NATIONAL PENN BANCSHARES, INC. CAPITAL ACCUMULATION PLAN
(Amended and Restated Effective January 1, 1997)
(Revised 2001)
Amendment No.7: Minimum Distribution Requirements
National Penn Bancshares, Inc (the "Company") adopted the National Penn
Bancshares, Inc. Capital Accumulation Plan (the "Plan "). The Company hereby
amends the Plan as required by the Internal Revenue Service to satisfy the
minimum distribution requirements of the Internal Revenue Code by addition of a
new Section 9A to the Plan to read as hereinafter set forth.
"9A. MINIMUM DISTRIBUTION REQUIREMENT
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(a) General Rules.
(i) Effective Date. The provisions of this section will apply
for purposes of determining required minimum distributions for calendar
years beginning with the 2003 calendar year.
(ii) Precedence. The provisions of this section will take
precedence over and supersede any inconsistent provisions of the Plan.
This section 9A shall be construed in a manner necessary to satisfy the
minimum distribution rules of the Code. Except for superseding
inconsistent provisions and addressing any matter related to minimum
required distributions not otherwise addressed in the Plan, the
distribution provisions of section 9 of the Plan shall control.
Notwithstanding the foregoing, in no event shall the provisions of this
section 9A be construed as making available any form of benefit
distribution not otherwise made available to a Member or beneficiary
under the Plan. Further, the forms of distribution the Plan permits
determined without regard to this section 9A shall remain the only
forms of benefit distribution available under the Plan.
(iii) Requirements of Treasury Regulations Incorporated. All
distributions required under this section will be determined and made
in accordance with the Treasury regulations under section 401(a)(9) of
the Code.
(b) Time and Manner of Distribution.
(i) Required Beginning Date. The Member's entire interest will
be distributed, or begin to be distributed, to the Member no later than
the Member's required beginning date, as defined in this section
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(ii) Death of Member Before Distributions Begin. If the Member
dies before distributions begin, the Member's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(A) If the Member's surviving spouse is the Member's
sole designated beneficiary, then distributions to the
surviving spouse will begin by December 31 of the calendar
year immediately following the calendar year in which the
Member died, or by December 31 of the calendar year in which
the Member would have attained age 70 1/2, if later.
(B)If the Member's surviving spouse is not the
Member's sole designated beneficiary, then distributions to
the designated beneficiary will begin by December 31 of the
calendar year immediately following the calendar year in which
the Member died.
(C)If there is no designated beneficiary as of
September 30 of the year following the year of the Member's
death, the Member's entire interest will be distributed by
December 31 of the calendar year containing the fifth
anniversary of the Member's death.
(D)If the Member's surviving spouse is the Member's
sole designated beneficiary and the surviving spouse dies
after the Member but before distributions to the surviving
spouse begin, this section 9A (b)(ii), other than section 9A
(b)(ii)(A), will apply as if the surviving spouse were the
Member.
For purposes of this section 9A (b)(ii) and section 9A (d) unless section
9A(b)(ii)(D) applies, distributions are considered to begin on the Member's
required beginning date. If section 9A(b)(ii)(D) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under section 9A (b)(ii)(A). If distributions under an
annuity purchased from an insurance company irrevocably commence to the
Member before the Member's required beginning date (or to the Member's
surviving spouse before the date distributions are required to begin to the
surviving spouse under section 9A(b)(ii)(A)), the date distributions are
considered to begin is the date distributions actually commence.
(iii) Forms of Distributions. Unless the Member's interest is
distributed in the form of an annuity purchased from an insurance
company or in a single sum on or before the required beginning date, as
of the first distribution calendar year distributions will be made in
accordance with sections (c) and (d) of this section 9A. If the
Member's interest is distributed in the form of an annuity purchased
from an insurance company, distributions thereunder will be made in
accordance with the requirement of section 401(a)(9) of the Code and
Treasury regulations.
(c) Required Minimum Distributions During Member's Lifetime.
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(i) Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the Member's lifetime, the minimum amount that will
be distributed for each distribution calendar year is the lesser of (A):
the quotient obtained by diving the Member's account balance by the
distribution period in the Uniform Lifetime Table set forth in section
1.401(a)(9)-9 of the Treasury regulations, using the Member's age as of the
Member's birthday in the distribution calendar year; or (B) if the Member's
sole designated beneficiary for the distribution calendar year is the
Member's spouse, the quotient obtained by dividing the Member's account
balance by the number in the Joint and Last Survivor Table set forth in
section 1.401(a)(9)-9 of the Treasury regulations, using the Member's and
spouse's attained ages as of the Member's and spouse's birthdays in the
distribution calendar year.
(ii) Lifetime Required Minimum Distributions Continue Through Year
of Member's Death. Required minimum distributions will be determined under
this section (c) beginning with the first distribution calendar year and up
to and including the distribution calendar year that included the Member's
date of death.
(d) Required Minimum Distributions After Member's Death.
(i) Death On or After Date Distributions Begin.
(A) Member Survived by Designated Beneficiary. If the Member
dies on or after the date distributions begin and there is a designed
beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Member' death is the
quotient obtained by dividing the Member's account balance by the
longer of the remaining life expectancy of the Member or the remaining
life expectancy of the Member's designated beneficiary, determined as
follows:
i. The Member's remaining life expectancy is calculated
using the age of the Member in the year of death,
reduced by one for each subsequent year.
ii. If the Member's surviving spouse is the Member's sole
designated beneficiary, the remaining life expectancy
of the surviving spouse is calculated for each
distribution calendar year after the year of the
Member's death using the surviving spouse's age as of
the spouse's birthday in that year. For distribution
calendar years after the year of the surviving spouse's
death, the remaining life expectancy of the surviving
spouse is calculated using the age of the surviving
spouse as of the spouse's birthday in the calendar year
of the spouse's death, reduced by one for each
subsequent calendar year.
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iii. If the Member's surviving spouse is not the Member's
designated beneficiary, the designated beneficiary's
remaining life expectancy is calculated using the age
of the beneficiary in the year following the year of
the Member's death, reduced by one for each subsequent
year.
(B) No Designated Beneficiary. If the Member dies on or after
the date distributions begin and there is no designated beneficiary as
of September 30 of the year after the year of the Member's death, the
minimum amount that will be distributed for each distribution calendar
year after the year of the Member's death is the quotient obtained by
dividing the Member's account balance by the Member's remaining life
expectancy calculated using the age of the Member in the year of death,
reduced by one for each subsequent year.
(ii) Death Before Date Distributions Begin.
(A) Member Survived by Designated Beneficiary. If the Member
dies before the date distributions begin and there is a designated
beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Member's death is the
quotient obtained by dividing the Member's account balance by the
remaining life expectancy of the Member's designated beneficiary,
determined as provided in section 9A(d)(i).
(B) No Designated Beneficiary. If the Member dies before the
date distributions begin and there is no designated beneficiary as of
September 30 of the year following the year of the Member's death,
distribution of the Member's entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of
the Member's death.
(C) Death of Surviving Spouse Before Distributions to
Surviving Spouse Are Required to Begin. If the Member dies before the
date distributions begin, the Member's surviving spouse is the Member's
sole designated beneficiary, and the surviving spouse dies before
distributions are required to begin to the surviving spouse under
section 9A(b)(ii), this section 9A(d)(ii) will apply as if the
surviving spouse were the Member.
(e) Definitions. Notwithstanding the general definition provisions of the
Plan, the following terms, when used in the section 9A, shall have the meaning
set forth below.
(i) Designated beneficiary. The individual who is designated as
the beneficiary under the general provisions of the Plan and is the
designated beneficiary under section 401(a)(9) of the Internal Revenue Code
and section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
(ii) Distribution calendar year. A calendar year for which a
minimum distribution is required. For distributions beginning before the
Member's death, the
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first distribution calendar year is the calendar year immediately preceding
the calendar year which contains the Member's required beginning date. For
distributions beginning after the Member's death, the first distribution
calendar year is the calendar year in which distributions are required to
begin under section 9A(b). The required minimum distribution for the
Member's first distribution calendar year will be made on or before the
Member's required beginning date. The required minimum distribution for
other distribution calendar years, including the required minimum
distribution for the distribution calendar year in which the Member's
required beginning date occurs, will be made on or before December 31 of
that distribution calendar year.
(iii). Life expectancy. Life expectancy as computed by use of
the Single Life Table in section 1.401(a)(9)-9 of the Treasury
regulations.
(iv) Member's account balance. The account balance as of the
last Valuation Date in the calendar year immediately preceding the
distribution calendar year (valuation calendar year) increased by the
amount of any contributions made and allocated or forfeitures allocated
to the account balance as of dates in the valuation calendar year after
the valuation date and decreased by distributions made in the valuation
calendar year after the valuation date. The account balance for the
valuation calendar year includes any amounts rolled over or transferred
to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the
valuation calendar year.
(v) Required beginning date. The latest date specified in
section 9(a) of the Plan on which the payment of benefits must
commence."
(f) Merged Plans. This Amendment No. 7 shall be deemed to be a part of
each plan merged with and into the Plan effective on or after January 1, 2003
..
EXECUTED this 17th day of December 2003.
NATIONAL PENN BANCSHARES, INC.
By: /s/ Sandra L. Spayd
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