Exhibit 10(i)

                            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.


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     (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
          or her employment with the Company on account of being Disabled, and
          (iii) with respect a Participant who is a Director and the portion of
          his or her Deferred Compensation Account attributable to an Award or
          other compensation earned as a Director, the earlier of (A) the date
          the Participant separates from service with the Company, or (B) the
          Participant's attainment of the age specified (not younger than age
          55) in an election form filed by the Participant with the Committee at
          such time as he or she first becomes eligible to defer compensation
          pursuant to Article 9 of this Plan. The determination of whether a
          Participant has separated from service with the Company shall be made
          in accordance with Section 409A of the Code and the regulations
          promulgated thereunder.

     (k)  "Exchange Act" means the Securities Exchange Act of 1934, as amended,
          and the regulations promulgated thereunder.

     (l)  "Fair Market Value" means, with respect to a share of Stock as of any
          given date, (i) if the Stock is traded on the over-the-counter market,
          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 such given date; (ii) if the Stock is listed on a national
          securities exchange, the average of the closing prices of the Stock on
          the composite tape for the trading day immediately preceding such
          given date; and (iii) if the Stock is neither traded on the
          over-the-counter market nor listed on a national securities exchange,
          such value as the Committee, in good faith, shall determine.

     (m)  "Non-Employee Director" means a member of the Board who qualifies as a
          "Non-Employee Director" as defined in Rule 16b-3(b)(3) under the
          Exchange Act, or any successor definition adopted by the Board.

     (n)  "Participant" means a person who, as a Director or an employee,
          officer, or executive of the Company, has been granted an Award under
          the Plan, or who has been designated as eligible to make an election
          to defer compensation under this Plan.



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     (o)  "Plan" means the DNB Financial Corporation Incentive Equity and
          Deferred Compensation Plan as set forth herein.

     (p)  "Restricted Stock Award" means Stock granted to a Participant under
          Article 7 that is subject to certain restrictions and to risk of
          forfeiture.

     (q)  "Specified Employee" means an individual who is a key employee (within
          the meaning of Section 416(i) of the Code without regard to paragraph
          (5) thereof) of a corporation any stock in which is publicly traded on
          an established securities market or otherwise.

     (r)  "Stock" means the common stock of DNB Financial Corporation and such
          other securities of DNB Financial Corporation which may be substituted
          for Stock pursuant to Article 10.

     (s)  "Stock Appreciation Right" or "SAR" means a right granted to a
          Participant under Article 6 to receive a payment equal to the
          difference between the Fair Market Value of a share of Stock as of the
          date of exercise of the SAR over the grant price of the SAR, all as
          determined pursuant to Article 6.

     (t)  "Unrestricted Stock Award" means Stock granted to a Participant under
          Article 7 that is not subject to restrictions or a risk of forfeiture.

                                    ARTICLE 4
                                 ADMINISTRATION

     4.1 COMMITTEE; BOARD APPROVAL. The Plan shall be administered by a
Committee appointed by, and which serves at the discretion of, the Board. The
Board may designate the Bank's Compensation Committee as the "Committee"
hereunder provided the Compensation Committee meets the requirements of this
Section. Notwithstanding any other provision of the Plan, at all times one of
the following two provisions shall apply: (i) the Committee shall consist of at
least two individuals and each member of the Committee shall qualify as a
Non-Employee Director; or (ii) (A) at least two members of the Committee must
qualify as Non-Employee Directors, (B) any member of the Committee who does not
qualify as a "Non-Employee Director" may not participate in any action of the
Committee with respect to any Award under the Plan, and (C) the Plan shall be
deemed to be administered by the full Board, the actions of the Committee under
the Plan shall be deemed merely advisory to the Board, and the Board's approval
shall be required for all actions of the Committee under the Plan, including
without limitation the grant of each Award. The members of the Committee shall
meet such additional criteria as may be necessary or desirable to comply with
regulatory or stock exchange rules or exemptions. The Bank will pay all
reasonable expenses of the Committee.

     4.2 AUTHORITY OF COMMITTEE. Subject to any specific designation in the
Plan, the Committee (or the Board, in cases where the Board administers the Plan
pursuant to Section 4.1) has the exclusive power, authority and discretion to:

     (a)  Designate Participants to receive Awards;

     (b)  Determine the type or types of Awards to be granted to each
          Participant;

     (c)  Determine the number of Awards to be granted and the number of shares
          of Stock to which an Award will relate;



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<PAGE>


     (d)  Determine the terms and conditions of any Award granted under the Plan
          including but not limited to any restrictions or limitations on the
          Award, any schedule for lapse of forfeiture restrictions or
          restrictions on the exercisability of an Award, and accelerations or
          waivers thereof, based in each case on such considerations as the
          Committee in its sole discretion determines;

     (e)  Amend, modify, or terminate any outstanding Award, with the
          Participant's consent unless the Committee has the authority to amend,
          modify, or terminate an Award without the Participant's consent under
          any other provision of the Plan.

     (f)  Determine whether, to what extent, and under what circumstances an
          Award may be settled in cash, Stock, other Awards, or other property,
          or an Award may be canceled, forfeited, or surrendered;

     (g)  Prescribe the form of each Award Agreement, which need not be
          identical for each Participant;

     (h)  Decide all other matters that must be determined in connection with an
          Award;

     (i)  Establish, adopt, revise, amend or rescind any guidelines, rules and
          regulations as it may deem necessary or advisable to administer the
          Plan; and

     (j)  Interpret the terms of, and rule on any matter arising under, the Plan
          or any Award Agreement;

     (k)  Make all other decisions and determinations that may be required under
          the Plan or as the Committee deems necessary or advisable to
          administer the Plan; and

     (l)  Retain counsel, accountants and other consultants to aid in exercising
          its powers and carrying out its duties under the Plan.

     4.3 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan shall (if approved or
ratified by the Board during any period when the Board is deemed to administer
the Plan pursuant to Section 4.1) be final, binding, and conclusive on all
parties and any other persons claiming an interest in any Award or under the
Plan.

                                   ARTICLE 5
                          ELIGIBILITY AND PARTICIPATION

     5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
Directors and any key executive of the Company (which term shall be deemed to
include among others, the president, any vice president, secretary, treasurer or
any manager in charge of a principal business unit, division or function (such
as sales, administration or finance), any other officer who performs a policy
making function, or any other person who performs similar policy making
functions for the Company) and who on the date of any Award is in the employ of
the Company.

     5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No individual shall have any right to be granted an Award under
this Plan.



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                                   ARTICLE 6
                            STOCK APPRECIATION RIGHTS

     6.1 GRANT OF SARS. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

     (a)  RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right, the
          Participant to whom it is granted has the right to receive the excess,
          if any, of:

          (1)  The Fair Market Value of a share of Stock on the date of
               exercise; over

          (2)  The grant price of the Stock Appreciation Right as determined by
               the Committee, which shall not be less than the Fair Market Value
               of a share of Stock on the date of grant.

     (b)  OTHER TERMS. All such Awards shall be evidenced by an Award Agreement.
          The terms, methods of exercise, methods of settlement, form of
          consideration payable in settlement, and any other terms and
          conditions of any Stock Appreciation Right shall be determined by the
          Committee at the time of the grant of the Award and shall be reflected
          in the Award Agreement, and shall comply with the requirements of
          Section 409A of the Code.

                                   ARTICLE 7
                                  STOCK AWARDS

     7.1 GRANT OF STOCK. The Committee is authorized to grant Unrestricted Stock
Awards and Restricted Stock Awards to Participants in such amounts and subject
to such terms and conditions as determined by the Committee. All such Awards
shall be evidenced by an Award Agreement.

     7.2 ISSUANCE AND RESTRICTIONS. An Unrestricted Stock Award may provide for
a transfer of shares of Stock to a Participant at the time the Award is granted,
or it may provide for a deferred transfer of shares of Stock subject to
conditions prescribed by the Committee. Restricted Stock Awards shall be subject
to such restrictions on transferability and risks of forfeiture as the Committee
may impose. These restrictions and risks may lapse separately or in combination
at such times, under such circumstances, in such installments, or otherwise, as
the Committee determines at the time of the grant of the Award or thereafter.

     7.3 FORFEITURE. Except as otherwise determined by the Committee at the time
of the grant of the Award or thereafter, upon termination of employment or
service as a Director during the applicable restriction period, Stock subject to
a Restricted Stock Award that is at that time subject to restrictions shall be
forfeited, provided, however, that the Committee may provide in any Restricted
Stock Award that restrictions or forfeiture conditions relating to the Stock
will be waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or in part
restrictions or forfeiture conditions relating to the Stock.

     7.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock Awards granted
under the Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing shares of Stock subject to Restricted Stock Awards
are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such shares, and the Company may, at its discretion, retain
physical possession of the certificate until such time as all applicable
restrictions lapse.



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                                   ARTICLE 8
                       PROVISIONS APPLICABLE TO ALL AWARDS

     8.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in
the discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted under the Plan. Awards granted in addition
to or in tandem with other Awards may be granted either at the same time as or
at a different time from the grant of such other Awards.

     8.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange or
buy out any previously granted Award for a payment in cash, Stock, or another
Award, based on the terms and conditions the Committee determines and
communicates to the Participant at the time the offer is made.

     8.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee.

     8.4 LIMITS ON TRANSFER. No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company, or shall be subject to any lien, obligation, or liability of
such Participant to any other party other than the Company; provided, however,
that the foregoing shall not be deemed to imply any obligation of the Company to
lend against or accept a lien or pledge of any Award for any reason. No Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution, except that the Committee, in its discretion,
may permit a Participant to make a gratuitous transfer of an Award to his or her
spouse, lineal descendants, lineal ascendants, or a duly established trust for
the benefit of one or more of these individuals.

     8.5 BENEFICIARIES. Notwithstanding Section 8.4, a Participant may, if and
to the extent, and in such manner as may be determined by the Committee from
time to time, designate a beneficiary to exercise the rights of the Participant
and to receive any distribution with respect to any Award upon the Participant's
death. A beneficiary, legal guardian, legal representative, or other person
claiming any rights under the Plan is subject to all terms and conditions of the
Plan and any Award applicable to the Participant, except to the extent the Plan
and Award otherwise provide, and to any additional restrictions deemed necessary
or appropriate by the Committee. If no beneficiary has been designated or
survives the Participant, payment shall be made to the Participant's estate.
Subject to the foregoing, if a Participant is entitled to designate a
beneficiary, a beneficiary designation may be changed or revoked by a
Participant at any time in accordance with any procedures or conditions
established by the Committee from time to time, provided the change or
revocation is filed with the Committee.

     8.6 STOCK CERTIFICATES. Notwithstanding anything herein to the contrary,
the Company shall not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Awards, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded as well as the
terms of this Plan and any other terms, conditions or restrictions that may be
applicable. All Stock certificates delivered under the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or
advisable to comply with Federal, state, or foreign jurisdiction, securities or
other laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock. In addition to the terms and conditions
provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion,
deems advisable in order to comply with any such laws, regulations, or
requirements.



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                                   ARTICLE 9
                            DEFERRAL OF COMPENSATION

9.1      RIGHT TO DEFER COMPENSATION.
         ---------------------------

         (a) TYPES OF DEFERRALS. Any Participant designated by the Board or by
the Committee may elect to defer (i) all or any portion of the Participant's
salary, (ii) any percentage of a fiscal year bonus determined by the Board or
other duly constituted authority or delegate to be payable to such Participant,
or (iii) all or any portion of the Participant's director's fees. Such election
shall remain in force for all future years, to the extent applicable, until
modified or revoked. In addition, the Committee, in its discretion, may permit a
Participant to elect to defer his or her receipt of the payment of cash or the
delivery of shares of Stock that would otherwise be due to such Participant
pursuant to an Award. Any election under this Section 9 shall be made by written
notice delivered to the Chief Financial Officer of DNB Financial Corporation,
specifying the amount (or percentage) of salary and/or bonus and/or directors'
fees and/or the Award to be deferred.

         (b) TIMING OF ELECTIONS. A Participant's election to defer compensation
for services performed during a calendar year must be made not later than the
close of the preceding calendar year, or at such other time as provided in
regulations under Section 409A of the Code. Notwithstanding the preceding
sentence, (i) in the case of the first calendar year in which a Participant
becomes eligible to defer compensation pursuant to this Plan, such election may
be made with respect to services to be performed subsequent to the election
within 30 days after the date the Participant becomes eligible to participate,
and (ii) in the case of any performance-based compensation based on services
performed over a period of at least 12 months, such election may be made no
later than six months before the end of the period. The determination of whether
any compensation satisfied the criteria of clause (ii) shall be made in
accordance with Section 409A of the Code and regulations promulgated thereunder.
A Participant's election to defer salary or director's fees shall continue from
year to year unless revoked or modified with respect to a calendar year prior to
such calendar year. A Participant's election with respect to a fiscal year bonus
shall apply only with respect to that bonus. A Participant may make an election
to defer the receipt of cash or shares of Stock otherwise payable or
transferable to the Participant pursuant to an Award in accordance with the
terms of such Award as well as the requirements of this Section 9.1(b).

9.2      DEFERRED COMPENSATION ACCOUNTS.
         ------------------------------

         (a) ESTABLISHMENT OF ACCOUNTS. A Deferred Compensation Account in the
name of each Participant who has elected to defer compensation under the Plan
shall be established and maintained as a special ledger account on the books of
the Company. On the last day of each calendar month in which salary or
director's fees deferred under this Plan would have become payable to a
Participant (in the absence of an election to defer payment thereof), the amount
of such deferred salary or director's fees shall be credited to the
Participant's Deferred Compensation Account. On the last day of the month in
which the bonuses deferred under this Plan would have become payable to a
Participant in the absence of an election to defer payment thereof, the amount
of such deferred bonus shall be credited to the Participant's Deferred
Compensation Account. On the last day of the month in which an Award would have
otherwise become payable or transferable to a Participant in the absence of an
election to defer receipt thereof, the amount of such deferred Award shall be
credited to the Participant's Deferred Compensation Account.


         (b) DEEMED INVESTMENT OF ACCOUNT BALANCE.



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         (1) Except as otherwise provided by the terms of an Award, the
Participant shall, at the time of making a deferred compensation election under
this Plan, make an election directing the Company to credit to the Deferred
Compensation Account in that calendar year based upon the options made available
by the Board or designated Committee which options may include either cash,
Stock, or a combination of cash and Stock equal in value to the amount of the
current year's salary or bonus deferred under the Plan. In addition to cash or
Stock, the Board or the Committee may offer to the Participant such deemed
investment options as it shall decide are appropriate. Such investment options
may include deemed investments in individual stocks or bonds, mutual funds, and
such other investment options as the Board or Committee may choose. The Board or
Committee shall not be required to offer the same deemed investment options to
each Participant but may restrict certain investment options to designated
Participants. In the absence of a contrary election by a Participant, the amount
credited to a Deferred Compensation Account shall be credited as cash.

         (2) If the Participant directs that any amount credited to the Deferred
Compensation account be credited in the form of Stock, the Board shall credit to
the Deferred Compensation Account sufficient shares of Stock equal in value to
the Deferred Compensation Account balance, or such lesser amount as the
Participant shall direct. The value of such Stock shall be determined in
accordance with a valuation methodology approved by the Board or by the
Committee. Except as provided in Section 9.6, such Stock credited to the
Deferred Compensation Account shall merely constitute a bookkeeping entry of the
Company, and (except as provided herein) the Participant shall have no voting,
dividend, or other legal or economic rights with respect to such Stock. At the
end of each fiscal quarter, an amount equivalent to all dividends which would
otherwise have been payable with respect to such Stock shall be credited to the
Deferred Compensation Account as additional Stock. The amount of the
Participant's Deferred Compensation Account that is credited as cash shall
increase or decrease based on the deemed investment options offered to the
Participant pursuant to clause (i) and selected by the Participant, and
valuations of that portion of the Participant's Deferred Compensation Account
shall occur at such times as prescribed by the Committee.

         (3) The Participant shall elect the portion of their deferral to be
allocated to Stock or cash or such other option as made available by the Board
at the time of making such election to defer compensation. Such allocation may
not be amended with respect to such deferral without the approval of the
Committee. Any allocation to Stock shall be paid in the form of Stock. No
Participant will be granted the right to take payment of the Stock in cash
rather than in shares.

         (4) If, at any time, the deferral of a Participant is allocated to
Stock, and such Participant would otherwise be deemed to have violated the
short-swing profit rules of Section 16(b) of the Exchange Act through such
allocation, the allocation to Stock shall be void and such allocation shall
default to cash.

9.3      PAYMENT OF DEFERRED COMPENSATION.
         --------------------------------

         (a) IN GENERAL. Amounts credited to a Participant's Deferred
Compensation Account shall be payable upon the Participant's Distribution Event.
The Participant shall determine the method of distributing the amounts in the
Deferred Compensation Account at the time the first election to participate in
the Plan is made, which shall be either a single distribution or a series of up
to ten (10) consecutive, substantially equal annual installments paid to such
Participant or his or her beneficiary, as the case may be, on or before January
15 of each year, commencing in the year following the Distribution Event. If no
such election is made, the method of distribution shall be determined solely by
the Board. If the Participant has elected to receive installment distributions,
and less than the full value of the Participant's Deferred Compensation Account
balance has been distributed as of the date of his or her death, the balance
shall be paid to the Participant's beneficiary in accordance with the same
method in


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effect at the Participant's death. For purposes of this Article 9, a
Participant's "beneficiary" shall mean the person or persons designated by the
Participant pursuant to Section 8.5 of this Plan, or, in the absence of such
designation or if no such person survives the Participant, the Participant's
estate. If any portion of the Participant's Deferred Compensation Account is
credited with Stock, then distributions from that portion of the Deferred
Compensation Account shall be made directly in the form of Stock. If the
Participant has elected installment distributions, the undistributed balance of
the Participant's Deferred Compensation Account will continue to be valued and
will continue to be credited with dividends with respect to Stock, if
applicable, in accordance with Section 9.2, until the final installment is
distributed.

         (b) MODIFICATION OF PAYMENT TERMS. A Participant may elect to change
the method of distribution of his or her Deferred Compensation Account
previously elected (or deemed elected) pursuant to Section 9.3(a), subject to
the following limitations:

               (i)  no such election shall take effect until at least 12 months
                    after the date on which the election is made;

               (ii) the first payment made as a result of such election be made
                    no earlier than five years after the date such payment would
                    have been made absent such election; and

               (iii) in the case of a payment scheduled to be made or payments
                    scheduled to commence at a Distribution Event with respect
                    to a Director that is a specified age of the Director, the
                    election must be made at least 12 months prior to the
                    attainment of such age.

         (c) CHANGE IN CONTROL. In the event of a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of its assets (in all cases as described in regulations under Section 409A of
the Code), a Participant shall receive a distribution of all or a portion of his
or her Deferred Compensation Account. Any distribution pursuant to this Section
9.3(c) shall be made (i) in the form of cash and/or Stock as his or her Deferred
Compensation Account is allocated and (ii) within seven (7) days subsequent to
the change in ownership or effective control.

         (d) HARDSHIP DISTRIBUTION IN THE CASE OF UNFORESEEABLE EMERGENCY. Prior
to the time a Deferred Compensation Account of a Participant would otherwise
become payable, the Committee, in its sole discretion, may elect to distribute
all or a portion of the Deferred Compensation Account in the event such
Participant requests a distribution by reason of an unforeseeable emergency. For
purposes of this Plan, an unforeseeable emergency shall be deemed to have
occurred if the Committee determines that a Participant has experienced (i) a
severe financial hardship resulting from an illness or accident of the
Participant, the Participant's spouse, or a dependent (within the meaning of
Section 152(a) of the Code) of the Participant, (ii) a loss of the Participant's
property due to casualty, or (iii) another similar extraordinary and
unforeseeable circumstance arising as a result of events beyond the control of
the Participant. A distribution based on an unforeseeable emergency shall not
exceed the amount necessary to satisfy such emergency plus the amount necessary
to pay taxes reasonably anticipated as a result of the distribution, after
taking into account the extent to which such emergency may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant's assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship). In the event the Participant is a
member of the Committee making such determination, the Participant shall not
participate in the decision by the Committee.




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9.4     TRUST PROVISIONS.
        ----------------

         (a) ESTABLISHMENT OF TRUST. The Company may in its sole discretion
establish one or more trusts to provide a source of payment for its obligations
under the Plan and such trust shall be permitted to hold cash, Stock, or other
assets to the extent of the Company's obligations hereunder. The Company may,
but is not required to, utilize a single trust with respect to its obligations
to Participants who are members of the Board and Participants who are not
members of the Board. The accounts of multiple Participants may be held under a
single trust but in such event each account shall be separately maintained and
segregated from each other account.

         (b) CLAIMS OF THE COMPANY'S CREDITORS. All assets held by any account
or trust created hereunder and all distributions to be made by the Company or
any trustee pursuant to this Plan and any trust agreement shall be subject to
the claims of general creditors of the Company, including judgment creditors and
bankruptcy creditors. The rights of a Participant or his or her beneficiaries in
or to any assets of the trust shall be no greater than the rights of an
unsecured creditor of the Company.

         9.5 NON-ASSIGNMENT. No right or interest of any Participant or any
person claiming through or under such Participant in the Participant's Deferred
Compensation Account shall be assignable or transferable in any manner or be
subject to alienation, anticipation, sale, pledge, encumbrance or other legal
process (including execution, levy, garnishment, attachment, bankruptcy, or
otherwise) or in any manner be subject to the debts or liabilities of such
Participant. If any Participant or any such person shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his
or her benefits hereunder or any part thereof, or if by reason of his or her
bankruptcy or other event happening at any time such benefits would devolve upon
anyone else or would not be enjoyed by him or her, then the Committee, in its
discretion, may terminate his or her interest in any such benefit to the extent
the Committee considers necessary or advisable to prevent or limit the effects
of such occurrence. Termination shall be effected by filing a written
declaration of termination with the Committee's records and making reasonable
efforts to deliver a copy to such Participant or any such other person or his or
her legal representative. As long as any Participant is alive, any amounts
affected by the termination shall be retained by the Company or the trustee of
any trust established pursuant to Section 9.4 of this Plan and, in the
Committee's sole and absolute discretion, may be paid to or expended for the
benefit of such Participant, his or her spouse, his or her children, or any
other person or persons in fact dependent upon him or her in such a manner as
the Committee shall deem proper.

                                   ARTICLE 10
                          CHANGES IN CAPITAL STRUCTURE

10.1     GENERAL.

         (a) OUTSTANDING AWARDS - INCREASE OR DECREASE IN ISSUED SHARES WITHOUT
CONSIDERATION. Subject to any required action by the shareholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Stock resulting from a subdivision or consolidation of shares of Stock or the
payment of a stock dividend (but only on the shares of Stock), or any other
increase or decrease in the number of such shares effected without receipt or
payment of consideration by the Company, the Committee shall proportionally
adjust the number of shares of Stock subject to each outstanding Award and the
exercise price per share of Stock of each such Award.

         (b) OUTSTANDING AWARDS - CERTAIN MERGERS. Subject to any required
action by the shareholders of the Company, in the event that the Company shall
be the surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the



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<PAGE>


holders of shares of Stock receive securities of another corporation), each
Award outstanding on the date of such merger or consolidation shall pertain to
and apply to the securities which a holder of the number of shares of Stock
subject to such Award would have received in such merger or consolidation.

         (c) OUTSTANDING AWARDS - CERTAIN OTHER TRANSACTIONS. In the event of
(i) a dissolution or liquidation of the Company, (ii) a sale of all or
substantially all of the Company's assets, (iii) a merger or consolidation
involving the Company in which the Company is not the surviving corporation or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Stock receive securities of
another corporation and/or other property, including cash, the Committee shall,
in its absolute discretion, have the power to:

              (A) cancel, effective immediately prior to the occurrence of such
event, each Award outstanding immediately prior to such event (whether or not
then exercisable), and, in full consideration of such cancellation, pay to the
Participant to whom such Award was granted an amount in cash, for each share of
Stock subject to such Award, respectively, equal to the excess of (1) the value,
as determined by the Committee in its absolute discretion, of the property
(including cash) received by the holder of a share of Stock as a result of such
event over (2) the exercise of such Award; or

              (B) provide for the exchange of each Award outstanding immediately
prior to such event for a different Award and, incident thereto, make an
equitable adjustment as determined by the Committee in its absolute discretion
in the value of the Award or the number of shares or amount of property subject
to the Award or, if appropriate, provide for a cash payment to the Participant
to whom such Award was granted in partial consideration for the exchange of the
Award, or any combination thereof.

         (d) OUTSTANDING AWARDS - OTHER CHANGES. In the event of any other
change in the capitalization of the Company or corporate change other than those
specifically referred to in this Article, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Awards outstanding on the date on which such change occurs and in the per share
exercise price of each Award as the Committee may consider appropriate to
prevent dilution or enlargement of rights.

         (e) NO SHAREHOLDER APPROVAL REQUIRED. Except to the extent required by
applicable law, no adjustment in the number of shares subject to outstanding
Awards, and no adjustment in the number of shares available for grant under this
Plan, shall require shareholder approval, and all such future adjustments shall
be deemed approved by the approval of this Plan, to the extent that such
adjustment, whether automatic or discretionary, is proportional to and
accompanies an equivalent adjustment in the number of shares held by the
Company's shareholders.

         (f) NO OTHER RIGHTS. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to an Award or the exercise
price of any Award.



                                       11
<PAGE>


                                   ARTICLE 11
                    AMENDMENT, MODIFICATION, AND TERMINATION

         11.1 AMENDMENT, MODIFICATION, AND TERMINATION. At any time and from
time to time, the Board may terminate, amend or modify the Plan.

         11.2 AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the
Plan, including without limitation, the provisions of Article 10, no
termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted under the Plan, without the
written consent of the Participant.

                                   ARTICLE 12
                               GENERAL PROVISIONS

         12.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person
shall have any claim to be granted any Award under the Plan, and neither the
Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.

         12.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.

         12.3 WITHHOLDING. The Company shall have the authority and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of this Plan.

         12.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any
Award Agreement shall interfere with or limit in any way the right of the
Company or the Bank or any of their affiliates or subsidiaries to terminate any
Participant's employment or services at any time, nor confer upon any
Participant any right to continue in the employ of the Company.

         12.5 INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee or of the Board shall be indemnified and held
harmless by the Company and the Bank and any of their applicable subsidiaries
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such member in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action or failure to act under the
Plan and against and from any and all amounts paid by him or her in satisfaction
of judgment in such action, suit, or proceeding against him or her provided he
or she gives the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's or the Bank's or any of their applicable subsidiaries' Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company or the Bank or any of their applicable subsidiaries may have to
indemnify them or hold them harmless.

         12.6 FRACTIONAL SHARES. No fractional shares of Stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.



                                       12
<PAGE>


         12.7 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act of 1933, as amended, any of the shares of Stock paid under the
Plan. If the shares paid under the Plan may in certain circumstances be exempt
from registration under the Securities Act of 1933, as amended, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.

         12.8 GOVERNING LAW. The Plan and the terms of all Awards shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania without regard to rules of choice of law or conflict of laws,
except to the extent such laws may be pre-empted by the federal laws of the
United States of America.




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