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 0000 (xxx 0000 Xxx):
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)
