EXHIBIT 99.1
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EXECUTIVE AGREEMENT
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THIS AGREEMENT is made as of this ____ day of December, 2004, among
NATIONAL PENN BANCSHARES, INC., a Pennsylvania business corporation having its
principal place of business in Boyertown, Pennsylvania ("NPB"), NATIONAL PENN
BANK, a national banking association having its principal place of business in
Boyertown, Pennsylvania ("Bank"), and________________, an individual residing at
_______________________________, Pennsylvania ("Executive").
W I T N E S S E T H :
WHEREAS, Executive is employed by NPB and Bank as _______________ of
Bank's _________________; and
WHEREAS, the Boards of Directors of NPB and Bank deem it advisable to
provide Executive with certain additional benefits in the event of certain
changes in control of NPB or Bank so that Executive will continue to attend to
the business of NPB and Bank without distraction in the face of the potentially
disturbing circumstances arising therefrom.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, and each intending to be legally bound, NPB, Bank and
Executive agree as follows:
1. Definitions. The following terms have the meanings specified below:
a. "Affiliate" means any corporation which is included within a
"controlled group of corporations" including NPB, as determined under
Code Section 1563.
b. "Base Salary" means the Executive's annual base salary, established
either by contract or by the Employer, prior to any reduction of such
salary pursuant to any contribution to a tax-qualified plan under
Section 401(k) of the Code.
c. "Cause" means the occurrence of either of the following, the result of
which is the termination of Executive's Employment:
i. Executive's conviction of, or plea of guilty or nolo
contendere to, a felony or a crime of falsehood or involving
moral turpitude; or
ii. the willful failure by Executive to substantially perform
his duties to Employer, other than a failure resulting from
Executive's incapacity as a
result of the Executive's disability, which willful failure
results in demonstrable material injury and damage to
Employer.
Notwithstanding the foregoing, Executive's Employment shall
not be deemed to have been terminated for Cause if such termination
took place as a result of:
x. questionable judgment on the part of Executive;
y. any act or omission believed by Executive in good
faith, to have been in or not opposed to the best
interests of the Employer; or
z. any act or omission in respect of which a determination
could properly be made that Executive met the
applicable standard of conduct prescribed for
indemnification or reimbursement or payment of expenses
under the By-laws of NPB or the laws of the
Commonwealth of Pennsylvania, or the directors and
officers' liability insurance of NPB or any Employer,
in each case as in effect at the time of such act or
omission.
d. "Change in Control" means:
i. An acquisition by any "person" or "group" (as those terms
are defined or used in Section 13(d) of the Exchange Act) of
"beneficial ownership" (within the meaning of Rule 13d-3
under the Exchange Act) of securities of NPB representing
24.99% or more of the combined voting power of NPB's
securities then outstanding;
ii. A merger, consolidation or other reorganization of Bank,
except where the resulting entity is controlled, directly or
indirectly, by NPB;
iii. A merger, consolidation or other reorganization of NPB,
except where shareholders of NPB immediately prior to
consummation of any such transaction continue to hold at
least a majority of the voting power of the outstanding
voting securities of the legal entity resulting from or
existing after any transaction and a majority of the members
of the Board of Directors of the legal entity resulting from
or existing after any such transaction are former members of
NPB's Board of Directors;
iv. A sale, exchange, transfer or other disposition of
substantially all of the assets of the Employer to another
entity, except to an entity controlled, directly or
indirectly, by NPB;
v. A sale, exchange, transfer or other disposition of
substantially all of the assets of NPB to another entity, or
a corporate division involving NPB; or
vi. A contested proxy solicitation of the shareholders of NPB
that results in the contesting party obtaining the ability
to cast 25% or more of the votes entitled to be cast in an
election of directors of NPB.
e. "Code" means the Internal Revenue Code of 1986, as amended, and as
the same may be amended from time to time.
f. "Employer" means Bank, NPB or any Affiliate which employs Executive
at any particular time.
g. "Employment" means Executive's employment by Bank, NPB or any
Affiliate at any particular time.
h. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2. Resignation of Executive. If a Change in Control shall occur and if within
one hundred eighty (180) days after the effective date of a Change in
Control (or thirty (30) days after the completion of the conversion of the
computer systems if such conversion is later than one hundred eighty (180)
days after the effective date of a Change in Control, in either event, the
"Transition Period") there shall be:
a. Any involuntary termination of Executive's employment (other than for
Cause);
b. Any reduction in Executive's title, responsibilities or authority,
including such title, responsibilities or authority as such may be
increased from time to time;
c. Any reduction in Executive's Base Salary in effect immediately prior
to a Change in Control, or any failure to provide Executive with
benefits at least as favorable as those enjoyed by Executive under any
of the pension, life insurance, medical, health and accident,
disability or other employee plans of NPB or an Affiliate in which
Executive participated immediately prior to a Change in Control, or
the taking of any action that would materially reduce any of such
compensation or benefits in effect at the time of the Change in
Control, unless such reduction relates to a reduction applicable to
all employees generally;
d. Any reassignment of Executive beyond a thirty (30) mile commute by
automobile from Boyertown, Pennsylvania; or
e. Any requirement that Executive travel in performance of his duties on
behalf of NPB or an Affiliate for a greater period of time during any
year than was required of Executive during the year preceding the year
in which the Change in Control occurred (each of the foregoing, a
"Triggering Event");
then, at the option of Executive, exercisable by Executive within one hundred
eighty (180) days of the occurrence of any Triggering Event within the
Transition Period, Executive may resign from Employment (or, if involuntarily
terminated, give notice of intention to collect benefits hereunder) by
delivering a notice in writing to NPB, in which case Executive shall be entitled
to a lump sum cash severance payment equal to ____% of Executive's Base Salary
in effect immediately prior to a Change in Control, which Employer shall pay to
Executive within fifteen (15) days of Executive's termination of employment.
Executive shall not be required to mitigate the amount of any payment
provided for in the preceding paragraph by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in the
preceding paragraph be reduced by any compensation earned by Executive as the
result of employment by another employer or by reason of Executive's receipt of
or right to receive any retirement or other benefits after the date of
termination of employment or otherwise, except as otherwise provided therein.
3. Out-Placement Services. If a Change in Control occurs and Executive exercises
the option to resign from Employment (or is involuntarily terminated) as
described in Section 2, Employer shall provide Executive with the services of a
professional out-placement firm, if Executive so requests, for the period not to
exceed one year from the date of Executive's resignation (or termination), at
Employer's sole cost and expense, up to a maximum amount of Seven Thousand Five
Hundred Dollars ($7,500).
4. No Implied Rights; Rights on Termination of Employment.
a. No Right to Continued Employment. Nothing in this Agreement shall
confer upon Executive any right with respect to continuance of Employment by
Employer, nor shall it interfere with or limit in any way the right of Employer
to terminate Executive's Employment at any time.
b. Voluntary Termination of Employment. If Executive terminates
Executive's Employment with Employer at any time prior to a Change in Control,
this Agreement shall terminate at that time and Employer shall have no further
liability hereunder.
c. Termination--Cause. If Employer terminates Executive's Employment at
any time for Cause, this Agreement shall terminate at that time and Employer
shall have no further liability hereunder.
d. Termination--Without Cause. Employer may terminate Executive's
Employment at any time without Cause. If Employer terminates Executive's
employment at any time without Cause prior to a Change in Control, and if no
event has been publicly announced that with the passing of time would constitute
a Change in Control, this Agreement shall terminate at that time and Employer
shall have no further liability hereunder. If Employer terminates Executive's
Employment at any time prior to a Change in Control but subsequent to the
occurrence of an event that has been publicly
announced that with the passing of time would constitute a Change in Control,
the provisions of Sections 2 and 3 of this Agreement shall apply to same extent
as if Executive's Employment had been involuntarily terminated subsequent to a
Change in Control.
5. Arbitration. Any dispute or controversy arising out of or relating to this
Agreement and any controversy as to a termination for Cause shall be settled
exclusively by arbitration, conducted before a panel of three arbitrators, in
Reading, Pennsylvania, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrators' award in
any court having jurisdiction.
6. Exclusive Benefit. Executive shall have no right to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payment and the right thereto are expressly declared to be non-assignable and
non-transferrable. In the event of any attempted assignment or transfer, this
Agreement shall terminate at that time and Employer shall have no further
liability hereunder.
7. Notices. Any notice required or permitted to be given under this Agreement
shall be properly given if in writing and if mailed by registered or certified
mail, postage prepaid with return receipt requested, to Executive's residence in
the case of any notice to Executive, or to the attention of the President at the
principal office of Bank, in the case of any notice to the Employer.
8. Entire Agreement. This Agreement contains the entire agreement relating to
the subject matter hereof and may not be modified, amended or changed orally but
only by an agreement in writing, consented to in writing by NPB, and signed by
the party against whom enforcement of any modification, amendment or change is
sought.
9. Benefits.
a. This Agreement shall be binding upon and inure to the benefit of NPB
and Bank and their respective successors and assigns. Each of NPB and
Bank shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially
all of the business and/or assets of NPB or Bank to expressly assume
and agree to perform this Agreement in the same manner and to the same
extent that NPB or Bank would be required to perform it if no such
succession had taken place. Failure to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
constitute a breach of this Agreement and the provisions of Sections 2
and 3 of this Agreement shall apply. As used in this Agreement, "NPB"
or "Bank" shall mean NPB or Bank as defined previously and any
successor to the business and/or assets of NPB or Bank as aforesaid
which assumes and agrees to perform this Agreement by operation of law
or otherwise.
b. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by Executive's personal or legal representatives,
executors, administrators, heirs, distributees, devisees and legatees.
10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the domestic internal law (but not the law of conflicts of law)
of the Commonwealth of Pennsylvania.
11. Headings. The headings of the sections and subsections hereof are for
convenience only and shall not control or affect the meaning or construction or
limit the scope or intent of any of the sections or subsections of this
Agreement.
IN WITNESS WHEREOF, NPB and Bank have each duly caused this Agreement
to be executed on its behalf by its duly authorized officers, and Executive has
hereunto set his hand and seal, as of the day and year first above written.
NATIONAL PENN BANCSHARES, INC. NATIONAL PENN BANK
By:____________________________ By:________________________
Name: Name:
Title: Title:
Attest:________________________ Attest:____________________
Name: Name:
Title: Title:
Witness:
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(Name of Executive)
