DNB FINANCIAL CORPORATION

                                INCENTIVE EQUITY

                                       AND

                           DEFERRED COMPENSATION PLAN





                                    ARTICLE 1

                                     PURPOSE



     1.1 GENERAL. The purpose of this DNB Financial Corporation Incentive Equity

and Deferred Compensation Plan (the "Plan") is to promote the success and

enhance the value of DNB Financial Corporation (the "Company") by linking the

personal interests of directors, employees, officers and executives of the

Company and its subsidiaries to those of Company shareholders and by providing

such individuals with an incentive for outstanding performance in order to

generate superior returns to shareholders of the Company. The Plan is further

intended to provide flexibility to the Company in its ability to motivate,

attract, and retain the services of directors, employees, officers, and

executives upon whose judgment, interest, and special effort the successful

conduct of the Company's operation is largely dependent. For purposes of this

Plan, "Company" shall be deemed to include direct and indirect subsidiaries of

DNB Financial Corporation, unless the context requires otherwise.



                                    ARTICLE 2

                                 EFFECTIVE DATE



     2.1 EFFECTIVE DATE. The Plan will be effective as of the date it is

approved by the Board of Directors of DNB Financial Corporation (the "Effective

Date").



                                   ARTICLE 3

                          DEFINITIONS AND CONSTRUCTION



     3.1 DEFINITIONS. When a word or phrase appears in this Plan with the

initial letter capitalized, and the word or phrase does not commence a sentence,

the word or phrase shall generally be given the meaning ascribed to it in this

Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required

by the context. The following words and phrases shall have the following

meanings:



     (a)  "Award" means any Stock Appreciation Right, Restricted Stock Award or

          Unrestricted Stock Award granted to a Participant under the Plan.



     (b)  "Award Agreement" means a writing, in such form as the Committee in

          its discretion shall prescribe, evidencing an Award.



     (c)  "Bank" means DNB First, National Association.



     (d)  "Board" means the Board of Directors of DNB Financial Corporation.



     (e)  "Code" means the Internal Revenue Code of 1986, as amended, and

          regulations promulgated thereunder.



     (f)  "Committee" means the committee of the Board described in Article 4.





{PAGE}





     (g)  "Deferred Compensation Account" means the bookkeeping account

          established for each Participant pursuant to Section 9.2 of this Plan.



     (h)  "Director" means a member of the Board, or a member of the board of

          directors or comparable governing body of a direct or indirect

          subsidiary of the Company.



     (i)  "Disabled" means a condition whereby a Participant (i) is unable to

          engage in any substantial gainful activity by reason of any medically

          determinable physical or mental impairment which can be expected to

          result in death or can be expected to last for a continuous period of

          not less than 12 months, or (ii) is, by reason of any medically

          determinable physical or mental impairment which can be expected to

          last for a continuous period of not less than 12 months, receiving

          income replacement benefits for a period of not less than three months

          under a plan covering employees of the Company.



     (j)  "Distribution Event" means an event as a result of which a Participant

          is entitled to receive the balance of his or her Deferred Compensation

          Account pursuant to Section 9.3 of this Plan, namely (i) with respect

          to a Participant who is an employee of the Company, but not a

          Specified Employee with respect to the Company, and the portion of his

          or her Deferred Compensation Account attributable to an Award or other

          compensation earned as an employee, the date the Participant separates

          from service with the Company, (ii) with respect to a Participant who

          is an employee of the Company and a Specified Employee with respect to

          the Company, and the portion of his or her Deferred Compensation

          Account attributable to an Award of other compensation earned as an

          employee, the date that is six months after his or her separation from

          service with the Company, or the date the Participant terminates his

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC