Exhibit 10(n)

August 5, 2003

«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».
 
 
 

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Stock Option Agreement
August 5, 2003

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):

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Stock Option Agreement
August 5, 2003

(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.

 

 

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Stock Option Agreement
August 5, 2003

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.

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Stock Option Agreement
August 5, 2003

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

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Stock Option Agreement
August 5, 2003

 

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)