As filed with the Securities and Exchange Commission on January 29, 1999
Registration No. 333-_____________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NATIONAL PENN BANCSHARES, INC.
(Exact name of issuer as specified in its charter)
Pennsylvania 23-2215075
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Philadelphia and Reading Avenues
Boyertown, Pennsylvania 19512
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(Address of Principal (Zip Code)
Executive Offices)
National Penn Bancshares, Inc. Elverson Substitute
Stock Option Plan
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(Full title of the Plan)
Lawrence T. Jilk, Jr.
Chairman and Chief
Executive Officer
National Penn Bancshares, Inc.
Philadelphia and Reading Avenues
Boyertown, Pennsylvania 19512
(Name and address of agent for service)
(610) 369-6130
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(Telephone number, including area code, of agent for service)
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Copies to:
H. Anderson Ellsworth, Esquire
Jay W. Waldman, Esquire
Ellsworth, Carlton & Waldman, P.C.
1105 Berkshire Boulevard
Suite 320
Wyomissing, PA 19610
(610) 374-1135
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Amount maximum maximum Amount of
securities to be offering aggregate registration
to be registered price offering fee
registered (1) per share(2) price
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Common 65,248 $25.875 $1,688,292 $470
Stock shares
(without (with Rights)
par value)
(and associated
Stock Purchase
Rights) (3)
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(1) In accordance with Rule 416, this Registration Statement shall also
register any additional shares of the Registrant's common stock which may
become issuable to prevent dilution resulting from stock splits, stock
dividends or similar transactions, as provided by the Plan.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h)(1), based on the average of the high and low sale
prices of the Common Stock on the Nasdaq National Market tier of the Nasdaq
Stock Market on January 22, 1999.
(3) Prior to the occurrence of certain events, the Stock Purchase Rights will
not be evidenced separately from the Common Stock.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this Registration
Statement:
(a) The Annual Report on Form 10-K of the Registrant for the year ended
December 31, 1997.
(b) The Quarterly Report on Form 10-Q of the Registrant for the quarter
ended March 31, 1998.
(c) The Quarterly Report on Form 10-Q of the Registrant for the quarter
ended June 30, 1998, as amended by Form 10- Q/A No. 1 dated October 9,
1998.
(d) The Quarterly Report on Form 10-Q of the Registrant for the quarter
ended September 30, 1998.
(e) All other reports filed by the Registrant pursuant to sections 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since December 31, 1997.
(f) The description of the Registrant's common shares which is contained
in the Registration Statement on Form 8-A of the Registrant dated
February 24, 1983, filed pursuant to the Exchange Act.
(g) The description of the Registrant's Shareholder Rights Plan which is
contained in the Registration Statement on Form 8-A of the Registrant
dated September 11, 1989, filed pursuant to the Exchange Act.
All documents subsequently filed by the Registrant pursuant to sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters in connection with the Plan have been passed upon for
the Registrant by the law firm of Ellsworth, Carlton & Waldman, P.C.,
Wyomissing, Pennsylvania. H. Anderson
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Ellsworth, a principal in such law firm, owns directly or indirectly 10,761
shares of the Registrant's common stock.
Item 6. Indemnification of Directors and Officers.
Pennsylvania law provides that a Pennsylvania corporation may indemnify
directors, officers, employees, and agents of the corporation against
liabilities they may incur in such capacities for any action taken or any
failure to act, whether or not the corporation would have the power to indemnify
the person under any provision of law, unless such action or failure to act is
determined by a court to have constituted recklessness or willful misconduct.
Pennsylvania law also permits the adoption of a bylaw amendment, with the
approval of a corporation's shareholders, providing for the elimination of a
director's liability for monetary damages for any action taken or any failure to
act unless (1) the director has breached or failed to perform the duties of his
office and (2) the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
The Registrant's bylaws provide for (1) indemnification of directors,
officers, employees, and agents of the Registrant and of its subsidiaries, and
(2) the elimination of a director's liability for monetary damages, each to the
full extent permitted by Pennsylvania law.
Directors and officers are also insured against certain liabilities for
their actions, as such, by an insurance policy obtained by the Registrant.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 National Penn Bancshares, Inc. Elverson Substitute Stock Option Plan.
4.2 Rights Agreement dated as of August 23, 1989, between the Registrant
and National Penn Bank, as Rights Agent (incorporated by reference to
Exhibit 4.4 to the Registrant's Form S-8 Registration Statement No.
33-87654 dated December 22, 1994).
4.3 Articles of Incorporation of National Penn Bancshares, Inc.
(incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
4.4 Bylaws of National Penn Bancshares, Inc. (incorporated by reference to
Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996).
<PAGE>
5 Opinion re: Legality and Consent of Ellsworth, Carlton & Waldman,
P.C., special counsel to the Registrant.
23.1 Consent of Grant Thornton LLP, independent auditors.
23.2 Consent of Ellsworth, Carlton & Waldman, P.C., special counsel to the
Registrant (included in Exhibit 5).
24 Power of Attorney.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by the Registrant pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 that is incorporated herein by
reference;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement, unless the information
required to be included in such post-effective amendment is contained
in a periodic report filed by the Registrant pursuant to section 13 or
15(d) of the Securities Exchange Act of 1934 that is incorporated
herein by reference;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of
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1933, each filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liability (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Borough of Boyertown, Commonwealth of Pennsylvania, on this
27th day of January, 1999.
NATIONAL PENN BANCSHARES, INC.
(Registrant)
By /s/ Lawrence T. Jilk, Jr.
Lawrence T. Jilk, Jr.,
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title
/s/ Gary L. Rhoad Treasurer January 27, 1999
Gary L. Rhoads (Principal Financial
and Accounting Officer)
/s/ John H. Body Director January 27, 1999
John H. Body
/s/ J. Ralph Borneman, Jr. Director January 27, 1999
J. Ralph Borneman, Jr.
/s/ Frederick H. Gaige Director January 27, 1999
Frederick H. Gaige
/s/ John W. Jacobs Director January 27, 1999
John W. Jacobs
/s/ Lawrence T. Jilk, Jr. Director, Chairman January 27, 1999
Lawrence T. Jilk, Jr. and Chief Executive
Officer (Principal
Executive Officer)
/s/ Patricia L. Langiotti Director January 27, 1999
Patricia L. Langiotti
/s/ Kenneth A. Longacre Director January 27, 1999
Kenneth A. Longacre
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/s/ Robert E. Rigg Director January 27, 1999
Robert E. Rigg
/s/ C. Robert Roth Director January 27, 1999
C. Robert Roth
/s/ Harold C. Wegman, D.D.S. Director January 27, 1999
Harold C. Wegman, D.D.S.
/s/ Wayne R. Weidner Director and January 27, 1999
Wayne R. Weidner President
<PAGE>
EXHIBIT INDEX
Exhibit
4.1 National Penn Bancshares, Inc. Elverson Substitute Stock Option
Plan.
4.2 Rights Agreement dated as of August 23, 1989, between the
Registrant and National Penn Bank, as Rights Agent (incorporated
by reference to Exhibit 4.4 to the Registrant's Form S-8
Registration Statement No. 33-87654 dated December 22, 1994).
4.3 Articles of Incorporation of National Penn Bancshares, Inc.
(incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
4.4 Bylaws of National Penn Bancshares, Inc. (incorporated by
reference to Exhibit 3.2 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996).
5 Opinion re: Legality and Consent of Ellsworth, Carlton &
Waldman, P.C., special counsel to the Registrant.
23.1 Consent of Grant Thornton LLP, independent auditors.
23.2 Consent of Ellsworth, Carlton & Waldman, P.C., special counsel
to the Registrant (included in Exhibit 5).
24 Power of Attorney.
NATIONAL PENN BANCSHARES, INC.
ELVERSON SUBSTITUTE STOCK OPTION PLAN
(as assumed, amended and restated
effective January 4, 1999)
ARTICLE I
Purpose, Assumption, Amendment and Restatement
1.1 Elverson National Bank ("ENB") adopted the 1996 Stock Incentive Plan
(the "ENB Plan") effective April 1, 1996. The ENB Plan was intended to provide a
means for the granting of awards of stock options and stock appreciation rights
to selected key employees of ENB as designated from time to time by ENB's Board
of Directors. The ENB Plan was designed to (a) provide incentives and rewards to
those employees who were in key positions to contribute to ENB's long-term
growth and profitability; (b) assist ENB to attract, retain and motivate
personnel with experience and ability; (c) make ENB's compensation program more
competitive with those of other comparable employers; and (d) link participants
directly to shareholder interests through increased stock ownership.
1.2 On January 4, 1999 (the "Effective Date"), National Penn Bancshares,
Inc. (the "Company") acquired ENB, by the merger of ENB with and into National
Penn Bank, a wholly-owned subsidiary of the Company (the "Bank"), pursuant to an
Amended Agreement and Plan of Merger (the "Agreement") dated as of July 21,
1998, by and among the Company, Bank and ENB.
1.3 On the Effective Date, pursuant to the Agreement, each outstanding
share of ENB's common stock was automatically converted into 1.46875 shares of
the Company's common stock, without par value (the "Stock").
1.4 Immediately prior to the Effective Date, there were stock options
outstanding and presently exercisable, under the ENB Plan, for 44,424 shares of
ENB's common stock. On the Effective Date, pursuant to the ENB Plan and the
Agreement, each such option was automatically converted into a substitute stock
option for Stock, with the number of shares and the per share exercise price
adjusted to reflect the exchange ratio of 1.46875 to 1, and otherwise on the
same terms and conditions as the converted ENB stock option. As a result, stock
options presently exercisable for 65,248 shares of Stock were issued by the
Company.
1.5 This National Penn Bancshares, Inc. Elverson Substitute Stock Option
Plan (the "Plan") reflects the Company's assumption of
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the ENB Plan and of the stock options outstanding under the ENB Plan as of the
Effective Date, on the terms and conditions provided in the Agreement, and the
Company's determination to delete provisions of the ENB Plan inapplicable to
such outstanding options. The Plan amends and restates the ENB Plan accordingly.
1.6 As used herein, the term "Participant" means, individually and
collectively, the persons who received substitute stock options from the Company
pursuant to the ENB Plan and the Agreement, and the term "Options" means,
individually and collectively, the substitute stock options issued pursuant to
the ENB Plan and the Agreement, exercisable for 65,248 shares of Stock, subject
to adjustment as provided in Article IX hereof.
ARTICLE II
Administration
2.1 The Plan shall be administered by a committee (the "Committee")
composed of three to six members of the Company's Board of Directors (the
"Board") who are (i) "non-employee directors" of the Company within the meaning
of Rule 16b-3(b)(3) under Section 16 of the Securities Exchange Act of 1934 (the
"1934 Act"), and (ii) "outside directors" of the Company within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board.
2.2 Subject to the terms, provisions and conditions of the Plan, the
Committee shall have full power and authority, in its discretion, to interpret
the Plan; to supervise the administration of the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; and to make all other
determinations and take any other action deemed necessary or desirable to the
proper operation or administration of the Plan. The Committee may authorize such
of the Company's officers or other persons to perform functions related to the
execution and administration of the Plan (other than the interpretation of the
Plan and the adoption of rules governing its execution and administration) as
the Committee shall determine from time to time.
2.3 All decisions made by the Committee pursuant to the powers vested in it
by the Plan document and related orders or resolutions of the Board shall be
final and binding on all persons (including each Participant, the Company and
any shareholder and/or employee of the Company or any affiliate). No member of
the Committee or the Board shall be liable for any action or determination made
in good faith with respect to the Plan or any Option.
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2.4 Neither the Committee, the Board, the Company nor any officer or
employee of the Company or any affiliate shall have any duty to advise
Participants of any rules, interpretations or determinations by the Committee,
and each Participant shall be bound by such rules, interpretations or
determinations upon communication thereof to such Participant, effective as of
such date (prior to, subsequent to or concurrent with such communication) that
each such rule, interpretation or determination shall have been intended to be
effective by the Committee.
2.5 The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan regarding any leave of
absence taken by a Participant who is the holder of any Option. Without limiting
the generality of the foregoing, the Committee shall be entitled to determine
(a) whether or not any such leave of absence shall constitute a termination of
employment within the meaning of the Plan, and (b) the impact, if any, of any
such leave of absence on Options held by any Participant who takes such leave of
absence.
ARTICLE III
Scope and Term
3.1 All Options issued pursuant to the ENB Plan and the Agreement were
issued in the form of non-qualified stock options. No incentive stock options or
stock appreciation rights were issued pursuant to the ENB Plan or the Agreement.
References in the Plan to "Options" means only non-qualified stock options.
3.2 The total number of shares of Stock that may be subject to Options
under the Plan is 65,248 shares, subject to adjustment in accordance with
Article IX hereof. Issuance of Stock upon exercise of an Option shall reduce the
total number of shares of Stock available under the Plan. Under no circumstances
shall any fractional shares of Stock be issued or sold under the Plan or any
Option.
3.3 Shares of Stock as to which Options under the Plan were issued may be
made available by the Company from authorized but unissued shares of Stock or
from shares reacquired by the Company (including, without limitation, shares
purchased in the open market or in private transactions), subject to adjustment
provided for in Article IX hereof.
3.4 The Plan shall continue in effect until it is terminated in accordance
with Article X hereof and until all Options have either been exercised, lapsed
unexercised, or been terminated, forfeited, or cancelled as provided herein.
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ARTICLE IV
No Further Eligible Employees
4.1 Other than the persons who received Options on the Effective Date, no
persons are eligible to participate in the Plan. Prior to the Effective Date,
the persons eligible to participate in the ENB Plan were such key officers and
other management employees (including officers and directors who were employees)
of ENB or an affiliate, without limitation as to length of service, who were
from time to time serving in a managerial, administrative or professional
position who were recommended to, and authorized by, the administrative
committee under the ENB Plan.
ARTICLE V
No Granting of Further Stock Options
5.1 The Committee does not have authority to grant any stock options in
addition to the Options or any stock appreciation rights under the Plan.
ARTICLE VI
Terms and Conditions of Options
6.1 General. Each Option issued pursuant to the ENB Plan and the Agreement
is subject to all of the terms and conditions hereinafter provided in this
Article VI, all other terms and conditions as may be provided in any other
section of the Plan, and such other terms and conditions as may be specified by
the Committee in the exercise of its powers under the Plan. Without limiting the
foregoing, it is understood that the Committee may, at any time and from time to
time, specify such additional terms and conditions with respect to any Option as
may be deemed necessary or appropriate to ensure compliance with any and all
applicable laws, including, without limitation, terms and conditions for
compliance with federal and state securities laws, and methods of withholding or
providing for the payment of required taxes. The terms and conditions with
respect to any Option need not be identical with the terms and conditions with
respect to any other Option held by such Participant or any other Participant.
6.2 Option Agreement. Each Option shall be reflected in a written agreement
(the "Option Agreement") between the Company and the Participant, in a form
approved by the Committee, which shall set forth the number of shares of Stock
that may be purchased pursuant to such Options, the applicable per share option
price, and such other terms and conditions provided in the Plan as may be deemed
appropriate by the Committee. The Option Agreement shall be
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subject to, and shall be deemed amended to include, such additional
discretionary conditions as the Committee may thereafter specify in the exercise
of its powers under the Plan. A fully executed original counterpart of the
Option Agreement shall be provided to the Company and the Participant.
6.3 Option Price. The per share exercise price of the Stock covered by each
Option (the "Option Price") was determined by dividing the per share exercise
price of each stock option outstanding on the Effective Date under the ENB Plan
by the exchange ratio (1.46875).
6.4 Term and Exercisability of Option. Pursuant to the ENB Plan and the
Agreement, by virtue of the Agreement's execution, all stock options outstanding
under the ENB Plan became 100% vested and fully exercisable. All Options issued
pursuant to the ENB Plan and the Agreement (which are governed by the Plan) are
100% vested and fully exercisable. Subject to earlier termination as provided in
the Plan, each Option shall be exercisable for a term equal to the term of the
ENB stock option for which it was substituted under the Agreement. The
expiration of Options may be accelerated as provided in Article IX of the Plan.
6.5 Exercise. Subject to the provisions of the Plan and unless otherwise
provided in the Option Agreement, an Option may be exercised, from time to time,
as to any and all full shares of Stock subject to the Option by giving written
notice to the Company of the exercise of the Option in accordance with such
procedures as may be established from time to time by the Committee. Except as
provided in Section 6.6 or Article IX, no Option may be exercised at any time
unless the Participant is then an employee of the Company or an affiliate.
6.6 Rights Upon Termination of Employment.
A. In the event that a Participant ceases to be an employee of the
Company or an affiliate, for any cause other than retirement, death, or
disability, the Participant shall have the right, unless otherwise determined by
the Committee, to exercise the Option during its term within a period of one
month after such termination, to the extent the Option remains exercisable at
the date of such termination of employment. In the event that a Participant
retires, dies, or becomes disabled (as determined by the Committee) prior to
termination of the Option without having fully exercised such Option, the
Participant or, as provided in the relevant Option Agreement, such Participant's
successor in interest, shall have the right to exercise the Option during its
term within a period of twenty-four months after the date of such termination
due to retirement, death or disability, to the extent the Option remains
exercisable at the date of termination due to retirement, death, or disability,
or during such other period and subject to such terms as may have been
determined by the ENB
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administrative committee at the time of issuance of the ENB stock option.
B. For purposes of this Section 6.6, continued employment of a
Participant by a successor corporation to the Company or by an affiliate of such
successor corporation shall be deemed continued employment by the Company if
such successor corporation or its affiliate has assumed the Plan and any Options
now held by a Participant.
6.7 Payment.
A. The Option Price for the shares as to which an Option is exercised
shall be paid to the Company in full at the time the Option is exercised. Such
payment shall be in cash, equal to the Option Price for the shares of Stock
being purchased, unless the Committee determines to permit payment of the Option
Price in accordance with the immediately following sentence. The Committee shall
have the sole discretion to determine that it shall permit, at the election of a
Participant, payment of the Option Price (i) in cash, (ii) in shares of Stock
owned by the Participant prior to exercising the Option and having a Fair Market
Value (as defined in Section 11.10 hereof) on date of payment equal to the
Option Price for the shares of Stock being purchased and satisfying such other
requirements as may be imposed by the Committee, or (iii) partly in cash and
partly in such shares of Stock. In addition, and subject to the provisions of
Section 11.2 with respect to withholding for taxes, (i) prior to delivery of the
shares of Stock issuable upon exercise of the Option, any amount necessary to
satisfy applicable federal, state and/or local tax requirements shall be paid
promptly by the Participant upon notification of the amount due; and (ii)
whenever under the Plan payments are to be made in cash, such payments shall be
net of an amount sufficient to satisfy any federal, state and/or local
withholding tax requirements.
B. To the extent permitted by applicable law and regulations, the
Committee may permit payment of the Option Price through arrangements with a
brokerage firm under which such firm, on behalf of the Participant, will pay to
the Company the Option Price of the shares being purchased, and the Company will
promptly deliver to such firm the number of shares of Stock subject to the
Option so that the firm may sell such shares, or a portion thereof, for the
account of the Participant. In addition, the Committee may permit payment of the
Option Price by delivery of an unconditional and irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay the Option
Price as soon as the shares subject to the Option, or a portion thereof, are
sold on behalf of the Participant.
6.8 Right as a Shareholder. No Participant shall have any rights to
dividends or other rights of a shareholder with respect to shares of Stock
subject to an Option until the Participant has
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given written notice of exercise of the Option, has paid in full the Option
Price for such shares of Stock and has otherwise complied with the Plan, the
Option Agreement and such rules and regulations as may be established by the
Committee.
6.9 Investment Purpose. Each Option is subject to the condition that the
purchases of shares of Stock hereunder by exercise of an Option shall be for
investment purposes, and not with a view to resale or distribution, except that
in the event the Stock subject to such Option is registered under the Securities
Act of 1933, as amended, or in the event that a resale of such Stock without
registration thereunder would otherwise be permissible, such condition shall be
inoperative if, in the opinion of counsel for the Company, such condition is not
required under the Securities Act of 1933 or any other applicable law,
regulation or rule of any governmental agency.
6.10 Fully Vested Options. Pursuant to the ENB Plan and the Agreement, by
virtue of the Agreement's execution, all Options are 100% vested and fully
exercisable.
ARTICLE VII
Nontransferability of Options
7.1 Options issued under the Plan are not transferable by the Participant
other than by will or by the laws of descent and distribution. During the
lifetime of a Participant, Options may be exercised only by the Participant.
Options exercisable after the death of a Participant may be exercised by the
legatees, personal representatives or distributees of the Participant.
ARTICLE VIII
Forfeiture Upon Occurrence of Certain Acts
8.1 Notwithstanding any other provisions of the Plan, all rights of the
Participant who received an Option (or his designated beneficiary or legal
representative) to the exercise thereof shall be forfeited if, prior to the time
of such exercise, the Participant has been dishonest or fraudulent in any matter
affecting the Company or any affiliate. The Company shall give a Participant
written notice of the occurrence of any such event prior to making any such
forfeiture. The determination of the Committee as to the occurrence of any of
the events specified in the above clause of this Section 8.1 shall be conclusive
and binding upon all persons for all purposes. Each Option shall be subject to
forfeiture for the reasons provided in this section in such manner as shall be
provided by the Committee.
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ARTICLE IX
Stock Adjustments
9.1 In the event that the shares of Stock shall be changed into or
exchanged for a different number or kind of shares of Stock of the Company or of
another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, stock split, combination of shares or
otherwise), or if the number of such shares of Stock shall be increased through
the payment of a stock dividend, then there shall be substituted for or added to
each share of Stock subject to an Option under the Plan and to the maximum
number of shares of Stock that may be subject to Options as set forth in Section
3.2, the number and kind of shares into which each outstanding share of Stock
shall be exchanged, or to which each such share shall be entitled, as the case
may be. Where appropriate, outstanding Options shall also be amended by the
Committee as to Option Price and other terms as may be necessary to equitably
reflect the foregoing events. In the event there shall be any other change in
the number or kind of outstanding shares of the Stock, or any shares into which
such shares shall have been changed, or for which the Committee shall, in its
sole discretion, determine that such change equitably requires an adjustment in
any outstanding Options, such adjustments shall be made in accordance with the
Committee's determination.
9.2 Fractional shares resulting from any adjustment in Options pursuant to
this Article IX shall be carried through until exercise of affected Options, but
Options may only be exercised for full or whole shares and, unless the Committee
determines otherwise, a Participant shall not be entitled to any settlement for
fractional shares. In the event that an Option is exercised for all full or
whole shares of Stock subject to the Option, the number of shares of Stock
subject to the Option shall be deemed rounded down to the nearest whole number
and, upon exercise for such whole number of shares of Stock, the Option shall
terminate. Notice of any adjustments shall be given by the Company to each
holder of an Option which shall have been so adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of the Plan.
9.3 Any agreement to which the Company is a party which provides for any
merger, consolidation or similar transaction of the Company with or into another
corporation whereby the Company is not to be the surviving corporation may
provide, without limitation, for the assumption of outstanding Options by the
surviving corporation or its parent, for their accelerated expiration, or for an
equitable mandatory settlement of outstanding Options in cash based on the
consideration paid to shareholders in such transaction, and all outstanding
Options shall be subject to such agreement. In any case where the Options are
assumed by another corporation, appropriate equitable adjustments as to the
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number and kind of shares or other securities and the per share purchase price
shall be made.
ARTICLE X
Suspension, Termination and Amendment of Plan
10.1 To the extent permitted by applicable law, the Board may amend,
suspend, or terminate the Plan at any time. The amendment or termination of the
Plan shall not, without the consent of a Participant, adversely affect or impair
any rights of a Participant under any Option outstanding hereunder; provided,
however, that any amendment or termination contemplated by the Plan, including
without limitation by Section 9.3, shall be conclusively presumed not to
adversely affect or impair rights of a Participant under any Option.
10.2 If not terminated by the Board at an earlier time, then at such time
as all Options issued under the Plan have either been exercised, lapsed
unexercised, or been terminated, forfeited or cancelled as provided herein, the
Plan shall terminate.
10.3 Upon the dissolution or liquidation of the Company, the Plan and the
Options outstanding hereunder shall terminate.
ARTICLE XI
Miscellaneous
11.1 No Rights to Options or Continued Employment. The Plan does not,
directly or indirectly, create any right for the benefit of any employee or
class of employees to receive any stock options or other stock-related rights
under the Plan, or create in any employee or class of employees any right with
respect to continuation of employment by the Company or any affiliate, and the
Plan shall not be deemed to interfere in any way with the Company's or an
affiliate's right to terminate or otherwise modify an employee's employment at
any time.
11.2 Withholding Taxes. Whenever the Company proposes or is required to
issue or transfer shares of Stock to a Participant under the Plan, the Company
shall have the right to require the Participant to remit to the Company an
amount sufficient to satisfy all federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. If such certificates have been delivered prior to the time a withholding
obligation arises, the Company shall have the right to require the Participant
to remit to the Company an amount sufficient to satisfy all federal, state or
local withholding tax requirements at the time such obligation arises and to
withhold
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from other amounts payable to the Participant, as compensation or otherwise, as
necessary. The Committee, in its sole discretion, may permit a Participant to
elect to satisfy all or part of such Participant's withholding or income tax
obligations arising in connection with Options under the Plan, by having the
Company withhold all or a portion of any shares of Stock that otherwise would be
issued to the Participant or by surrendering all or a portion of any shares of
Stock previously acquired by the Participant. Such shares of Stock shall be
valued at their Fair Market Value on the date when taxes otherwise would be
withheld in cash. Any payment of withholding taxes by assigning shares of Stock
to the Company may be subject to such additional restrictions as the Committee
at any time deems appropriate. The Committee may, from time to time, make or
impose, in its discretion, such additional restrictions, rules or regulations as
it deems appropriate with respect to withholding of any taxes.
11.3 Failure to Comply With Terms and Conditions. Notwithstanding any other
provisions of the Plan, no delivery of Stock with respect to any Option shall be
made, and all rights of the Participant who holds such Option (or his designated
beneficiary or legal representative) to such delivery shall be forfeited, at the
discretion of the Committee, if, prior to the time of such delivery, the
Participant breaches a restriction or any of the terms, restrictions and/or
conditions of the Plan and/or the Option Agreement.
11.4 Parties in Interest. The provisions of the Plan and the terms and
conditions of each Option shall, in accordance with their terms, be binding
upon, and inure to the benefit of, all successors of each Participant,
including, without limitation, such Participant's estate and the executors,
administrators or trustees thereof, heirs and legatees and any receiver. Subject
to the terms of the Plan, all obligations of the Company under the Plan with
respect to Options shall be binding on successors and assigns of the Company.
11.5 Indemnification. No member of the Committee shall be personally liable
by reason of any contract or other instrument executed by such member or by
another person on behalf of such member, nor for any mistake or judgment made in
good faith, and the Company shall indemnify and hold harmless each member of the
Committee and each other officer, employee or director of the Company to whom
any duty or power relating to the administration or interpretation of the Plan
may be allocated or delegated, against any cost or expense (including counsel
fees) or liability (including any sum paid in settlement of a claim with the
approval of the Board) arising out of any act or omission to act in connection
with the Plan, unless arising out of such person's own fraud or bad faith.
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11.6 Designation of Beneficiary. Each Participant may designate a
beneficiary or beneficiaries (on a form supplied by the Committee) to exercise
such Participant's Options in the event of his or her death, and may change such
designation from time to time and at any time prior to the death of such
Participant.
11.7 Governing Law. All questions pertaining to construction, validity and
effect of the provisions of the Plan and the rights of all persons hereunder
shall be governed by the laws of the Commonwealth of Pennsylvania, without
regard to the conflict of laws principles thereof.
11.8 Miscellaneous. Any reference contained in the Plan to a particular
section or provision of law, rule or regulation, including without limitation
the Code and 1934 Act, shall include any subsequently enacted or promulgated
section or provision of law, rule or regulation, as the case may be, of similar
import. With respect to persons subject to Section 16 of the 1934 Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or any successor rule that may be promulgated by the
Securities and Exchange Commission, and to the extent any provision of the Plan
or action by the Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by applicable law and deemed advisable by the Committee.
Where used in the Plan, the plural shall include the singular, and unless the
context otherwise clearly requires, the singular shall include the plural and,
the term "affiliate" shall mean each and every subsidiary and any parent of the
Company as such terms are defined under Section 424 of the Code. The captions of
the numbered sections contained in the Plan are for convenience only, and shall
not limit or affect the meaning, interpretation or construction of any of the
provisions of the Plan.
11.9 No Restrictions on Issuances of Other Shares and Securities. Adoption
of the Plan shall not be taken to impose any limitations on the powers of the
Company, its affiliates or any other of its or their affiliates to issue, grant,
award or assume stock or options, warrants or rights to purchase or receive
stock, otherwise than under the Plan, or to adopt other stock plans or to impose
any requirement of shareholder approval upon same.
11.10 Fair Market Value. As used in the Plan, "Fair Market Value" as of any
date shall mean the market price of the Stock, determined by the Committee as
follows:
A. If the shares of Stock were traded over-the-counter on the date in
question and the Stock was classified by The Nasdaq Stock Market as a national
market issue (or, in the judgment of the Committee, a comparable designation),
then the Fair Market Value shall be equal to the average of the high and low
sales prices of the shares of Stock reported in Nasdaq trading for that date or,
if no reported sale of shares of Stock shall have occurred on such
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date, then on the next preceding day on which there was a reported sale.
B. If the shares of Stock were traded over-the-counter on the date in
question but the Stock was not classified by The Nasdaq Stock Market as a
national market issue (or, in the judgment of the Committee, a comparable
designation), then the Fair Market Value shall be equal to the mean between the
last reported representative bid and asked prices quoted by the Nasdaq system
for such date.
C. If the shares of Stock were traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date.
D. If none of the foregoing provisions is applicable then the Fair
Market Value shall be determined by the Committee in good faith on such basis as
it deems appropriate.
E. Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Eastern Edition of THE
WALL STREET JOURNAL. Such determination shall be conclusive and binding on all
persons.
ARTICLE XII
Effective Date
This Plan shall be effective as of January 4, 1999.
12
Ellsworth, Carlton & Waldman, P.C.
1105 Berkshire Boulevard
Suite 320
Wyomissing, PA 19610
-----------
Telephone (610) 374-1135
Fax (610) 371-9510
January 29, 1999
Board of Directors
National Penn Bancshares, Inc.
Philadelphia and Reading Avenues
Boyertown, PA 19512
Re: Elverson Substitute Stock Option Plan
Ladies and Gentlemen:
You have asked us to provide you with our opinion as to whether the
common shares, without par value, of National Penn Bancshares, Inc. (the
"Company") which may be issued from time to time pursuant to the National Penn
Bancshares, Inc. Elverson Substitute Stock Option Plan (the "Plan"), when and if
such shares are issued pursuant to the Plan, will be duly and validly issued,
fully paid and nonassessable.
In connection with this matter, we, as special counsel to the Company,
have reviewed the Business Corporation Law of the Commonwealth of Pennsylvania,
the Company's Articles of Incorporation, the Company's Bylaws, the Plan
document, and such other documents and authority as we have deemed necessary
under the circumstances to render the opinion hereinafter set forth.
Based upon such review, it is our opinion that the common shares of the
Company issuable under the Plan, when and as issued in accordance with the
provisions of the Plan document, will, when so issued, be duly and validly
issued, fully paid and nonassessable.
We hereby consent to the use of the name of our firm under Item 5 in
Part II of the Registration Statement, and to the filing of this opinion as an
exhibit to the Registration Statement which the Company is filing in connection
with the registration of 65,248 common shares of the Company issuable under the
Plan.
Very truly yours,
ELLSWORTH, CARLTON & WALDMAN, P.C.
/s/ H. Anderson Ellsworth
H. Anderson Ellsworth
Authorized Officer
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of National Penn Bancshares, Inc. on Form S- 8 of our report dated
January 16, 1998 incorporated in the Annual Report on Form 10-K of National Penn
Bancshares, Inc. for the year ended December 31, 1997.
/s/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
January 29, 1999
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Lawrence T. Jilk, Jr., Wayne R. Weidner
and H. Anderson Ellsworth, Esquire, and each of them, his or her true and lawful
attorney-in-fact, as agent with full power of substitution and resubstitution
for him or her in his or her name, place and stead, in any and all capacity, to
sign any or all amendments to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures Title
/s/ Gary L. Rhoads Treasurer January 27, 1999
Gary L. Rhoads (Principal Financial
and Accounting Officer)
/s/ John H. Body Director January 27, 1999
John H. Body
/s/ J. Ralph Borneman, Jr. Director January 27, 1999
J. Ralph Borneman, Jr.
/s/ Frederick H. Gaige Director January 27, 1999
Frederick H. Gaige
/s/ John W. Jacobs Director January 27, 1999
John W. Jacobs
/s/ Lawrence T. Jilk, Jr. Director, Chairman January 27, 1999
Lawrence T. Jilk, Jr. and Chief Executive
Officer (Principal
Executive Officer)
/s/ Patricia L. Langiotti Director January 27, 1999
Patricia L. Langiotti
/s/ Kenneth A. Longacre Director January 27, 1999
Kenneth A. Longacre
/s/ Robert E. Rigg Director January 27, 1999
Robert E. Rigg
<PAGE>
/s/ C. Robert Roth Director January 27, 1999
C. Robert Roth
/s/ Harold C. Wegman, D.D.S. Director January 27, 1999
Harold C. Wegman, D.D.S.
/s/ Wayne R. Weidner Director and January 27, 1999
Wayne R. Weidner President
