8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 1, 2005
NATIONAL PENN BANCSHARES, INC.
(Exact Name of Registrant as Specified in Charter)
	Pennsylvania (State or Other Jurisdiction of Incorporation)

000-22537-01	23-2215075
(Commission File Number)	(IRS Employer Identification No.)
Philadelphia and Reading Avenues, Boyertown, PA	19512
(Address of Principal Executive Offices)	(Zip Code)
Registrant’s telephone number, including area code: (610) 367-6001
N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a- 12(b))

[ ]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1

Item 1.01 Entry into a Material Definitive Agreement.

On December 1, 2005, the Compensation Committee of the Board of Directors of National Penn Bancshares, Inc. granted non-qualified stock options for National Penn common stock to various National Penn officers, including executive officers, under National Penn’s Long-Term Incentive Compensation Plan. This Plan was approved by National Penn’s shareholders in April, 2005. In accordance with the Plan and the Committee’s action:

·   Each option has an exercise price of $20.63 per share (the closing price of National Penn common stock on December 1, 2005).

·   Each option vests (becomes exercisable) in 20 percent increments annually, beginning December 1, 2006.

·   Each option expires on January 1, 2016 if not earlier exercised, forfeited or terminated.

The following individuals received stock options for the number of shares indicated:

·   Wayne R. Weidner, Chairman and Chief Executive Officer - 50,000.

·   Glenn E. Moyer, President - 37,500.

·   Bruce G. Kilroy, Group Executive Vice President - 11,000.

·   Garry D. Koch, Group Executive Vice President - 11,000.

·   Paul W. McGloin, Group Executive Vice President - 11,000.

·   Michael R. Reinhard, Group Executive Vice President - 11,000

·   Gary L. Rhoads - Group Executive Vice President & Chief Financial Officer - 11,000.

·   Sandra L. Spayd, Group Executive Vice President - 11,000.

·   Sharon L. Weaver, Group Executive Vice President - 11,000.

·   Donald P. Worthington, Executive Vice President - 5,000.

·   Hugh J. Garchinsky, Executive Vice President - 3,500.

·   Michelle H. Debkowski, Senior Vice President and Chief Accounting Officer - 5,000.

·   H. Anderson Ellsworth, Senior Vice President and SEC Compliance Officer - 4,000.

The Plan is included in National Penn’s Report on Form 8-K dated April 25, 2005 as Exhibit 10.1, which Report was filed with the Securities and Exchange Commission on April 29, 2005.

Each of the above stock options is evidenced by a Stock Option Agreement between National Penn and the option holder, in the form filed in this Report as Exhibit 10.1.

Section 9

Item 9.01 Financial Statements and Exhibits.

(c)Exhibits.

10.1Form of Stock Option Agreement for Non-Qualified Stock Option Grant for Officers or Employees.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NATIONAL PENN BANCSHARES, INC.

By: /s/  Wayne R. Weidner

Name: Wayne R. Weidner

Title: Chairman and CEO

Dated: December 1, 2005

EXHIBIT INDEX

Exhibit NumberDescription

10.1      - Form of Stock Option Agreement for Non-Qualified Stock Option Grant for Officers or Employees.

EX-10.1

EXHIBIT 10.1

NATIONAL PENN BANCSHARES, INC.

LONG-TERM INCENTIVE COMPENSATION PLAN

(APPROVED BY SHAREHOLDERS, APRIL 25, 2005)

STOCK OPTION AGREEMENT

BETWEEN

NATIONAL PENN BANCSHARES, INC.

AND

«Optionee»

(the Optionee)

Date of Grant:	December 1, 2005
Number of Shares:	«NumberofShares» shares
Purchase Price:	$_______ per share
Option Expires:	January 1, 2016

NATIONAL PENN BANCSHARES, INC.

LONG-TERM INCENTIVE COMPENSATION PLAN

NON-QUALIFIED

STOCK OPTION AGREEMENT

This Stock Option Agreement dated December 1, 2005, between National Penn Bancshares, Inc. (the "Corporation") and «Optionee» (the "Optionee"),

WITNESSETH:

1.Grant of Option

Pursuant to the National Penn Bancshares, Inc. Long-Term Incentive Compensation Plan (the "Plan"), this Agreement confirms the Corporation's grant to the Optionee, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, of the right and option to purchase from the Corporation all or any part of an aggregate of «NumberofShares» common shares (without par value) of the Corporation at the purchase price of $_____ per share, such option to be exercised as hereinafter provided.

2.Terms and Conditions

It is understood and agreed that the option evidenced hereby is subject to the following terms and conditions:

(a)Expiration Date. Subject to the provisions of Paragraph 2(d), the option evidenced hereby shall expire on January 1, 2016 [10 years and one month from the date of grant].

(b)Exercise of Option. The Optionee shall have a cumulative vested interest in the right to exercise an option granted hereby, determined by reference to his or her continuous employment with the Corporation and/or a subsidiary following the date of grant of the option, as follows:

Period of Continuous	Cumulative Vested
Employment Following Grant	Percentage
Less than 1 year	-0-
1 year or more	20.0
2 years or more	40.0
3 years or more	60.0
4 years or more	80.0
5 years or more	100.0

To the extent the application of the above vesting schedule would at any time result in the right to acquire a fractional share, the right to acquire such fractional share shall be deferred to the next vesting period.

This option may be exercised, to the extent exercisable by its terms, in whole or from time to time in part at any time prior to the expiration hereof. Any exercise shall be accompanied by a written notice to the Corporation specifying the number of shares as to which the option is being exercised.

(c)Payment of Purchase Price Upon Exercise. The option exercise price for the shares as to which this option shall be exercised shall be paid in cash or as otherwise permitted by the Plan and the Committee.

(d)Exercise Upon Death, Disability, Retirement or other Termination of Employment.

(1)If the Optionee's employment with the Corporation or a subsidiary terminates due to death, Disability (as defined in the Plan) or Retirement (as defined in the Plan and also including a voluntary termination of employment at age 60 or more), or if the Company or a subsidiary terminates the Optionee’s employment not for Cause (as defined in the Plan), this option (whether or not exercisable by the Optionee immediately prior to ceasing to be an employee) will be exercisable at any time prior to the expiration date of this option or within five years after the date of termination of employment, whichever is the shorter period.

(2)If the Optionee voluntarily terminates employment not qualifying as Retirement (as provided in Paragraph 2(d)(1)) defined in the Plan), this option, if and to the extent not yet exercisable, will terminate, and if and to the extent then exercisable, may be exercised by the Optionee at any time prior to the expiration date of this option or within three months after the date of termination of employment, whichever is the shorter period.

(3)If the Corporation or a subsidiary terminates the Optionee’s employment for Cause (as defined in the Plan), this Option, including any unexercised vested portion, shall immediately lapse and be cancelled. Any lapse occurring under this subsection of this Agreement shall be final, and no person or corporation shall be liable to the Optionee therefor.

(e)Transferability. This option shall be transferable by Will or by the laws of descent and distribution. During the lifetime of the Optionee, this option may be transferred to the extent permitted by, and subject to the conditions imposed by, the Plan and the Committee.

(f)Adjustment and Substitution of Shares. If any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, share combination, or other change in the corporate structure of the Corporation affecting the Corporation’s common shares shall occur, the number and class of shares subject to this option and the price per share thereof (but not the total price) shall be adjusted or substituted for, as the case may be, as shall be determined by the Committee to be appropriate and equitable to prevent dilution or enlargement of rights, and provided that the number of shares shall always be a whole number. Any adjustment or substitution so made shall be final and binding upon the Optionee.

(g)No Rights as Shareholder. The Optionee shall have no rights as a shareholder with respect to any common shares subject to this option prior to the date of issuance to him or her of a certificate or certificates for such shares.

(h)No Right To Continued Employment. This option shall not confer upon the Optionee any right to continue as an employee of the Corporation or any subsidiary, nor shall it interfere in any way with the right of his or her employer to terminate his or her employment at any time.

(i)Compliance with Law and Regulations. This option and the obligation of the Corporation to sell and deliver shares hereunder shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required. The Corporation shall not be required to issue or deliver any certificates for common shares prior to (1) the effectiveness of a registration statement under the Securities Act of 1933, as amended, with respect to such shares, if deemed necessary or appropriate by counsel for the Corporation, (2) the listing of such shares on any stock exchange on which the common shares may then be listed, or upon the Nasdaq Stock Market if the common shares are then listed thereon, and (3) compliance with all other applicable laws, regulations, rules and orders which may then be in effect.

(j)Change-in-Control. If any "Change-in-Control" (as defined in the Plan) occurs, this option shall become immediately and fully exercisable whether or not otherwise then exercisable.

3.Investment Representation

The Committee may require the Optionee to furnish to the Corporation, prior to the issuance of any shares upon the exercise of all or any part of this option, an agreement (in such form as such Committee may specify) in which the Optionee represents that the shares acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof.

4.Optionee Bound by Plan

The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions of the Plan, as in effect on the date hereof and as it may be amended from time to time in accordance with its terms, all of which terms and provisions are incorporated herein by reference. If there shall be any inconsistency between the terms and provisions of the Plan, as in effect from time to time, and those of this Agreement, the terms and provisions of the Plan, as in effect from time to time, shall control.

 

5. Committee

All references herein to the “Committee” mean the Compensation Committee of the Board of Directors of the Corporation (or any successor committee designated by the Board of Directors to administer the Plan).

6.Withholding of Taxes

The Corporation will require as a condition precedent to the exercise of this option that appropriate arrangements be made for the withholding of any applicable Federal, state and local taxes.

7.Notices

Any notice hereunder to the Corporation shall be addressed to it at its office, Philadelphia and Reading Avenues, Boyertown, Pennsylvania 19512, Attention: Corporate Secretary, and any notice hereunder to Optionee shall be addressed to him or her at the address below, subject to the right of either party to designate at any time hereafter in writing some other address.

IN WITNESS WHEREOF, National Penn Bancshares, Inc. has caused this Agreement to be executed by a duly authorized officer and the Optionee has executed this Agreement, both as of the day and year first above written.

NATIONAL PENN BANCSHARES, INC.	OPTIONEE
By: ______________________________	______________________________
WAYNE R. WEIDNER	(Signature)
Chairman & CEO
	______________________________
	(Print Name)
	______________________________
	(Print Address)