SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant | Filed by a Party other than the Registrant | |
Check the appropriate box: | ||
| Preliminary Proxy Statement | |
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) | |
| Definitive Proxy Statement | |
| Definitive Additional Materials | |
| Soliciting Material Pursuant to 240.14a-12 |
FIDELITY D & D BANCORP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ | No fee required. |
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March 22, 2023
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Dear Fellow Shareholders of Fidelity D & D Bancorp, Inc.:
On behalf of the Board of Directors, we are pleased to invite you to join us at our virtual Annual Meeting of Shareholders via a live webcast at www.virtualshareholdermeeting.com/FDBC2021FDBC2023 to be held on Tuesday, May 4, 20212, 2023, at 3:00 p.m., Eastern Daylight Time. You will have the opportunity to ask questions and to make comments via the live webcast. Enclosed are your requested notice of meeting, proxy statement, proxy card and the Company’s 20202022 Annual Report to Shareholders. These materials are also available online at www.proxyvote.com and www.bankatfidelity.com/proxymaterials.
The principal business of the meeting is to nominate and elect four (4)three (3) Class AB Directors to serve for a three-year term; to ratify the selection of our independent registered public accounting firm; to vote; and to transact any other business that is properly presented at the annual meeting. The notice of meeting and proxy statement accompanying this letter describes the specific business to be acted upon in more detail.
We are delighted you have chosen to invest in the Company. We look forward to you joining us. Whether or not you expect to attend the virtual annual meeting, we hope that you will vote as soon as possible by internet, telephone or by completing, signing, and returning the enclosed proxy in the envelope provided. The prompt return of your proxy will save the Company expenses involved in further communications. Your vote is important. Voting by proxy will ensure your representation at the annual meeting.
We look forward to you joining us on May 4, 2021.2, 2023.
Sincerely, | |
/s/ Brian J. Cali | |
Brian J. Cali | |
Chairman of the Board |
FIDELITY D & D BANCORP, INC.
Blakely and Drinker Streets
Dunmore, Pennsylvania 18512
(570) 342-8281
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 20212, 2023
The Board of Directors is distributing this proxy statement to shareholders
on or about March 24, 202122, 2023
Nasdaq Market trading symbol: FDBC
www.bankatfidelity.com
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CERTAIN BUSINESS RELATIONSHIPS AND TRANSACTIONS WITH MANAGEMENT | 18 |
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RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL NO. | 30 |
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 4, 20212, 2023
TO THE SHAREHOLDERS OF FIDELITY D & D BANCORP, INC.:
NOTICE IS HEREBY GIVEN that Fidelity D & D Bancorp, Inc. will hold its Annual Meeting of Shareholders virtually via a live webcast at www.virtualshareholdermeeting.com/FDBC2021FDBC2023 on Tuesday, May 4, 20212, 2023 at 3:00 p.m., Eastern Daylight Time. The meeting will be held online only to consider and vote upon the following proposals:
(1) | to elect |
(2) | to ratify the selection of an independent registered public accounting firm for the Corporation for the year ending December 31, |
(3) | to transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
Shareholders of record at the close of business on March 10, 2021,8, 2023, are entitled to notice of the meeting and may vote during the virtual meeting or by proxy.
Management welcomes your attendance at the live webcast of the annual meeting. We ask you to promptly fill out the proxy by the following means: online, by telephone, or sign, and date and return in the accompanying postage-paid envelope. The prompt return of your proxy will save expenses involved in further communications. Even if you return a proxy, you may vote during the live webcast at www.virtualshareholdermeeting.com/FDBC2021.FDBC2023. Promptly returning your completed proxy will ensure that your shares are voted in accordance with your wishes and will guarantee the presence of a quorum.
The Board of Directors is distributing this proxy statement, form of proxy, and Fidelity D & D Bancorp, Inc.’s 20202022 Annual Report on or about March 24, 2021.22, 2023.
By Order of the Board of Directors, | |
/s/ John T. Cognetti | |
John T. Cognetti | |
Dunmore, Pennsylvania | Secretary |
March |
YOUR VOTE IS IMPORTANT.
PLEASE VOTE ONLINE, BY TELEPHONE,
OR COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD.
Important Notice Regarding Internet Availability of Proxy Materials for the Shareholder Meeting to be held on May 4, 2021.2, 2023. The Proxy Statement, Proxy Card and 20202022 Annual Report are available at www.proxyvote.com.
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Date and Time of the Annual Meeting
Fidelity D & D Bancorp, Inc. (the “Company”) is furnishing this proxy statement in connection with the solicitation by the Board of Directors of proxies to be voted at the Annual Meeting of Shareholders of the Company. The Annual Meeting will be held via a live webcast at www.virtualshareholdermeeting.com/FDBC2021FDBC2023 on Tuesday, May 4, 20212, 2023 at 3:00 p.m., Eastern Daylight Time. The telephone number for the Company is (570) 342-8281. Please direct all inquiries to Salvatore R. DeFrancesco, Jr., Treasurer and Chief Financial Officer of the Company.
Description of the Company
Fidelity D & D Bancorp, Inc., a Pennsylvania corporation, and registered bank holding company, was organized in 1999 and became the holding company for The Fidelity Deposit and Discount Bank (the “Bank”) on June 30, 2000. The Bank, the Company’s wholly owned subsidiary, was established in 1902 as a commercial banking institution under the laws of Pennsylvania. In 1997, the Bank acquired trust powers. The Bank offers a full range of traditional banking and wealth management services as well as alternative financial products and services.
The Board of Directors provides a copy of the annual report for the fiscal year ended December 31, 2020,2022, with this proxy statement. The annual report is available online at www.proxyvote.com. You may obtain additional print copies of the Company’s annual report for the 20202022 fiscal year at no cost by contacting Salvatore R. DeFrancesco, Jr., Treasurer and Chief Financial Officer, Fidelity D & D Bancorp, Inc., Blakely and Drinker Streets, Dunmore, Pennsylvania 18512, telephone (570) 342-8281.
We have not authorized anyone to provide you with information. You should rely only on the information contained in this document or in documents to which we refer you. Although we believe we have provided you with all the information you will need to make your decision to vote, events may occur at the Company subsequent to printing this proxy statement that might affect your decision or the value of your stock.
Solicitation and Voting of Proxies
The Board of Directors furnishes this proxy statement and proxy to shareholders on or about March 24, 2021.22, 2023. The Board of Directors of the Company solicits this proxy for use at the 20212023 Annual Meeting of Shareholders of the Company. The directors, officers and other employees of the Company or the Bank may solicit proxies in person or by telephone, facsimile, or other electronic means. The Company will pay the cost of preparing, assembling, printing, mailing, and soliciting proxies and any additional material that the Company sends to shareholders. The Company will make arrangements with brokerage houses and other custodians, nominees and fiduciaries to forward proxy solicitation materials to the beneficial owners of stock held by these persons. The Company will reimburse these persons for their reasonable forwarding expenses.
Only shareholders of record as of the close of business on Wednesday, March 10, 2021,8, 2023, the voting record date, may vote at the annual meeting. On all matters to come before the annual meeting, shareholders may cast one vote for each share held. Cumulative voting rights do not exist with respect to the election of directors.
By properly completing a proxy, the shareholder appoints the proxy holders named to vote his or her shares as specified on the proxy. Any valid proxy, which does not specify how the shares are to be voted, will be votedFOR:
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| ● | Election of |
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| Ratification of the selection of RSM US LLP as the Company’s independent registered public accounting firm for the year ending December 31, |
If a shareholder is a participant in the Fidelity D & D Bancorp, Inc. Dividend Reinvestment Plan, his or her proxy will also serve as a proxy for the shares held in the plan. Computershare, as the administrator of the plan, will not provide plan participants with separate proxies covering the shares held in the Dividend Reinvestment Plan. Each holder of common stock is entitled to one vote, while attending the virtual meeting, or by proxy, for each whole share of common stock held as of the record date. If your proxy is signed but does not indicate your voting preferences, the proxy holders will vote your shares for all nominees and in favor of the proposal to ratify the Company’s independent registered public accounting firm. If you do not return a proxy, your shares will not be voted.
Quorum and Vote for Approval
The Company’s Articles of Incorporation authorize the issuance of up to 10,000,000 shares of common stock. At the close of business on March 10, 2021,8, 2023, the Company had 5,040,3625,735,137 of common stock outstanding, without par value. The Company’s Articles of Incorporation also authorize the issuance of up to 5,000,000 shares of preferred stock. The Company has not issued preferred stock.
To hold the annual meeting, a “quorum” of shareholders must be present. Under Pennsylvania law and the by-laws of the Company, the presence, while attending the virtual meeting or by proxy, of the holders of a majority of the outstanding shares entitled to vote is necessary to constitute a quorum for the transaction of business at the meeting. Votes withheld and abstentions will be counted in determining the presence of a quorum for the particular matter. The Company will not count broker non-votes in determining the presence of a quorum. A broker non-vote occurs when a broker nominee, holding shares for a beneficial owner, does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item, and has not received instructions from the beneficial owner. Those shareholders present, while attending the virtual meeting or by proxy, may adjourn the meeting to another time and place if a quorum is lacking.
Assuming the presence of a quorum, the four (4)three (3) nominees for Class AB directors receiving the highest number of votes cast by shareholders entitled to vote for the election of directors shall be elected. Votes withheld from a nominee and broker non-votes will not be cast for a nominee. The Company’s Articles of Incorporation do not permit cumulative voting in the election of directors.
Revocability of Proxy
Shareholders who submit valid proxies to the Company may revoke them at any time before they are voted by:
| ● | Delivering written notice of revocation to John T. Cognetti, Secretary of Fidelity D & D Bancorp, Inc., at Blakely and Drinker Streets, Dunmore, Pennsylvania 18512; |
| ● | Delivering a properly executed proxy bearing a later date to John T. Cognetti, Secretary of Fidelity D & D Bancorp, Inc., at Blakely and Drinker Streets, Dunmore, Pennsylvania 18512; |
| ● | Voting again via telephone or internet vote; or |
| ● | Attending the virtual meeting and voting again. |
You have the right to vote and, if desired, to revoke your proxy any time before the annual meeting. Should you have any questions, please call John T. Cognetti, Secretary, at (570) 342-8281.
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Methods of Voting
If you are a shareholder whose shares are registered in your name, you may vote your shares by using one of the following four methods:
On-line via the Internet. If you hold the Company’s common stock in your own name and not through a broker or other nominee, you can vote your shares of common stock electronically via the Internet at www.proxyvote.com. Internet voting is available 24 hours a day until 11:59 p.m. local time on May 3, 2021.1, 2023. Internet voting procedures are designed to authenticate shareholders by using the individual control numbers on your shareholder meeting notice or proxy card. If you vote via the Internet, you do not need to return your proxy card.
Telephone. If you hold the Company’s common stock in your own name and not through a broker or other nominee, you can vote your shares of common stock on a touch tone telephone by dialing the toll-free telephone number 1-800-690-6903. Telephone voting is available 24 hours a day until 11:59 p.m. local time on May 3, 2021.1, 2023. Telephone voting procedures are designed to authenticate shareholders by using the individual control numbers on your shareholder meeting notice or proxy card. If you vote by telephone, you do not need to return your proxy card.
Mail. To vote your proxy by mail, please obtain a copy of the Proxy Materials. If you want to receive a copy of these documents, you must request one. There is no charge to you for requesting a copy. Then, please complete your proxy card and sign, date and return it in the enclosed envelope. To be valid, a returned proxy card must be signed and dated.
Virtual Meeting. Shareholders of record as of March 10, 20218, 2023, will be able to participate in the Annual Meeting by visiting our Annual Meeting website at www.virtualshareholdermeeting.com/FDBC2021.FDBC2023. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials.
The Annual Meeting will begin promptly at 3:00 p.m. Eastern timeDaylight Time on Tuesday, May 4, 2021.2, 2023. Online check-in will begin at 2:55 p.m. Eastern time.Daylight Time.
If your shares are registered in the nominee name of a bank or brokerage firm, you will receive instructions from your holder of record that must be followed in order for the record holder to vote the shares per your instructions. Many banks and brokerage firms have a process for their beneficial holders to provide instructions over the telephone or via the Internet. If you hold shares through a bank or brokerage firm and wish to be able to vote while attending the virtual meeting, you must obtain a legal proxy from your broker, bank or other holder of record and present it to the inspector of elections with your ballot.
Our Board of Directors believes that the purpose of corporate governance is to ensure that we maximize shareholder value in a manner consistent with legal requirements and the highest standards of integrity. The Board of Directors has adopted and adheres to corporate governance practices which the Board of Directors and Management believe promote this purpose, are sound and represent best practices. We continually review these governance practices, Pennsylvania law (the state in which we are incorporated), the rules and listing standards of Nasdaq, and U.S. Securities and Exchange Commission (“SEC”) regulations, as well as best practices suggested by recognized governance authorities.
Board of Directors Leadership Structure
The Company separates the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting the strategic direction for the Company and the day-to-day operation and performance of the
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Company, while the Chairman of the Board provides guidance to the Chief Executive Officer and presides over meetings of the Board of Directors. The Board of Directors believes the separated roles of Chief Executive Officer and Chairman are in the best interest of shareholders because it promotes both strategic development and facilitates information flow between Management and the Board of Directors, both essential for effective governance.
The Company's Board of Directors oversees all business, property and affairs of the Company. The President and Chief Executive Officer and the Company'sCompany’s officers keep the members of the Board of Directors informed of the Company’s business through discussions at Board of Directors’ meetings and by providing them with reports and other materials. The Directors of the Company also serve as the directors of the Company'sCompany’s wholly owned bank subsidiary, The Fidelity Deposit and Discount Bank, upon election by the Company.
Currently, our Board of Directors has eleventen members. Under the Nasdaq listing standards for independence, Brian J. Cali, John T. Cognetti, Richard M. Hotchkiss, William J. Joyce, Sr., Richard J. Lettieri, Mary E. McDonald, Michael J. McDonald, Kristin D. O’Donnell, Alan Silverman, and HelenBeth G. Vilcek, and Paul C. Woelkers meet the Nasdaq standards forindependence. ThisThis constitutes more than a majority of our Board of Directors. In determining the Director’s independence, the Board of Directors considered loan and certain business transactions between the Company and the Director, their immediate family members, and businesses with whom they are associated.
The table below includes a description of other categories or types of transactions, and relationships or arrangements considered by the Board of Directors, in addition to those listed above, in reaching their determination that the directors are independent under Nasdaq rules.
Name | Independent | Other Transactions, Relationships or Arrangements |
Brian J. Cali | Yes | Loan closing representation |
John T. Cognetti | Yes | None |
Kristin D. O’Donnell | Yes | Facility services |
Richard M. Hotchkiss | Yes |
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William J. Joyce, Sr. | Yes | Ownership interest in branch lease |
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Michael J. McDonald | Yes | None |
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| None |
Alan Silverman | Yes | None |
HelenBeth G. Vilcek | Yes | None |
Paul C. Woelkers | Yes | None |
In each case, the Board of Directors determined that none of the transactions above impaired the independence of these directors. For more information, please refer to “Certain Business Relationships and Transactions with Management.”
Risk Management
The Board of Director'sDirectors role in the Company'sCompany’s risk oversight process includes receiving regular reports from members of Management on areas of material risk to the Company, including operational, financial, legal, regulatory, strategic, and reputational risks. The Board of Directors receives reports from various committees of the Board of Directors.Directors. The Chair of the respective committee reports on the discussion to the full Board of Directors during the committee report section of the Board of Directors’ meetings. This enables the Board of Directors and its committees to coordinate risk oversight, particularly with respect to risk interrelationships. As part of its charter, the Audit Committee discusses, with respect to audit and risk review,the adequacy and effectiveness of internal accounting controls, financial systems or financial statements, the accuracy of management reporting and compliance with laws, regulations and Company policy. The Boardof Directors conducted a risk assessment of the Bank'sBank’s compensation program and concluded that the program is balanced, does not motivate imprudent risk taking, and is not reasonably likely to have a material adverse effect on the Corporation.
5Company.
Meetings and Committees of the Board of Directors
During 2020,2022, the Company’s Board of Directors maintained five standing committees including the Governance Committee which was established in 2019.committees. The Bank’s Board of Directors maintained eleventwelve standing committees. TheThe Board of Directors of the Company has a standing Executive Committee, Compensation Committee, Audit Committee, and Governance Committee. In addition, the full Board of Directors of the Company performs the functions of aCommittee and Nominating Committee. The Board of Directors of the Bank has an Asset/Liability Committee, Audit and Compliance Committee, Governance Committee, Credit Administration Committee, Executive Committee, Human Resource Committee, Compensation Committee, Loan Application Committee, Trust/Investment Committee, Building Committee, and a BuildingRisk Management Committee.
Executive Committee. Members of the Company’s Executive Committee were Brian J. Cali, Chairman, Michael J. McDonald, and Kristin D. O’Donnell. All members of the Executive Committee meet the Nasdaq listing standards for independence. The principal duties of the Executive Committee are to act on behalf of the Board of Directors between meetings to take actionact on loan approvals and to review and evaluate governance issues and strategic plans. The Executive Committee met three (3) timesdid not meet in 2020.2022.
Compensation Committee. Members of the Company’s Compensation Committee were Brian J. Cali, Chairman, Michael J. McDonald, and Kristin D. O’Donnell. All members of the Compensation Committee meet the Nasdaq listing standards for independence. The primary purpose of the committee is to review and approve the annual base salaries and annual incentive for the Chief Executive Officer and other executive officers; incentive awards including both cash based and equity based awards; any employment arrangements; any change-in-control agreements; and any element of compensation and benefits. Secondarily, the committee reviews and makes recommendations to our Board of Directors regarding director compensation. Lastly, the committee reviews and makes recommendations to the Board of Directors with respect to new compensation programs. The committee’s charter is available on our website, www.bankatfidelity.com,, under Investor Relations – Other InformationGovernance – Governance Documents. The Compensation Committee met two (2) times in 2020.2022.
Audit Committee. Members of the Company’s Audit Committee were Michael J. McDonald, Chairman, Mary E. McDonald, RichardWilliam J. Lettieri,Joyce, Sr., Alan Silverman, and HelenBeth G. Vilcek. All members are independent under Nasdaq and SEC standards. The Board of Directors has determined that Alan Silverman is an “audit committee financial expert” as defined under applicable SEC and Nasdaq rules. The principal duties of the Audit Committee, as set forth in its charter,which is available on our website, www.bankatfidelity.com,, under Investor Relations - Other Information -– Governance – Governance Documents, include reviewing significant audit and accounting principles, policies and practices, reviewing performance of internal auditing procedures, reviewing reports of examination received from regulatory authorities and recommending annually, to the Board of Directors, the engagement of an independent registered public accounting firm. The Audit Committee met five (5) times during 2020.2022.
Governance Committee. Members of the Governance Committee were Richard J. Lettieri,Paul C. Woelkers, Chairman, Brian J. Cali, John T. Cognetti, Michael J. McDonald, and Kristin D. O’Donnell.HelenBeth G. Vilcek. All members of the Governance Committee meet the Nasdaq listing standards for independence. The primary purpose of this committee is to develop and recommend to the Directors a set of corporate governance guidelines, assist the Directors in the identification and evaluation of new Director member candidates, to oversee annual assessments for the performance of the Directors and its members and to play a leadership role in matters of corporate governance. In performing its principal duties, the Committee is entitled to rely in good faith upon the Company’s records and upon information, opinions, reports, or statements prepared or presented by any of the Company’s officers or employees, or by any other person as to matters reasonably believed to be within such other person’s professional or expert competence. The Committee also may rely in good faith upon actions taken by another committee as to matters within its designated authority. Among its specific responsibilities, the Committee shall: Develop and annually review a set of corporate governance guidelines for Board of Directors approval. Annually evaluate and make recommendations with respect to the size, composition and leadership of committees and consider
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periodic rotation of committee members. Periodically review the charters of all committees and recommend any revised
committee charters to the Directors for approval. With Director input and approval, establish the process and criteria for selecting director “candidates”. Oversee the orientation of new directors and the continuing education “of directors”.of directors. Annually assess the independence of all members in accordance with the Company’s corporate governance guidelines and submit assessments to the Board of Directors for approval. Develop a process for Director evaluation for approval by the Board. In accordance with that process, conduct an annual performance evaluation of the Board and its members. Develop a process for evaluation of Board committees for approval by the Board. Conduct an annual performance evaluation of the Governance Committee. Our Corporate Governance Guidelines are available on our website www.bankatfidelity.com under Investor Relations - Other Information -– Governance – Governance Documents. The Governance Committee met seven (7)six (6) times during 2020.2022.
Nominating Committee. All Independent Directors participate in and perform the functions of a Nominating Committee. All members meet the Nasdaq listing standards for independence. Because of full director participation, the Board of Directors believes there is no need to have a separate standing committee to perform similar functions. The principal duties of a Nominating Committee include developing and recommending the criteria for selecting qualified director candidates, identifying individuals qualified to become Board of Directors members, evaluating and selecting or recommending director nominees for each election of directors, considering committee member qualifications, appointment and removal, recommending codes of conduct and codes of ethics applicable to the Company and providing oversight in the evaluation of the Board of Directors and each committee. Because of the rare occurrence of shareholder recommendations, the Board of Directors has not developed a formal policy to consider potential director candidates recommended by shareholders but will give due consideration to any and all such candidates. If a shareholder wishes to recommend a potential director candidate, the shareholder should mail the information regarding the candidate as required by the Company’s by-law provision section 9.1 to the Secretary of the Company at the Company'sCompany’s offices at Blakely and Drinker Streets, Dunmore, PA 18512. The Board of Directors acting as a Nominating Committee met twice in 2020.
Composition Table of the Company and Bank Committees
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| AUDIT* | ALCO | BLDG |
CREDIT ADM. | COMP* | EXEC* | GOVERN* | HUMAN RESCS. | LOAN | NOM* | TRUST/ INVEST |
Brian J. Cali |
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| X | X | X | X | X |
| X | X |
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John T. Cognetti |
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| X |
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| X | X | X | X | X |
Richard M. Hotchkiss |
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| X | X |
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| X | X | X |
William J. Joyce |
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| X | X |
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| X | X | X | X |
Richard J. Lettieri | X | X |
| X |
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| X |
| X | X |
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Mary E. McDonald | X |
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| X | X | X | X |
Michael J. McDonald | X |
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| X | X | X |
| X | X |
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Kristin D. O’Donnell |
| X |
| X | X | X | X |
| X | X |
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Daniel J. Santaniello |
| X | X | X |
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| X | X |
| X |
Alan Silverman | X | X |
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| X | X | X |
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HelenBeth G. Vilcek | X | X |
| X |
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| X | X |
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Meetings held in 2020 | 5 | 4 | 0 | 4 | 2 | 3 | 7 | 2 | 23 | 2 | 4 |
AUDIT* | ALCO | BLDG | CREDIT ADM. | COMP* | EXEC* | GOVERN* | HUMAN RESCS. | LOAN | NOM* | RISK MGMT | TRUST/ INVEST | |
Brian J. Cali | X | X | X | X | X | X | X | |||||
John T. Cognetti | X | X | X | X | X | X | ||||||
Richard M. Hotchkiss | X | X | X | X | X | |||||||
William J. Joyce, Sr. | X | X | X | X | X | X | X | |||||
Michael J. McDonald | X | X | X | X | X | X | X | |||||
Kristin D. O’Donnell | X | X | X | X | X | X | ||||||
Daniel J. Santaniello | X | X | X | X | X | X | X | |||||
Alan Silverman | X | X | X | X | X | |||||||
HelenBeth G. Vilcek | X | X | X | X | X | X | ||||||
Paul C. Woelkers | X | X | X | X | X | X | ||||||
Meetings held in 2022 | 5 | 4 | 4 | 4 | 2 | 0 | 6 | 2 | 23 | 0 | 2 | 4 |
*Committee jointly serves both the Company and Bank.
The Board of Directors of the Company met 1513 times during 2020.2022. There was a total of 56 meetings of the various committees of the Board of Directors in 2020.2022. All directors attended at least 90% or more of the meetings of the Board of Directors and of the various committees on which they served. The Board of Directors has no policy regarding annual meeting attendance. All directors attended the 20202022 Annual Meeting of Shareholders. All directors anticipate attending the 20212023 meeting.
7Shareholder Communications
Shareholder Communications
The Board of Directors has not adopted a formal process for shareholders to send communications to the Board of Directors. Due to the infrequency of shareholder communications, the Board of Directors does not believe that a formal process is necessary. Written communications received by the Company from shareholders are shared with the full Board of Directors no later than the next regularly scheduled Board of Directors meeting.
Nomination of Directors
In considering whether to recommend any candidate for inclusion as a nomination for director, including candidates recommended by shareholders, the Board of Directors has determined that the Board of Directors must have the right diversity. This includes the candidate'scandidate’s integrity, business acumen, age, experience, education, commitment, diligence, conflicts of interest and the ability to act in the best interests of all shareholders. The Board of Directors seeks nominees with a broad diversity of experience, professions, skills, geographic representation, and backgrounds. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.
Under the Company’s by-laws, nominations for a director may be made by the Board of Directors or by a shareholder of record entitled to vote. In order for a shareholder to make a nomination, the shareholder must provide a notice along with the additional information and materials required by the by-laws to the Company’s Secretary not less than 60 days prior to the date of any meeting of shareholders called for the election of directors. For our annual meeting in the year 20222024 we must receive this notice on or before March 4, 2022.8, 2024. You can obtain a copy of the full text of the by-law provision by writing to John T. Cognetti, Secretary, Blakely and Drinker Streets, Dunmore, PA.PA 18512. A copy of our by-laws has been filed with the Securities and Exchange Commission as an exhibit to the Company’s current report on Form 8-K, filed with the SEC on November 21, 2007.April 16, 2020.
Submission of Shareholder Proposals
Any shareholder who, in accordance with the proxy rules of the SEC, wishes to submit a proposal for inclusion in the Company’s proxy statement for its 20222024 Annual Meeting of Shareholders must deliver such proposal in writing to the Secretary of Fidelity D & D Bancorp, Inc. at its principal executive office, Blakely and Drinker Streets, Dunmore, PennsylvaniaPA 18512, not later than November 24, 2021.23, 2023.
A shareholder may have other business brought before the 20222024 Annual Meeting by submitting the proposal to the Company’s Secretary, in accordance with our by-laws. The proposal must be delivered to our executive offices at Blakely and Drinker Streets, Dunmore, PA 18512, to the attention of the Company’s Secretary. We are not required to include any proposal received after November 24, 202123, 2023 in our proxy materials for the 20222024 annual meeting.
In addition to satisfying the foregoing requirements under the Company’s by-laws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 3, 2024.
Anti-Hedging Policy
Our Board of Directors has not adopted a hedging policy with respect to transactions by our directors, officers and employees that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities.
Employee Code of Ethics
Since 1993, the Bank has had a Code of Ethics. As required by law and regulation, the Board of Directors amended the Code of Ethics as of May 16, 2017, so that our Code of Ethics is applicable to all of the Company’s and the Bank’s directors, officers and employees, including the Chief Executive Officer and senior financial officers.Chief Financial Officer.
The Code of Ethics encourages individuals to report any conduct that they believe in good faith to be an actual or apparent violation of the code of ethics. The Board of Directors periodically receives reports on our compliance program. The Code of Ethics is posted on our website atwww.bankatfidelity.com, under Investor Relations - Other Information -– Governance Documents.– Governance Documents. We have also filed a copy of the Code of Ethics with the SEC as Exhibit 14 to our May 22, 2017 current report on Form 8-K.
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(PROPOSAL NO. 1)
Qualification and Nomination of Directors
The Company’s by-laws provide that the Board of Directors consist of at least three directors and be classified into three classes. Each class is elected for a term of three years. Accordingly, the terms of the classes expire at successive annual meetings. The Board of Directors may fix the number of directors and their respective classifications within the foregoing limits. A majority of the Board of Directors may also fill vacancies on the Board, and the person appointed to fill the vacancy serves, until the expiration of the term of office of the class of directors to which he or she was appointed.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL TO ELECT THE FOURTHREE NOMINEES LISTED BELOW AS CLASS AB DIRECTORS OF THE COMPANY.
Currently, Class A consists of fourthree directors, Class B consists of fourthree directors, and Class C consists of threefour directors. Shareholders will elect fourthree Class AB directors at the annual meeting to serve for a three-year term that expires at the Company’s annual meeting in the year 2024.2026.
The proxy holders will vote the proxies for the election of each of the nominees named below, unless you indicate that your vote should be withheld from any or all of them. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified, or until his or her death, resignation, or retirement.
The Board of Directors nominated John T. Cognetti, RichardWilliam J. Lettieri, Michael J. McDonald,Joyce, Sr., Kristin D. O’Donnell, and HelenBeth G. VilcekAlan Silverman to serve as Class AB directors until the 20242026 annual meeting of shareholders.Ms. VilcekO’Donnell and Messrs. Cognetti, Lettieri,Joyce and McDonaldSilverman are presently members of the Board of Directors and have consented to serve another term, if elected. If any of the nominees is unable to serve for any reason, a majority of the Board of Directors then in office may fill the vacancy until the expiration of the term of the class of directors to which he or she was appointed.
The Board of Directors is proposing the following nominees for election as Class AB Directors at the annual meeting:
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The Board of Directors recommends a vote FOR the election of the above-named nominees for directors.
BOARD OF DIRECTORS AND MANAGEMENT
Information as to Directors and Nominees
The following biographies contain selected information with respect to the directors of the Company. The information includes each person’s age as of March 10, 2021,8, 2023, and principal occupation for at least the past five years.
Current Class A Directors (to serve until 2021) and Nominees (to serve until 2024, if re-elected)2024)
John T. Cognetti
Mr. Cognetti, age 71,73, has been a Director of the Company since 1999. He has served as a member of the Bank’s Board of Directors since 1988. Mr. Cognetti is the former President of Hinerfeld Commercial Real Estate, based in Scranton, Pennsylvania. With his background, education and forty fourforty-six years’ experience in real estate brokerage, he provides insight on issues, trends and values of the regional
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and national commercial real estate markets. He also provides guidance to the Board on Bank owned real
estate issues. Having hired and managed sales professionals in his business, Mr. Cognetti shares his insight on personnel, marketing, and management issues.
Richard J. Lettieri
Mr. Lettieri, age 73, has been a Director of the Company and a member of the Bank’s Board of Directors since 2012. In 1986, Mr. Lettieri founded Dock Square Consultants in Boston, MA, and managed the firm until his retirement in 2005. His consulting practice focused on business strategy and market development. Mr. Lettieri’s expertise in strategic consulting, centering on helping to solve complex problems and plot future directions in a wide variety of business environments, provides valuable insight for the Company and Bank.
Michael J. McDonald, Esquire
Mr. McDonald, age 66,68, has been a Director of the Company since 1999. Mr. McDonald1999, and he has served as a member of the Bank’s Board of Directors since 1994. He is aA founding partner within the law firm of McDonald and MacGregor, LLC in Scranton, Pennsylvania. Mr. McDonald’s education and legal experience providesprovide valuable insight for the Company and Bank.
HelenBeth G. Vilcek
Ms. Vilcek, age 63,65, has been a Director of the Company and member of the Bank’s Board of Directors since 2020. Ms. Vilcek is the owner of Garofalo Real Estate, a property management company located in Easton, Pennsylvania. Ms. Vilcek serves on the board and chairs the audit committee at the Bank of Bird-in-Hand in Bird-in-Hand, Pennsylvania. She was an original investor with the former Premier Bank, Doylestown, Pennsylvania. HelenBethMs. Vilcek is active in the community and is a Past Grand Matron of the Order of Eastern Star for the state of Pennsylvania. Ms. Vilcek’s experience and community involvement provides valuable insight for the Company and Bank.
Current Class B Directors (to serve until 2023) and Nominees (to serve until 2026, if re-elected)
William J. Joyce, Sr.
Mr. Joyce, age 62,64, has been a Director of the Company and member of the Bank’s Board of Directors since 2020. Mr. Joyce is the former Principal of Joyce Insurance Group located in Pittston, Pennsylvania. As a Principal of Joyce Insurance, Mr. Joyce has expertise in risk assessment and management, financial statement preparation, review, and analysis. Mr. Joyce holds an Associateassociate degree of Hotel and Restaurant Management from the Culinary Institute of America and has a Property & Casualty Insurance License in the Commonwealth of Pennsylvania. Mr. Joyce’s education, experience and community involvement provides valuable insight for the Company and Bank.
Mary E. McDonald
Mrs. McDonald, age 88, has been a Director of the Company and member of the Bank’s Board of Directors since 2000. Mrs. McDonald is a retired educator. Mrs. McDonald’s many years in education provides valuable insight for the Company and Bank.
Kristin D. O’DonnellO’Donnell
Mrs. O’Donnell, age 51,53, has been a Director of the Company and a member of the Bank’s Board of Directors since 2012. Mrs. O’Donnell’s experience includes over sixteeneighteen years as a vice president of sales and marketing for Dempsey Uniform & Linen Supply, Inc., in Jessup, Pennsylvania, driving the responsible and successful growth of the company. As an owner and member of the Company’scompany’s Board of Directors, she has also participated in risk assessment, financial statement preparation, review and analysis, and acquisitions. Mrs. O’Donnell has an undergraduate degree in Engineering and an M.B.A. Mrs. O’Donnell’s education and experience provides valuable insight for the Company and Bank.
10Alan Silverman
Alan Silverman
Mr. Silverman, age 63,65, has been a Director of the Company and member of the Bank’s Board of Directors since 2020. Mr. Silverman, is a Certified Public Accountant for over thirty years, operates his own firm specializing in meeting the needs of the healthcare industry. He is one of the founders and CEO of PrimeMed P.C. Mr. Silverman has acted as President of not-for-profit nursing home corporations, serving the Medicaid community, and is a past President of Glen Oak Country Club. Mr. Silverman’s background provides valuable financial knowledge for the Company and Bank.
Current Class C Directors (to serve until 2022) 2025)
Brian J. Cali, Esquire
Mr. Cali, age 68,70, has been a Director of the Company and a member of the Bank's Board of Directors since February of 2001. He is the managing owner of Brian J. Cali and Associates
a Pennsylvania law firm located in Dunmore, Pennsylvania. He has been a practicing attorney for over 40 years. Mr. Cali is also the owner of several businesses located in Northeastern Pennsylvania.
Attorney Cali's law practice and the experience he has in the operation and management of several businesses provides a wealth of knowledge as a Director and as Chairman.
Richard M. Hotchkiss
Mr. Hotchkiss, age 77,79, has been a Director of the Company and a member of the Bank’s Board of Directors since 2020. Mr. Hotchkiss, a veteran, has been the owner of several businesses including a family lumber business, convenience store, gas station and freight hauling company. Upon retiring he became a PA Certified UCC building inspector. Mr. Hotchkiss served at the former MNB Corporation of Bangor as the Chairman of the Building Committee and Chairman of the Board of Directors. Mr. Hotchkiss’s leadership experience in business operations provides valuable knowledge for the Company and Bank.
Daniel J. Santaniello
Mr. Santaniello, age 55,57, has been a Director of the Company and a member of the Bank’s Board of Directors since March 2011. Mr. Santaniello has served as President and Chief Executive Officer of the Corporation and Bank since December 2010. Mr. Santaniello had previously served as Vice President and Chief Operating Officer of the Company since May 2004. Mr. Santaniello has a broad knowledge of banking from his many years in the industry.
Family Relationships
Paul C. Woelkers
Mr. Woelkers, age 63, has been a Director Mary E. McDonaldof the Company and a member of the Bank’s Board of Directors since July 2021. Mr. Woelkers founded Lackawanna Mobile X-Ray spending his career growing the company throughout seven states in the Mid-Atlantic region and beyond. In 2010, he sold the company and is now President of Lackawanna Mobile X-Ray, acquiring 170 former clients back into his service fold. Mr. Woelkers served as a member of the auntBoard of Director Michael J. McDonald, Esquire.Directors of the former Landmark Bancorp Inc. Mr. Woelkers’ leadership experience in business provides valuable knowledge for the Company and Bank.
Listed below is a board diversity matrix chart pursuant to the Nasdaq Board Diversity Rules as of February 1, 2023.
Total Number of Directors | 10 | |||
Female | Male | Non-Binary | Did Not | |
Part I: Gender Identity | ||||
Directors | 2 | 8 | 0 | 0 |
Part II: Demographic Background | ||||
African American or Black | 0 | 0 | 0 | 0 |
Alaskan Native or Native American | 0 | 0 | 0 | 0 |
Asian | 0 | 0 | 0 | 0 |
Hispanic or Latino | 0 | 0 | 0 | 0 |
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 |
White | 2 | 8 | 0 | 0 |
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 |
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 0 |
Listed below is a board diversity matrix chart pursuant to the Nasdaq Board Diversity Rules as of February 1, 2022.
Total Number of Directors | 11 | |||
Female | Male | Non-Binary | Did Not | |
Part I: Gender Identity | ||||
Directors | 2 | 9 | 0 | 0 |
Part II: Demographic Background | ||||
African American or Black | 0 | 0 | 0 | 0 |
Alaskan Native or Native American | 0 | 0 | 0 | 0 |
Asian | 0 | 0 | 0 | 0 |
Hispanic or Latino | 0 | 0 | 0 | 0 |
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 |
White | 2 | 9 | 0 | 0 |
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 |
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 0 |
Executive Officers of the Company and Bank
Daniel J. Santaniello, age 55,57, has served as President and Chief Executive Officer of the CorporationCompany and Bank since December 2010. Mr. Santaniello had previously served as Vice President and Chief Operating Officer of the Company since May 2004. Mr. Santaniello has been employed by the Bank since July 2001.
Salvatore R. DeFrancesco, Jr., CPA, CGMA, age 51,53, has served as Treasurer and Chief Financial Officer of the Company since January 2003. Mr. DeFrancesco has been employed by the Bank since January 2003 and serves as Executive Vice President and Chief Financial Officer.
Timothy P. O’Brien, age 69, has been employed by the Bank since January 2008 and serves as Senior Executive Vice President and Chief Lending Officer.
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Eugene J. Walsh, age 56,58, re-joined the Bank on March 17, 2014, as Executive Vice President and Chief Risk and Credit Officer. In May 2016, Mr. Walsh was named Vice President and Chief Operating Officer of the Company and Executive Vice President and Chief Operating Officer of the Bank. Mr. Walsh was previously Executive Vice President and Senior Loan Officer of the Bank from 2001 to 2005. During the interim period, Mr. Walsh served as Vice President, Government Banking & Corporate Lending at M&T Bank in Wilkes-Barre, Pennsylvania, and Chief Financial Officer of Intific, Inc. in Peckville, Pennsylvania.
Michael J. Pacyna, age 55,57, joined the Bank on April 14, 2015, as Executive Vice President and Chief Business Development Officer. In 2021, Mr. Pacyna was named Chief Lending Officer. Mr. Pacyna was previously employed by PNC Bank for 26 ½ years as SVP Commercial and Corporate Manager based in Scranton, PA.
The Audit Committee of the Board of Directors is comprised of directors who meet the Nasdaq standards for independence. The Audit Committee operates under a written charter adopted in 2004 by the Board of Directors, which was reviewed and revisedapproved in February 2008,2023, and is available through our website, www.bankatfidelity.com, under Investor Relations - Other Information Governance - Governance Documents.
The Audit Committee met with Management periodically during the year to consider the adequacy of the Company’s internal controls and the objectivity of its financial reporting. The Audit Committee discussed these matters with the Company’s independent registered public accountants and with
appropriate Company financial personnel and internal auditors. The Audit Committee also discussed with the Company’s Management and independent registered public accountants the process used for certifications by the Company’s Chief Executive Officer and Chief Financial Officer which are required for certain of the Company’s filings with the Securities and Exchange Commission.
The Audit Committee met privately at its regular meeting with both the independent registered public accountants and the internal auditors, as well as with the Chief Financial Officer and the Chief Executive Officer on a number of occasions, each of whom has unrestricted access to the Audit Committee.
The Trust and Compliance Management Operational audits have been outsourced to independent auditors, S.R. Snodgrass, P.C. (“Snodgrass”). The main responsibility of the firm was to complete the internal audits necessary to meet the monitoring component of the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Other responsibilities included identifying, re-testing and reporting all significant findings to the Audit Committee.
The Audit Committee outsourced the regulatory compliance audit function to the independent firm Snodgrass. Snodgrass specializes in providing regulatory compliance services to the financial services industry. The main responsibility of the firm is to provide comprehensive regulatory compliance audits to identify compliance exceptions and report all significant exceptions to the Audit Committee.
Finally, the Audit Committee outsourced the Information Technology audit, including an audit of the FFIEC Maturity level and Cybersecurity, to NETBank Audit of Alexandria, Va., which specializes in providing information technology services to the financial services industry.
The commitment of the Audit Committee, internal audit and management, resulted in the completion of the scheduled internal audits. Management, in response to findings, has taken corrective action and internal audit re-testing was performed as required. The combined efforts were successful in meeting the internal control components of risk assessment and monitoring required by year end. The internal audit outsource arrangement, audit schedule and the commitment to maintain an effective system of internal controls, required under regulation, caused the Audit Committee to meet five (5) times in 2020.2022.
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The Audit Committee selected RSM US LLP as the independent registered public accounting firm for the Company in 2016 after reviewing the firm’s performance and independence from Management.
Management has primary responsibility for the Company’s consolidated financial statements and the overall reporting process, including the Company’s system of internal controls.
RSM US LLP audited the annual consolidated financial statements prepared by Management, expressed an opinion as to whether those consolidated financial statements fairly present the consolidated financial position, results of operations and cash flows of the Company in conformity with accounting principles generally accepted in the United States of America and discussed with the Audit Committee any issues they believed should have been raised with the Audit Committee.
The Audit Committee reviewed with Management and RSM US LLP, the Company’s audited consolidated financial statements and met separately with both Management and RSM US LLP, to discuss and review those consolidated financial statements and reports prior to issuance. Management has represented, and RSM US LLP has confirmed, to the Audit Committee that the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.The Audit Committee also has discussed with RSM US LLP the matters required to be discussed by Statement of Auditing Standards No. 1301, Communications with Audit Committees, as currently in effect.
The Audit Committee received from RSM US LLP, the written disclosure and the letter required by Public Company Accounting Oversight Board (PCAOB) Rule 3526, Communication with Audit Committees Concerning Independence. The Audit Committee first discussed with RSM US LLP, the
items related to the firm’s independence from the Company. The Audit Committee also discussed with RSM US LLP, matters required to be discussed by PCAOB Auditing Standards No. 16, Communication with Audit Committee. As such, the Audit Committee implemented a procedure to monitor auditor independence, reviewed audit and non-audit services performed by RSM US LLP, and discussed with the auditors their independence.
In reliance on these reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020,2022, for filing with the Securities and Exchange Commission. The Committee and the Board of Directors have also recommended, subject to shareholder ratification, the selection of RSM US LLP, as the Company’s independent registered public accounting firm for the year ending December 31, 2021.2023.
Members of the Audit Committee
Michael J. McDonald, Chairman
RichardWilliam J. LettieriJoyce, Sr.
Mary E. McDonald
Alan Silverman
HelenBeth G. Vilcek
BENEFICIAL OWNERSHIP OF THE COMPANY’SCOMPANY’S COMMON STOCK BY PRINCIPAL SHAREHOLDERS, DIRECTORS, AND EXECUTIVE OFFICERS
The following table shows, to the best of our knowledge, the names and address of each person or entity who owned more than 5% of the Company’s outstanding common stock, either on the Company’s records or indirectly as a “beneficial” owner, as of February 28, 2021: