Item 5.02
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Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
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The Merger Agreement requires DNB to increase the size of its board of directors by three members, effective immediately following the effective time of the Merger, and to elect John F. McGill and two additional pre-Merger directors of ERB to fill those positions. In connection therewith, DNB's board of directors has taken the necessary action to increase the size of the board of directors and has appointed Charles A. Murray, Daniel O'Donnell and John F. McGill to serve as directors, serving in the class of directors whose terms expire at the 2017, 2018 and 2019 annual meetings of DNB shareholders, respectively. Mr. McGill also has been appointed as the Vice Chairman of the board of directors. In addition, Messrs. Murray, O'Donnell and McGill have been appointed to the board of directors of DNB First. Committee assignments for Messrs. Murray, O'Donnell and McGill will be determined at a later date.
Pursuant to the Merger Agreement, at the end of the initial term of Messrs. Murray, O'Donnell and McGill, each of them will be re-nominated for at least one additional three-year term, subject to the fiduciary duties of DNB's board of directors and any applicable eligibility requirements set forth in DNB's and DNB First's then-applicable articles of incorporation, articles of association, bylaws, or nominating and corporate governance committee guidelines, or any applicable law, rule, regulation or listing standard. The Merger Agreement also provides that in the event Mr. Murray, Mr. O'Donnell or Mr. McGill is unable to complete his term as a director or elects to not stand for re-election following his initial term, the remaining former directors of ERB then serving on the DNB board of directors will be permitted to nominate a replacement director for consideration by DNB's nominating and corporate governance committee and board of directors. The nominee must meet the eligibility requirements set forth in DNB's and DNB First's then-applicable articles of incorporation, articles of association, bylaws, or nominating and corporate governance committee guidelines, or any applicable law, rule, regulation or listing standard, and his or her nomination is subject to the fiduciary duties of DNB's board of directors.
Each of Messrs. Murray, O'Donnell and McGill will be entitled to receive compensation and participate in compensation plans available to DNB's non-employee directors, as described in DNB's definitive proxy statement for its 2016 annual meeting of shareholders, filed with the Securities and Exchange Commission (the "Commission") on March 23, 2016.
Other than the provisions of the Merger Agreement summarized above, there are no arrangements or understandings between Mr. Murray, Mr. O'Donnell or Mr. McGill and any other person pursuant to which they were appointed as directors. Since the beginning of the last fiscal year there have been no related party transactions between DNB and Messrs. Murray, O'Donnell and McGill that would be reportable under Item 404(a) of Regulation S-K.
The employment of Albert J. Melfi, DNB's Executive Vice President and Chief Lending Officer, ended effective October 1, 2016. Mr. Mefli's operating responsibilities will be assumed by other members of DNB management.