Exhibit 10 (x)

RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT is made as of this 23rd day of April, 2010 (the “Grant Date”), by
and between DNB Financial Corporation (“Holding Company”) and William S. Latoff
(“Grantee”).
 
Background:
 
Grantee is a valued employee of the Holding Company and/or DNB First, National
Association (the “Bank”) (the Holding Company and the Bank are collectively
referred to herein as the “Company”).  The Holding Company’s Board of Directors
adopted the DNB Financial Corporation Incentive Equity and Deferred Compensation
Plan on November 24, 2004 (“Plan”).  As additional compensation for Grantee’s
past and future services to the Company, and to induce the Grantee to continue
Grantee’s efforts to enhance the value of the Company for shareholders,
generally, the Company wishes to conditionally transfer rights to receive shares
of Common Stock of the Holding Company to Grantee pursuant to the terms of the
Plan, subject to the additional terms and conditions of this Agreement.
 
NOW, THEREFORE, the Company and Grantee hereby agree as follows, intending to be
legally bound:
 
1.           Subject to and as soon as practicable following the satisfaction of
the vesting condition set forth in Paragraph 2 below, but subject to the further
conditions set forth in Paragraph 4 below, the Company agrees to transfer to
Grantee on the “Vesting Date” (as defined below) Fourteen thousand two hundred
(14,200) shares of the Holding Company’s common stock, par value $1.00 per share
(“Award Shares”), minus that number of Award Shares, if any, required to pay
taxes as more fully described in Paragraph 6, below (such shares actually
transferred to Grantee are sometimes hereinafter referred to as “Transferred
Shares”), subject to the transfer restrictions in this Agreement and the Plan. 
The number of Award Shares is subject to adjustment as provided in Section 10.1
of the Plan.
 
2.           Grantee shall first be entitled to the Award Shares on a date (the
“Vesting Date”) that shall be the earlier of (1) the third (3rd) anniversary of
the Grant Date, (2) the date of Grantee’s death, (3) Grantee’s termination of
employment on account of disability, (4) the date on which a “Change in Control”
(as hereinafter defined) of the Company first occurs, or (5) the later of the
second (2nd) anniversary of the Grant Date, provided he has continued to perform
substantial services for the Company through that date, or the date on which
Grantee attains age sixty-five (65), subject to such further terms and
conditions of the Plan as may be applicable.  If Grantee’s employment terminates
for any reason prior to the Vesting Date, this Agreement shall automatically
terminate, the Grantee shall forfeit all rights hereunder, and no shares of
common stock or other consideration shall be transferred to Grantee pursuant to
this Agreement.
 
3.           “Change in Control” shall mean the occurrence of an event that
satisfies both of the following requirements in subparagraphs (a) and (b) of
this Paragraph 3.

(a)           Either:

(I)           Company is acquired by an entity that is not an affiliate of the
Company in an acquisition of any form, including without limitation a purchase
of substantially all of the assets of the Company, such that, pursuant to the
Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009, and the rules and regulations promulgated
by the Department of Treasury thereunder (“EESA”), including without limitation
12 C.F.R. Section 30.14 or any successor provision, as amended, Grantee is no
longer subject to Section 111 of EESA; or

(II)           The event would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 (the “Exchange Act”), or if either (i) any “persons” (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act in effect on the Grant
Date), other than the Company or any “person” who on the date hereof is a
director of officer of the Company, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company’s then outstanding securities, or (ii) during any period of two
(2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office who were
directors at the beginning of the period.
 
 
 
 

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(b)           The event must be a change in control event within the meaning of
26 C.F.R. Section 1.280G-1, Q&A-27 through Q&A-29 or within the meaning of 26
C.F.R. Section 1.409A-3(i)(5)(i). 

4.             For so long as Grantee is subject to Section 111 of EESA,
Grantee’s entitlement to Award Shares shall be subject to the following further
conditions pursuant to Section 111(b)(3)(D) of EESA, which apply to the Award
Shares due to the Holding Company’s receipt of financial assistance under EESA’s
Troubled Asset Relief Program (“TARP”).  For purposes of this Agreement, the
Vesting Date with respect to Award Shares shall be no earlier than the
applicable date set forth in the following schedule:

(a)           with respect to 25% of the Award Shares, the time of repayment of
25% of the aggregate financial assistance received under TARP;

(b)           with respect to an additional 25% of the Award Shares (for an
aggregate total of 50% of the Award Shares), the time of repayment of 50% of the
aggregate financial assistance received under TARP;

(c)           with respect to an additional 25% of the Award Shares (for an
aggregate total of 75% of the Award Shares), the time of repayment of 75% of the
aggregate financial assistance received under TARP; and

(d)           with respect to an additional 25% of the Award Shares (for an
aggregate total of 100% of the Award Shares), the time of repayment of 100% of
the aggregate financial assistance received under TARP.

5.           If, and for so long as, the Company is prohibited from making any
payment to Grantee that would constitute a “golden parachute payment” within the
meaning of Section 111(b)(3)(C) of EESA, due to the Company’s receipt of
financial assistance under TARP, Grantee’s right to exercise all or any portion
of this stock option shall be suspended to the extent necessary to comply with
said prohibition.  Grantee  hereby acknowledges and agrees, therefore, that the
Company has an independent obligation to comply, and to determine compliance
with, EESA, and for that reason the Company shall be entitled to determine,
consistent with the provisions of this Agreement, whether the prohibition set
forth in Section 111(b)(3)(C) of EESA apply or no longer apply, and in doing so
the Company shall be entitled to rely conclusively on an opinion of independent
legal counsel acceptable to the Company, and such determination by the Company,
if made in conformance with such opinion and not inconsistent with the
provisions of this Agreement, shall be binding upon Grantee.

6.           At Grantee’s written election, to be provided in writing to the
Company on or prior to the Vesting Date together with the cash necessary for
such payment, Grantee shall pay to the Company in cash an amount sufficient to
fund all of the Federal, state and local taxes the Company may be required to
withhold with respect to the Award Shares.  To the extent that the Grantee shall
not so have elected and paid the necessary amount on or prior to the Vesting
Date, the Company may reduce the Award Shares by that number of shares having an
aggregate Fair Market Value, as of the Vesting Date, equal to the aggregate
amount of Federal, state and local taxes required to be withheld with respect to
the Award Shares.
 
 
 

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7.           Grantee shall not sell, assign, pledge, gift, encumber or otherwise
alienate or dispose of any of the Transferred Shares for one (1) year from the
Vesting Date.  Each certificate for the Transferred Shares shall bear the
following legend:
 
“Sale, assignment, pledge, gift, encumbrance or other alienation or disposition
of the shares represented by this certificate may be restricted as provided
under applicable federal and state securities laws, and are also restricted and
prohibited until ____________ __, _____  pursuant to the terms of a Restricted
Stock Award Agreement dated ____________ __, _____, between DNB Financial
Corporation and the holder of the shares named on this certificate, and the
provisions of the DNB Financial Corporation Incentive Equity and Deferred
Compensation Plan approved on November 24, 2004, each of which may be examined
at the principal office of the Company, and any subsequent transfer is subject
to the terms and conditions of such Agreement and Plan.”
 
8.           As a condition to any transfer, encumbrance or other alienation of
any of the Transferred Shares, Grantee shall provide the Company and/or any
transfer agent or broker upon request with such certifications, legal opinions
and other documents as they may request with respect to applicable securities
and tax laws.
 
9.           Nothing in this Agreement confers on Grantee any right to continue
as an employee or director of the Company or any affiliate or interfere with or
restrict in any way the rights of the Company or its affiliates to terminate
Grantee’s employment or other Service at any time.
 
10.           Transfer of rights under this Agreement are further restricted as
provided in the Plan.  Grantee acknowledges receipt of a copy of the Plan, which
is incorporated into this Agreement.  Capitalized terms not otherwise defined in
this Agreement shall have the respective meanings, if any, assigned to such
terms in the Plan.  This Agreement is an “Award Agreement” under the Plan.
 
11.           This Agreement is governed by the internal laws of Pennsylvania,
without giving effect to the choice of law or conflict of laws principles,
subject to pre-emption by applicable federal law and regulations.
 
The parties hereby have duly entered into this Agreement as of the first date
set forth above.
 
ATTEST:
 
DNB FINANCIAL CORPORATION
     
 /s/ Gerald F. Sopp
 
By:
 /s/ William J. Hieb
Print Name: Gerald F. Sopp
 
Print Name: William J. Hieb
Title:  EVP, Chief Financial Officer
 
Title:  President and COO
     
Witness:
 
GRANTEE
     
 /s/ Bruce E. Moroney
 
(Signature)
 /s/ William S. Latoff
 Print Name: Bruce E. Moroney
 
Print Name: William S. Latoff
     

 
 
 
 

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