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Exhibit 10e
AMENDED AND RESTATED CHANGE OF CONTROL
AGREEMENT
FOR
WILLIAM S. LATOFF
THIS AMENDED AND RESTATED CHANGE OF CONTROL
AGREEMENT (this "Agreement"), made as of December 20, 2006, is by
and among DNB FINANCIAL CORPORATION ("Holding Company"), DNB FIRST,
NATIONAL ASSOCIATION (formerly known as Downingtown National Bank),
a national banking association with principal offices at 4
Brandywine Avenue, Downingtown, PA 19335 ("Bank") (Holding Company
and Bank are sometimes referred to individually and collectively
herein as the "Company") and WILLIAM S. LATOFF, an individual
("Executive").
Background
A. On December 17, 2004 Company and Executive
entered into an agreement pursuant to which Company wishes to
secure the future services of Executive by providing Executive the
severance payments provided in this Agreement as additional
incentive to induce Executive to devote Executive’s time and
attention to the interests and affairs of the Company (the
"Agreement").
B. Company and Executive wish to amend and
restate the Agreement upon the terms and conditions herein set
forth.
C. The Boards of Directors of the Holding Company
and the Bank have each approved this Agreement and it is intended
to be maintained as part of the official records of the Holding
Company and the Bank.
NOW THEREFORE, in consideration of the mutual
promises and agreements set forth herein, and intending to be
legally bound hereby, the parties agree to amend the Agreement so
that it shall provide in full as follows (as so amended and
restated, hereafter the "Agreement"):
1. Employment . Except strictly to such
extent (if any) as may be provided in another agreement between
Holding Company or Bank and Executive, Executive shall remain an
employee at will of the Company hereafter. This Agreement is not an
employment agreement, but shall only be interpreted as governing
the payment of severance, which may be due to Executive upon
termination of Executive’s employment with Company under the
specific circumstances described in this Agreement. No provision of
this Agreement shall be interpreted to derogate from the power of
the Company or its Board of Directors to terminate the employment
of the Executive, subject nevertheless to the terms of this
Agreement.
2. Compensation . The compensation to be
paid by Company to Executive from time to time, including any
fringe benefits or other employee benefits, shall not be governed
by this Agreement. This Agreement shall not be deemed to affect the
terms of any stock options, employee benefits or other agreements
between the Company and Executive.
3. Severance Payments upon Termination of
Employment After a "Change in Control" . This Agreement does
not govern any termination of Executive’s employment with
Company which occurs prior to a "change in control" as defined in
subsection (e) of this Section. No inference shall be drawn from
any provision of this Section concerning the rights and obligations
of the parties in connection with a termination of
Executive’s employment prior to such a "change in
control".
(a) Termination by Company for Cause
or Not for Cause. If Executive’s
employment is terminated by Company for "cause" (as defined in
subsection (c) of this Section) at any time, or with or without
"cause" prior to a "change in control", Executive shall have no
right to any severance or other payments under this Agreement due
to such termination. If Executive is terminated by Company or
Holding Company after a "change in control" (as defined in
subsection (e) of this Section) other than for "cause",
Executive’s right to severance payments under this Agreement
shall be as set forth in subsection (f) of this Section. A
termination by Company of Executive’s employment with Bank
only or Holding Company only shall be deemed a termination for
purposes of this Agreement, and Executive’s right to
severance payments (if any) hereunder, shall be determined as if
such termination were a termination from employment with Company
entirely.
(b) Termination by Executive for Good
Reason or Not for Good Reason. If Executive
terminates Executive’s employment with Holding Company and
Bank prior to a change in control, or without "good reason" (as
defined in subsection (d) of this Section) at any time, Executive
shall have no right to any severance or other payments under this
Agreement due to such termination. If Executive terminates
Executive’s employment with Holding Company and Bank for
"good reason" after a "change in control" (as defined in subsection
(e) of this Section), Executive’s right to severance payments
under this Agreement shall be as set forth in subsection (f) of
this Section.
(c) Definition of "Cause".
For the purpose of this Agreement, termination for
"cause" shall mean termination for 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 Holding Company’s or Bank’s affairs pursuant
to a notice or other action by any Regulatory Agency, 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 of
the Company 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 this
Agreement. For purposes of this paragraph, 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.
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(d) Definition of "Good Reason".
For purposes of this Agreement, Executive shall have
"good reason" for terminating his employment with Holding Company
and Bank if Executive terminates such employment within two (2)
years after the occurrence of any one or more of the following
events (a "Triggering Event") without Executive’s express
written consent, but only if the Triggering Event occurs within two
(2) years after a "change in control" (as defined in subsection (e)
of this Section) of Bank or Holding Company: (i) the assignment to
Executive of any duties inconsistent with Executive’s
positions, duties, responsibilities, titles or offices with Bank or
Holding Company as in effect immediately prior to a change in
control of Bank or Holding Company, (ii) 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, (iii) a
reduction by Holding Company or 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, or (iv) any purported termination of
Executive’s employment with Bank or Holding Company when
"cause" (as defined in this Agreement) for such termination does
not exist, or (v) a relocation of Executive’s workplace
outside of Chester County.
(e) Definition of "Change in Control".
F or purposes of this Agreement, a "change in
control" of Company or Bank shall mean any one or more of the
following:
(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
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