DNB 8K
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
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Date
of Report (Date of Earliest Event Reported):
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September
27, 2006
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__________________________________________
(Exact
name of registrant as specified in its charter)
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Pennsylvania
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0-16667
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23-2222567
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_____________________
(State
or other jurisdiction
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_____________
(Commission
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______________
(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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4
Brandywine Avenue, Downingtown, Pennsylvania
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19335
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_________________________________
(Address
of principal executive offices)
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___________
(Zip
Code)
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Registrant’s
telephone number, including area code:
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(610)
269-1040
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Not
Applicable
______________________________________________
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:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] 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))
On
September 27, 2006, the Board of Directors of DNB Financial Corporation
(“DNB”) approved deferred compensation plans for DNB’s non-employee directors
and for certain senior executives of DNB. The plans are known as the Deferred
Compensation Plan for Directors of DNB Financial Corporation (the “Directors
Plan”) and the DNB Financial Corporation Deferred Compensation Plan (the
“Officers Plan”). Each of the plans was adopted subject to the terms of the DNB
Financial Corporation Incentive Equity and Deferred Compensation Plan adopted
effective November 24, 2004 (the “Omnibus Plan”) (the Omnibus Plan, Directors
Plan and Officers Plan are sometimes referred to collectively as the “Plans”).
DNB’s
non-employee directors are eligible to participate in the Directors Plan and
DNB’s executive officers at the level of senior vice president and above are
eligible to participate in the Officers Plan. The Directors Plan permits a
non-employee director of DNB or any of its direct or indirect subsidiaries
to
defer all or a portion of the compensation otherwise payable in cash or DNB
stock to the director for his or her services as a member of the board of DNB
or
a subsidiary and committees thereof. The Officers Plan permits an eligible
officer to elect to defer up to fifty percent (50%) of the regular salary
otherwise payable in cash to the eligible officer and all or a portion of any
annual or other periodic bonus otherwise payable in cash or DNB stock to the
eligible officer. Each election is subject to and must be made in accordance
with the terms of the respective Plans. Deferred amounts will be payable
on the date or dates selected by each participant in accordance with the terms
of the applicable Plans or on such other date or dates as specified in the
applicable Plans. The Plans permit the board of directors or administering
committee to authorize distribution of all or a portion of a participant’s
deferred compensation account in advance of the elected deferral date upon
request of the participant if the board of directors or administering committee
determines that the participant has experienced an unforeseeable emergency,
within the meaning of Section 409A of the Internal Revenue Code.
When
compensation that has been deferred in accordance with the applicable Plans
would otherwise have been payable to a director or officer, DNB will credit
the
amount of the deferred compensation to a deferred compensation account for
the
director or officer. As to compensation that would otherwise have been payable
in DNB stock, the amount subject to a deferral election will not be credited
to
the participant’s deferred compensation account until it vests pursuant to any
vesting conditions that may be applicable to the DNB stock grant.
On
the
last business day of each calendar month, DNB will transfer to the rabbi trust
referred to below and allocate to the participants’ deferred compensation
accounts (i) at least that number of shares of DNB common stock having a fair
market value equal to 110% of the amount of cash compensation the director
or
officer has elected to defer; and (ii) that number of shares of DNB stock
granted to the participant in which the participant has vested during the month
and to which a deferral election applies. For purposes of calculating the number
of shares of DNB stock to be credited on account of cash compensation that
is
deferred, the “fair market value” of the stock will be the average of the mean
between the bid and the asked price for the stock at the close of trading for
the trading day immediately preceding the last business day of the calendar
month. Cash dividends deemed to be paid with respect to the stock in each
deferred compensation account shall also be allocated to the director’s or
officer’s deferred compensation account and immediately reinvested in additional
shares of DNB common stock in accordance with the same procedures and valuation
provisions as are applicable under DNB’s dividend reinvestment plan from time to
time.
Participants
may not reallocate deferred amounts into any form other than DNB stock or stock
for which DNB stock may hereafter be exchanged in accordance with the applicable
Plans. The Omnibus Plan makes provisions with respect to adjustment of shares
allocated to participants’ deferred compensation accounts in circumstances
involving increases or decreases in the number of issued shares of DNB common
stock, mergers or consolidations, other transactions such as dissolution or
sale
of assets of DNB, and other changes in the capitalization of or corporate
changes with respect to DNB. Upon distribution, the amount in each director’s or
officer’s deferred compensation account will be paid in shares of DNB common
stock or stock for which DNB stock may hereafter be exchanged in accordance
with
the applicable Plans. The Plans provide that, without the express, written
consent of the board or the administering committee, the shares of DNB stock
to
be issued on distribution may
not
be sold, hypothecated or otherwise transferred for a period of one (1) year
from
the date of distribution.
In
connection with the Plan, DNB has created a nonqualified grantor trust, commonly
known as a “Rabbi Trust.” The assets of the trust will be used to pay
participants’ benefits under the Plans. From time to time but in no event
less frequently than monthly, DNB will contribute to the trust the amounts
DNB
is obligated to credit to each participant’s deferred compensation account.
However, assets cannot be set aside in the Rabbi Trust to fund nonqualified
deferred compensation for any individual subject to Section 16(a) the 34 Act
during any restricted period with respect to a defined benefit pension plan
maintained by DNB or a member of the same controlled group as DNB. For this
purpose, a “restricted period” exists with respect to a defined benefit pension
plan (a) at any time while the employer sponsoring the defined benefit pension
plan is in bankruptcy, (b) at any time beginning six months before and ending
six months after the date the defined benefit pension plan is terminated in
an
involuntary or distress termination (per PBGC procedures), or (c) during any
period in which the defined benefit pension plan is in "at risk status" within
the meaning of the new pension funding rules enacted as part of the Pension
Protection Act of 2006.
The
assets of the trust are subject to the claims of DNB’s general creditors. The
trust agreement provides that a participant’s rights or the rights of any other
person to receive payment under a Plan may not be sold, assigned, transferred,
pledged, mortgaged or otherwise encumbered, except that a participant may
designate a beneficiary to receive the balance of the participant’s deferred
compensation account upon the participant’s death. The initial trustee for the
trust will be DNB First, National Association, the wholly owned subsidiary
of
DNB. The trustee may change.
The
Plans
are currently administered by DNB’s full board of directors, but they may
hereafter be administered by a committee appointed by and serving at the
discretion of the board of directors if the committee meets certain criteria
set
forth in the Omnibus Plan.
DNB’s
board of directors reserves the right at any time to amend or terminate the
Plans in whole or in part, retroactively or prospectively, for any reason and
without the consent of any eligible director or employee, any participant or
any
beneficiary. However, no amendment may adversely affect the rights of a director
or employee or his or her beneficiary with respect to amounts credited to the
director’s or employee’s deferred compensation account prior to such amendment
or alter the timing of distribution of any director’s or employee’s deferred
compensation account. The trust is irrevocable and provides that it shall not
terminate until the date on which the participants and their beneficiaries
are
no longer entitled to benefits pursuant to the terms of the Plans (as certified
to the trustee by DNB).
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.
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DNB
Financial Corporation
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October
3, 2006
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By:
/s/
Bruce E. Moroney
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Name:
Bruce E. Moroney |
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Title:
Executive Vice President and Chief Financial Officer
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