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

Date of Report (Date of Earliest Event Reported):
 
 November 15, 2017
 


 
DNB Financial Corporation
(Exact name of registrant as specified in its charter)
__________________________________________

Pennsylvania
1-34242
23-2222567
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
     
 
4 Brandywine Avenue
 Downingtown, Pennsylvania 19335
 
 
(Address of principal executive offices, including zip code)
 
     
 
(610) 269-1040
 
 
(Registrant's telephone number, including area code)
 
     
 
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:

☐   W ritten 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 


 
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 15, 2015, the Board of Directors of DNB Financial Corporation (the "Company") approved, and the Company and DNB First, National Association entered into, an Amendment to Change of Control Agreement with each of William J. Hieb, the Company's President and Chief Executive Officer, and Gerald F. Sopp, the Company's Executive Vice President, Chief Financial Officer and Secretary (each, an "Amended Change of Control Agreement" and together, the "Amended Change of Control Agreements").

Mr. Hieb's and Mr. Sopp's existing agreements obligate the Company to pay each of them, upon a termination of their employment in connection with a "change in control" (as defined in their agreements), either by the Company other than for "cause" (as defined in their agreements), or by Mr. Hieb or Mr. Sopp for "good reason" (as defined in their agreements) a base severance in an in an amount equal to a designated multiple of each executive's total annual cash compensation (the elements of which are defined in their agreements).  The Amended Change of Control Agreements adjust Mr. Hieb's designated multiple from 2.00 to 3.00, and Mr. Sopp's designated multiple from 1.50 to 2.50. The Amended Change of Control Agreements also eliminate the provisions of their existing agreements that would operate to limit their severance payments to the extent that the payments, either alone or together with other payments they would have the right receive from the Company that would constitute "parachute payments" under Section 280G of the Internal Revenue Code, would result in the imposition of the excise tax imposed by Section 4999 of the Internal Revenue Code.

Also on November 15, 2015, the Board of Directors of DNB Financial Corporation (the "Company") approved, and the Company entered into, an Amendment to Restricted Stock Award Agreements with each of Mr. Hieb and Mr. Sopp (each, an "Amended Restricted Stock Award Agreement" and together, the "Amended Restricted Stock Award Agreements"). The Amended Restricted Stock Award Agreements provide for the acceleration of the vesting date of grants previously made to Mr. Hieb (9,800 shares) and Mr. Sopp (7,600 shares).  Pursuant to the Amended Restricted Stock Award Agreements, those shares became immediately vested as of November 15, 2017.

The foregoing descriptions of the Amended Change of Control Agreements and Amended Restricted Stock Award Agreements are qualified in their entirety by reference to the Amended Change of Control Agreement and Amended Restricted Stock Award Agreement with respect to Mr. Hieb, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, and the Amended Change of Control Agreement and Amended Restricted Stock Award Agreement with respect to Mr. Sopp, copies of which are filed as Exhibits 10.3 and 10.4 to this Current Report on Form 8-K, and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed herewith:

  
 
 
Exhibit
No.
  
Description
 
 
10.1
 
 
10.2
 
 
10.3
 
 
10.4
 

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.

 
DNB Financial Corporation
 
 
November 17, 2017
By:
/s/ Gerald F. Sopp
 
 
Name: Gerald F. Sopp
 
 
Title: Chief Financial Officer and Executive Vice President

Exhibit Index

  
 
 
Exhibit
No.
  
Description
 
 
10.1
 
 
10.2
 
 
10.3
 
 
10.4
 


 
Exhibit 10.1
 

AMENDMENT TO CHANGE OF CONTROL AGREEMENT
FOR
WILLIAM J. HIEB

THIS AMENDMENT TO CHANGE OF CONTROL AGREEMENT dated as of November 15, 2017 (this "Amendment"), amends that certain Amended and Restated Change of Control Agreement dated December 20, 2006, as previously amended by Amendment to Change of Control Agreement dated December 16, 2009, and Amendment to Change in Control Agreement dated October 14, 2011 (as so amended, the "Agreement") by and among DNB FINANCIAL CORPORATION ("Holding Company"), DNB FIRST, NATIONAL ASSOCIATION, a national banking association with principal offices at 4 Brandywine Avenue, Downingtown, PA 19335 ("Bank") (Holding Company and Bank are sometimes referred to individually and collectively herein as the "Company") and William J. Hieb, an individual ("Executive").

Background

A. The Company and the Executive desire to amend the Agreement to make certain modifications to the severance payments to be received by the Executive in the event of a change in control.

C. The Boards of Directors of the Holding Company and the Bank have each approved this Agreement and it is intended to be maintained as part of the official records of the Holding Company and the Bank.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows:

1.  Definitions .  Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the respective meanings assigned thereto in the Agreement.

2.  Change to Base Severance Multiplier and Elimination of Golden Parachute Limitation .  Section 3(f)(I) is hereby revised to increase the multiplier for computing the Base Severance amount and to delete the last sentence of the first paragraph thereof.  As revised such first paragraph shall read as follows:

(I) Base Severance. A basic severance payment ("Base Severance") in an amount equal to: (X) the sum (herein called "Total Annual Cash Compensation") 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 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 under this Section (the "Base Element"), plus (II) the average of the aggregate 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 under this Section, 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 under this Section (the "Bonus Element"); multiplied by (Y) 3.00.  Such payment shall be made in a lump sum within one (1) calendar week following the date of termination, or, if later, at the earliest time permitted under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), subject to withholding by the Company as required by applicable law and regulations.

3.  Reaffirmation of Agreement as Amended; Conflicts .  All of the provisions of the Agreement, as amended by this Amendment, remain in full force and effect.  In the event that any express provision of the Agreement conflicts with any express provision of this Amendment, the express provisions of this Amendment shall control.  All references to the "Agreement" hereafter shall mean the Agreement as amended by this Amendment.

4.  Prior Agreements . There are no other agreements between Company and Executive regarding the subject matter of this Amendment. This Amendment is the entire agreement of the parties with respect to its subject matter and supersedes any and all prior or contemporaneous discussions, representations, understandings or agreements regarding its subject matter.

5.  Assigns and Successors . The rights and obligations of Company and Executive under this Amendment shall inure to the benefit of and shall be binding upon the successors and assigns of Company and Executive, respectively, provided, however, that Executive shall not assign or anticipate any of his rights hereunder, whether by operation of law or otherwise. For purposes of this Agreement, "Company" shall also refer to any successor to Holding Company or Bank, whether such succession occurs by merger, consolidation, purchase and assumption, sale of assets or otherwise.

IN WITNESS WHEREOF, the parties hereto have caused the due execution of this Agreement as of the date first set forth above.

Attest:
 
 
     
Holding Company:
DNB FINANCIAL CORPORATION
 
 
 
 
   
By:
Name:
Bruce E. Moroney   Name:
Gerald F. Sopp
Title:
Chief Accounting Officer    Title: 
Chief Financial Officer
         
Attest:
 
 
 
     
Bank
DNB FIRST, NATIONAL ASSOCIATION
 
 
 
 
     By:
 
Name: 
Bruce E. Moroney    Name:
Gerald F. Sopp
Title:
 Chief Accounting Officer    Title: 
Chief Financial Officer
         
Witness:
 
 
 
     Executive:
 
 
 
 
 
     
 
Print Name:
     Name:
William J. Hieb
       
Individually


Exhibit 10.2
 
AMENDMENT TO RESTRICTED STOCK AWARD AGREEMENTS
FOR
WILLIAM J. HIEB

THIS AMENDMENT TO RESTRICTED STOCK AWARD AGREEMENTS dated as of November 15, 2017 (this "Amendment"), amends the Restricted Stock Award Agreements dated December 17, 2014, December 16, 2015, February 9, 2016, and November 30 (individually, an "Agreement," and collectively, the "Agreements"), by and among DNB FINANCIAL CORPORATION ("Company") and William J. Hieb, an individual ("Grantee").

Background

A.  The Agreements provide for conditional grants, in the aggregate, of 9,800 shares of common stock of the Company, par value $1.00 per share, to the Grantee.

B.  The Company and the Grantee desire to amend each Agreement to accelerate the Vesting Date, as defined therein.

C.  The Board of Directors of the Company has approved this Amendment and it is intended to be maintained as part of the official records of the Company.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows:

1.  Definitions .  Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the respective meanings assigned thereto in the Agreements.

2.  Acceleration of Vesting Date .  Paragraph 2 of each Agreement is revised such that the Vesting Date with respect to the Award Shares shall be the date of this Amendment.  Accordingly, the Award Shares shall be transferred to the Grantee as soon as practicable hereafter in accordance with the terms of Paragraph 1 of each Agreement.

3.  Reaffirmation of Agreement as Amended; Conflicts .  All of the provisions of the Agreement, as amended by this Amendment, remain in full force and effect.  In the event that any express provision of the Agreement conflicts with any express provision of this Amendment, the express provisions of this Amendment shall control.  All references to the "Agreement" hereafter shall mean the Agreement as amended by this Amendment.

4.  Prior Agreements . There are no other agreements between Company and the Grantee regarding the subject matter of this Amendment.  This Amendment is the entire agreement of the parties with respect to its subject matter and supersedes any and all prior or contemporaneous discussions, representations, understandings or agreements regarding its subject matter.

5.  Assigns and Successors . The rights and obligations of Company and Grantee under this Amendment shall inure to the benefit of and shall be binding upon the successors and assigns of Company and Grantee, respectively, provided, however, that Grantee shall not assign or anticipate any of his rights hereunder, whether by operation of law or otherwise. For purposes of this Agreement, "Company" shall also refer to any successor to Company, whether such succession occurs by merger, consolidation, purchase and assumption, sale of assets or otherwise.

IN WITNESS WHEREOF, the parties hereto have caused the due execution of this Agreement as of the date first set forth above.

Attest:
 
 
 
 
 
  		 
Company:
DNB FINANCIAL CORPORATION
 
 
 
 
   
By:
 
Name:
Bruce E. Moroney   Name: Gerald F. Sopp
Title: 
Chief Accounting Officer   Title: Chief Financial Officer
         
Witness:
 
 
   
Grantee:
 
 
 
         
Print Name:
    Name: William J. Hieb
       
Individually


Exhibit 10.3
 
AMENDMENT TO CHANGE OF CONTROL AGREEMENT
FOR
GERALD F. SOPP

THIS AMENDMENT TO CHANGE OF CONTROL AGREEMENT dated as of November 15, 2017 (this "Amendment"), amends that certain Change of Control Agreement dated March 28, 2007, as previously amended by Amendment to Change of Control Agreement dated December 16, 2009, Amendment to Change in Control Agreement dated October 14, 2011, and Amendment to Change in Control Agreement dated December 19, 2012 (as so amended, the "Agreement") by and among DNB FINANCIAL CORPORATION ("Holding Company"), DNB FIRST, NATIONAL ASSOCIATION, a national banking association with principal offices at 4 Brandywine Avenue, Downingtown, PA 19335 ("Bank") (Holding Company and Bank are sometimes referred to individually and collectively herein as the "Company") and Gerald F. Sopp, an individual ("Executive").

Background

A. The Company and the Executive desire to amend the Agreement to make certain modifications to the severance payments to be received by the Executive in the event of a change in control.

C. The Boards of Directors of the Holding Company and the Bank have each approved this Agreement and it is intended to be maintained as part of the official records of the Holding Company and the Bank.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows:

1.  Definitions .  Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the respective meanings assigned thereto in the Agreement.

2.  Change to Base Severance Multiplier and Elimination of Golden Parachute Limitation .  Section 3(f)(I) is hereby revised to increase the multiplier for computing the Base Severance amount and to delete the last sentence of the first paragraph thereof.  As revised such first paragraph shall read as follows:

(I) Base Severance. A basic severance payment ("Base Severance") in an amount equal to: (X) the sum (herein called "Total Annual Cash Compensation") 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 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 under this Section (the "Base Element"), plus (II) the aggregate cash bonuses that have been earned by the Executive during the most recent fiscal year of the Company ended prior to the time the Executive becomes entitled to severance payments under this Section, 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 under this Section (the "Bonus Element"); multiplied by (Y) 2.50.  Such payment shall be made in a lump sum within one (1) calendar week following the date of termination, or, if later, at the earliest time permitted under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), subject to withholding by the Company as required by applicable law and regulations.

3.  Reaffirmation of Agreement as Amended; Conflicts .  All of the provisions of the Agreement, as amended by this Amendment, remain in full force and effect.  In the event that any express provision of the Agreement conflicts with any express provision of this Amendment, the express provisions of this Amendment shall control.  All references to the "Agreement" hereafter shall mean the Agreement as amended by this Amendment.

4.  Prior Agreements . There are no other agreements between Company and Executive regarding the subject matter of this Amendment. This Amendment is the entire agreement of the parties with respect to its subject matter and supersedes any and all prior or contemporaneous discussions, representations, understandings or agreements regarding its subject matter.

5.  Assigns and Successors . The rights and obligations of Company and Executive under this Amendment shall inure to the benefit of and shall be binding upon the successors and assigns of Company and Executive, respectively, provided, however, that Executive shall not assign or anticipate any of his rights hereunder, whether by operation of law or otherwise. For purposes of this Agreement, "Company" shall also refer to any successor to Holding Company or Bank, whether such succession occurs by merger, consolidation, purchase and assumption, sale of assets or otherwise.

IN WITNESS WHEREOF, the parties hereto have caused the due execution of this Agreement as of the date first set forth above.

Attest:
 
 
 
 
 
Holding Company:
DNB FINANCIAL CORPORATION
 
 
 
     
By:
 
Name:
Bruce E. Moroney
 
Name:
William J. Hieb
Title:
Chief Accounting Officer
 
Title:
President and CEO
         
Attest:
 
 
 
 
 
Bank
DNB FIRST, NATIONAL ASSOCIATION
 
 
 
     
By:
 
Name:
Bruce E. Moroney
 
Name:
William J. Hieb
Title:
Chief Accounting Officer
 
Title:
President and CEO
         
Witness:
 
 
 
 
Executive:
 
         
Print Name:
   
Name:
Gerald F. Sopp
     
Individually 
         
         

 
Exhibit 10.4
 

AMENDMENT TO RESTRICTED STOCK AWARD AGREEMENTS
FOR
GERALD F. SOPP

THIS AMENDMENT TO RESTRICTED STOCK AWARD AGREEMENTS dated as of November 15, 2017 (this "Amendment"), amends the Restricted Stock Award Agreements dated December 17, 2014, December 16, 2015, February 9, 2016, and November 30 (individually, an "Agreement," and collectively, the "Agreements"), by and among DNB FINANCIAL CORPORATION ("Company") and Gerald F. Sopp, an individual ("Grantee").

Background

A.  The Agreements provide for conditional grants, in the aggregate, of 7,600 shares of common stock of the Company, par value $1.00 per share, to the Grantee.

B.  The Company and the Grantee desire to amend each Agreement to accelerate the Vesting Date, as defined therein.

C.  The Board of Directors of the Company has approved this Amendment and it is intended to be maintained as part of the official records of the Company.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows:

1.  Definitions .  Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the respective meanings assigned thereto in the Agreements.

2.  Acceleration of Vesting Date .  Paragraph 2 of each Agreement is revised such that the Vesting Date with respect to the Award Shares shall be the date of this Amendment.  Accordingly, the Award Shares shall be transferred to the Grantee as soon as practicable hereafter in accordance with the terms of Paragraph 1 of each Agreement.

3.  Reaffirmation of Agreement as Amended; Conflicts .  All of the provisions of the Agreement, as amended by this Amendment, remain in full force and effect.  In the event that any express provision of the Agreement conflicts with any express provision of this Amendment, the express provisions of this Amendment shall control.  All references to the "Agreement" hereafter shall mean the Agreement as amended by this Amendment.

4.  Prior Agreements . There are no other agreements between Company and the Grantee regarding the subject matter of this Amendment.  This Amendment is the entire agreement of the parties with respect to its subject matter and supersedes any and all prior or contemporaneous discussions, representations, understandings or agreements regarding its subject matter.

5.  Assigns and Successors . The rights and obligations of Company and Grantee under this Amendment shall inure to the benefit of and shall be binding upon the successors and assigns of Company and Grantee, respectively, provided, however, that Grantee shall not assign or anticipate any of his rights hereunder, whether by operation of law or otherwise. For purposes of this Agreement, "Company" shall also refer to any successor to Company, whether such succession occurs by merger, consolidation, purchase and assumption, sale of assets or otherwise.

IN WITNESS WHEREOF, the parties hereto have caused the due execution of this Agreement as of the date first set forth above.

Attest:
 
 
 
 
 
Company:
DNB FINANCIAL CORPORATION
 
 
 
     
By:
 
Name:
Bruce E. Moroney
 
Name:
William J. Hieb
Title:
Chief Accounting Officer
 
Title:
President and CEO
         
         
Witness:
 
 
 
 
Grantee:
 
         
Print Name:
   
Name:
Gerald F. Sopp
     
Individually