Summary of NATIONAL PENN BANCSHARES INC

Item 1.01. Entry Into a Material Definitive Agreement

TARP Restriction Agreements

As previously reported, in December 2008, as part of the U.S. Treasury's Capital Purchase Program Troubled Asset Relief Program (the "TARP CPP"), National Penn Bancshares, Inc. ("National Penn") issued $150 million of senior preferred stock, and related common stock purchase warrants to the U.S. Treasury. Certain provisions of the American Reinvestment and Recovery Act of 2009 (the "Recovery Act"), and certain rules issued by the U.S. Treasury implementing the Recovery Act, including the TARP Interim Final Rules, require TARP CPP participants, including National Penn to adopt certain restrictive standards for executive compensation and corporate governance during the period in which the U.S. Treasury holds the TARP program participant's stock (the "TARP Compliance Period"). Also as previously reported, Messrs. Bruce G. Kilroy and Paul W. McGloin (the "Officers"), each entered into a CPP Clawback and Parachute Restriction Agreement (each a "Clawback Agreement") with National Penn on December 10, 2008, which imposed certain restrictions on the Officer's compensation.

In connection with the announcement of the retirements of each of the Officers, as described in Item 5.02 of this Report, on October 30, 2009 and November 2, 2009, respectively, Messrs. Kilroy and McGloin entered into a TARP Restriction Agreement with National Penn (each a "Restriction Agreement"). Each Restriction Agreement provides that during any time period when the Officer is classified by National Penn as either a "senior executive officer" or one of the top 5 "most highly compensated employees" (in each case, as defined in the TARP Interim Final Rules) (1) that any bonus or incentive compensation paid to the Officer will be subject to recovery by National Penn if the payments were based on financial statements or performance metric criteria that are later proven to be materially inaccurate; (2) that the Officer agrees to forfeit any payments to which he may be entitled resulting from the Officer's departure from National Penn or from a "change in control" of National Penn; and (3) that the Officer agrees to forfeit any reimbursement by National Penn of any taxes owed to the Officer with respect to any compensation. Each Restriction Agreement also provides that during any time period when the Officer is classified by National Penn as a senior executive officer or one of the top 20 most highly compensated employees, clauses (2) and (3) of the preceding sentence will apply to the Officer. During any time period the Officer is classified by National Penn as one of the top 5 most highly compensated employees the Officer will forfeit the payment or accrual of any bonuses or retention awards accrued after June 15, 2009, except for certain restricted stock.

Finally, each Restriction Agreement provides that if the Officer's employment is terminated, at the option of the Officer, National Penn agrees to enter into a Consulting and Noncompetition Agreement with the Officer. Each Restriction Agreement terminates the Clawback Agreement referred to above.

Copies of the Restriction Agreements are included as exhibits to this current report on Form 8-K as Exhibit 10.1 and Exhibit 10.2 and are incorporated by reference into this Item 1.01. The foregoing summary of certain provisions of these documents is qualified in its entirety by reference to the complete copies of these documents included to this current report on Form 8-K.