESOP Organizational Documents”)agreement, as well as true and complete copies of ESOP contributions and allocation schedules for the last five years of contributionsschedules, ESOP voting procedures, account diversification documentation, distribution forms and notices, committee and trustee minutes and consents, and nondiscrimination tests for the last five years2011 and each subsequent year. (hviii) As of the Effective DateTime, with respect to the ESOP, (i) the ESOP Trustee and TF Financial the Company will have properly discharged their respective duties under the Plan, the IRCCode, and other applicable law regarding the ESOP participants’ rights to consider, vote upon or otherwise instruct the ESOP Trustee on the transactions contemplated hereby; and (ii) the ESOP Trustee and TF Financial the Company will have properly discharged their respective fiduciary duties with respect to all material aspects of the establishment and operation of the ESOP, including but not limited to, valuing the TF Financial Company Common Stock and making participant distributions. (iix) No shares of TF Financial Company Common Stock owned by the ESOP were acquired by the ESOP in a transaction pursuant to Section 1042 of the IRCCode. All TF Financial Company contributions to the ESOP were deductible under Section 404 of the IRC Code for the year made. Except as disclosed on Section 3.30(i5.03(bb)(ix) of the TF Financial Company’s Disclosure Schedule, none of the shares of TF Financial Company Common Stock held by the ESOP were acquired with the proceeds of any loan made or guaranteed by the seller of such securities, TF Financial the Company or any ERISA Affiliate of TF Financialthe Company. (jx) Since January 1, 2011, TF Financial the Company and the ESOP have complied with the voting requirements of Section 409(e) of the IRCCode. Neither the execution, delivery and performance of this Agreement and any ancillary documents, nor the consummation of the Contemplated Transactions Transaction will conflict with, result in a breach of or constitute a default under or violate any provision of the ESOP or ESOP Trust, or any other agreement to which the ESOP is a party, including, without limitation, any loan agreement or any provision of articles of incorporation Company Articles or bylaws of TF FinancialCompany Bylaws. There is no pending or threatened claims claim against TF Financial the Company by the ESOP, or the ESOP Trustee, and no claims claim pending, or to the Knowledge of TF Financialthe Company, threatened claims claim against the ESOP, the ESOP Trustee or TF Financial the Company with respect to the ESOP by any of its participants. To the Knowledge of TF Financialthe Company, neither the ESOP nor the ESOP participants have any basis for any claim against TF Financial the Company or the ESOP Trustee.