Document:

Unassociated Document

    Exhibit
      10r

    

    

     

    

    

    

    DNB
      FINANCIAL CORPORATION

    SUPPLEMENTAL
      EXECUTIVE RETIREMENT PLAN

    FOR

    WILLIAM
      S. LATOFF

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF
      CONTENTS

     

    
      
        	 	 PAGE
	
                ARTICLE
                  I. PURPOSE

              	
                1

                 

              
	
                ARTICLE
                  II. DEFINITIONS 

              	
                1

                 

              
	
                ARTICLE
                  III. ALLOCATION OF DEFERRED COMPENSATION 

              	
                3

                 

              
	
                ARTICLE
                  IV. VESTING 

              	
                3

                 

              
	
                ARTICLE
                  V. ENTITLEMENT TO DEFERRED COMPENSATION 

              	
                4

                 

              
	
                ARTICLE
                  VI. FUNDING OF DEFERRED COMPENSATION 

              	
                6

                 

              
	
                ARTICLE
                  VII. DESIGNATION OF BENEFICIARIES 

              	
                6

                 

              
	
                ARTICLE
                  VIII. ADMINISTRATION 

              	
                7

                 

              
	
                ARTICLE
                  IX. AMENDMENT 

              	
                8

                 

              
	
                ARTICLE
                  X. MISCELLANEOUS 

              	
                8

                 

              
	
                APPENDIX
                  A DESIGNATION OF BENEFICIARY 

              	10 

      

    

    
      
        
          

           

        

         

      

      
         

        
          

        

      

      
         

        
        

      

    

    ARTICLE
      I

    PURPOSE

    

    1.01
       The
      primary purpose of this Plan is to provide a supplemental retirement benefit
      to
      the Executive in order to competitively compensate him for being elected
      full-time Chairman and Chief Executive Officer of the Company in 2004 and,
      as a
      result, foregoing opportunities to accrue substantial retirement income in
      connection with his other business interests. The Deferred Compensation shall
      be
      earned by the Executive and accrued by the Company on a defined contribution
      basis. 

    

    

    ARTICLE
      II

    DEFINITIONS

    

    2.01
       "Account"
      means a bookkeeping reserve account established in the books of the Company
      for
      the Executive.

    

    2.02 “Accrued
      Benefit” means, at any point in time, the Executive’s vested interest, as
      determined pursuant to Article IV, below, in the Account resulting from all
      thirteen (13) allocations pursuant to Section 3.01, below, plus or minus
      earnings or losses pursuant to Section 3.02, below, and after taking into
      account any previous payments pursuant to Article V, below. 

    

    2.03
       “Bank”
      means DNB First, National Association.

    

    2.04 "Beneficiary"
      means the beneficiary or beneficiaries designated by the Executive to receive
      the amounts, if any, payable under the Plan upon his or her death, pursuant
      to
      Article VII, below.

     

    2.05
       "Board
      of
      Directors" means the Board of Directors of the Company.

     

                   
      2.06 “Cause”
      means personal dishonesty, incompetence, willful misconduct, breach of fiduciary
      duty involving personal profit, conviction of a felony, suspension or removal
      from office or prohibition from participation in the conduct of the Company’s or
      Bank’s affairs pursuant to a notice or other action by any regulatory agency
      having jurisdiction over the Company or the Bank, or willful violation of any
      law, rule or regulation or final cease-and-desist order which in the reasonable
      judgment of the Board of Directors will probably cause substantial economic
      damages to the Company, willful or intentional breach or neglect by Executive
      of
      his duties, or material breach of any material provision of any agreement
      between the Company or the Bank and the Executive pertaining to his employment.
      For purposes of this definition of “Cause,” no act, or failure to act on
      Executive’s part shall be considered “willful” unless done, or omitted to be
      done, by him without good faith and without reasonable belief that this action
      or omission was in the best interest of Company; provided that any act or
      omission to act by Executive in reliance upon an approving opinion of counsel
      to
      the Company or counsel to the Executive shall not be deemed to be willful.
      The
      terms “incompetence” and “misconduct” shall be defined with reference to
      standards generally prevailing in the banking industry. In determining
      incompetence and misconduct, Company shall have the burden of proof with regard
      to the acts or omission of Executive and the standards prevailing in the banking
      industry. 

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    2.07 “Change
      of Control” means any one or more of the following, with respect to the Company
      or the Bank: 

    

    (1)
      a
      change in control of a nature that 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 any successor provision) as it may
      be amended from time to time; 

     

    (2)
      any
“persons” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act
      in effect on the date first written above), other than Company or Bank or any
      “person” who on the date hereof is a director of officer of Company or Bank, is
      or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
      Act), directly or indirectly, of securities of Company or Bank representing
      25%
      or more of the combined voting power of Company’s or Bank’s then outstanding
      securities; or

    

    (3)
      during any period of two (2) consecutive years, individuals who at the beginning
      of such period constitute the Board of Directors of Company or Bank 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.
      

    

    2.08 “Code”
      means the Internal Revenue Code of 1986, as amended.

    

    2.09 "Company"
      means DNB Financial Corporation.

    

    2.10
       "Deferred
      Compensation" means the supplemental compensation and earnings thereon
      credited to the Account.

    

    2.11
       "Effective
      Date" means December 20, 2006.

     

    2.12
       "Executive"
      means William S. Latoff.

    

    2.13
       “Good
      Reason” means (a) the assignment to Executive of any duties inconsistent with
      Executive’s positions, duties, responsibilities, titles or offices with the
      Company or the Bank as in effect immediately prior to a Change in Control,
      (b)
      any removal of Executive from, or any failure to re-elect Executive to, any
      of
      such positions, except in connection with a termination or suspension of
      employment for Cause, disability, death or retirement, (c) a reduction by the
      Company or the Bank in Executive’s base annual salary, bonus and/or benefits as
      in effect immediately prior to a Change in Control or as the same may be
      increased from time to time thereafter, or the failure to grant periodic
      increases in the Executive’s base annual salary on a basis at least
      substantially comparable to the lowest periodic increase granted to other
      officers of the Company having the title of executive vice president or above,
      (iv) any purported termination of Executive’s employment with the Company or the
      Bank when Cause does not exist, or (v) a relocation of Executive’s workplace
      outside of Chester County. 

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    2.14 “Payment
      Date” means January 1, 2019. 

    

    2.15 "Plan"
      means this DNB Financial Corporation Supplemental Executive Retirement Plan,
      as
      the same may be amended from time to time.

    

    2.16
       "Trustee"
      means the individual or corporation appointed by the Company to serve as trustee
      of a trust established by the Company pursuant to Article VI,
      below.

    

    2.17
       "Valuation
      Date" means the last day of each calendar month on which the New York Stock
      Exchange is open for business.

    

    

    ARTICLE
      III 

    ALLOCATION
      OF DEFERRED COMPENSATION

    

    3.01
       On
      or
      about the Effective Date, but not later than December 31, 2006, and on or about
      each one-year anniversary of the Effective Date during the years 2007 through
      2018, but not later than December 31 of such year, the Company shall credit
      Deferred Compensation to the Account in the amount of seventy thousand dollars
      ($70,000). 

    

    3.02
       As
      of
      each Valuation Date, the Company shall credit the Account with earnings or
      losses on the balance of the Account since the preceding Valuation Date in
      accordance with the performance of the investments selected pursuant to Section
      6.04, below. 

     

    ARTICLE
      IV

    VESTING

    

    4.01
       For
      purposes of this Plan, the Executive shall have a vested interest in the balance
      of the Account of forty percent (40%) as of the Effective Date. Thereafter,
      the
      Executive’s vested interest in the balance of the Account shall be determined in
      accordance with the following schedule, provided that the Executive remains
      employed, continuously, by the Company or the Bank through the dates
      indicated:

    

    
      	
              Date

            	
              Vested
                Percentage

            
	
              December
                15, 2007

            	
              60%

            
	
              December
                15, 2008

            	
              80%

            
	
              December
                15, 2009

            	
              100%

            

    

    

    4.02 Notwithstanding
      Section 4.01, above, (a) the Executive’s vested interest in the Account upon and
      at all times following his termination by the Company or the Bank for reasons
      other than Cause shall be one hundred percent (100%); (b) the Executive’s vested
      interest in the Account upon and at all times following his termination of
      employment with the Company or the Bank for Good Reason following a Change
      in
      Control shall be one hundred percent (100%); and (c) the Executive’s vested
      interest in the Account upon and at all times following his termination of
      employment with the Company or the Bank for Good Reason following the signing
      of
      a letter of intent or a formal acquisition or merger agreement between the
      Company or the Bank, of the one part, and a third party which contemplates
      a
      transaction that would result in a Change in Control, but only if such letter
      of
      intent or agreement, or the transaction contemplated thereby, has not been
      canceled or terminated at the time of his termination for Good
      Reason.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    

    ARTICLE
      V

    ENTITLEMENT
      TO DEFERRED COMPENSATION

    

    5.01  
      Commencing
      on the Payment Date, or as soon as practicable thereafter, the Executive’s
      Accrued Benefit shall be paid to him in ten (10) annual installments. Payment
      shall commence on the Payment Date whether or not the Executive is still
      employed by the Company or the Bank as of the Payment Date. 

    

    5.02  
      At
      least
      one year prior to the Payment Date, the Executive may make an election to defer
      receipt of the installment payments set forth in Section 5.01, and instead
      receive payment of his Accrued Benefit in two or more, but not more than ten
      (10), annual installments commencing as of a date specified by the Executive,
      or
      in a single lump sum as of a date specified by the Executive, provided that
      in
      either case such date is at least five years following the Payment Date. Any
      such election shall be in writing and delivered to the Chief Financial Officer
      of the Company at least one year prior to the Payment Date.

    

    5.03 
       In
      the
      event of the death of the Executive prior to the Payment Date, the Executive’s
      Accrued Benefit shall be paid to his Beneficiary in either a single lump sum,
      in
      annual installments over a period of years not exceeding ten (10), or by the
      purchase and distribution of a commercial annuity contract, as of or commencing
      on the Payment Date, or as soon as practicable thereafter, as directed by the
      Beneficiary in a written election delivered to the Chief Financial Officer
      of
      the Company. Such written election shall be made no later than the last date
      permitted by Section 409A of the Code and the regulations thereunder. If no
      such
      written election is made in a timely manner, or if no such election is permitted
      by Section 409A of the Code and the regulations thereunder, the Executive’s
      Accrued Benefit shall be paid to the Beneficiary in a single lump sum as of
      the
      Payment Date, or as soon as practicable thereafter. 

    

    5.04  
      If
      payments hereunder are to be made in two or more installments, the amount of
      each installment, other than the final installment, shall be equal to the
      Accrued Benefit as of the last Valuation Date preceding payment, divided by
      the
      number of payments remaining in the installment period, including the current
      payment. The amount of the final installment shall be equal to the Accrued
      Benefit as of the last Valuation Date preceding the date of payment. Any amount
      remaining upon the death of the Executive shall be paid to his Beneficiary
      in
      either a single lump sum, in annual installments over a period of years not
      exceeding ten (10), or by the purchase and distribution of a commercial annuity
      contract, as of or commencing on the Payment Date, or as soon as practicable
      thereafter, as directed by the Beneficiary in a written election delivered
      to
      the Chief Financial Officer of the Company. Such written election shall be
      made
      no later than the last date permitted by Section 409A of the Code and the
      regulations thereunder. If no such written election is made in a timely manner,
      or if no such election is permitted by Section 409A of the Code and the
      regulations thereunder, the Executive’s Accrued Benefit shall be paid to the
      Beneficiary in a single lump sum as of the Payment Date, or as soon as
      practicable thereafter.

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    5.05  
      All
      amounts payable pursuant to this Plan shall be subject to all applicable
      Federal, state and local tax withholding requirements, and other charges and
      assessments imposed by law.

     

    5.06  
      Notwithstanding
      the foregoing provisions of this Article V, or the vesting rules of Article
      IV,
      if the Executive’s employment with the Company or the Bank is terminated for
      Cause prior to the commencement of payments, he shall forfeit the Accrued
      Benefit, and no payments to him or his Beneficiary shall be made under this
      Plan. If the Executive’s employment with the Company or the Bank is terminated
      for Cause after the commencement of payments, he shall forfeit the Accrued
      Benefit, and no further payments to him or his Beneficiary shall be made under
      this Plan.

    

    5.07 (a) If,
      as a
      result of payments provided for under or pursuant to this Plan, together with
      all other payments in the nature of compensation provided to or for the benefit
      of the Executive under any other plans or agreements in connection with a Change
      in Control, the Executive becomes subject to excise taxes under Section 4999
      of
      the Code, then, in addition to any other benefits provided under or pursuant
      to
      this Plan or otherwise, the Company shall pay to the Executive at the time
      any
      such payments are made under or pursuant to this or other plans or agreements,
      an amount equal to the amount of such excise taxes (the “Parachute Tax
      Reimbursement”). In addition, the Company shall “gross up” such Parachute Tax
      Reimbursement by paying to the Executive at the same time an additional amount
      equal to the aggregate amount of any additional taxes (whether income taxes,
      excise taxes, special taxes, employment taxes or otherwise, and whether Federal,
      state or local) that are or will be payable by the Executive as a result of
      the
      Parachute Tax Reimbursement being paid or payable to the Executive and as a
      result of such additional amounts paid or payable to the Executive pursuant
      to
      this sentence, such that after payment of such additional taxes the Executive
      shall have been paid on a net, after-tax basis an amount equal to the Parachute
      Tax Reimbursement. The amount of the gross-up described in the immediately
      preceding sentence shall be computed on the assumption that the Executive shall
      be subject to each applicable tax at the highest marginal rate of such tax.
      

    

    (b) The
      amount of any Parachute Tax Reimbursement and any gross-up shall be determined
      by a registered public accounting firm selected by the Compensation Committee
      of
      the Board of Directors of the Company, whose determination, absent manifest
      error, shall be treated as conclusive and binding absent a binding determination
      by a governmental authority that a greater or lesser amount of taxes is payable
      by the Executive. 

    

    (c) If
      the
      Parachute Tax Reimbursement and a gross-up are provided for the Executive
      pursuant to one or more other plans or agreements in addition to this Plan,
      they
      shall be provided only once. 

    
      
         

         

      

      
        5

        
          

        

      

      
         

      

    

    ARTICLE
      VI

    FUNDING
      OF DEFERRED COMPENSATION

    

    6.01
       Except
      as
      provided by the terms of the Trust established pursuant to Section 6.02, below,
      neither the Executive nor the Beneficiary shall have any right, title, or
      interest in or to any investments which the Company may make to aid it in
      meeting its obligations hereunder. Such investments, whether held in trust
      or
      otherwise, shall be unrestricted corporate assets.

    

    6.02
       The
      Company shall establish the Trust for the purpose of funding the Deferred
      Compensation provided hereunder. The Trust shall include such terms,
      restrictions and limitations as necessary to ensure that it will be treated
      as a
      "grantor trust" within the meaning of subpart E, part I, subchapter J, chapter
      I, subtitle A of the Code, with respect to the Company. Moreover, the Trust
      shall be evidenced by an agreement substantially similar to the form of the
      model trust agreement set forth in Internal Revenue Service Revenue Procedure
      92-64, including any modification to such Revenue Procedure, and include
      provisions required in such model trust agreement that all assets of the trust
      shall be subject to the claims of creditors of the Company in the event of
      its
      insolvency. Any assets of the Trust remaining after the obligations to the
      Executive and his Beneficiary have been satisfied shall be paid to the Company.
      

    

    6.03 On
      each
      date an amount is credited to the Account pursuant to Section 3.01, above,
      the
      Company shall contribute such amount to the Trust. 

    

    6.04 The
      Company shall direct the Trustee of the Trust to invest the assets of the Trust
      in accordance with the investment directions of the Executive, or, after the
      Executive’s death, the Compensation Committee of the Board of Directors. The
      Executive shall communicate his investment selections, and any changes thereto,
      in writing to the Company, and the Company shall direct the Trustee to implement
      such investment selections or changes thereto as soon as practicable thereafter.
      Neither the Company, the Compensation Committee of the Board of Directors,
      the
      Trustee, nor their respective employees and agents shall be liable for any
      losses attributable to the Executive’s investment selections or changes thereto,
      or a reasonable delay in implementation thereof, or the investment selections
      made by the Compensation Committee of the Board of Directors following the
      Executive’s death. 

    

    6.05 Notwithstanding
      any provision of the Trust to the contrary, all expenses of the Trust, and
      any
      taxes that may be levied against the Trust, shall be paid by the Company, other
      than taxes required to be withheld from payments of Trust assets to the
      Executive or his Beneficiary. In the event that any Trust assets are used to
      pay
      expenses or taxes of the Trust, the Company shall reimburse the Trust within
      five business days of such payment. 

    

    

    ARTICLE
      VII

    DESIGNATION
      OF BENEFICIARIES

    

    7.01
       The
      Executive shall file with the Company a written designation in the form attached
      hereto as Appendix A of one or more persons as Beneficiary to receive the
      amount, if any, payable under the Plan upon his death. The Executive may, from
      time to time, revoke or change his Beneficiary designation by filing a new
      designation with the Company. The last such designation received by the Company
      shall be controlling, provided, however, that no designation, change or
      revocation thereof, shall be effective unless received by the Company prior
      to
      the Executive’s death. 

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    7.02
       If
      no
      such Beneficiary designation is in effect at the time of the Executive’s death,
      or if no designated Beneficiary survives the Executive, the payment of the
      amount, if any, payable under the Plan upon his or her death shall be made
      to
      his or her surviving spouse; if no surviving spouse, to the Executive’s
      surviving children equally; if no surviving children, to the Executive’s
      surviving grandchildren equally; if no surviving grandchildren, to the
      Executive’s estate.

    

    ARTICLE
      VIII

    ADMINISTRATION

    

    8.01
       The
      Company shall have the discretionary authority to determine eligibility for
      payments under the Plan and to construe, interpret and administer the Plan,
      and
      shall do so in a manner that is consistent with the requirements and limitations
      of Section 409A of the Code. 

     

    8.02 The
      Executive or, in the event of the Executive’s death, the Executive’s
      Beneficiary, may file a written claim for payment hereunder with the Company.
      In
      the event of a denial of any payment due to or requested by the Executive or
      Beneficiary (the “claimant”), the Company will give the claimant written
      notification containing specific reasons for the denial. The written
      notification will contain specific reference to the pertinent provisions of
      this
      Agreement on which the denial of the claim is based. In addition, it will
      contain a description of any other material or information necessary for the
      claimant to perfect a claim, and an explanation of why such material or
      information is necessary. The notification will provide further appropriate
      information as to the steps to be taken if the claimant wishes to submit the
      claim for review and the time limits applicable thereto, and a statement of
      the
      claimant’s right to bring a civil action under Section 502(a) of the Employee
      Retirement Income Security Act of 1974, as amended. This written notification
      will be given to a claimant within ninety (90) days after receipt of the claim
      by the Company unless special circumstances require an extension of time for
      processing the claim, in which case the Company shall provide written notice
      of
      the extension to the claimant and the reasons therefore, and the date by which
      the Company expects to make its determination with respect to the claim. In
      no
      event shall such extension exceed 90 days.

     

    8.03 In
      the
      event of a denial of a claim for benefits, the claimant or a duly authorized
      representative will be permitted to submit issues and comments in writing to
      the
      Company and to submit documents, records and other information relating to
      the
      claim for benefits. The claimant or a duly authorized representative shall
      also
      be provided, upon request and free of charge, reasonable access to, and copies
      of, all documents, records, and other information relevant to the claimant’s
      claim for benefits. In addition, the claimant or a duly authorized
      representative may make a written request for a full and fair review of the
      claim and its denial by the Company that takes into account all comments,
      documents, records and other information submitted by the claimant, without
      regard to whether such information was submitted or considered in the initial
      benefits determination; provided, however, that such written request is received
      by the Company (or its delegate) within sixty (60) days after receipt by the
      claimant of written notification of the denial. The sixty (60) day requirement
      may be waived by the Company in appropriate cases.

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    8.04 A
      decision on review of a claim for benefits will be rendered by the Company
      within sixty (60) days after the receipt of the request. Under special
      circumstances, an extension (up to an additional 60 days) can be granted for
      processing the decision. Notice of this extension must be provided in writing
      to
      the claimant prior to the expiration of the initial sixty-day period. In no
      event will the decision be rendered more than one hundred twenty (120) days
      after the initial request for review. Any decision by the Company will be
      furnished to the claimant in writing and will set forth the specific reasons
      for
      the decision and the specific provisions on which the decision is based. The
      claimant or a duly authorized representative shall also be provided, upon
      request and free of charge, reasonable access to, and copies of, all documents,
      records, and other information relevant to the claimant’s claim for benefits.

     

    

    ARTICLE
      IX

    AMENDMENT
      

    

    9.01
       Except
      as
      provided in Section 9.02, the Company may amend the Plan only with the express,
      written consent of the Executive or, after his death, the
      Beneficiary.

    

    9.02 The
      Company may amend the Plan at any time to the extent necessary to comply with
      any requirement or limitation set forth in Section 409A of the Code or the
      regulations relating thereto.

     

    

    ARTICLE
      X

    MISCELLANEOUS

    

    10.01
       Nothing
      contained in the Plan shall give the Executive the right to be retained in
      the
      employment of the Company or the Bank or affect the right of either party to
      terminate the Executive’s services. The adoption of the Plan shall not
      constitute an employment contract between the Company and
      Executive.

    

    10.02
       If
      the
      Company shall find that any person to whom any amount is payable under the
      Plan
      is unable to care for his or her affairs because of illness or accident, or
      is a
      minor, the Company may direct that any amount to which such person is entitled
      be paid to his or her spouse, a child, a relative, an institution maintaining
      or
      having custody of such person, or any other person deemed by the Company to
      be a
      proper recipient on behalf of such person otherwise entitled to payment. Any
      such payment shall be a complete discharge of the liability of the Plan and
      the
      Company therefor.

    

    10.03
       Except
      insofar as may otherwise be required by law, no amount payable at any time
      under
      the Plan shall be subject in any manner to alienation by anticipation, sale,
      transfer, assignment, bankruptcy, pledge, attachment, charge, encumbrance or
      garnishment by creditors of the Executive or the Beneficiary nor be subject
      in
      any manner to the debts or liabilities of any person,
      and any attempt to do so alienate or subject any such amount, whether presently
      or thereafter payable, shall be void.

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    10.04
       It
      is the
      intention of the Company that the Plan shall be unfunded for Federal income
      tax
      purposes and for purposes of the Employee Retirement Income Security Act of
      1974, as amended. 

    

    10.05 All
      rights under this Plan shall be governed by and construed in accordance with
      the
      laws of the Commonwealth of Pennsylvania, except to the extent such laws are
      superseded by the laws of the United States. 

    

    IN
      WITNESS WHEREOF, the Company has caused this Plan to be executed by its
authorized
      officers as of this 20th
      day of
      December, 2006. 

    

    
      	 	 
	
              ATTEST:
                

            	
              DNB
                FINANCIAL CORPORATION

            
	 	 
	 	 
	 	 
	
              __________________________

            	
              By:_________________________

            

    

    
      
         

         

         

      

      
        9

        
          

        

      

      
         

      

    

    DNB
      FINANCIAL CORPORATION

    SUPPLEMENTAL
      EXECUTIVE RETIREMENT PLAN

    FOR

    WILLIAM
      S. LATOFF

    

    APPENDIX
      A· 

    

    DESIGNATION
      OF BENEFICIARY

    

    Pursuant
      to the above-referenced Supplemental Executive Retirement Plan (“Plan”), I,
      William S. Latoff, hereby designate the following person(s) or entity(ies)
      as
      beneficiary(ies) of any and all amounts which shall be payable pursuant to
      the
      Plan by reason of or following my death and revoke all such prior beneficiary
      designations:

     

    
      
        	
                Primary
                  Beneficiary I

              	
                Primary
                  Beneficiary II (optional)

                 

              
	
                Name:
                  Mary D. Latoff

                 

              	
                Name:

                 

              
	
                Address:
                  1110 Debra’s Way, West Chester, PA 19382

                 

              	 
	 	
                Address:

                 

              
	 	
                 

                 

              
	
                SSN/EIN:
                  ###-##-####

                 

              	
                SSN/EIN:

                 

              
	
                Relationship:
                  Spouse

                 

              	
                Relationship:

                 

              
	
                Percentage:
                  100%

                 

              	
                Percentage:

                 

              
	 	
                 

                 

              
	
                Contingent
                  Beneficiary I

              	
                Contingent
                  Beneficiary II (optional)

                 

              
	
                Name:
                  Blair Wade Latoff

                 

              	
                Name:
                  

                 

              
	
                Address:
                  1110 Debra’s Way, West Chester, PA 19382

                 

              	
                Address:
                  

                 

              
	 	
                 

                 

              
	
                SSN/EIN:
                  ###-##-####

                 

              	
                SSN/EIN:
                  

                 

              
	
                Relationship:
                  Daughter

                 

              	
                Relationship:
                  

                 

              
	
                Percentage:
                  100%

              	
                Percentage:

              
	 	 
	 	 
	 	 

                _____________________
                  12/20/2006

                (signature)   (date)

              

      
________________

    
      
        · This
          form
          should be revised if more than two Primary Beneficiaries or more than two
          Contingent Beneficiaries are to be designated.

         

         

          10Unassociated Document

    Exhibit
      10s

    

    TRUST
      AGREEMENT

    

    THIS
      TRUST AGREEMENT, effective as of December 20, 2006, is made by and between
      DNB
      FINANCIAL CORPORATION ("Company") and DNB FIRST, NATIONAL ASSOCIATION
      ("Trustee").

    

    WHEREAS,
      the Company has a adopted the DNB Financial Corporation Supplemental Executive
      Retirement Plan for William S. Latoff (the “Plan”);

    

    WHEREAS,
      the Company has incurred or expects to incur liability under the terms of the
      Plan to Mr. Latoff (the “Participant”);

    

    WHEREAS,
      the Company wishes to establish a trust (the "Trust") and to contribute to
      the
      Trust the assets that shall be held therein, subject to the claims of the
      Company's creditors in the event of the Company's Insolvency, as defined in
      Section 4, until paid to the Participant in such manner and at such times as
      specified in the Plan and this Trust Agreement;

    

    WHEREAS,
      it is the intention of the parties that this Trust shall constitute an unfunded
      arrangement and shall not affect the status of the Plan as an unfunded plan
      maintained for the purpose of providing deferred compensation for a management
      or highly compensated employee as described in Sections 201(2), 301(a)(3) and
      401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended
      (“ERISA”); and

    

    WHEREAS,
      it is the intention of the Company to make contributions to the Trust to provide
      a source of funds to meet its liabilities under the Plan.

    

    NOW
      THEREFORE, the parties do hereby establish the Trust and agree that the Trust
      shall be comprised, held and disposed of as follows:

    

    Section
      1. Establishment of Trust.

    

    (a)
      The
      Company hereby establishes the Trust with the Trustee, consisting of such sums
      of money and other property acceptable to the Trustee as from time to time
      shall
      be paid and delivered to and accepted by the Trustee from the Company (the
      "Trust Fund"). The Trustee shall have no duty to determine or collect
      contributions under the Plan and shall have no responsibility for any property
      until it is received and accepted by the Trustee. The Company shall have the
      sole duty and responsibility for the determination of the accuracy or
      sufficiency of the contributions to be made under the Plan. All such money
      and
      other property paid or delivered to and accepted by the Trustee shall become
      the
      principal of the Trust to be held, administered and disposed of by the Trustee
      as provided in this Trust Agreement.

    

    (b)
      The
      Trust hereby established shall be irrevocable; notwithstanding the fact that
      the
      Trust is irrevocable, the Company may terminate the Plan to the extent permitted
      by its terms. 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (c)
      The
      Trust is intended to be a grantor trust, of which the Company is the grantor,
      within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle
      A of
      the Code, as amended, and shall be construed accordingly. The Company represents
      and warrants to the Trustee that the Plan is not and shall not be subject to
      Part 4 of Title I of ERISA.

    

    (d)
      The
      principal of the Trust and any earnings thereon shall be held separate and
      apart
      from other funds of the Company and shall be used exclusively for the purposes
      of paying benefits to the Participant under the Plan, expenses of the Trust
      and,
      in the event of Insolvency, obligations of the Company to its general creditors
      as herein set forth. The Participant and his beneficiaries shall have no
      preferred claim on, nor any beneficial ownership interest in, any assets of
      the
      Trust. Any rights created under the Plan and this Trust Agreement shall be
      unsecured contractual rights of the Participant and his beneficiaries against
      the Company. Any assets held by the Trust will be subject to the claims of
      the
      Company's general creditors under federal and state law in the event of
      Insolvency, as defined in Section 4(a) herein.

    

    (e)
      In
      addition to the contributions necessary to meet the funding requirement
      described in Section 2, the Company, in its sole discretion, may at any time,
      or
      from time to time, make additional deposits of cash or other property in trust
      with the Trustee to augment the principal to be held, administered and disposed
      of by the Trustee as provided in this Trust Agreement. Neither the Trustee
      nor
      the Participant or any beneficiary shall have any right to compel such
      additional deposits.

    

    Section
      2. Trust Funding Requirement

    

    From
      time
      to time, the Company shall contribute to the Trust (in cash or other property
      as
      provided or permitted by the Plan) the amounts the Company is obligated to
      credit to the Participant’s account under the Plan (herein, the “Deferred
      Compensation Account”), except that no amounts shall be contributed during any
      period to the extent necessary to avoid the application of Section 409A(b)(3)
      of
      the Internal Revenue Code of 1986, as amended (the “Code”), or regulations
      applicable thereto. 

    

    Section
      3. Payments to the Participant and his Beneficiaries.

    

    (a)
      The
      Company shall deliver to the Trustee a schedule (the "Payment Schedule") that
      indicates the amounts payable in respect of the Participant and that provides
      a
      formula or other instructions acceptable to the Trustee for determining the
      amounts so payable, the form in which such amount is to be paid (as provided
      for
      or available under the Plan), and the time of commencement for payment of such
      amounts. The Company shall be responsible for notifying the Trustee of any
      change in the information on the Payment Schedule. Except as otherwise provided
      herein, the Trustee shall make payments to the Participant (including
      beneficiaries) in accordance with such Payment Schedule.

    

    (b)
      It is
      the intent of the Company and the Trustee that the Company shall be responsible
      for determining and effecting all federal, state and local tax aspects of the
      Plan and the Trust Fund, including without limitation income taxes payable
      on
      the Trust Fund's income, if any, any required withholding of income or other
      payroll taxes in connection with the payment of benefits 

     

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    from
      the
      Trust Fund pursuant to the Plan, and all reporting required in connection with
      any such taxes. To the extent that the Company is required by applicable law
      to
      pay or withhold such taxes or to file such reports, such obligation shall be
      a
      responsibility allocated to the Company, as the case may be, hereunder. To
      the
      extent the Trustee is required by applicable law to pay or withhold such taxes
      or to file such reports, the Company shall inform the Trustee of such
      obligation, shall direct the Trustee with respect to the performance of such
      obligations and shall provide the Trustee with all information required by
      the
      Trustee to meet such obligations. Notwithstanding the foregoing, the Company
      may
      elect to pay any applicable taxes directly. In the event the Company pays taxes
      directly, such amounts may be reimbursed from Trust assets by the Trustee,
      provided that the Company certifies the amount of taxes paid directly and
      instructs the Trustee to remit a reimbursement of such taxes to the
      Company.

    

    (c)
      The
      entitlement of the Participant (including any beneficiaries) to benefits under
      the Plan shall be determined by the Company or such party as it shall designate
      under the Plan, and any claim for such benefits shall be considered and reviewed
      under the procedures set out in the Plan. The Company shall notify the Trustee
      of such determination and shall direct commencement of payments of such
      benefits.

    

    (d)
      The
      Company may make payment of benefits directly to the Participant as they become
      due under the terms of the Plan. The Company shall notify the Trustee of its
      decision to make payment of benefits directly prior to the time such amounts
      are
      payable. If requested by the Company, the Trustee shall reimburse the Company
      for any benefits under the Plan and Trust which are paid by the Company or
      otherwise satisfied. In addition, if the principal of the Trust, together with
      any earnings thereon, are not sufficient to make payment of benefits in
      accordance with the terms of the Plan, the Company shall immediately make up
      the
      balance of each such payment as it falls due. The Trustee shall notify the
      Company when principal and earnings are not sufficient.

    

    Section
      4. Trustee Responsibility regarding Payments to Trust Beneficiary When Company
      Is or Is Alleged to Be Insolvent.

    

    (a)
      The
      Trustee shall cease payment of benefits to the Participant and his beneficiaries
      if the Company is Insolvent. The Company shall be considered "Insolvent" for
      purposes of this Trust Agreement if (i) the Company is unable to pay its debts
      as they become due, or (ii) the Company is subject to a pending proceeding
      as a
      debtor under the United States Bankruptcy Code. A determination of Insolvency
      under the terms of this Trust Agreement does not constitute an admission of
      insolvency by the Company for any other purpose.

    

    (b)
      At
      all times during the continuance of this Trust, as provided in Section 1(d)
      hereof, the principal and income of the Trust shall be subject to claims of
      general creditors of the Company under federal and state law as set forth
      below.

    

    (1)
      The
      Board of Directors and the Chief Executive Officer of the Company shall have
      the
      duty to inform the Trustee in writing of the Company's Insolvency. If a person
      claiming to be a creditor of the Company alleges in writing to the Trustee
      that
      the Company has become Insolvent, the Trustee shall determine whether the
      Company is Insolvent and, pending such determination, the Trustee shall
      discontinue payment of benefits to the Participant and his beneficiaries. In
      all
      cases, the Trustee shall be entitled to conclusively rely upon the written
      certification of the Board of Directors or the Chief Executive Officer of the
      Company when determining whether the Company is Insolvent.

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    

    (2)
      Unless the Trustee has received notice from the Company or a person claiming
      to
      be a creditor alleging that the Company is Insolvent, the Trustee shall have
      no
      duty to inquire whether the Company is Insolvent. The Trustee may in all events
      rely on such evidence concerning the Company's solvency as may be furnished
      to
      the Trustee and that provides the Trustee with a reasonable basis for making
      a
      determination concerning the Company's solvency.

    

    (3)
      If at
      any time the Trustee has determined that the Company is Insolvent, the Trustee
      shall discontinue payments to the Participant or his beneficiaries and shall
      hold the assets of the Trust for the benefit of the Company's general creditors
      except that the Trustee's fees and expenses may continue to be paid pursuant
      to
      Section 11 subject to any applicable bankruptcy rules. Nothing in this Trust
      Agreement shall in any way diminish any rights of the Participant or his
      beneficiaries to pursue their rights as general creditors of the Company with
      respect to benefits due under the Plan or otherwise.

    

    (4)
      The
      Trustee shall resume the payment of benefits to the Participant or his
      beneficiaries in accordance with Section 3 of this Trust Agreement only after
      the Trustee has determined that the Company is not Insolvent (or is no longer
      Insolvent).

    

    (c)
      Provided that there are sufficient assets if the Trustee discontinues the
      payment of benefits from the Trust pursuant to Section 4(b) hereof and
      subsequently resumes such payments, the first payment following such
      discontinuance shall include the aggregate amount of all payments due to the
      Participant or his beneficiaries under the terms of the Plan (as certified
      to
      the Trustee by the Company) for the period of such discontinuance less the
      aggregate amount of any payments made to the Participant or his beneficiaries
      by
      the Company in lieu of the payments provided for hereunder during any such
      period of discontinuance.

    

    Section
      5. Payments to Company.

    

    Except
      as
      otherwise specifically provided in this Trust Agreement, the Company shall
      have
      no right or power to direct the Trustee to return to the Company or to divert
      to
      others any of the Trust assets before all payment of benefits has been made
      to
      the Participant and his beneficiaries pursuant to the terms of the Plan (as
      certified to the Trustee by the Company). Notwithstanding the above, the Company
      may direct the Trustee to transfer to the Company Trust Fund assets in an amount
      necessary to avoid triggering taxable income to the Participant or a beneficiary
      if the Participant or beneficiary would be required to recognize income tax
      on
      such funds if they remain in the Trust. The Trustee shall be entitled to rely
      solely on the Company's representation that the amount directed to be returned
      to the Company could become taxable to the Participant or a beneficiary and
      shall have no duty to review the Company's determination of the
      amount.

    

    
      
         

         

         

      

      
        -3-

        
          

        

      

      
         

      

    

    Section
      6. Investment and Administrative Authority.

    

    (a)
      The
      Trustee shall invest the assets of the Trust in accordance with the directions
      of the Company. Subject to the investment directions of the Company, the Trustee
      shall have the following powers:

    

    (1)
      The
      Trustee may invest and reinvest the principal and income of the Trust and keep
      it invested, without distinction between principal and income, as provided
      in
      the Investment Guidelines.

    

    (2)
      The
      Trustee may collect and receive any and all money and other property due the
      Trust and give full discharge therefor.

    

    (3)
      The
      Trustee may settle, compromise or submit to arbitration any claims, debt or
      damages due or owing to or from the Trust; the Trustee may also commence or
      defend suits or legal proceedings to protect any interest of the Trust, and may
      represent the Trust in all suits or legal proceedings in any court or before
      any
      other body or tribunal.

    

    (4)
      The
      Trustee may take all action necessary to pay for authorized transactions,
      including the temporary advancement of cash or securities to settle security
      purchases and/or foreign exchange or contracts for foreign exchange and any
      property at any time held in the Trust Fund shall be security therefore to
      the
      extent of such advancement until it is repaid.

    (5)
      The
      Trustee may appoint custodians, subcustodians or subtrustees, domestic or
      foreign (including affiliates of the Trustee), as to part or all of the Trust.
      The Trustee shall not be responsible or liable for any losses or damages
      suffered by the Company arising as a result of the insolvency of any custodian,
      subcustodian or subtrustee, except to the extent the Trustee was negligent
      in
      its selection or continued retention of such custodian, subcustodian or
      subtrustee. In no event shall Trustee be liable for the acts or omissions of
      any
      custodian, subcustodian or subtrustee appointed pursuant to the direction of
      the
      Company or an investment manager.

    

    (6)
      The
      Trustee may hold property in nominee name, in bearer form, or in book entry
      form, in a clearinghouse corporation or in a depository (including an affiliate
      of the Trustee), so long as the Trustee's records clearly indicate that the
      assets held are a part of the Trust. The Trustee shall not be responsible for
      any losses resulting from the deposit or maintenance of securities or other
      property (in accordance with market practice, custom, or regulation) with any
      recognized foreign or domestic clearing facility, book-entry system, centralized
      custodial depository, or similar organization.

    

    (7)
      The
      Trustee may generally do all acts, whether or not expressly authorized, which
      the Trustee may deem necessary or desirable for the protection of the
      Trust.

    

    (b)
      Notwithstanding any other provision of this Agreement, to the extent that the
      Company has directed the Trustee to invest Trust assets in shares of Company
      common stock or other stock for which Company common stock has been exchanged
      (“Stock”), the Trustee shall be authorized to accept, hold and purchase Stock,
      reinvest income in Stock, and otherwise administer Stock for the benefit of
      the
      Participant, without any obligation to diversify

     

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    investments
      or investment risk for the benefit of the Participant, and without regard to
      any
“prudent investor” or similar laws or rules, and notwithstanding that the
      Trustee may be affiliated with the Company or otherwise personally interested
      in
      the Company, the Stock or any transactions in Stock; and the Trustee shall
      have
      no obligation to refrain from self-dealing in connection with any Stock or
      any
      interests in Stock administered by the Trustee. Without limiting the foregoing,
      the Trustee shall not be obligated, even when requested by the Participant,
      to
      sell or otherwise dispose of any Stock prior to distribution of the Stock to
      the
      Participant in accordance with the provisions of the Plan, the Participant’s
      applicable elections, and this Trust Agreement. The Company, for itself and
      its
      successors, hereby releases, holds harmless and indemnifies the Trustee, all
      successors to the Trustee in such capacity, and each of their agents and the
      respective successors, personal representatives and heirs of each of the
      foregoing, from and against all liability (including without limitation due
      to
      claims of negligence), loss, cost, damages (including without limitation
      consequential damages, lost profits, loss of expectation and punitive or
      exemplary damages of all kinds) and expense (including without limitation
      attorneys fees and costs of litigation) which the Company or the Participant
      or
      his personal representatives, heirs or beneficiaries may now or hereafter suffer
      or incur by virtue of the Trustee’s acting or omitting to act based on the
      authority granted to the Trustee in this subsection. The provisions of this
      subsection shall survive the termination of this Trust Agreement.

    

    (c)
      Neither the Company nor the Trustee shall have discretion to vote any shares
      of
      Stock except pursuant to instructions received from the Participant. The Trustee
      shall be authorized, in its discretion, to take either of the following actions
      in connection with shareholders meetings or other circumstances where the
      Participant’s vote, approval or other action is requested: (i) to forward to
      each Participant the materials received by the Trustee for the Participant
      with
      respect to the vote, approval or other action, along with a notification to
      the
      Participant to deliver the proxy card or other voting, approval or other
      materials directly to the Company or elsewhere as the Company shall direct;
      or
      (ii) to forward to the Participant copies of the materials received with respect
      to the vote, approval or other action, along with a notification to the
      Participant that the Trustee will vote or withhold votes, or provide or withhold
      other approvals or actions, with respect to shares of Stock allocated to the
      Deferred Compensation Account, only according to instructions received from
      the
      Participant. In the case described in clause (ii) of this subsection, the
      Trustee shall have no authority to take any action with respect to a vote,
      approval or other action requested of any Stock allocated to the Deferred
      Compensation Account in the absence of instructions from the Participant. The
      Company agrees, to the extent requested by the Trustee, to: (I) provide to
      the
      Trustee copies of materials being distributed to shareholders as the Trustee
      may
      request in order to fulfill the Trustee’s obligations to the Participant under
      this Trust Agreement with respect thereto; and (II) deliver such materials
      directly to the Participant, along with any notification or other materials
      required by the Trustee, to addresses to be provided by the
      Trustee.

    

    Section
      7. Settlement and Income; Market Practice Settlements.

    

    (a)
      In
      accordance with the Trustee's standard operating procedure, the Trustee shall
      credit the Trust Fund with income, which shall include interest, dividends
      and
      return of capital, and maturity proceeds on securities on contractual payment
      date net of any taxes or upon actual 

     

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    receipt.
      To the extent the Trustee credits income on contractual payment date, the
      Trustee may reverse such accounting entries to the contractual payment date
      if
      the Trustee reasonably believes that such amount will not be
      received.

    

    (b)
      In
      accordance with the Trustee's standard operating procedure, the Trustee will
      attend to the settlement of securities transactions on the basis of either
      contractual settlement date accounting or actual settlement date accounting.
      To
      the extent the Trustee settles certain securities transactions on the basis
      of
      contractual settlement date accounting, the Trustee may reverse any entry
      relating to such contractual settlement if the Trustee reasonably believes
      that
      such amount will not be received.

    

    (c)
      Settlements of transactions may be effected in trading and processing practices
      customary in the jurisdiction or market where the transaction occurs. The
      Company acknowledges that this may, in certain circumstances, require the
      delivery of cash or securities (or other property) without the concurrent
      receipt of securities (or other property) or cash. In such circumstances, the
      Trustee shall have no responsibility for nonreceipt of payment (or late payment)
      or nondelivery of securities or other property (or late delivery) by the
      counterparty.

    

    Section
      8. Disposition of Income.

    

    During
      the term of this Trust, all income received by the Trust with respect to the
      Deferred Compensation Account, net of expenses and taxes, shall be accumulated
      and reinvested in and for the benefit of the Deferred Compensation Account,
      and
      in the case distributions with respect to Stock,
      according to
      the
      procedures and valuation provisions as are applicable under the Company’s
      dividend reinvestment plan from time to time. In order to comply with this
      requirement, the Trustee is authorized to deposit Stock held by it in one or
      more accounts under the Company’s dividend reinvestment plan. The Trustee shall
      have no liability to anyone whatsoever for any failure of the Company, any
      administrator or any other agent of the Company to adhere to the provisions
      of
      the Company’s dividend reinvestment plan.

    

    Section
      9. Accounting by Trustee.

    

    The
      Trustee shall keep accurate and detailed records of all investments, receipts,
      disbursements, and all other transactions required to be made, including such
      specific records as shall be agreed upon in writing between the Company and
      the
      Trustee. Within sixty (60) days following the close of each calendar year and
      within ninety (90) days after the removal or resignation of the Trustee, the
      Trustee shall deliver to the Company a written account of its administration
      of
      the Trust during such year or during the period from the close of the last
      preceding year to the date of such removal or resignation, setting forth all
      investments, receipts, disbursements and other transactions effected by it,
      including a description of all securities and investments purchased and sold
      with the cost or net proceeds of such purchases or sales (accrued interest
      paid
      or receivable being shown separately), and showing all cash, securities and
      other property held in the Trust at the end of such year or as of the date
      of
      such removal or resignation, as the case may be. If, within 120 days after
      the
      Trustee mails to the Company a statement with respect to the Trust, the Company
      has not given the Trustee written notice of any exception or objection thereto,
      the statement shall be deemed to have been approved, and in such case, the
      Trustee shall not be liable for any matters in such statements. The Company
      or
      its agent shall have the right at its own expense and with prior written notice
      to the Trustee to inspect the Trustee's books and records directly relating
      to
      the Trust Fund during normal business hours.

     

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    

    Section
      10. Responsibility of Trustee.

    

    (a)
      The
      Trustee shall act with the care, skill, prudence and diligence under the
      circumstances then prevailing that a prudent person acting in like capacity
      and
      familiar with such matters would use in the conduct of an enterprise of a like
      character and with like aims, provided, however, that the Trustee shall incur
      no
      liability to any person for any action taken pursuant to a direction, request
      or
      approval given by the Company which is contemplated by, and in conformity with,
      the terms of the Plan (as certified to the Trustee by the Company) or this
      Trust
      and is given in writing by the Company. In the event of a dispute between the
      Company and a third party, the Trustee may apply to a court of competent
      jurisdiction to resolve the dispute.

    

    (b)
      The
      Trustee is not a party to and has no duties or responsibilities under the Plan
      other than those that may be expressly contained in this Trust Agreement. In
      any
      case in which a provision of this Trust Agreement conflicts with any provision
      in the Plan, this Trust Agreement shall control.

    

    (c)
      The
      Trustee shall not be responsible for the title, validity or genuineness of
      any
      property or evidence of title thereto received by it or delivered by it pursuant
      to this Trust Agreement and shall be held harmless in acting upon any notice,
      request, direction, instruction, consent, certification or other instrument
      believed by it to be genuine and delivered by the proper party or
      parties.

    

    (d)
      The
      Company agrees to indemnify and hold harmless the Trustee, its parent,
      subsidiaries and affiliates, and each of their respective officers, directors,
      employees and agents from and against all liability, loss and expense, including
      reasonable attorneys' fees and expenses incurred by the Trustee or any of the
      foregoing indemnitees arising out of or in connection with this Trust Agreement,
      except as a result of the Trustee's own negligence, willful misconduct, bad
      faith or breach of this Agreement or of its fiduciary duties. The Trustee shall
      be fully indemnified by the Company for any action taken in accordance with,
      or
      any failure to act in the absence of, the Company's or an investment manager's
      directions. If the Trustee undertakes or defends any litigation arising in
      connection with this Trust, the Company agrees to indemnify the Trustee against
      the Trustee's costs, expenses and liabilities (including, without limitation,
      attorneys' fees and expenses) relating thereto and to be primarily liable for
      such payments except where the Trustee is determined to be liable due to its
      negligence, willful misconduct, bad faith, or breach of this Trust Agreement
      or
      of its fiduciary duties. If the Company does not pay such costs, expenses and
      liabilities in a reasonably timely manner, the Trustee may obtain payment from
      the Trust. This Section 10(d) shall survive the termination of this Trust
      Agreement. The provisions of this subsection shall supplement and shall not
      restrict the application of any other provisions of this Trust Agreement
      providing for indemnification, hold-harmless or release of the Trustee, and
      in
      the event of a conflict in application of this subsection and any other such
      provision, the provision most protective to the Trustee shall
      control.

     

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    

    (e)
      The
      Trustee may consult with legal counsel (who may also be counsel for the Company
      generally) with respect to any of its duties or obligations hereunder and as
      a
      part of its reimbursable expenses under this Agreement, pay counsel's reasonable
      compensation and expenses. The Trustee shall be entitled to rely on and may
      act
      upon advice of counsel on all matters, and shall be without liability for any
      action reasonably taken or omitted pursuant to such advice.

    

    (f)
      The
      Trustee may hire agents, accountants, actuaries, investment advisors, financial
      consultants or other professionals, including affiliates, to assist it in
      performing any of its duties or obligations hereunder.

    

    (g)
      The
      Trustee shall have without exclusion, all powers conferred on Trustees by
      applicable law, unless expressly provided otherwise herein, provided, however,
      that if an insurance policy is held as an asset of the Trust, the Trustee shall
      have no power to name a beneficiary of the policy other than the Trust, to
      assign the policy (as distinct from conversion of the policy to a different
      form) other than to a successor Trustee, or to loan to any person the proceeds
      of any borrowing against such policy.

    

    (h)
      Notwithstanding any powers granted to the Trustee pursuant to this Trust
      Agreement or to applicable law, the Trustee shall not have any power that could
      give this Trust the objective of carrying on a business and dividing the gains
      therefrom, within the meaning of Section 301.7701-2 of the Procedure and
      Administrative Regulations promulgated pursuant to the Code.

    

    (i)
      Notwithstanding anything in this Trust Agreement to the contrary contained
      herein, the Trustee shall not be responsible or liable for any losses to the
      Trust resulting from any event beyond the reasonable control of the Trustee,
      its
      agents or custodians, including but not limited to nationalization, strikes,
      expropriation, devaluation, seizure, or similar action by any governmental
      authority, de facto or de jure; or enactment, promulgation, imposition or
      enforcement by any such governmental authority of currency restrictions,
      exchange controls, levies or other charges affecting the Trust's property;
      or
      the breakdown, failure or malfunction of any utilities or telecommunications
      systems; or any order or regulation of any banking or securities industry
      including changes in market rules and market conditions affecting the execution
      or settlement of transactions; or acts of war, terrorism, insurrection or
      revolution; or acts of God; or any other similar event; or any action or
      omission taken by the Trustee consistent with the provisions of this Trust
      Agreement. 

    

    (j)
      The
      Trustee shall not be liable for any act or omission of any other person, except
      to the extent that such person is an agent of the Trustee (not appointed
      pursuant to the direction of the Company or an investment manager) or under
      the
      control of the Trustee, in carrying out any responsibility imposed upon such
      person and under no circumstances shall the Trustee be liable for any indirect,
      consequential, or special damages with respect to its role as
      Trustee.

    

    (k)
      The
      Trustee shall not be obligated to monitor, or to advise or give any notices
      to
      the Participant with respect to, the Stock, the Company or the market value,
      trading prices or other events affecting the Stock or the Company.

     

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    

    (l)
      The
      provisions of this Section shall survive the termination of this Trust
      Agreement.

    

    Section
      11. Compensation and Expenses of Trustee.

    

    The
      Company shall pay all Trustee's fees and expenses necessary for the Trustee
      to
      fulfill its duties hereunder as mutually agreed between the parties. If not
      so
      paid within sixty (60) days after an invoice is sent to the Company, the fees
      and expenses shall be paid from the Trust. The Company acknowledges that as
      part
      of the Trustee's compensation, the Trustee may earn interest on balances
      including disbursement balances and balances arising from purchase and sale
      transactions. If the Trustee advances cash or securities to the Trust for any
      purpose, or in the event that the Trustee shall incur or be assessed taxes,
      interest, charges, expenses, assessments, or other liabilities in connection
      with the performance of this Trust Agreement, except such as may arise from
      its
      own negligent failure to act or willful misconduct, any property at any time
      held in the Trust Fund shall be, to the extent of the advance, security therefor
      and the Trustee shall be entitled to collect from the Trust sufficient cash
      for
      reimbursement, and if such cash is insufficient, dispose of the assets of the
      Trust Fund to the extent necessary to obtain reimbursement. To the extent the
      Trustee advances funds to the Trust for disbursements or to effect the
      settlement of purchase transactions, the Trustee shall be entitled to collect
      from the Trust either (i) with respect to domestic assets, an amount equal
      to
      what would have been earned on the sums advanced (an amount approximating the
      "federal funds" interest rate) or (ii) with respect to non-domestic assets,
      the
      rate applicable to the appropriate foreign market.

    

    Section
      12. Change of Control

    

    (a)
      For
      purposes of this Agreement, a "Change of Control" shall mean any one or more
      of
      the following with respect to the Company:

    

    (1)
      a
      change in control of a nature that 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 any successor provision) as it
      may
      be amended from time to time;

    

    (2)
      any
      "persons" (as such term is used in Sections 13(d) and 14(d) of the Exchange
      Act
      in effect on the date first written above), other than Company, its primary
      wholly owned subsidiary bank (“Bank’) or any "person" who on the date hereof is
      a director of officer of Company or Bank, is or becomes the "beneficial owner"
      (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
      of
      securities of Company representing 25% or more of the combined voting power
      of
      Company's then outstanding securities; or

    

    (3)
      during any period of two (2) consecutive years, individuals who at the beginning
      of such period constitute the Board of Directors of Company or Bank 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.

     

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    

    (b)
      The
      Company shall have the duty to inform the Trustee in writing upon the occurrence
      of a Change of Control. The Trustee shall be entitled to conclusively rely
      upon
      such written certification of the Company and shall have no responsibility
      or
      liability for determining whether a Change of Control has occurred.

    

    Section
      13. Resignation and Removal of Trustee.

    

    (a)
      The
      Trustee may resign at any time by written notice to the Company, which shall
      be
      effective sixty (60) days after receipt of such notice unless the Company and
      the Trustee agree otherwise.

    

    (b)
      The
      Trustee may be removed by the Company on sixty (60) days notice or upon shorter
      notice accepted by the Trustee, except that after a Change of Control as defined
      herein, the Trustee may not be removed by the Company for one year.

    

    (c)
      Upon
      resignation or removal of the Trustee and appointment of a successor Trustee,
      all assets shall subsequently be transferred to the successor Trustee. The
      transfer shall be completed within ninety (90) days after receipt of the notice
      of resignation, removal or transfer, unless the Company extends the time
      limit.

    (d)
      If
      the Trustee resigns or is removed, a successor shall be appointed in accordance
      with Section 14 hereof by the effective date of resignation or removal under
      paragraphs (a) or (b) of this Section. If no such appointment has been made,
      the
      Trustee may apply to a court of competent jurisdiction for appointment of a
      successor or for instructions. The Trustee shall continue to fulfill its duties
      hereunder and shall receive compensation pursuant to Section 11 until the
      successor's appointment is effective. All expenses of the Trustee in connection
      with the proceeding shall be allowed as administrative expenses of the
      Trust.

    

    (e)
      If
      the Trustee resigns within one year of a Change of Control, as defined herein,
      the Trustee shall select a successor Trustee in accordance with the provisions
      of Section 14(c) hereof prior to the effective date of the Trustee's
      resignation.

    

    Section
      14. Appointment of Successor.

    

    (a)
      If
      the Trustee resigns or is removed in accordance with Section 13 (a) or (b)
      hereof, the Company shall appoint any third party, such as a bank trust
      department or other party that may be granted corporate trustee powers under
      state law, as a successor to replace the Trustee upon such resignation or
      removal. The appointment shall be effective when accepted in writing by the
      new
      Trustee, who shall have all of the rights and powers of the former Trustee,
      including ownership rights in the Trust assets. The former Trustee shall execute
      any instrument necessary or reasonably requested by the Company or the successor
      Trustee to evidence the transfer.

    

    (b)
      The
      successor Trustee need not examine the records and acts of any prior Trustee
      and
      shall not be responsible for and the Company shall indemnify and defend the
      successor Trustee from any claim or liability resulting from any action or
      inaction of any prior Trustee or from any other past event, or any condition
      existing at the time it becomes successor Trustee.

     

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    

    (c)
      If
      the Trustee resigns pursuant to the provisions of Section 13(e) hereof and
      selects a successor Trustee, the Trustee may appoint any third party such as
      a
      bank trust department or other party that may be granted corporate trustee
      powers under state law. The appointment of a successor Trustee shall be
      effective when accepted in writing by the new Trustee. The new Trustee shall
      have all the rights and powers of the former Trustee, including ownership rights
      in Trust assets. The former Trustee shall execute any instrument necessary
      or
      reasonably requested by the successor Trustee to evidence the
      transfer.

    

    Section
      15. Amendment or Termination.

    

    (a)
      Subject to Section 15(c), this Trust Agreement may be amended by a written
      instrument which is executed by the Trustee and Company and which recites that
      it is an amendment to this Trust Agreement. Notwithstanding the foregoing,
      no
      such amendment shall conflict with the terms of the Plan (as certified to the
      Trustee by the Company) or shall make the Trust revocable.

    

    (b)
      The
      Trust shall not terminate until the date on which the Participant and his
      beneficiaries are no longer entitled to benefits pursuant to the terms of the
      Plan (as certified to the Trustee by the Company). Upon termination of the
      Trust
      any assets remaining in the Trust shall be returned to the Company.

    

    (c)
      Notwithstanding any other provision in this Trust Agreement, this Trust
      Agreement may not be amended within one year after the occurrence of a Change
      of
      Control, unless the Trustee determines, in its discretion, that such amendment
      is necessary for the administration of the trust and does not conflict with
      or
      alter the provisions of the Plan.

    

    Section
      16. Miscellaneous.

    

    (a)
      Neither the Company nor the Trustee may assign this Trust Agreement without
      the
      prior written consent of the other, except that the Trustee may assign its
      rights and delegate its duties hereunder to any corporation or entity which
      directly or indirectly is controlled by, or is under common control with, the
      Trustee. This Trust Agreement shall be binding upon, and inure to the benefit
      of, the Company and the Trustee and their respective successors and permitted
      assigns. Any entity which shall by merger, consolidation, purchase, or
      otherwise, succeed to substantially all the trust business of the Trustee shall,
      upon such succession and without any appointment or other action by the Company,
      be and become successor trustee hereunder, upon notification to the
      Company

    

    (b)
      Any
      provision of this Trust Agreement prohibited by law shall be ineffective to
      the
      extent of any such prohibition, without invalidating the remaining provisions
      hereof.

    

    (c)
      Benefits payable to the Participant and his beneficiaries under this Trust
      Agreement may not be anticipated, assigned (either at law or in equity),
      alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
      execution or other legal or equitable process

     

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    

    (d)
      Notwithstanding anything to the contrary contained elsewhere in this Trust
      Agreement, any reference to the Plan or Plan provisions which require knowledge
      or interpretation of the Plan shall impose a duty upon the Company to
      communicate such knowledge or interpretation to the Trustee. The Trustee shall
      have no obligation to know or interpret any portion of the Plan and shall in
      no
      way be liable for any proper action taken contrary to the Plan.

    

    (e)
      This
      Trust Agreement shall be governed by and construed in accordance with the
      internal laws of the Commonwealth of Pennsylvania (without reference to rules
      of
      conflicts of law or choice of law) and applicable federal law. The parties
      hereby expressly waive, to the full extent permitted by applicable law, any
      right to trial by jury with respect to any judicial proceeding arising from
      or
      related to this Trust Agreement.

    

    Section
      17. Reliance of Representations.

    

    (a)
      The
      Company and the Trustee each acknowledge that the other will be relying, and
      shall be entitled to rely, on the representations, undertakings and
      acknowledgments of the other as set forth in this Trust Agreement. The Company
      and the Trustee each agree to notify the other promptly if any of its
      representations, undertakings, or acknowledgments set forth in this Trust
      Agreement ceases to be true.

    

    (b)
      The
      Company and the Trustee hereby each represent and warrant to the other that
      it
      has full authority to enter into this Agreement upon the terms and conditions
      hereof and that the individual executing this Trust Agreement on their behalf
      has the requisite authority to bind the Company and the Trustee to
      this.

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Trust Agreement as of
      the
      date first set forth above.

    

    
      	
              DNB
                FINANCIAL CORPORATION

               

               

              By:
                ____________________________

              Name:
                Bruce E. Moroney

              Title:
                EVP and CFO

            	
              DNB
                FIRST, NATIONAL ASSOCIATION, as Trustee

               

               

              By:
                ____________________________

              Name:
                William J. Hieb 

              Title:
                President and COO

            

    

     

     

    -12-

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