NATIONAL PENN BANCSHARES INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>agreemt.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                              EMPLOYMENT AGREEMENT
                              --------------------

          EMPLOYMENT AGREEMENT dated as of January 22, 2003, among NATIONAL PENN
BANCSHARES,  INC., a  Pennsylvania  business  corporation  and  registered  bank
holding  company  ("NPB");  NATIONAL PENN BANK, a national  banking  association
("Bank");  and  WAYNE R.  WEIDNER  ("Executive")  (NPB  and  Bank are  sometimes
referred to herein collectively as "Employer").

                                   BACKGROUND
                                   ----------

          1. Executive is presently  employed by NPB as Chairman,  President and
Chief Executive Officer, and by Bank as Chairman and Chief Executive Officer.

          2. It is the  desire of the Boards of  Directors  of NPB and Bank that
Executive continue his employment, on the terms and conditions set forth herein,
in order  that the  experience  he has  gained  throughout  his  career  and the
management  ability he has  demonstrated  for NPB and Bank will  continue  to be
available to NPB and Bank. Executive is willing to continue such employment,  on
the terms and conditions set forth herein.

                                    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:

          1. Background.  The matters set forth in the  "Background"  section of
this Agreement are incorporated by reference herein.

          2. Term. This Agreement shall be for a term of three years,  beginning
on January 22, 2003 and ending on January 21, 2006, subject to the following:

             (a) This  Agreement  may be  terminated  at any time as provided in
Sections 10 through 14.

             (b) If this  Agreement is not  terminated on or before  January 21,
2004 or any  subsequent  January  21,  then,  on  such  date,  the  term of this
Agreement  shall be  automatically  extended by adding one year to the term then
remaining.  For  example,  if this  Agreement  is still in effect on January 21,
2004, then, on such date, its term shall be automatically  extended so as to end
on January 21, 2007.  Notwithstanding  the foregoing,  there shall be no further
extensions  of the term of this  Agreement  beginning  with the first January 22
that occurs after Executive shall have reached age 62.


                                       1
<PAGE>


         3. Position, Duties.

             (a) During the time this  Agreement  is in effect,  NPB will employ
Executive as Chairman,  President  and Chief  Executive  Officer,  and Bank will
employ Executive as Chairman and Chief Executive Officer. Executive accepts such
employment,  with such powers and duties commensurate with Executive's titles as
an executive  officer of NPB and Bank as may from time to time be  determined by
the  respective  Boards of  Directors of NPB or Bank.  Executive's  duties shall
include  compliance  with  Employer's  Code of Conduct as in effect from time to
time.

             (b)  Executive's  office  will be  located at the  location  of the
executive offices of NPB and Bank, wherever maintained from time to time.

             (c) During  the period of  Executive's  employment  hereunder,  the
Board of Directors of NPB will cause NPB, as sole  shareholder of Bank, to elect
and  annually  re-elect  Executive  to the Board of Directors of Bank (unless it
believes such action would violate its fiduciary  duties).  Upon any termination
of Executive's employment hereunder for any reason, including without limitation
a termination without cause,  Executive will concurrently resign from the Boards
of Directors of NPB, Bank, and all direct or indirect subsidiaries or affiliates
of NPB or Bank on which he is then serving.

             (d) Executive will devote  substantially all his time and attention
to, and will use his best  energies  and  abilities in the  performance  of, his
duties and responsibilities as prescribed in this Section 3, and will not engage
in  consulting  work or any trade or  business  for his own account or for or on
behalf of any other person,  firm or corporation which competes,  conflicts,  or
interferes   with  the   performance  of  his  duties   hereunder  in  any  way.
Notwithstanding   the  foregoing,   Executive  may  perform   community  service
consistent  with  Employer  policy and engage in  activities on behalf of NPB or
Bank or for his own account, including personal investment activities (excluding
any personal  investments  in  publicly-traded  companies  (other than NPB) with
voting power equal to five percent or more);  provided,  however,  that all such
service or activities  do not  interfere  with  Executive's  performance  of his
responsibilities under this Agreement.

         4. Base Compensation. Except as provided in Section 23, for all
services to be rendered by Executive pursuant to Section 3, Employer will pay
Executive a base salary of at least Three Hundred Fifty-Five Thousand Dollars
($355,000) per year (effective January 1, 2003). Employer shall pay such salary
to Executive in approximately equal installments during each year on the
customary salary payment dates of Employer, and such salary shall be subject to
applicable income tax withholding, deductions required by law, and other
deductions authorized by Executive. Executive shall not


                                       2
<PAGE>

be  entitled  to any  additional  compensation  for  service  as a  director  or
committee  member of NPB, Bank or any other  affiliated  company.  Employer will
evaluate Executive's  performance annually,  and Executive shall be eligible for
annual merit increases in base salary in the discretion of the respective Boards
of  Directors  of NPB and Bank.  Except as provided in Section 23, a base salary
increase  shall,  when it takes  effect,  become  the new  minimum  base  salary
required thereafter by this Section 4.

         5. Health Insurance, Benefit Plans, Stock Compensation Plans, etc.

             (a) In addition to the compensation  payable to Executive  pursuant
to Section 4 hereof,  Executive shall be entitled during the time this Agreement
is in effect to  participate in all health  insurance and benefit  plans,  group
insurance,  pension or  profit-sharing  plans,  or other plan or plans providing
benefits applicable generally to employees of NPB or Bank which are presently in
force or which may hereafter be adopted by NPB or Bank.

             (b) Executive shall also be eligible during the time this Agreement
is in effect for receipt of stock options or restricted stock  commensurate with
his positions with NPB and Bank,  pursuant to NPB's Officers' and Key Employees'
Stock  Compensation  Plan or any  successor or  additional  stock option plan or
stock  compensation  plan which may hereafter be adopted by NPB for officers and
other key  employees of NPB and its  subsidiaries.  Any  discretionary  terms of
grants or awards to  Executive  (other  than with  respect to  amount)  shall be
consistent with grants or awards to other senior officers generally.

         6. Bonuses. As additional compensation for services rendered hereunder,
Executive shall be entitled during the time this Agreement is in effect:

             (a) To  participate as a "Type A  Participant"  in NPB's  Executive
Incentive Plan,  assuming such plan remains in effect, or at an equivalent level
in any successor executive bonus plan covering the officers of NPB or Bank which
may be adopted by NPB or Bank; and

             (b) To receive any  discretionary  bonus that may be awarded to him
under the Executive Incentive Plan or such successor executive bonus plan.

Executive  acknowledges  that this Section 6 does not  preclude  NPB's or Bank's
Board of  Directors,  as the case  may be,  from  amending  or  terminating  the
Executive  Incentive Plan or any other  executive  bonus plan in accordance with
its terms.

         7. Other Benefits. Except as provided in Sections 14 and 23, as
additional compensation for services rendered hereunder,

                                       3

<PAGE>

Executive shall be entitled during the time this Agreement is in effect:

             (a) To payment by NPB or Bank of, or  reimbursement  by NPB or Bank
for, 100% of Executive's  regular  membership  dues and assessments at Berkshire
Country Club and Moselem Springs Golf Club, or similar quality  replacement club
or clubs, and all eligible business expenses related thereto;

             (b) To life insurance coverage and long-term  disability  insurance
coverage at no expense to Executive,  in at least such amounts and on such terms
and conditions as are such insurance  coverages for Executive that are in effect
on the date of this Agreement;

             (c) To the receipt of an  automobile  allowance,  in such amount as
shall  be  determined  by  Employer  from  time  to  time,  in  Employer's  sole
discretion, but in no event less than $850 per month; and

             (d) To  reasonable  vacation  and  sick  leave in  accordance  with
Employer policy, as the same may be revised from time to time.

         8. Supplemental Retirement Benefits.

             (a) Normal Retirement. If Executive's employment continues until he
attains the age of sixty-five (65) and Executive retires at age sixty-five (65),
then Employer shall pay to Executive monthly  payments,  each in an amount equal
to  sixty-five  percent  (65%) of the "Average  Monthly  Salary  Base"  (defined
below),  for a period of one hundred  eighty  (180)  months,  commencing  on the
"Normal  Retirement  Date"  (defined  below).  If  Executive  dies before he has
received or  commenced to receive all of such one hundred  eighty (180)  monthly
payments, then the provisions of subsection 8(d) hereof shall apply.

             (b) Later Retirement.  If Executive's employment continues until he
attains the age of sixty-five (65) and, at the request of the Board of Directors
of Employer,  Executive chooses to continue to perform services thereafter,  for
such  compensation  as may be mutually  agreed upon at that time or from time to
time, and if thereafter  Executive's  employment shall terminate for any reason,
other than termination for Cause,  then Employer shall pay to Executive  monthly
payments,  each in an amount equal to sixty-five  percent (65%) of the "Adjusted
Average Monthly Salary Base" (defined below), for a period of one hundred eighty
(180) months,  commencing on the first day of the first calendar month following
Executive's termination of employment.  If Executive dies before he has received
or commenced to receive all of the payments to which he is entitled  pursuant to
this subsection 8(b), then the provisions of subsection 8(d) hereof shall apply.


                                       4
<PAGE>

             (c) Early  Retirement.  If Executive elects to retire early between
the ages of sixty (60) and sixty-five (65), then Employer shall pay to Executive
monthly  payments,  each in an amount equal to  sixty-five  percent (65%) of the
Average Monthly Salary Base,  reduced by an amount equal to one-quarter  percent
(1/4%)  thereof for each month by which the date that  benefit  payments  are to
commence under this subsection 8(c) precedes Executive's Normal Retirement Date,
for a period of one hundred eighty (180) months,  commencing on the first day of
the first calendar month following  Executive's early  retirement.  If Executive
dies before he has received or commenced to receive all of the payments to which
he is  entitled  pursuant  to this  subsection  8(c),  then  the  provisions  of
subsection 8(d) hereof shall apply.

             (d) Continuation of Payments. If Executive shall become entitled to
payments under the  provisions of this Section 8 and shall die before  receiving
all of the payments that he is entitled to receive,  then the remaining payments
shall be made to Executive's "Designated Beneficiary" (defined below).

             (e) Special  Payments.  If  Executive  shall die while  employed by
Employer at a time when he was eligible to have previously  retired  pursuant to
subsections 8(b) or (c) hereof, then for purposes of this Section 8, the date of
Executive's  death shall be deemed to be the date of an election by Executive to
retire from, or voluntarily  terminate his, employment.  In such event, Employer
shall  pay to  the  Designated  Beneficiary  monthly  payments  as  provided  in
subsections 8(b) or 8(c), as the case may be.

             (f) Pension  Plan.  The  payments  to be made under this  Section 8
shall be reduced  by any amount  concurrently  payable  to  Executive  or to the
Designated  Beneficiary  pursuant to the Bank Retirement Plan.  Accordingly,  if
Executive  elects  to  defer  the  receipt  of  payments  pursuant  to the  Bank
Retirement  Plan until  Executive  reaches age 70 1/2,  the  payments to be made
under this Section 8 shall not be reduced by any amount until  Executive  begins
receiving payments pursuant to the Bank Retirement Plan at age 70 1/2.

         Any payments to be made under this Section 8 shall not be deemed Salary
or other  compensation  to Executive  for the purpose of  computing  benefits to
which he may be entitled under any pension plan or other arrangement of Employer
or any Affiliate thereof for the benefit of their employees.

             (g)  Definitions.  For  purposes of this  Section 8, the  following
words and phrases shall have the following meanings:

                  (1) "Adjusted  Average  Monthly Salary Base" means the greater
of (i) the total of  Executive's  monthly Salary for the sixty (60) months prior
to his  attainment  of age  sixty-five  (65) or (ii) the  total  of  Executive's
monthly Salary for the sixty (60)

                                       5

<PAGE>

months prior to his termination of employment, divided by the number sixty (60).

                  (2)  "Average   Monthly   Salary  Base"  means  the  total  of
Executive's  monthly Salary for the sixty (60) months  immediately  prior to the
month in which (i) he attains the age of sixty-five  (65),  (ii) he elects early
retirement,  or (iii) his employment is terminated by Employer at any time prior
to a Change in Control other than for Cause,  as the case may be, divided by the
number sixty (60).

                  (3) "Bank  Retirement  Plan" means the defined benefit pension
plan maintained now or in the future for employees of the Bank or NPB.

                  (4) "Designated Beneficiary" means, collectively,  the persons
or entities (e.g., the United Way) designated by Executive as his beneficiary or
beneficiaries  on the  "Beneficiary  Designation  Form"  (the  form of  which is
attached  hereto as Exhibit "A") duly  completed,  signed and filed by Executive
with NPB's  Corporate  Secretary.  Executive  may at any time,  and from time to
time, revoke or amend such designation by duly completing,  signing and filing a
new  "Beneficiary  Designation  Form"  with  the  Corporate  Secretary.   Should
Executive die without a completed, signed "Beneficiary Designation Form" on file
with the Corporate  Secretary,  "Designated  Beneficiary" shall mean Executive's
heirs at law.

                  (5) "Normal  Retirement Date" means the first day of the first
calendar month following Executive's 65th birthday.

                  (6)  "Salary"  means   Executive's  base  salary   established
annually by the Board of Directors of Employer,  prior to any  reduction of such
salary pursuant to any contribution to a tax-qualified plan under Section 401(k)
of the Internal Revenue Code of 1986, as amended.

         9. Change in Control.

             (a) If a Change in Control  (defined  in Section  9(b)) shall occur
during the time this  Agreement is in effect,  then, at the option of Executive,
exercisable  by  Executive  at any time  within  three  years  after a Change in
Control  occurs,  Executive  may resign from  employment  (or, if  involuntarily
terminated  from  employment,  give  notice of  intention  to  collect  benefits
hereunder)  by  delivering  a notice  in  writing  to  Employer,  in which  case
Executive  shall be entitled to a lump sum cash severance  payment equal to 299%
of Executive's  Base Amount (defined in Section 9(c)),  which Employer shall pay
to Executive within fifteen (15) days of Executive's termination of employment.


                                       6
<PAGE>

         Notwithstanding  the foregoing or any other provision of this Agreement
to the contrary, in no event shall the lump sum payment to Executive pursuant to
this Section 9(a) be greater than an amount equal to an amount ("X")  determined
pursuant to the following formula:

                                    X = (2.99A - B) x (1 + C)D.

                  For purposes of the foregoing formula:

                  A =       Executive's Base Amount on the date of the Change in
                            Control;

                  B =       The  present  value  of all  other  amounts  which
                            qualify as  parachute  payments  under Code  Section
                            280G(b)(2)(A)   or  (B)   (without   regard  to  the
                            provisions of Code Section 280G(b)(2)(A)(ii)),  such
                            present  value  to be  determined  pursuant  to  the
                            provisions of Code Section 280G;

                  C =       120%  times 0.5 times the  lowest of the  semiannual
                            applicable  federal  rates  (determined  pursuant to
                            Code  Section  1274(d)) in effect on the date of the
                            Change in Control; and

                  D =       The  number  of whole  semiannual  periods  plus any
                            fraction of a semiannual period from the date of the
                            Change in Control to the date of  termination of the
                            Executive's employment.

                  (b)       "Change in Control" means:

                  (1) An  acquisition by any "person" or "group" (as those terms
are defined or used in Section 13(d) of the Securities Exchange Act of 1934 (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;

                  (2) A merger,  consolidation or other  reorganization of Bank,
except where the resulting entity is controlled, directly or indirectly, by NPB;

                  (3) 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  sixty-one  percent  (61%) of  combined
voting power of the outstanding  voting securities of the legal entity resulting
from or existing after any such transaction and at least sixty-one percent (61%)
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;


                                       7
<PAGE>


                  (4)  A  sale,  exchange,  transfer  or  other  disposition  of
substantially  all of the assets of Bank to another entity,  except to an entity
controlled, directly or indirectly, by NPB;

                  (5)  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

                  (6) A contested proxy  solicitation of the shareholders of NPB
which 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.

             (c) "Base  Amount" means  Executive's  average  annualized  taxable
compensation  from  Employer  for the  five  years  prior to the year in which a
Change in Control  occurs,  determined in accordance with the provisions of Code
Section 280G.

             (d)  Executive  shall not be required to mitigate the amount of any
payment  provided for in Section 9(a) by seeking other  employment or otherwise,
nor shall the amount of any payment or benefit  provided  for in Section 9(a) 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.

         10.   Termination--Disability.   Employer  may  terminate   Executive's
employment  at any time if  Executive  shall be  "disabled"  for a period of 180
consecutive  days.  "Disability"  means that,  because of Executive's  injury or
sickness,  Executive  cannot perform each of the material  duties of his regular
occupation, as determined by Employer in good faith. In such event:

             (a) This Agreement  shall remain in effect for the remainder of its
term, as then extended, and terminate at the end of such term;

             (b) Employer shall continue to pay Executive the  compensation  set
forth in Section 4 for the remainder of the term of this Agreement, at the times
set forth in Section 4; and

             (c) Employer shall pay to Executive the payments to which Executive
is  entitled  pursuant  to Section 8 at the times and in the manner set forth in
Section 8, notwithstanding termination of this Agreement.

         11. Termination--Death. If Executive's employment is terminated because
of Executive's death:

             (a) This Agreement shall terminate at that time;


                                       8
<PAGE>

             (b)  Within  30 days of the date of  death,  Employer  shall pay to
Executive's  Designated  Beneficiary,  in one lump sum,  an amount  equal to the
total  amount of  compensation  remaining  to be paid to  Executive  pursuant to
Section 4 through what would have been the  remaining  term of the Agreement but
for its  termination  under  subparagraph  11(a) above or the amount  payable to
Executive pursuant to Section 9(a); and

             (c) Employer shall pay to Executive's  Designated  Beneficiary  the
payments to which Executive was entitled to receive pursuant to Section 8 at the
times set forth in Section 8, notwithstanding termination of this Agreement.

         12. Voluntary Termination. Executive may terminate his employment with
Employer at any time. In such event:

             (a) This Agreement shall terminate at that time; and

             (b) Employer  shall not be obligated to pay  Executive  any further
compensation pursuant to Section 4 or otherwise, except that the following shall
remain due and payable by Employer to Executive  notwithstanding  termination of
this Agreement:

                  (1) Section 4 compensation, if any, accrued and unpaid through
the date of voluntary termination;

                  (2) Section 8 supplemental  retirement benefits,  at the times
and in the manner set forth in Section 8; and

                  (3) The amount payable to Executive  pursuant to Section 9(a),
if any.

         13.  Termination--Cause.  Nothing  contained in this Agreement shall be
construed to prevent  Employer  from  terminating  the  employment  of Executive
hereunder at any time for "cause".

             (a) "Cause" means the occurrence of either of the following:

                  (1)  Executive's  conviction  of,  or plea of  guilty  or nolo
contendere to, a felony or a crime of falsehood or involving moral turpitude; or

                  (2) 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,  and which
willful  failure  continues  uncured  after  thirty (30) days notice  containing
specific written instructions relating to the matter.

                                       9
<PAGE>


               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:

                  (1) Questionable judgment on the part of Executive;

                  (2) Any act or omission  believed by  Executive in good faith,
to have been in or not opposed to the best interests of Employer; or

                  (3) 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
Bylaws of NPB or Bank or the laws of the  Commonwealth of  Pennsylvania,  or the
directors and officers'  liability  insurance of NPB or Bank, in each case as in
effect at the time of such act or omission.

             (b) If Employer  proposes to terminate  Executive's  employment for
cause,  Employer  shall  give  Executive  written  notice  specifying  the exact
circumstances  relating  to cause and an  opportunity  for  Executive  to appear
before a joint meeting of the Boards of Directors of NPB and the Bank,  with his
counsel, if he so desires.

             (c) If Employer terminates Executive's employment for cause:

                  (1)  Employer   shall  give  Executive  a  written  notice  of
termination  effective on the date  specified by Employer in said notice,  which
notice  shall  contain  a full  statement  of the  facts  and  reasons  for such
termination;

                  (2) This Agreement shall terminate at such time; and

                  (3)  Employer  shall not be  obligated  to pay  Executive  any
further compensation pursuant to Sections 4, 8 or otherwise,  except for Section
4 compensation, if any, accrued and unpaid through the date of termination.

         14.  Termination--Without  Cause.  Employer may  terminate  Executive's
employment at any time without cause (defined in Section 13(a)). In such event:

             (a) This Agreement  shall remain in effect for the remainder of its
term, as then extended, and terminate at the end of such term;

             (b) Employer shall continue to pay Executive the  compensation  set
forth in  Section 4 for the  remainder  of the term


                                       10
<PAGE>

of this Agreement, as then extended, at the times set forth in Section 4;

             (c)  Employer  shall  reimburse  Executive  for the cost of "COBRA"
health  care  continuation  coverage  for  the  remainder  of the  term  of this
Agreement, as then extended;

             (d) Employer shall continue to provide Executive with the following
benefits for one year from the date of termination of employment:

                  (1) Payment by NPB or Bank of, or reimbursement by NPB or Bank
for, 100% of Executive's  regular  membership  dues and assessments at Berkshire
County Club or similar quality replacement club;

                  (2) Life insurance coverage and long-term disability insurance
coverage at no expense to Executive,  in at least such amounts and on such terms
and conditions as are such insurance  coverages for Executive that are in effect
on the date of this Agreement; and

                  (3) The receipt of an automobile allowance,  in such amount as
shall  be  determined  by  Employer  from  time  to  time,  in  Employer's  sole
discretion, but in no event less than $850 per month.

             (e) Employer shall pay to Executive the payments to which Executive
is  entitled  pursuant  to Section 8 at the times and in the manner set forth in
Section 8, notwithstanding termination of this Agreement;

             (f) If a Change in Control  (defined  in Section  9(a)) shall occur
prior to the end of the term of this Agreement, as then extended, Employer shall
pay to Executive the payment to which Executive is entitled  pursuant to Section
9(a); and

             (g) Except as  described  in  Section  14(d),  Executive  shall not
receive any other employee benefits, including the benefits described in Section
7 of this  Agreement,  or be entitled to  participate in any other plan or plans
providing  benefits  generally to employees of Employer  which are  presently in
effect or which may  hereafter be adopted by Employer,  for the remainder of the
term of this Agreement, as then extended.

         15.  Non-Competition.  Executive  acknowledges that NPB is a registered
bank holding  company  engaged  principally in the commercial and retail banking
business through its ownership, support, operation and management of its banking
subsidiaries  which,  as of the date  hereof,  are Bank and Panasia  Bank,  N.A.
("Panasia"). During the time this Agreement is in effect, and if Executive shall
voluntarily  terminate  his  employment  pursuant to


                                       11
<PAGE>

Section 12 hereof,  for the  remainder  of the term of this  Agreement in effect
immediately  prior  to  such  termination,  Executive  shall  not,  directly  or
indirectly, acting alone or in conjunction with others:

             (a) Engage as a director, officer, employee, partner,  shareholder,
consultant,  agent or in any other capacity, in the commercial or retail banking
business in competition with NPB, Bank, Panasia, or any other future NPB banking
subsidiary, in any location within the Commonwealth of Pennsylvania that is:

                  (1) During such time as the executive  offices of NPB and Bank
are located in Boyertown, Berks County,  Pennsylvania----Within fifty (50) miles
of Boyertown, Berks County, Pennsylvania;

                  (2) If the  executive  offices  of NPB and Bank are moved from
Boyertown,  Berks County,  Pennsylvania  to a new location,  and if Executive is
employed  by  Employer  on the date of such move,  then  during such time as the
executive  offices  of NPB and Bank are  located at such new  location  (but not
beyond  the  time  period  provided  in the  first  paragraph  of  this  Section
15)----Within  fifty (50) miles of the new location of the executive  offices of
NPB and Bank, wherever that may be;

                  (3) If the executive  offices of NPB and Bank are moved from a
successor-to-Boyertown  location to a new location, and if Executive is employed
by  Employer on the date of such move,  then  during such time as the  executive
offices  of NPB and Bank are  located at such new  location  (but not beyond the
time period provided in the first paragraph of this Section  15)----Within fifty
(50)  miles  of the new  location  of the  executive  offices  of NPB and  Bank,
wherever that may be;

it being understood that Section 15(a)(3) shall apply to any further  relocation
or  relocations  that may occur  within the time  period  provided  in the first
paragraph  of  this  Section  15;  and it  being  further  understood  that  the
geographic  limitation relating to the Commonwealth of Pennsylvania set forth in
this Section 15(a) shall not apply if the executive  offices of NPB and Bank are
ever relocated outside of the Commonwealth of Pennsylvania;

             (b) Request  any  customers  of NPB,  Bank,  Panasia,  or any other
future NPB banking  subsidiary,  to curtail or cancel their  business  with NPB,
Bank, Panasia, or any other future NPB banking subsidiary, excluding himself and
any customer who is a relative of Executive; or

             (c) Induce,  or attempt to  influence,  any employee of NPB,  Bank,
Panasia, or any other future NPB banking subsidiary to terminate employment with
NPB, Bank, Panasia, or any other future NPB banking subsidiary, or to enter into
any employment or other


                                       12
<PAGE>

business  relationship  with any other  person  (including  Executive),  firm or
corporation.

         Executive  recognizes that immediate and irreparable damage will result
to  Employer  if  Executive  breaches  any of the terms and  conditions  of this
Section 15 and, accordingly, Executive hereby consents to the entry by any court
of  competent  jurisdiction  of an  injunction  against him to restrain any such
breach,  in addition to any other  remedies  or claims for money  damages  which
Employer  may seek.  Executive  represents  and  warrants to  Employer  that his
experience and capabilities  are such that he can obtain  employment in business
without  breaching  the  terms  and  conditions  of  this  Section  15,  and the
enforcement  hereof by injunction or otherwise will not prevent him from earning
a livelihood.

         Notwithstanding   anything  in  this  Agreement  to  the  contrary,  if
Executive  files  a  lawsuit  challenging  any  provision  of this  Section  15,
Executive  shall forfeit any and all rights to receive any further  compensation
pursuant to Section 8 of this Agreement.

         16.  Non-Disclosure.  During the time this  Agreement  is in effect and
thereafter  for a period of three (3) years,  Executive  shall not,  directly or
indirectly,  acting alone or in conjunction with others, disclose to any person,
firm or  corporation  any of the following  information:  any trade secret,  any
details  of  organization  or  business  affairs,  any names of past or  present
customers, consumers or employees, or any other proprietary data or confidential
information,  of NPB, Bank, Panasia or of any of NPB's other direct or indirect,
present  or  future,   subsidiaries  or  affiliates;   provided,  however,  that
disclosure  of such  information  within  the scope of  Executive's  employment,
disclosure  of such  information  as is required by law, and  disclosure of such
information  already in the public domain  through no fault of Executive,  shall
not be prohibited by this Section 16.

         Employer  may enforce  the  provisions  of this  Section 16 by suit for
damages,   injunction,   or  both.  Executive  agrees  that  Employer  would  be
irreparably injured by the breach of any provision of this Section 16, and money
damages alone would not be an  appropriate  measure of the harm to Employer from
such  continuing  breach.   Therefore,   equitable  relief,  including  specific
performance  of the  provisions  of this Section 16 by  injunction,  would be an
appropriate remedy for the breach of these provisions.

         17. Release of Non-Competition Covenant.  Notwithstanding Section 15 of
this Agreement,  if Employer  terminates  Executive's  employment  without cause
pursuant to Section 14 of this Agreement,  Executive may, at his option,  at any
time prior to termination of this Agreement  pursuant to Section 14(a), elect to
accept a position  with another firm  otherwise  prohibited  by Section 15(a) of
this Agreement, in which case:



                                       13
<PAGE>

             (a) Executive shall  concurrently  give Employer  written notice of
such election;

             (b) This Agreement shall terminate  immediately,  including without
limitation Section 15 hereof;

             (c) Employer shall  immediately  cease making any payments pursuant
to Sections 14(b) and 14(c) of this Agreement; and

             (d) All other provisions of Section 14 shall remain unaffected.

         18. No  Disparagement.  During the time this Agreement is in effect and
thereafter  indefinitely,  Executive shall not,  directly or indirectly,  acting
alone or in conjunction with others,  disparage or criticize NPB, Bank, Panasia,
or any other future NPB banking  subsidiary,  or any of their respective present
or future directors, officers, employees, agents or attorneys (collectively, the
"NPB Parties"),  and the NPB Parties shall not,  directly or indirectly,  acting
alone or in conjunction with others, disparage or criticize Executive.

         19. Binding Effect, Assignment.

             (a) This  Agreement  shall be binding upon and inure to the benefit
of NPB and Bank,  and it shall be assignable to any  corporation,  bank or other
entity which may acquire NPB's or Bank's business or all or substantially all of
the  assets of NPB or Bank,  or with or into  which NPB or Bank may be merged or
consolidated, as provided in Section 19(b).

             (b) 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,  in which case a "Change in  Control"  (as  defined in Section  9(b))
shall be deemed to have occurred and Executive shall have the immediate right to
take the actions and receive the  payments  provided in Sections 8 and 9 hereof.
As  used in  this  Agreement,  "NPB"  and  "Bank"  shall  mean  NPB and  Bank as
previously  defined 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.

             (c) This  Agreement  shall be binding upon and inure to the benefit
of  Executive,  his personal  and legal  representatives,  heirs,  distributees,
devisees and assigns.  Notwithstanding the foregoing, the obligations and duties
of Executive  hereunder shall

                                       14
<PAGE>


be personal and not assignable or delegable by him in any manner whatsoever.

         20.  Exclusive  Benefit.  Neither  Executive,  his spouse nor any other
Designated Beneficiary shall have the 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-transferable.  If there is any attempted assignment or transfer, neither NPB
nor Bank  shall  have any  further  liability  hereunder.  The  interest  of any
beneficiary  in any  benefits  hereunder  shall not be  subject  to  attachment,
execution or sequestration for any debts, contracts,  obligations or liabilities
of any beneficiary and shall not be subject to pledge, assignment, conveyance or
attachment.

         21.  Unsecured  General  Creditor.  If NPB or  Bank  shall  acquire  an
insurance  policy  or  any  other  asset  in  connection  with  its  liabilities
hereunder,  neither Executive,  his spouse nor any other Designated  Beneficiary
shall have any right with respect to, or claimed  against,  such policy or other
asset.  Executive shall remain at all times an unsecured  general  creditor with
respect to any amount payable hereunder.

         22. Legal Fees and Expenses.  Employer shall pay all  reasonable  legal
fees and related expenses (including the costs of experts,  evidence and counsel
and expenses  included in connection with an arbitration or in other  litigation
or appeal)  incurred  by the  Executive  as a result of his seeking to obtain or
enforce any right or benefit  provided by any provision of this  Agreement,  but
only if  Executive's  efforts in seeking to obtain or enforce  any such right or
benefit are successful, and in the case of any provision of this Agreement other
than Section 9, not to exceed $10,000 in the aggregate in any calendar year.

         23. Exception for Across-the-Board Actions. If, during the term of this
Agreement, the Boards of Directors of NPB and NPBank shall determine,  acting in
good faith and with a reasonable basis, that it is in the best interests of NPB,
NPBank and NPB's  shareholders to implement one or more broad,  across-the-board
cost-cutting   measures   for  all   members   of   senior   management,   then,
notwithstanding  Sections  4 and 7,  Executive's  base  compensation  and  other
benefits  may be reduced in  accordance  with such  cost-cutting  measures  in a
manner  consistent  with any such reductions in base  compensation  and/or other
benefits for other senior officers generally.

         24. Notices. All notices or other communications  hereunder shall be in
writing and shall be deemed given upon  delivery if delivered  personally or two
business days after mailing if mailed by prepaid,  registered or certified mail,
return receipt requested, addressed as follows:



                                       15
<PAGE>

         If to NPB, to:

                  Board of Directors
                  National Penn Bancshares, Inc.
                  Reading and Philadelphia Avenues
                  Boyertown, PA  19512

                  Attention:  Chairman, Executive Committee

         If to Bank, to:

                  Board of Directors
                  National Penn Bank
                  Reading and Philadelphia Avenues
                  Boyertown, PA  19512

                  Attention:  Chairman, Executive Committee

         If to Executive, to:

                  Wayne R. Weidner
                  17 Lupine Lane
                  Oley, PA  19547

or to such other address as may have been  previously  furnished by the party to
the other by notice given in the manner provided herein.

         25.  Entire  Agreement.  This  Agreement  is intended by the parties to
constitute  and does  constitute  the entire  agreement  between  NPB,  Bank and
Executive  with respect to the  employment  of  Executive by NPB and Bank.  This
Agreement supersedes any and all prior agreements, understandings,  negotiations
and discussions of the parties, whether oral or written.

         26.  Amendment.  This  Agreement  may  be  amended,  modified,  waived,
discharged or terminated  only by an instrument in writing  signed by Executive,
an authorized  officer of NPB or an authorized  officer of Bank, as the case may
be, against whom or which  enforcement of the amendment,  modification,  waiver,
discharge or termination is sought.

         27. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic internal law of the Commonwealth of Pennsylvania.

         28. 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


                                       16
<PAGE>


remainder  of such  provision or the  remaining  provisions  of this  Agreement.
Without  limiting  the  generality  of the  foregoing,  if a court of  competent
jurisdiction shall determine that the time or geography provisions of Section 15
are not  reasonable,  then such  provision(s)  shall be reformed to reflect such
period  of time  or  geographical  areas  as the  court  shall  determine  to be
reasonable and enforceable.

         29.  Captions.  The  captions  contained  in  this  Agreement  are  for
reference purposes only and are not part of this Agreement.

         30.  Joint and Several  Obligations.  All  obligations  of NPB and Bank
herein shall be joint and several obligations.

         31. Survival.  Notwithstanding  any termination of this Agreement,  the
provisions of Sections 8, 9, 10, 11, 12, 14, 15, 16, 18 and 22 shall,  except as
otherwise expressly provided herein, survive such termination and remain in full
force and effect.

         32. Termination of Executive Supplemental Benefit Agreement.  Effective
concurrently  with the execution and delivery of this  Agreement,  the Executive
Supplemental  Benefit  Agreement dated December 27, 1989, as amended on February
23, 1994 and February 26, 1998,  among NPB, Bank and Executive is terminated and
of no further force and effect.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on
the date first above written.

                                                  NATIONAL PENN BANCSHARES, INC.


                                           By:/s/ Kenneth A. Longacre
                                                 --------------------------
                                                 Kenneth A. Longacre,
                                                 Chairman, Executive Committee



                                                  NATIONAL PENN BANCSHARES, INC.


                                           By:/s/ Kenneth A. Longacre
                                                 --------------------------
                                                 Kenneth A. Longacre,
                                                 Chairman, Executive Committee


Witness: /s/Sandra L. Spayd                By:/s/ Wayne R. Weidner
          ---------------------                   -----------------
            Sandra L. Spayd                       Wayne R. Weidner


                                       17
<PAGE>


                                                                     EXHIBIT "A"
                                                                     -----------
                          BENEFICIARY DESIGNATION FORM
                          ----------------------------

         I hereby  designate the following  person(s)  and/or  entity(ies) as my
"Designated  Beneficiary"  (as defined in Section 8 of that  certain  Employment
Agreement dated as of January 22, 2003,  among National Penn  Bancshares,  Inc.,
National Penn Bank and Wayne R. Weidner (the "Agreement")):

         Name, Address and Social
         Security No. (or Tax I.D. No.)     Percent Interest
         ------------------------------     ----------------

         _______________________                __________
         _______________________
         _______________________


         _______________________                __________
         _______________________
         _______________________


         ______________________                 __________
         _______________________
         _______________________

         _______________________                __________
         _______________________
         _______________________








--------------------------                   -----------------------------------
       Date                                           Wayne R. Weidner








--------------------------------------------------------------------------------
TO BE COMPLETED BY CORPORATE SECRETARY'S OFFICE ONLY


--------------------------                   -----------------------------------
Date filed with Corporate                             Authorized Signature
Secretary's Office


</TEXT>
</DOCUMENT>
