AMENDATORY AGREEMENT
EXHIBIT
10.7
AMENDATORY
AGREEMENT, dated June 5, 2006, between NATIONAL PENN BANCSHARES, INC., a
Pennsylvania business corporation (“NPB”), NATIONAL PENN BANK, a national
banking association (“Bank”), and XXXXXX X. XXXXX
(“Executive”).
BACKGROUND
1. NPB,
Bank
and Executive entered into a certain Executive Agreement dated July 22,
2004
(the
“Agreement”).
2. NPB,
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, NPB, Bank and Executive agree as follows to
amend
the Agreement as follows:
1. Amendment.
The
language of Section 3(b) is deleted in its entirety and replaced with
the
following:
“(b)
In
the event that the amounts and benefits payable under Subsection 3.a. of this
Agreement, when added to other amounts and benefits which may become payable
to
the Executive by NPB, Bank or their successors and any affiliated company,
are
such that he becomes subject to the excise tax provisions of Code Section 4999,
NPB, Bank or their successors shall pay him such additional amount or amounts
as
will result in his retention (after the payment of all federal, state and local
excise, employment and income taxes on such payments and the value of such
benefits) of a net amount equal to the net amount he would have retained had
the
initially calculated payments and benefits been subject only to income and
employment taxation. For purposes of the preceding sentence, the Executive
shall
be deemed to be subject to the highest marginal federal, relevant state and
relevant local tax rates. All calculations required to be made under this
subsection shall be made by independent public accountants retained by NPB,
Bank
or their successors, subject to the right of Executive's representative to
review the same. All such amounts required to be paid shall be paid at the
time
any withholding may be required under applicable law, and any additional amounts
to which the Executive may be entitled shall be paid or reimbursed no later
than
fifteen (15) days following confirmation of such amount by NPB, Bank or their
successors' accountants. In the event any amounts paid hereunder are
subsequently determined to be in error because estimates were required or
otherwise, the parties agree to reimburse each other to correct such error,
as
appropriate, and to pay interest thereon at the applicable federal rate (as
determined under Code Section 1274 for the period of time such erroneous amount
remained outstanding and unreimbursed). The parties recognize that the actual
implementation of the provisions of this subsection are complex and agree to
deal with each other in good faith to resolve any questions or disagreements
arising hereunder.”
2.
Amendment. Section 13 is hereby added to read as follows:
“13.
Interpretation of Provisions. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under
applicable law, but if any provision of this Agreement shall be prohibited
by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of the Agreement.”
“Notwithstanding
anything herein to the contrary, the provisions of this Agreement are subject
to
the conditions and provisions of Section 885 of the American Jobs Creation
Act
of 2004 and Code Section 409A implemented thereby. To the extent any provision
hereof would violate the provisions of such laws, thereby potentially resulting
in adverse tax consequences to the Executive, the parties agree to negotiate,
in
good faith and to the extent possible, to ameliorate or eliminate such potential
adverse tax consequences to the Executive. In connection therewith, in the
event
the provision of payments or benefits is accelerated, the parties acknowledge
and agree that NPB, Bank or their successors may take into account reasonable
present value concepts in making any payments or providing accelerated benefits
hereunder.”
3.
Ratification. As amended hereby, the Agreement is hereby ratified, confirmed
and
approved.
4.
Governing Law. This Amendatory Agreement shall be governed by and construed
in accordance
with the domestic internal law of the Commonwealth of Pennsylvania.
IN
WITNESS WHEREOF, the parties hereto have executed this Amendatory Agreement
on
the date first above written.
| NATIONAL PENN BANCSHARES, INC. | NATIONAL PENN BANK | ||
| By: |
/s/
Xxxxx X. Xxxxxxx
|
By: |
/s/
Xxxxx X. Xxxxxxx
|
| Name: |
Xxxxx
X. Xxxxxxx
|
Name: |
Xxxxx
X. Xxxxxxx
|
| Title: |
Chairman
and Chief Executive Officer
|
Title: |
Chairman
|
| Witness: |
/s/
Xxxxx X. Xxxxx
|
/s/
Xxxxxx X. Xxxxx
|
|
|
Xxxxx
X. Xxxxx
|
Xxxxxx
X. Xxxxx
|
||
