Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
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(a)
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On
December 20, 2006, the registrant (“DNB”) and its wholly owned subsidiary,
DNB First, National Association (the “Bank”) (collectively, the "Company")
entered into a change in control agreement with Albert J. Melfi,
Jr., in
connection with his appointment as the Company's Executive Vice
President
and Chief Lending Officer. Except for the factor by which Mr. Melfi’s base
severance is calculated from total annual compensation, and the
period for
which DNB agrees to pay medical benefits for Mr. Melfi, his Change
of
Control Agreement is on substantially the same terms as the Change
of
Control Agreements for the other executive officers of DNB and
the
Bank.
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The
agreement obligates the Company to pay Mr. Melfi, upon a termination of his
employment with the Company after a “change in control” (as defined in the
agreement), either by the Company other than for “cause” (as defined in the
agreement), or by him for “good reason” (as defined in the agreement), “Base
Severance” in an amount equal to 1.5 times his “Total Annual Cash Compensation.”
The agreement defines his “Total Annual Cash Compensation as the sum of two
elements: (I) the aggregate amount of (i) salary, (ii) the Company’s cash
contribution toward the cost of medical, life, disability and health insurance
benefits, and (iii) employer contributions (whether or not matching) under
the
Company’s qualified defined contribution retirement plans, that was payable to
or for the benefit of Mr. Melfi at any time during the most recent full fiscal
year of the Company ended prior to the time Mr. Melfi becomes entitled to
severance payments (the “Base Element”), plus (II) the aggregate cash bonuses
that have been earned by Mr. Melfi for performance by Mr. Melfi during the
most
recent fiscal year of the Company ended prior to the time Mr. Melfi becomes
entitled to severance payments, but any bonus shall only be included in the
foregoing to the extent it has been finally approved and fixed as to amount
at
the time Mr. Melfi becomes entitled to severance payments (the “Bonus Element”).
These payments are subject to withholding of applicable taxes. In addition,
in
such event, the agreement provides that the Company will pay for one (1)
year’s
medical insurance coverage on the same terms available to other employees
from
time to time.
The
agreement defines a “change in control” as any one or more of the following: (1)
a change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the
Securities Exchange Act of 1934 (the "Exchange Act")(or any successor provision)
as it may be amended from time to time; (2) any "persons" (as such term is
used
in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
written above), other than DNB or the Bank or any "person" who on the date
hereof is a director of officer of DNB or the Bank, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of DNB or the Bank representing 25% or more
of the
combined voting power of Company's or Bank's then outstanding securities;
(3)
during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of DNB or the Bank cease
for
any reason to constitute at least a majority thereof, unless the election
of
each director who was not a director at the beginning of such period has
been
approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the period;
or
(4) the signing of a letter of intent or a formal acquisition or merger
agreement between DNB or the Bank, of the one part, and a third party which
contemplates a transaction which would result in a "change of control" of
the
type described in clauses (1), (2) or (3) of this sentence, but only if the
letter of intent or agreement, or the transaction contemplated thereby, has
not
been canceled or terminated at the time employment terminates. The agreement
defines termination for “cause” as termination for personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, conviction of a felony, suspension or removal from office or prohibition
from participation in the conduct of DNB's or Bank's affairs pursuant to
a
notice or other action by any Regulatory Agency, or willful violation of
any
law, rule or regulation or final cease-and-desist order which in the reasonable
judgment of the Board of Directors of the Company will probably cause
substantial economic damages to the Company, willful or intentional breach
or
neglect by Mr. Melfi of his duties, or material breach of any material provision
of this Agreement. For purposes of this paragraph, no act, or failure to
act on
Mr. Melfi's part shall be considered "willful" unless done, or omitted to
be
done, by him without good faith and without reasonable belief that this action
or omission was in the best interest of Company; provided that any act or
omission to act by Mr. Melfi in reliance upon an approving opinion of counsel
to
the Company or counsel to Mr. Melfi shall not be deemed to be willful. The
terms
"incompetence" and "misconduct" shall be defined with reference to standards
generally prevailing in the banking industry. In determining incompetence
and
misconduct, Company shall have the burden of proof with regard to the acts
or
omission of Mr. Melfi and the standards prevailing in the banking industry.
Mr.
Melfi shall be deemed to have "good reason" for terminating his employment
under
the Agreement if Mr. Melfi terminates such employment within two (2) years
after
the occurrence of any one or more of the following events without his express
written consent, but only if the event occurs within two (2) years after
a
"change in control" (as defined in the agreement): (i) the assignment to
Mr.
Melfi of any duties inconsistent with Mr. Melfi's positions, duties,
responsibilities, titles or offices with Bank or DNB as in effect immediately
prior to a change in control of Bank or DNB, (ii) any removal of Mr. Melfi
from,
or any failure to re-elect Mr. Melfi to, any of such positions, except in
connection with a termination or suspension of employment for cause, disability,
death or retirement, (iii) a reduction by DNB or the Bank in Mr. Melfi's
base
annual salary, bonus and/or benefits as in effect immediately prior to a
change
in control or as the same may be increased from time to time thereafter,
or the
failure to grant periodic increases in Mr. Melfi's base annual salary on
a basis
at least substantially comparable to the lowest periodic increase granted
to
other officers of the Company having the title of senior vice president or
above, or (iv) any purported termination of Mr. Melfi's employment with Bank
or
DNB when "cause" (as defined in this Agreement) for such termination does
not
exist, or (v) a relocation of Mr. Melfi’s workplace outside of Chester County.
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(b)
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On
December 20, 2006, the Company’s Board of Directors approved an amendment
and restatement to the existing Change of Control Agreement between
the
Company and William S. Latoff, the Chairman and Chief Executive
Officer of
DNB and the Bank. The amended and restated agreement amends his
existing
Change of Control Agreement in the following significant respects:
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(1) The
base
upon which Mr. Latoff’s severance is calculated has been changed from his most
recent annual salary as of the time of termination to the sum of two elements:
(I) the aggregate amount of (i) salary, (ii) the Company’s cash contribution
toward the cost of medical, life, disability and health insurance benefits,
and
(iii) employer contributions (whether or not matching) under the Company’s
qualified defined contribution retirement plans, that was payable to or for
the
benefit of Mr. Latoff at any time during the most recent full fiscal year
of the
Company ended prior to the time Mr. Latoff becomes entitled to severance
payments (the “Base Element”), plus (II) the average of the aggregate annual
cash bonuses that have been earned by Mr. Latoff for performance by Mr. Latoff
during each of the three (3) most recent fiscal years of the Company ended
prior
to the time Mr. Latoff becomes entitled to severance payments, but any bonus
shall only be included in the foregoing average to the extent it has been
finally approved and fixed as to amount at the time Mr. Latoff becomes entitled
to severance payments (the “Bonus Element”).
(2) If,
as a
result of payments provided for under the agreement, together with all other
payments in the nature of compensation provided to or for the benefit of
Mr.
Latoff under any other plans or agreements in connection with a Change in
Control, Mr. Latoff becomes subject to excise taxes under Section 4999 of
the
Code, then, in addition to any other benefits provided under or pursuant
to the
Agreement or otherwise, the Company will be obligated to pay to Mr. Latoff
at
the time any such payments are made under or pursuant to this or other plans
or
agreements, an amount equal to the amount of such excise taxes (this is referred
to in the Agreement as the “Parachute Tax Reimbursement”). In addition, the
Company shall “gross up” any Parachute Tax Reimbursement by paying to Mr. Latoff
at the same time an additional amount equal to the aggregate amount of any
additional taxes (whether income taxes, excise taxes, special taxes, employment
taxes or otherwise, and whether Federal, state or local) that are or will
be
payable by Mr. Latoff as a result of the Parachute Tax Reimbursement being
paid
or payable to Mr. Latoff and as a result of such additional amounts paid
or
payable to Mr. Latoff for the Parachute Tax Reimbursement or its gross-up,
such
that after payment of such additional taxes Mr. Latoff shall have been paid
on a
net, after-tax basis an amount equal to the Parachute Tax Reimbursement.
The
amount of the gross-up described in the immediately preceding sentence shall
be
computed on the assumption that Mr. Latoff shall be subject to each applicable
tax at the highest marginal rate of such tax. The amount of any Parachute
Tax
Reimbursement and any gross-up is to be determined by a registered public
accounting firm selected by the Compensation Committee of the Board of Directors
of the Company, whose determination, absent manifest error, shall be treated
as
conclusive and binding absent a binding determination by a governmental
authority that a greater or lesser amount of taxes is payable by Mr. Latoff.
If
the Parachute Tax Reimbursement and a gross-up are provided for Mr. Latoff
pursuant to one or more other plans or agreements in addition to this Agreement,
they shall be provided only once.
(3) Events
which, under the agreement, would be a basis for Mr. Latoff to resign with
“good
reason” after a “change in control” and hence be eligible for severance under
the agreement have been modified to include the following in addition to
the
others specified in the agreement: (a) a reduction by DNB or the Bank in
Mr.
Latoff’s base annual salary, bonus and/or benefits as in effect immediately
prior to a change in control or as the same may be increased from time to
time
thereafter, or the failure to grant periodic increases in Mr. Latoff’s base
annual salary on a basis at least substantially comparable to the lowest
periodic increase granted to other officers of DNB having the title of executive
vice president or above, and (b) a relocation of Executive’s workplace outside
of Chester County.
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(c)
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On
December 20, 2006, the Company’s Board of Directors approved an amendment
and restatement to the existing Change of Control Agreement between
the
Company and William J. Hieb, the President and Chief Operating
Officer of
DNB and the Bank. The amended and restated agreement amends his
existing
Change of Control Agreement in the following significant respects:
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(1) The
base
upon which Mr. Hieb’s severance is calculated has been changed from his most
recent annual salary as of the time of termination to the sum of two elements:
(I) the aggregate amount of (i) salary, (ii) the Company’s cash contribution
toward the cost of medical, life, disability and health insurance benefits,
and
(iii) employer contributions (whether or not matching) under the Company’s
qualified defined contribution retirement plans, that was payable to or for
the
benefit of Mr. Hieb at any time during the most recent full fiscal year of
the
Company ended prior to the time Mr. Hieb becomes entitled to severance payments
(the “Base Element”), plus (II) the aggregate cash bonuses that have been earned
by the executive for performance by the executive during the most recent
fiscal
year of the Company ended prior to the time the executive becomes entitled
to
severance payments, but any bonus shall only be included in the foregoing
to the
extent it has been finally approved and fixed as to amount at the time the
executive becomes entitled to severance payments (the “Bonus
Element”).
(2) Events
which, under the agreement, would be a basis for Mr. Hieb to resign with
“good
reason” after a “change in control” and hence be eligible for severance under
the agreement have been modified to include the following in addition to
the
others specified in the agreement: (a) a reduction by DNB or the Bank in
Mr.
Hieb’s base annual salary, bonus and/or benefits as in effect immediately prior
to a change in control or as the same may be increased from time to time
thereafter, or the failure to grant periodic increases in Mr. Hieb’s base annual
salary on a basis at least substantially comparable to the lowest periodic
increase granted to other officers of DNB having the title of executive vice
president or above, and (b) a relocation of Executive’s workplace outside of
Chester County.
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(d)
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On
December 20, 2006, the Company’s Board of Directors approved amendments
and restatements to the existing Change of Control Agreements between
the
Company and the following respective executive officers of DNB
and the
Bank: Bruce E. Moroney, the Company’s Executive Vice President and Chief
Financial Officer; Ronald K. Dankanich, the Company’s Executive Vice
President of Operations; Richard J. Hartmann, the Company’s Executive Vice
President of Retail Banking; and C. Tomlinson Kline III, the Company’s
Senior Vice President and Chief Credit Officer. The amended and
restated
agreement amends his existing Change of Control Agreement in the
following
significant respects:
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(1) The
base
upon which the executive’s severance is calculated has been changed from his
most recent annual salary as of the time of termination to the sum of two
elements: (I) the aggregate amount of (i) salary, (ii) the Company’s cash
contribution toward the cost of medical, life, disability and health insurance
benefits, and (iii) employer contributions (whether or not matching) under
the
Company’s qualified defined contribution retirement plans, that was payable to
or for the benefit of the executive at any time during the most recent full
fiscal year of the Company ended prior to the time the executive becomes
entitled to severance payments (the “Base Element”), plus (II) the average of
the aggregate annual cash bonuses that have been earned by the executive
for
performance by the executive during each of the two (2) most recent fiscal
years
of the Company ended prior to the time the executive becomes entitled to
severance payments, but any bonus shall only be included in the foregoing
average to the extent it has been finally approved and fixed as to amount
at the
time the executive becomes entitled to severance payments (the “Bonus
Element”).
(2) Events
which, under the agreement, would be a basis for the executive to resign
with
“good reason” after a “change in control” and hence be eligible for severance
under the agreement have been modified to include the following in addition
to
the others specified in the agreement: (a) a reduction by DNB or the Bank
in the
executive’s base annual salary, bonus and/or benefits as in effect immediately
prior to a change in control or as the same may be increased from time to
time
thereafter, or the failure to grant periodic increases in the executive’s base
annual salary on a basis at least substantially comparable to the lowest
periodic increase granted to other officers of DNB having the title of executive
vice president or above, and (b) a relocation of Executive’s workplace outside
of Chester County.
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(e)
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On
December 20, 2006, the registrant’s wholly owned subsidiary, DNB First,
National Association (the “Bank”) entered into a Marketing Services
Agreement (the “Agreement”) with TSG, Inc., a Pennsylvania business
corporation (the “Service Provider”) for which Eli Silberman, a Director
of Registrant, is the President and owner. The Agreement is for
a twelve
(12) month term ending December 31, 2007. The Agreement obligates
the Bank
to pay the Service Provider compensation of $30,000.00 for the
following
services: (a) Assist DNB with niche marketing, and the development
of
DNB’s Advisory Board Strategy; and (b) Assist DNB Management with creative
supervision and copywriting as needed for all advertising and
communications including, but not limited to, the Annual Report.
The
Agreement requires the Services Provider to produce the deliverables,
and
be consistent with, documented discussions between DNB and the
Service
Provider, and the services are to be subject to such performance
measures
for each stage of performance as the parties shall identify prior
to
commencement of each stage of services. This Agreement expires
on December
31, 2007, however it is terminable by either party upon sixty (60)
days
written notice.
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(f)
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On
December 20, 2006 the Board of Directors of the Company approved
an
increase in annual base salary for William S. Latoff, the Company's
Chairman and CEO, to $295,000, and an increase in the annual base
salary
for William J. Hieb, the Company’s President and COO, to $210,000,
respectively. Each salary increase will become effective January
1,
2007.
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(g)
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On
December 20, 2006, the Board of Directors of DNB Financial Corporation
approved a Supplemental Executive Retirement Plan (also known as
a SERP)
for its Chairman and Chief Executive Officer, William S. Latoff.
The
purpose of the SERP is to provide Mr. Latoff a pension supplement
beginning at age 70 for 10 years in approximately equal amounts
each year
and to compensate him for the loss of retirement plan funding
opportunities from his other business interests because of his
commitments
to DNB as Chairman and CEO. Mr. Latoff was age 55 when DNB hired
him as
Chairman and CEO. Pursuant to the SERP, DNB proposes to make annual
contributions of $70,000 prior to December 31 each year, commencing
in
2006, until 2018, the year in which Mr. Latoff turns age 70, for
a total
of 13 installments. These contributions will be funded under a
Trust
Agreement (also known as a rabbi trust) between DNB Financial Corporation,
as grantor, and its wholly owned subsidiary DNB First, National
Association, as trustee, which was also approved by the Board of
Directors
of DNB Financial Corporation on December 20, 2006. The SERP provides
that
the adoption of the plan shall not constitute an employment contract
between DNB and Mr. Latoff.
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Pursuant
to the SERP, DNB will direct the trustee to invest the assets of the trust
in
accordance with written investment directions provided from time to time
by Mr.
Latoff, or, after his death, the compensation committee of DNB’s Board of
Directors. Mr. Latoff or his beneficiary will be entitled to select from
a
variety of investment to be designated by DNB. The SERP provides that neither
DNB, the compensation committee, the trustee, nor their respective employees
and
agents shall be liable for any losses attributable to the investment selections
or changes to them, or a reasonable delay in implementing the selections
or
changes, or for investment selections made by the compensation committee
following his death. The SERP account will be credited monthly with earnings
or
losses on the balance of the SERP account since the preceding month in
accordance with the performance of the investments selected.
At
any
point in time, Mr. Latoff’s accrued benefit under the SERP will be his vested
interest in the balance of the SERP account. Initially, Mr. Latoff’s accrued
benefit is equal to 40% of the SERP account balance. Provided that he remains
employed continuously by DNB or the Bank through the following dates, he
will
become 60% vested in the SERP account on December 15, 2007, 80% vested on
December 15, 2008 and 100% vested on December 15, 2009. However, the SERP
provides that he will become 100% vested in the SERP account if his employment
with DNB or the Bank is terminated for reasons other than “Cause” (as defined in
the SERP), or if he terminates his employment for “Good Reason” (as defined in
the SERP) following a “Change in Control” (as defined in the SERP). He will also
become 100% vested in the SERP account if he terminates his employment for
Good
Reason following the signing of a letter of intent or a formal acquisition
or
merger agreement between DNB or the Bank, of the one part, and a third party
which contemplates a transaction that would result in a Change in Control,
but
only if the letter of intent or agreement, or the transaction it contemplates,
has not been canceled or terminated at the time of his termination for Good
Reason. If Mr. Latoff’s employment is terminated for Cause before payments
begin, he will forfeit his entire benefit and no payments will be made to
him or
his beneficiary. If his employment is terminated for Cause after payments
begin,
no further payments will be made to him or his beneficiary.
The
SERP
defines “Cause” as personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, conviction of a felony, suspension
or removal from office or prohibition from participation in the conduct of
DNB’s
or Bank’s affairs pursuant to a notice or other action by any regulatory agency
having jurisdiction over DNB or the Bank, or willful violation of any law,
rule
or regulation or final cease-and-desist order which in the reasonable judgment
of the Board of Directors will probably cause substantial economic damages
to
DNB, willful or intentional breach or neglect by Mr. Latoff of his duties,
or
material breach of any material provision of any agreement between DNB or
the
Bank and Mr. Latoff pertaining to his employment. For purposes of this
definition of “Cause,” no act, or failure to act on Mr. Latoff’s part shall be
considered “willful” unless done, or omitted to be done, by him without good
faith and without reasonable belief that this action or omission was in the
best
interest of Company; provided that any act or omission to act by Mr. Latoff
in
reliance upon an approving opinion of counsel to DNB or counsel to Mr. Latoff
shall not be deemed to be willful. The terms “incompetence” and “misconduct”
shall be defined with reference to standards generally prevailing in the
banking
industry. In determining incompetence and misconduct, Company shall have
the
burden of proof with regard to the acts or omission of Mr. Latoff and the
standards prevailing in the banking industry.
The
SERP
defines “Good Reason” as (a) the assignment to Mr. Latoff of any duties
inconsistent with Mr. Latoff’s positions, duties, responsibilities, titles or
offices with DNB or the Bank as in effect immediately prior to a Change in
Control, (b) any removal of Mr. Latoff from, or any failure to re-elect Mr.
Latoff to, any of such positions, except in connection with a termination
or
suspension of employment for Cause, disability, death or retirement, (c)
a
reduction by DNB or the Bank in Mr. Latoff’s base annual salary, bonus and/or
benefits as in effect immediately prior to a Change in Control or as the
same
may be increased from time to time thereafter, or the failure to grant periodic
increases in Mr. Latoff’s base annual salary on a basis at least substantially
comparable to the lowest periodic increase granted to other officers of DNB
having the title of executive vice president or above, (iv) any purported
termination of Mr. Latoff’s employment with DNB or the Bank when Cause does not
exist, or (v) a relocation of Mr. Latoff’s workplace outside of Chester County.
The
SERP
defines “Change in Control” as any one or more of the following three events
with respect to DNB or the Bank:
(1)
a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the “Exchange Act”) (or any successor provision) as it may
be amended from time to time.
(2)
any
“persons” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act
in effect on the date first written above), other than DNB or the Bank or
any
“person” who on the date hereof is a director of officer of DNB or the Bank, is
or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of DNB or the Bank representing
25%
or more of the combined voting power of Company’s or Bank’s then outstanding
securities.
(3)
during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of DNB or the Bank cease
for
any reason to constitute at least a majority thereof, unless the election
of
each director who was not a director at the beginning of such period has
been
approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the
period.
The
SERP
provides that, commencing on January 1, 2019, or as soon as practicable after
that date, Mr. Latoff’s accrued benefit under the SERP will be paid to him in
ten annual installments. The payments are to be made on those dates whether
or
not he is still employed by DNB or the Bank as of January 1, 2019. However,
no
later than January 1, 2018, he may elect in writing to defer receipt of the
installment payments and instead receive the benefit in a lump sum or in
two to
ten annual installments, commencing as of a date he specifies, provided that
no
deferred payment can be made earlier than January 1, 2024. If Mr. Latoff
dies
before January 1, 2019, his beneficiary may elect to receive the benefit
beginning on January 1, 2019, or as soon as practicable after that date,
in
either a single lump sum, or in annual installments over a period of up to
ten
years, or in a commercial annuity, but if a valid election is not made by
the
beneficiary, the payment will be in a single lump sum. All payments will
be
subject to all applicable Federal, state and local tax withholding requirements,
and other charges and assessments imposed by law.
Payments
under the SERP are to be grossed up to compensate Mr. Latoff for any “parachute
payment” excise taxes under Section 4999 of the Internal Revenue Code to which
he would otherwise be subjected if the payments under the SERP, together
with
any other payments to him or for his benefit would subject him to those taxes.
In addition, DNB will further compensate him for any additional taxes (whether
income taxes, excise taxes, special taxes, employment taxes or otherwise,
and
whether Federal, state or local) that he will have to pay as a result of
this
gross up reimbursement or taxes on it. The amount of the gross-up for additional
taxes on the parachute payment gross up reimbursement is to be computed on
the
assumption that he will be subject to each tax at the highest marginal rate.
The
SERP provides, however, that if another plan or agreement also provides for
a
reimbursement of these costs or taxes, only one reimbursement will be given
to
him. The excise tax and the gross-ups shall be computed by a registered public
accounting firm selected by the compensation committee.
DNB
may
amend the SERP at any time to the extent necessary to comply with any
requirement or limitation set forth in Section 409A of the Internal Revenue
Code
or its regulations, but otherwise DNB may amend it only with the express,
written consent of Mr. Latoff or his beneficiary.
While
the
trust agreement directs the trustee to cause any DNB stock held in the trust
to
be voted as Mr. Latoff directs, the SERP provides that neither Mr. Latoff
nor
his beneficiary shall have any right, title, or interest in or to any
investments which DNB may make to aid it in meeting its obligations under
the
SERP, all of which will continue to be unrestricted corporate assets. Further,
except as may otherwise be required by law, no amount payable at any time
under
the SERP is to be subject in any manner to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge, encumbrance
or
garnishment by creditors of Mr. Latoff or his beneficiary nor be subject
in any
manner to the debts or liabilities of any person, and it provides that any
attempt to do so alienate or subject any such amount, whether presently or
thereafter payable, shall be void. The trust agreement obligates the trustee
to
cease payment of benefits if DNB becomes insolvent, and it further provides
that
the assets of the trust will be subject to claims of general creditors of
DNB as
more fully provided in the trust agreement.
Except
as
the trust agreement otherwise provides, DNB will have no right or power to
direct the trustee to return any trust assets to DNB or to divert them to
others
before all payment of benefits has been made. However, DNB may direct the
trustee to transfer to DNB trust assets in an amount necessary to avoid
triggering taxable income to Mr. Latoff or a beneficiary if either of them
would
be required to recognize income tax on any funds if they remain in the
trust.
All
expenses of the trust, and any taxes that may be levied against the trust,
will
be paid by DNB, other than taxes required to be withheld from payments of
trust
assets to Mr. Latoff or his beneficiary. In the event that any trust assets
are
used to pay expenses or taxes of the trust, DNB is obligated to reimburse
the
trust.
Complete
copies of the SERP
and
rabbi trust agreement are filed herewith as Exhibits 99.1 and 99.2 respectively
and are incorporated herein as if set forth in full.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits. The following exhibits are furnished or filed herewith:
SIGNATURES
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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December
22, 2006
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By:
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/s/
Bruce E. Moroney |
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Name:
Bruce E, Moroney |
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Title:
Chief financial Officer and Executive VP |
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EXHIBIT
INDEX