Exhibit 10(o)


Exhibit
10(o)



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:




(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.

 

 

 





















 

(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

       

       

      By:
      ________________________________

      Print
      Name: __________________________

      Title:
      _______________________________
	
      Grantee:

       

       

      ________________________________
      

      (Signature)

      Print
      Name: _______________________
















 


























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: Corporate Secretary




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)