-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OicklDugHgZUe2GMZa5Tk1cmuYQ8lUi3bYWYxF+jTxK3pFqsBtpWSmuAyNWLU27y kX1yJNnQfEg2AaKDW3QX5g== 0000950159-05-000496.txt : 20050427 0000950159-05-000496.hdr.sgml : 20050427 20050427165412 ACCESSION NUMBER: 0000950159-05-000496 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20050427 DATE AS OF CHANGE: 20050427 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DNB FINANCIAL CORP /PA/ CENTRAL INDEX KEY: 0000713671 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232222567 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40242 FILM NUMBER: 05776985 BUSINESS ADDRESS: STREET 1: 4 BRANDYWINE AVE CITY: DOWNINGTOWN STATE: PA ZIP: 19335 BUSINESS PHONE: 6102691040 MAIL ADDRESS: STREET 1: 4 BRANDYWINE AVENUE CITY: DOWNINGTOWN STATE: PA ZIP: 19335 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LATOFF WILLIAM S CENTRAL INDEX KEY: 0001208605 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O DNB FINANCIAL CORP STREET 2: 4 BRANDYWINE AVENUE CITY: DOWNINGTOWN STATE: PA ZIP: 19335 BUSINESS PHONE: 6102691040 SC 13D 1 dnb13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. ________)* DNB Financial Corporation - -------------------------------------------------------------------------------- (Name of Issuer) Common stock, par value $1.00 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 233237 10 6 - -------------------------------------------------------------------------------- (CUSIP Number) Bruce E. Moroney EVP and Chief Financial Officer DNB Financial Corporation 4 Brandywine Avenue Downingtown, PA 19335 (610) 873-5253 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 18, 2005 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] CUSIP No. 233237 10 6 - -------------------------------------------------------------------------------- 1. Names of Reporting Person - William S. Latoff - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a) (b) X - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization - U.S.A. - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 104,782 Shares -------------------------------------------------------- Beneficially 8. Shared Voting Power Owned by -------------------------------------------------------- Each 9. Sole Dispositive Power - 104,782 Reporting -------------------------------------------------------- Person With 10. Shared Dispositive Power - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Reporting Person - 104,782 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 5.30 % - -------------------------------------------------------------------------------- 14. Type of Reporting Person IN - -------------------------------------------------------------------------------- Item 1. Security and Issuer The class of securities to which this statement relates is common stock, par value $1.00 per share (the "Common Stock"), of DNB Financial Corporation (the "Issuer"), and the principal executive offices of the Issuer are located at 4 Brandywine Avenue, Downingtown, PA 19335. Item 2. Identity and Background The identity and background for each person filing this statement and each person enumerated in Instruction C to Schedule 13D is as follows: During the last five years, none of the reporting persons nor any person enumerated in Instruction C to Schedule 13D has been convicted in a criminal proceeding or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (a) Name: William S. Latoff (b) Business address: c/o DNB Financial Corporation, 4 Brandywine Avenue, Downingtown, PA 19335 (c) Present principal occupation or employment: Mr. Latoff is the Chairman and Chief Executive Officer of the Issuer, whose principal business address is 4 Brandywine Avenue, Downingtown, PA 19335. (f) Citizenship: U.S. Item 3. Source and Amount of Funds or Other Consideration The sources of funds used to purchase shares of Common Stock owned by William S. Latoff were personal funds. Mr. Latoff did not borrow any of the funds used to purchase any of the Common Stock. William S. Latoff can acquire up to 31,763 shares through the exercise of stock options granted by the Issuer to Mr. Latoff. These shares are included in the total number of shares reported above for Mr. Latoff. All of the shares of Common Stock acquired by Mr. Latoff were acquired by purchase, in the following amounts on the following dates: No. Shares Date No. Shares Date No. Shares Date - ---------- ---- ---------- ---- ---------- ---- 1,000 2/18/94 400 11/30/99 2,500 12/27/01 707 4/4/94 673 12/23/99 2,732 1/15/02 1,300 8/5/94 3,940 11/6/00 950 1/18/02 150 2/17/95 3,000 12/7/00 330 5/8/02 157 12/18/95 5,000 12/13/00 470 8/21/02 800 4/8/96 200 12/19/00 500 10/22/02 205 12/27/96 2,315 12/21/00 2,875 12/27/02 502 3/21/97 1,054 12/27/00 1,509 9/4/03 4,821 9/19/97 115 1/3/01 691 9/4/03 500 10/14/97 250 1/3/01 3,128 12/27/03 507 12/26/97 5,000 4/6/01 3,285 12/27/04 1,800 2/17/98 1,500 4/17/01 4,032 4/19/05 622 12/24/98 13,500 9/6/01 Item 4. Purpose of Transaction Mr. Latoff acquired the shares of Common Stock for general investment purposes. Mr. Latoff may purchase additional shares of Common Stock in private or open-market transactions for investment purposes, or dispose of shares of Common Stock. Mr. Latoff in his capacity as an investor in securities of the Issuer, has no plan or proposal with respect to (a) the acquisition by any person of additional securities of the issuer, or the disposition of securities of the issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the issuer or any of its subsidiaries; (d) any change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the issuer; (f) any other material change in the issuer's business or corporate structure including but not limited to, if the issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940; (g) changes in the issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person; (h) causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer (a) William S. Latoff beneficially owns, for purposes of this report, 104,782 shares of Common Stock, which represent 5.30 % of the shares of Common Stock outstanding as of April 22, 2005. (b) Of the shares beneficially owned by William S. Latoff, all are held by Mr. Latoff directly, over which he has sole voting and dispositive power. (c) The following transactions in the Common Stock of the Issuer have occurred since February 18, 2005 that were effected by William S. Latoff: Person Where/How Effecting Date No. Shares Price/Share Effected William S. 4/19/05 4,032 $25.85 Private Latoff Transaction (d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer The only contracts, arrangements, understandings or relationships (legal or otherwise) among Mr. Latoff and any other person, with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, understandings or relationships have been entered into, are as follows: The Issuer has adopted its 1995 Stock Option Plan, as amended and restated effective April 27, 2004 (the "Stock Option Plan") (see Exhibit 1 hereto), and pursuant to the Stock Option Plan has granted the options described below to Mr. Latoff. Prior to 2005, these options were granted pursuant to a form of Stock Option Agreement attached to this Report as Exhibit 2. Commencing with the April 18, 2005 grant, options granted under the Stock Option Plan are pursuant to a revised form of Stock Option Agreement attached to this Report as Exhibit 3. The Issuer has adopted its Incentive Equity and Deferred Compensation Plan approved by the Issuer's Board of Directors on November 24, 2004 (see Exhibit 4 hereto), as well as such other benefit, stock plan or equity incentive plans that may hereafter be adopted by the Issuer and in effect from time to time. Pursuant to each of these plans, equity-based awards, based on the Common Stock of the Issuer, may be made in accordance with the terms of each plan and subject to any necessary approvals of the Issuer's Board of Directors and/or Compensation Committee, and any such awards shall be subject to the terms of the applicable plan and any applicable award agreement. William S. Latoff holds options to acquire an aggregate of 31,762 shares of Common Stock granted under the Stock Option Plan. All such options were granted pursuant to stock option agreements entered into by between the Issuer and William S. Latoff. The material terms of William S. Latoff's options are set forth in the table below.
Number of Exercisable Exercise Grant Expiration Name of Equity Underlying (1) Price Date Date Incentive Plan Shares - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 1,629 12/31/98 25.0515 6/30/98 6/30/08 1995 Stock Option Plan of DNB Financial Corporation (as amended and restated, effective as of April 27, 2004) - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 1,628 12/31/99 20.1478 6/30/99 6/30/09 Same as above - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 1,627 12/31/00 10.6795 6/30/00 6/30/10 Same as above - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 1,626 12/31/01 12.9164 6/30/01 6/30/11 Same as above - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 1,626 12/31/02 19.4795 6/30/02 6/30/12 Same as above - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 1,626 12/31/03 21.6054 6/30/03 6/30/13 Same as above - ------------- ------------ ---------- ---------- ------------ --------------------------------------------------------------- 22,000 10/18/05 28.10 4/18/05 4/18/15 Same as above - ------------- ------------ ---------- ---------- ------------ ---------------------------------------------------------------
(1) All options vest immediately on the grant date. Item 7. Material to Be Filed as Exhibits The following are filed (or incorporated) herewith as exhibits: 1. 1995 Stock Option Plan of DNB Financial Corporation (as amended and restated, effective as of April 27, 2004) (incorporated by reference to Appendix A to the Issuer's Proxy Statement for its Annual Meeting of Stockholders held April 27, 2004, filed March 29, 2004). 2. Form of Nonqualified Stock Option Agreement for grants prior to 2005 under the Stock Option Plan, attached to this Report. 3. Form of Nonqualified Stock Option Agreement for April 18, 2005 and subsequent grants under the Stock Option Plan, attached to this Report. 4. DNB Financial Corporation Incentive Equity and Deferred Compensation Plan (incorporated by reference to Exhibit 10(i) to the Issuer's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed March 10, 2005). Signatures After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. April 22, 2005 - -------------------------------------------------------------------------------- Date /s/ William S. Latoff - -------------------------------------------------------------------------------- Signature - -------------------------------------------------------------------------------- William S. Latoff, Individually EX-99 2 ex2.txt EXHIBIT 2 Date _____________________ [[Name]] [[Address]] [[state]] Stock Option Agreement Dear [[Name1]]: In view of your substantial contributions toward the achievement of the business goals and objectives of DNB Financial Corporation (the "Corporation") and the Downingtown National Bank (the "Bank") and the expectation of your future contributions, the Board of Directors of the Corporation is pleased to award you an option to purchase shares of the Common Stock of the Corporation pursuant to the DNB Financial Corporation 1995 Stock Option Plan (the "Plan"). This letter will serve as the stock option agreement between you and the Corporation. The option awarded to you is subject to the following terms. 1. NUMBER OF SHARES: You are awarded an option to purchase a total of [[number]] shares of the Common Stock of the Corporation. 2. TYPE OF OPTION: The option awarded to you is a [[Type]] option as that term is defined in the Plan. 3. EXERCISE PRICE: The shares may be purchased upon your exercise of this option for the price of $[[Price]] per share 4. DATE OF GRANT OF AWARD: The Grant Date of the award of this option is [[grantdate]]. Stock Option Agreement Date _____________________ 5. STATED EXPIRATION DATE: Unless earlier terminated as explained below, the option awarded to you expires (with respect to any number of shares subject to this option not previously exercised) on the 10th anniversary of the Grant Date stated above. 6. DATE OPTION BECOMES EXERCISEABLE: The stock option awarded to you is exercisable on and after the date which is six (6) months after the Grant Date stated above. The stock option remains exercisable by you until the expiration of the option in accordance with the terms of this letter and the terms of the Plan. 7. EXERCISE OF OPTION: You may exercise the option awarded to you from time to time as provided above by delivering to the Corporation: (a) Written notice of the exercise marked for the attention of the Secretary specifying the number of whole shares in respect of which you are exercising the option; (b) Payment of the exercise price for such shares in cash or by certified check payable to the order of the Corporation, or in shares of Common Stock of the Corporation already owned by you having a fair market value (as determined under the Plan) on the Exercise Date equal to the exercise price, or any combination of cash or such stock; (c) Payment of any federal, state and local withholding taxes required in respect of such exercise in cash or by certified check payable to the order of the Corporation, or in shares of Common Stock of the Corporation already owned by you having a fair market value (as determined under the Plan) equal to the total amount of such withholding taxes, or any combination of cash or such stock. (d) Only if the shares to be acquired upon exercise have not been registered under the Securities Act of 1933 (the 1933 Act): Stock Option Agreement Date _____________________ (i) If required by the Board of Directors of the Corporation, a written statement that you are purchasing the shares for investment and not with a view toward their distribution and will not sell or transfer any shares received upon the exercise of the option except in accordance with the 1933 Act and following the expiration of the second anniversary of the Exercise Date of the option with respect to such shares; (ii) If required by the Board of Directors of the Corporation, with such information as is necessary for the Corporation to comply with securities laws. Upon receipt of the documents and payments listed above, the Corporation will issue you a certificate for the number of shares with respect to which you have exercised the option. 8. EXERCISE DATE: The date on which the Corporation receives the documents specified above in complete and otherwise acceptable form and the payments specified above will be treated as the Exercise Date with respect to your exercise of the stock option. 9. NON-ASSIGNABILITY OF OPTION: Except as provided by the Plan, the option awarded to you is exercisable only by you. The option may not be transferred, assigned, pledged as security or hypothecated in any way and is not subject to execution, attachment or similar process. Upon any attempt by you to transfer, assign, pledge, hypothecate or otherwise dispose of this option or of any portion thereof or upon the levy of any execution, attachment or similar process on this option or on any portion thereof, the option awarded to you will immediately expire with respect to the number of shares not exercised prior to such event. 10. RIGHTS IN SHARES SUBJECT TO OPTION: You will not be treated as a holder of any of the shares subject to this option or of any rights of a holder of such shares unless and until the shares are issued to you as evidenced by stock certificates. 11. EFFECT ON EMPLOYMENT: This letter is not an employment agreement or service contract. Therefore, none of the rights awarded to you by this letter affect, in any way, your employment or service relationship with the Corporation or the Bank. Stock Option Agreement Date _____________________ 12. TERMINATION OF EMPLOYMENT OR SERVICE: Except as otherwise provided in the Plan, upon termination of your employment with the Corporation or the Bank or your separation from service as a Director (if you are not also an employee of the Corporation or the Bank), the unexercised portion of this option will terminate as follows: a. If you terminate or separate on account of death or disability or you terminate on account of retirement which has been approved by the Corporation, your option will terminate on the Stated Expiration Date described above. b. If you are terminated or separated by act of the Corporation or the Bank for cause, as defined in the Plan, your option is terminated with respect to any shares not previously exercised effective immediately as of your termination or separation. c. If you terminate or separate by your own act, your option will terminate at the close of business on the earlier of the Stated Expiration Date described above or on the ninetieth day following the date of your termination or separation. d. If you terminate or separate for any other reason, your option will terminate at the close of business on the earlier of the Stated Expiration Date described above or on the third anniversary of the date of your termination or separation. 13. OPTION AWARDED SUBJECT TO PLAN PROVISIONS: The Plan provisions take precedence over the provisions of this letter agreement. Therefore, in the case of any inconsistency between any provision of this letter agreement and any provision of the Plan in effect on the Grant Date, the provision of the Plan will control. 14. COUNTERPARTS: This letter agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which shall be deemed one and the same agreement. Stock Option Agreement Date _____________________ If you accept the stock option award evidenced by this letter, subject to the terms stated above, you should date and sign the enclosed copy of this letter in the spaces indicated and return it to the Corporation marked for the attention of the Secretary. Your signature will also mean that you have been provided with and have read a copy of the Plan. DNB Financial Corporation By:______________________________ Chairman of the Board I acknowledge that I have read this letter and agree to accept the stock option award evidenced by it according to the terms set out above. [[name]] __________________________________ _________________ Signature Date DNB FINANCIAL CORPORATION 1995 STOCK OPTION PLAN NOTICE OF STOCK OPTION EXERCISE To: DNB Financial Corporation Attention: Corporate Secretary
From: _____________________________________ Date: ___________________________ (Grantee Name) _____________________________________ Tel. No. _____ - ______ - ______ (Address) _____________________________________ _____________________________________ Date of Grant: _____________________ Number of Shares Exercised: ______________ Exercise Price Per Share: $_____ . ____ Total Exercise Price: $ __________ . _____ Federal Income Tax Withholding __________ . _____ (Contact Payroll to Determine) F.I.C.A. Tax Withholding __________ . _____ (Contact Payroll to Determine) Pennsylvania Personal Income Tax Withholding __________ . _____ (Contact Payroll to Determine) Local Earned Income Tax Withholding __________ . _____ (Contact Payroll to Determine) Subtotal of withholding taxes __________ . _____ (Contact Payroll to Determine) Total Remittance __________ . _____ (Attach certified check for total or attach properly endorsed certificates of stock with equal value) [Please note that final remittance due is subject to adjustment pending determination of applicable stock value] Please accept the above notice of exercise and issue share certificates as required. _______________________________________________ (signature of person authorized to exercise)
EX-99 3 ex3.txt EXHIBIT 3 Exhibit 3 --------- STOCK OPTION AGREEMENT (Non-Qualified Option - Immediate Vesting - Restricted Stock) THIS AGREEMENT GRANTS A NON-QUALIFIED STOCK OPTION RESALE OF STOCK ISSUED ON EXERCISE OF THIS OPTION BY DIRECTORS AND CERTAIN SENIOR EXECUTIVE OFFICERS WILL BE RESTRICTED BY APPLICABLE SECURITIES LAWS Dear _______________________________ ("Grantee"): In view of your substantial contributions toward the achievement of the business goals and objectives of DNB Financial Corporation (the "Corporation") and DNB First, National Association (the "Bank") and the expectation of your future contributions, the Board of Directors of the Corporation is pleased to award you an option to purchase shares of the Common Stock of the Corporation pursuant to the 1995 Stock Option Plan of DNB Financial Corporation (As amended and restated, effective as of April 27, 2004) (the "Plan"). This letter will serve as the stock option agreement between you and the Corporation. The option awarded to you is subject to the following terms. 1. NUMBER OF SHARES: You are awarded an option to purchase a total of ______ shares of the Common Stock of the Corporation, subject to the terms, conditions and restrictions set forth in this Agreement and the Plan. 2. SECURITIES LAW RESTRICTIONS ON SHARES OWNED BY DIRECTORS AND CERTAIN OFFICERS OF THE CORPORATION: If you are an "affiliate" of the Corporation, your resale of the Common Stock you receive on exercise of an Option will be subject to resale restrictions under applicable securities laws. A person who is an "affiliate" of the Corporation may not resell shares of Common Stock received by such employee upon exercise of Options under the Plan, except pursuant to an effective registration statement under the Securities Act of 1933 (the "Securities Act") or in accordance with Rule 144 promulgated under the Securities Act or another exemption available under the Securities Act. For purposes of the Securities Act, an employee will be considered to be an "affiliate" of the Corporation if such employee directly or indirectly controls the Corporation. In addition, under Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), if you are a director or one of certain types of "officer" of the Corporation identified in SEC regulations under Section 16(b), you may be liable to the Corporation for profit you are deemed to realize if you make certain types of purchases and certain types of sales of the Common Stock within a period of less than six months of each other. You should consult with legal counsel as to your status as an "affiliate" of the Corporation and the applicability of Section 16(b) of the Exchange Act to you. 3. TYPE OF OPTION: The option awarded to you is a Non-Qualified Option as that term is defined in the Plan. 4. EXERCISE PRICE: The shares may be purchased upon your exercise of this option for the price of $____ per share 5. DATE OF GRANT OF AWARD: The Grant Date of the award of this option is _____, 200_, which is also the date of this Agreement. 6. STATED EXPIRATION DATE: Unless earlier terminated as explained below, the option awarded to you expires (with respect to any number of shares subject to this option not previously exercised) on the 10th anniversary of the Grant Date stated above. This is the Stated Expiration Date. 7. DATE OPTION BECOMES EXERCISEABLE; LOSS OF OPTION IN CERTAIN CIRCUMSTANCES: The stock option awarded to you is exerciseable at any time after the Grant Date stated above. The stock option remains exerciseable by you until the expiration of the option in accordance with the terms of this Agreement and the terms of the Plan. 8. EXERCISE OF OPTION: You may exercise the option awarded to you from time to time as provided above by delivering to the Corporation all of the following: Rev. 4-18-2005 (a) Written notice of the exercise marked to the attention of the Chief Financial Officer specifying the number of whole shares in respect of which you are exercising the option. (b) Payment of the exercise price for such shares in any of the following forms: (i) cash, (ii) certified check payable to the order of the Corporation, (iii) shares of Common Stock of the Corporation already owned by you, (iv) shares of Common Stock of the Corporation you are entitled to receive as a result of stock option exercises that you are entitled to make for such purpose, but only if those options are "in the money," or (v) any combination of the foregoing. (c) Payment of any federal, state and local withholding taxes required in respect of such exercise in any combination of the forms of payment described in (b) above. Shares of Common Stock of the Corporation may only be applied against the exercise price or to pay any federal, state or local withholding taxes to the extent consistent with any restrictions applicable to such shares. If shares of Common Stock of the Corporation are to be applied in whole or partial payment of the exercise price or any withholding taxes, they shall be applied at their fair market value (as determined under the Plan) on the Exercise Date. Upon receipt of the documents and payments listed above, the Corporation will issue you a certificate for the number of shares with respect to which you have exercised the option. 9. EXERCISE DATE: The date on which the Corporation receives the documents specified above in complete and otherwise acceptable form and the payments specified above will be treated as the Exercise Date with respect to your exercise of the stock option. 10. NON-ASSIGNABILITY OF OPTION: Except as provided by the Plan, the option awarded to you is exerciseable only by you. The option may not be transferred, assigned, pledged as security or hypothecated in any other way and shall not be subject to execution, attachment or similar process even if you agree with someone else that it will be, except that if you die while still employed with the Corporation or the Bank, your estate or the person who acquires the right to exercise the Stock Option upon your death by bequest or inheritance may exercise your option. Upon any attempt by you to transfer, assign, pledge, hypothecate or otherwise dispose of this option or of any portion thereof or upon the levy of any execution, attachment or similar process on this option or on any portion thereof, the option awarded to you will immediately expire with respect to the number of shares not exercised prior to such event. 11. RIGHTS IN SHARES SUBJECT TO OPTION: You will not be treated as a holder of any of the shares subject to this option or of any rights of a holder of such shares unless and until the shares are issued to you as evidenced by stock certificates. 12. EFFECT ON EMPLOYMENT: This letter is not an employment agreement or service contract. Therefore, none of the rights awarded to you by this letter affect, in any way, your employment or service relationship with the Corporation or the Bank. 13. TERMINATION OF EMPLOYMENT OR SERVICE: Except as otherwise provided in the Plan or this Agreement, upon termination of your employment with the Corporation or the Bank, if applicable, and your separation from service as a Director of the Corporation and the Bank, if applicable, the unexercised portion of this option will terminate according to the following terms: (a) If you terminate or separate on account of death or disability or you terminate on account of retirement which has been approved by the Corporation, your option will terminate on the Stated Expiration Date described above. (b) If the termination of your employment or separation from service as a Director is a "Termination for Cause" as defined in the Plan, your option will terminate automatically with respect to any shares not previously exercised, effective immediately as of your termination or separation. -2- (c) If you terminate or separate by your own act, your option will terminate at the close of business on the earlier of the Stated Expiration Date described above or on the ninetieth (90th) day following the date of your termination or separation. (d) If you terminate or separate for any other reason, your option will terminate at the close of business on the earlier of the Stated Expiration Date described above or on the third (3rd) anniversary of the date of your termination or separation. 14. OPTION AWARDED SUBJECT TO PLAN PROVISIONS: The Plan provisions take precedence over the provisions of this letter agreement, Therefore, in the case of any inconsistency between any provision of this letter agreement and any provision of the Plan in effect on the Grant Date, the provision of the Plan will control. 15. COUNTERPARTS: This letter agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which shall be deemed one and the same agreement. IN WITNESS WHEREOF, the Corporation and the Grantee have duly executed this Agreement as of the Grant Date. DNB FINANCIAL CORPORATION Grantee: By: ________________________________ ___________________________(L.S.) Print Name: __________________________ (Signature) Title: _______________________________ Print Name: _____________________ -3-
1995 STOCK OPTION PLAN OF DNB FINANCIAL CORPORATION (As amended and restated, effective as of April 27, 2004) NOTICE OF STOCK OPTION EXERCISE To: DNB Financial Corporation Attention: Chief Financial Officer From: _______________________________ Date: ____________________, 20____ (Grantee Name) _______________________________ Tel.No. (______) _______ - ___________ (Address) _______________________________ _______________________________ Date of Grant: _______________, _______ Number of Shares Exercised: _____________ Exercise Price Per Share: $ _________.____ Total Exercise Price: $ __________. ____ PLUS: Federal Income Tax Withholding $ __________. ____ (Contact Payroll to Determine) F.I.C.A. Tax Withholding $ __________. ____ (Contact Payroll to Determine) Pennsylvania Personal Income Tax Withholding $ __________. ____ (Contact Payroll to Determine)) Local Earned Income Tax Withholding $ __________. ____ (Contact Payroll to Determine) Subtotal of withholding taxes $ __________. ____ (Contact Payroll to Determine) Total Remittance $ __________. ____ _____ Check this box if you want to use all or part of any shares exercised that are "in the money" to pay exercise price or withholding taxes.
(Attach certified check for net remittance due or attach properly endorsed certificates of stock with equal value) [Please note that final remittance due is subject to adjustment pending determination of applicable stock value] Please accept the above notice of exercise and issue share certificates as required. __________________________________ (signature of person authorized to exercise) Rev. 4-18-2005 -----END PRIVACY-ENHANCED MESSAGE-----