UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
______________
Date of Report (Date of earliest event reported): June 21, 2004
Fidelity D & D Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 333-90273 23-3017653
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Blakely and Drinker Streets, Dunmore, PA 18512
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (570) 342-8281
FIDELITY D & D BANCORP, INC.
CURRENT REPORT ON FORM 8-K
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
On June 21, 2004, the Registrant entered into an employment agreement with Steven C. Ackmann as
President and Chief Executive Officer of The Fidelity Deposit and Discount Bank, the wholly-owned
subsidiary of the Registrant. The agreement is attached as Exhibits 99.1 to this Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit Number Description
99.1 Employment Agreement between Fidelity D & D Bancorp, Inc., The Fidelity Deposit and
Discount Bank, and Steven C. Ackmann, dated June 21, 2004.
99.2 Press release dated June 22, 2004 regarding appointment of Steven C. Ackmann as President and
Chief Executive Officer of The Fidelity Deposit and Discount Bank.
ITEM 9.REGULATION FD DISCLOSURE.
On June 22, 2004, the Registrant announced that it hired Steven C. Ackmann as President and
Chief Executive Officer of its wholly-owned subsidiary, The Fidelity Deposit and Discount Bank. A copy
of the related press release is attached as Exhibit 99.2 to this Report. The information furnished under
this Item 9 of this Report, including Exhibit 99.2, shall not be deemed "filed" for the purposes of the
Securities Exchange Act of 1934, as amended.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Fidelity D & D Bancorp, Inc.
Date: June 22, 2004 BY: /s/Salvatore DeFrancesco, Jr.
Name: Salvatore DeFrancesco, Jr.
Title: Treasurer and Chief Financial
Officer
EXHIBIT INDEX
EXHIBIT NO.
99.1 Employment Agreement between Fidelity D & D Bancorp, Inc., The Fidelity Deposit and
Discount Bank, and Steven C. Ackmann, dated June 21, 2004.
99.2 Press release dated June 22, 2004 regarding appointment of Steven C. Ackmann as President and
Chief Executive Officer of The Fidelity Deposit and Discount Bank.
:167935
Exhibit 99.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 21st day of June, 2004, between Fidelity D&D
Bancorp, Inc. (the "Corporation") and The Fidelity Deposit and Discount Bank (the "Bank"), and
Steven C. Ackmann (the "Executive").
WHEREAS, the Bank is a subsidiary of the Corporation; and
WHEREAS, the Bank desires to employ the Executive as President and Chief Executive
Officer under the terms and conditions set forth herein; and
WHEREAS, the Executive desires to serve Bank in an executive capacity under the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties agree as follows:
1. TERM OF EMPLOYMENT.
(a) General. The Corporation and Bank hereby shall employ the
Executive and the Executive hereb accepts employment with the
Corporation and Bank for a term of three (3) years beginning on July 6,
2004, and ending three years later (the "Employment Period"), subject,
however, to prior termination of this Agreement as set forth below. Six
months prior to the termination of this Agreement, the Executive, the
Corporation and Bank shall begin discussions concerning possible
extension of the employment relationship. In the event that the parties do
not enter into an extension of this Agreement or some other written
Executive Employment Agreement, the Employment Period shall
terminate as of the last day of this Agreement.
2. POSITION AND DUTIES. The Executive shall serve as the President and Chief
Executive Officer of the Bank, reporting only to the Board of Directors of the Bank and
shall have supervision and control over, and responsibility for, the general management
and operation of the Bank, and shall have such other powers and duties as may from time
to time be prescribed by the Board of Directors of the Corporation and Bank. In addition,
the executive shall report to the Board of Directors of the Corporation as requested by the
Corporation.
3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive will devote his
full attention, time and energies to the business of Corporation, Bank and any of their
subsidiaries or affiliates. The Executive shall neither engage in any business or
commercial activities, duties or pursuits, nor serve as a director or officer or in any other
capacity in any other company, enterprise, or philanthropic endeavor without written
approval from the Board of Directors of the Corporation.
4. COMPENSATION.
(a) Annual Direct Salary. As compensation for services rendered the
Corporation and Bank under this Agreement, the Executive shall be
entitled to receive from the Corporation or Bank an annual direct salary of
Two Hundred Thousand Dollars ($200,000) per year (the "Annual Direct
Salary"), payable in substantially equal weekly installments (or such other
intervals, consistent with the Bank's payroll policy), prorated for any
partial employment period. After July 2005, the Annual Direct Salary
shall be reviewed annually, no later than July 31 of the then calendar year
and shall be subject to annual change at the discretion of the Corporation
and the Bank (but not reduced below Two Hundred Thousand Dollars
($200,000) without the Executive's written consent, except in cases of
national financial depression or emergency when compensation reduction
has been implemented by the Board of Directors for the Bank's senior
management) as may be set by the Board of Directors of the Corporation
and Bank taking into account the position and duties of the Executive and
the performance of the Corporation and Bank under the Executive's
leadership.
(b) Bonus. The Executive shall receive a bonus, in an amount of
Twenty Thousand Dollars ($20,000) for the year 2004, which bonus shall
be payable on or before February 28, 2005. After the year 2004, the
Board of Directors of the Corporation or Bank, in its sole discretion may
provide for payment of a periodic bonus to the Executive in such an
amount or nature as it may deem appropriate to provide incentive to the
Executive and to reward the Executive for his performance.
5. FRINGE BENEFITS, VACATION, EXPENSES, AND PERQUISITES.
(a) Employee Benefit Plans. The Executive shall be eligible to participate in
or receive benefits under all Bank employment benefit plans including, but
not limited to, any pension plan, profit-sharing plan, savings plan, life
insurance plan or disability insurance plan as made available by the Bank
to its employees, subject to and on a basis consistent with terms,
conditions and overall administration of such plans and arrangements,
including without limiting the eligibility requirements of such plans or
arrangements, or the right of Bank to modify, change or eliminate such
plans or arrangements.
(b) Vacation, Holidays, Sick Days and Personal Days. The Executive shall be
entitled to the number of twenty(20) paid vacation days in each calendar
year. The Executive shall also be entitled to all paid holidays, sick days
and personal days given by the Corporation and/or the Bank to its
employees.
(c) Business Expenses. During the term of his employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him in furtherance of his duties and
responsibilities, which are properly accounted for, in accordance with the
policies and procedures established by the Board of Directors of the
Corporation and/or the Bank for its senior executive officers.
(d) Automobile. The Executive shall be provided with a company-owned or
leased vehicle during the Employment Period. The vehicle is to be used for
Corporation or Bank business and/or business development.
(e) Club Memberships. The Corporation shall provide payment of annual
dues and monthly business development expenses for the Executive in
connection with a club membership to a golf club that shall be mutually
determined by the parties. Unless otherwise agreed, initiation fees shall be
paid by the Corporation or Bank only if the membership is the property of
the Corporation or Bank.
6. INDEMNIFICATION. The Corporation and Bank will indemnify the Executive
and advance expenses to the same degree as provided by the Bylaws of the Corporation
to Members of its Board of Directors and as required under Pennsylvania and federal law,
with respect to any threatened, pending or completed legal or regulatory action, suit or
proceeding brought against him by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation or Bank.
7. LIABILITY INSURANCE. The Bank and/or the Corporation shall use its best
efforts to obtain insurance coverage for the Executive under an insurance policy covering
officers and directors of the Bank and Corporation against lawsuits, arbitrations or other
legal or regulatory proceedings; however, nothing herein shall be construed to require
the Bank and/or the Corporation to obtain such insurance, if the Board of Directors of the
Bank and/or the Corporation determine that such coverage cannot be obtained at a
reasonable price.
8. UNAUTHORIZED DISCLOSURE. During the term of his employment
hereunder, or at any later time, the Executive shall not, without the written consent of the
Board of Directors of the Corporation or Bank or a person authorized thereby, knowingly
use for his own benefit or the benefit of any other person or other entity, or disclose to
any person, other than an employee of the Corporation or Bank or a person to whom
disclosure is reasonably necessary or appropriate in connection with the performance by
the Executive of his duties as an executive of the Corporation or Bank, any confidential
information, trade secrets, or know how, obtained by him while in the employ of the
Corporation or Bank. Confidential information includes any services, products,
improvements, formulas, projects, proposals, designs or styles, processes, customers,
(including, but not limited to, customers of Corporation, Bank or any of their affiliates or
subsidiaries on whom the Executive called or with whom he became acquainted during
the term of his employment), methods of business or any business practices, research,
product or business plans, customer lists, markets, software, developments, inventions,
technology, drawings, engineering, marketing, distribution and sales methods and
systems, finances, sales and profit figures, and other business information of Corporation,
Bank or any of their subsidiaries or affiliates, the disclosure of which could be or will be
materially damaging to the Corporation, Bank or any of their subsidiaries or affiliates,
provided, however, that confidential information shall not include any information known
generally to the public (other than as a result of unauthorized disclosure by the Executive
or any person with the assistance, consent or direction of the Executive) or any
information of a type not otherwise considered confidential by persons engaged in the
same business or a business similar to that conducted by the Corporation or Bank or any
information that must be disclosed as required by law.
9. WORK MADE FOR HIRE. Any work performed by the Executive under this
Agreement should be considered a "Work Made for Hire" as that phrase is defined by the
U.S. patent laws and shall be owned by and for the express benefit of Corporation, Bank
and any of their subsidiaries and affiliates. In the event it should be established that such
work does not qualify as a Work Made for Hire, the Executive agrees to and does hereby
assign to Corporation, Bank and their affiliates and subsidiaries, all of his rights, title,
and/or interest in such work product, including, but not limited to, all copyrights, patents,
trademarks, and proprietary rights.
10. RETURN OF COMPANY PROPERTY AND DOCUMENTS. The Executive
agrees that, at the time of termination of his employment, regardless of the reason
for termination, he will deliver to Corporation or Bank, any and all company property,
including, but not limited to, keys, security codes or passes, mobile telephones, pagers,
computers, devices, confidential information (as defined in this Agreement), records,
data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, software programs, equipment, other documents or property, or reproductions
of any of the aforementioned items developed or obtained by the Executive during the
course of his employment. The Executive further agrees to sign and return the
"Termination Certificate" attached hereto as Exhibit "A," together with all company
property within three (3) days of the date of termination of the Executive's employment.
11. RESTRICTIVE COVENANT.
(a) Non-competition and Non-solicitation. The Executive hereby
acknowledges and recognizes the highly competitive nature of the
business of Corporation and Bank and accordingly agrees that, for the
applicable period set forth in Section 11(c) hereof, Executive shall not:
(i) be engaged, directly or indirectly, either for his own
account or as agent, consultant, employee, partner, officer,
director, proprietor, investor (except as an investor owning less
than 2% of the stock of a publicly owned company) or otherwise of
any person, firm, corporation or enterprise engaged in (1) the
banking or financial services industry (including bank holding
company), or (2) any other activity in which Corporation, Bank or
any of their subsidiaries or affiliates are engaged during the
Employment Period, within a fifty (50) mile radius of Blakely &
Drinker Streets, Dunmore, Pennsylvania 18512 (the "Non-
Competition Area"); or
(ii) provide financial or other assistance to any person,
firm, corporation, or enterprise engaged in (1) the banking or
financial services industry (including bank holding company), or
(2) any other activity in which Corporation, Bank or any of their
subsidiaries or affiliates are engaged during the Employment
Period in the Non-Competition Area; or
(iii) directly or indirectly contact, solicit or induce any
person, firm, corporation or other entity who or which is a
customer or referral source of Corporation, Bank or any of their
subsidiaries or affiliates during the term of Executive's
employment or at the date of termination of Executive's
employment, to become a client, customer or referral service of
any other person,firm, Corporation or other entity; or
(iv) directly or indirectly solicit, induce or encourage
any employee of Corporation, Bank or any of their subsidiaries or
affiliates, who is employed during the term of Executive's
employment or at the date of termination of Executive's
employment, to leave the employ of Corporation, Bank or any of
their subsidiaries or affiliates or to seek, obtain or accept
employment with any person or entity other than Corporation,
Bank or any of their subsidiaries or affiliates.
(b) Amendment of Restrictive Covenant. It is expressly understood and
agreed that, although Executive,Corporation and Bank consider the
restrictions contained in Section 11(a) reasonable for the purpose of
preserving for Corporation, Bank and any of their subsidiaries or affiliates,
their good will and other proprietary rights, if a final judicial
determination is made by a court having jurisdiction that the time or
territory or any other restriction contained in Section 11(a) is an
unreasonable or otherwise unenforceable restriction against the Executive,
the provisions of Section 11(a) shall not be rendered void, but shall be
deemed amended to apply as to such maximum time and territory and to
such other extent as such court may judicially determine or indicate to be
reasonable.
(c) Period of Restrictive Covenant. The provisions of this Section 11 shall be
applicable, commencing on the date this Agreement is entered and ending
eighteen (18) months after the effective date of termination of employment.
(d) Breach of Restrictive Covenant. It is expressly understood and agreed
that if the Executive violates or breaches any provisions of this Section 11,
then the provisions of this Section 11 shall apply to the Executive for an
additional one (1) year following the date of such violation or breach.
(e) Enforcement of Restrictive Covenant, Unauthorized Disclosure, and
Return of Company Property. Executive acknowledges that his breach of
any of the restrictions set forth in this Agreement in Sections 8, 10 and 11
will result in irreparable injury which is not compensable in damages or
other legal remedies, and Bank, Corporation or their successor may seek
to obtain injunctive relief against the breach, or threatened breach of this
Agreement, and/or specific performance and damages, as well as other
legal and equitable remedies including attorney's fees which may be
available and to which Bank, Corporation or their successors may be
entitled. The right to equitable relief shall include, without limitation, the
right to both preliminary and permanent injunctions against any breach or
threatened breach and specific performance for the provisions of this
Agreement, and in such case, the Employee shall raise no objection, and
.. hereby waives any objection, to the form of relief prayed for in any such
proceeding. Bank, Corporation or their successor shall not be required to
post a bond or similar assurance should Bank, Corporation or their
successor bring any action for equitable relief in order to enforce this
Agreement.
12. TERMINATION.
(a) Death. Notwithstanding any other provisions of this Agreement, this
Agreement shall terminate automatically upon the Executive's death and
the Executive's rights under this Agreement shall cease as of the date such
termination.
(b) Disability. Notwithstanding any other provisions of this Agreement, if, as
result of physical or mental injury or impairment, Executive is unable to
perform all of the essential job functions of his position on a full time
basis, with or without a reasonable accommodation, and without posing a
direct threat to himself and others, for a period up to six (6) months, all
obligations of Bank and Corporation to pay Executive an Annual Direct
Salary as set forth in Section 4(a) of this Agreement are suspended. Any paid
time off, sick leave, or short term disability pay Executive may be
entitled to receive, pursuant to an established disability plan or program of
the Bank and/or Corporation shall be considered part of the compensation
Executive shall receive while disabled and shall not be in addition to
the compensation received by Executive under this provision of the
Agreement. Executive agrees that should he remain unable to perform all
of the essential functions of his position on a full time basis, with or
without a reasonable accommodation and without posing a direct threat to
himself or others, after six (6) months, the Bank and/or Corporation will
suffer an undue hardship by continuing Executive in his position. Upon this
event, all compensation and employment obligations of the Bank and
Corporation under this Agreement shall cease (with the exception of
Executive's rights under the Bank's then existing short term and/or long term
disability plans if any), and this Agreement shall terminate.
(c) Cause. Notwithstanding any other provisions of this Agreement, the Bank
and/or Corporation may terminate the Executive's employment hereunder
for "Cause." As used in this Agreement, the Bank and/or Corporation
shall have "Cause" to terminate the Executive's employment hereunder
upon: (i) the willful failure by the Executive to substantially perform his
duties hereunder (other than a failure resulting from the
Executive's incapacity because of physical or mental illness, as provided in Section
12(b) hereof); (ii) the willful engaging by the Executive in misconduct
injurious to the Corporation or Bank; (iii) the willful violation by the
Executive of the provisions of Sections 3, 8, 9 or 11 hereof; (iv) the
dishonesty or gross negligence of the Executive in the performance of his
duties; (v) the breach of Executive's fiduciary duty involving personal
profit; (vi) the violation of any law, rule or regulation governing banks or
bank officers or any final cease and desist order issued by a bank
regulatory authority; (vii) conduct on the part of Executive which brings
public discredit to the Corporation or Bank; (viii) unlawful discrimination
by the Executive, including harassment against Corporation or Bank's
employees, customers, business associates, contractors, or visitors; (ix)
theft or abuse by Executive of the Corporation or Bank's property or the
property of Corporation or Bank's customers, employees, contractors,
vendors, or business associates; (x) failure of the Executive to follow the
good faith lawful instructions of the Board of Directors of Corporation or
Bank with respect to its operations and a failure to cure such violation within
five (5) working days of said notice; (xi) the direction or
recommendation of a state or federal bank regulatory authority to remove
the Executive's position with Corporation and/or Bank as identified herein;
(xii) any final removal or prohibition order to which the Executive
is subject, by a federal banking agency pursuant to Section 8(e) or Section
8(g) of the Federal Deposit Insurance Act, or a state banking agency
pursuant to Pennsylvania Law; (xiii) the Executive's conviction of or plea
of guilty or nolo contendere to a felony, crime of falsehood or a crime
involving moral turpitude, or the actual incarceration of Executive; (xiv)
any act of fraud, misappropriation or personal dishonesty; (xv)
insubordination; (xvi)misrepresentation of a material fact, or omission of
information necessary to make the information supplied not materially
misleading, in an application or other information provided by the
Executive to the Bank or Corporation or any representative of the Bank or
Corporation in connection with the Executive's employment with the
Bank or Corporation; (xvii) the existence of any material conflict between
the interests of Corporation and the Executive that is not disclosed in
writing by the Executive to the Bank or the Corporation and approved in
writing by the Board of Directors of the Bank or the Corporation; or
(xviii) the Executive takes action that is clearly contrary to the best interest
of the Bank or the Corporation.
(d) Termination by Executive. The Executive may terminate his employment
hereunder if (i) his health should become impaired to an extent that
it makes continued performance of his duties hereunder hazardous to his
physical or mental health or his life, or (ii) for Good Reason. The term
"Good Reason" shall mean (1) any assignment to the Executive, without
his consent, of any duties other than those contemplated by, or any
limitation of the powers of the Executive not contemplated by Section 2
hereof; or (2) any removal of the Executive from any of the positions
indicated in Section 2 hereof, except as a result of his regulatory
removal and/or in connection with termination of the Executive's employment for
Cause; or (3) failure of the Bank to comply with Section 2 hereof, all after
notice from the Executive to the Corporation and Bank that such action or
limitation of the Bank or Corporation constitutes Good Reason and the
failure to cure such situation within thirty (30) days of said notice, or if
said situation cannot be cured within thirty(30) days, within a reasonable
time thereafter if a diligent effort is being made by the Corporation and/or
the Bank to cure such situation.
(e) Termination Without Cause. Nothing herein shall prohibit the
Corporation or Bank from terminating the employment of Executive
without cause (and other than pursuant to Sections 12(a) (Death) or 12(b)
(Disability) in which case the Executive shall be limited to the remedies
provided in Section 13(b).
13. PAYMENTS UPON TERMINATION ABSENT A CHANGE IN CONTROL.
(a) If the Executive's employment is terminated by the Executive because of
his health as described in Section 12(d)(i) hereof, or if the Executive's
employment is terminated by the Bank or Corporation because of
Executive's disability or for Cause (as defined herein), the Corporation
shall pay the Executive his full Annual Direct Salary through the date of
termination at the rate in effect at the time of termination and
the Corporation and Bank shall have no further obligation to the Executive
under this Agreement.
(b) If the Executive's employment is terminated by the Corporation or Bank
other than pursuant to Sections 12(a) (Death); 12(b) (Disability); or 12(c)
(Cause) hereof, or if the Executive shall terminate his employment for
Good Reason, pursuant to Section 12(d)(ii)(1), (2), or (3), then the
Corporation or Bank shall pay the Executive
(i) For less than twelve (12) months of continuous service
Corporation or Bank shall pay Executive a lump sum amount equal
to and no greater than 0.5 times the Executive's Annual Direct
Salary as defined in Section 4(a), minus applicable taxes and
withholdings.
(ii) For more than twelve (12) months of continuous service
Corporation or Bank shall pay Executive a lump sum amount equal
to his full Annual Direct Salary as defined in Section 4(a) from the
date of termination through the last day of the term of this
Agreement or an amount equal to his then current Annual Direct
Salary, whichever is less.
The obligations of the Corporation and Bank pursuant to this Section
13(b) in the event Executive terminates his employment for Good Cause
shall be contingent upon receipt of thirty (30) days notice from
Executive of Executive's termination of employment for Good Reason, and
Executives best efforts during that thirty (30) day period to assist in
the transition including training of Executive's replacement if chosen.
14. PAYMENTS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.
(a) If a Change in Control (as defined herein) shall occur, Executive may
resign from employment with Corporation and Bank effective as of the
Date of Change of Control (as defined herein) subject to the Bank's right
to extend his employment for up to six months under Section 14(c) (or, if
involuntarily terminated, give notice of intention to collect benefits under
this Agreement) by delivering a notice in writing (the "Notice of
Termination") to Corporation and Bank or other successor, and the
provisions of Section 14 (c) of this Agreement shall apply.
(b) During the period of time between the execution of an agreement to effect
a Change in Control (as defined herein) and the Date of the Change in
Control (as defined herein), Executive's employment may only be
terminated for Cause (as defined herein). If, during that period of time,
Executive's employment is terminated for Cause (as defined herein), then
all rights of Executive under this Agreement shall cease as of the effective
date of such termination. If, during that period of time, Executive's
employment is terminated other than for Cause (as defined herein), then
Executive may give notice of intention to collect benefits under this
Agreement by delivering a notice in writing ("Notice of Termination") to
Corporation and Bank and the provisions of Section 14(c) of this
Agreement shall apply.
(c) In the event that Executive delivers a Notice of Termination (as defined in
Section 14(a) of this Agreement) to Corporation and Bank or their
successor, following the Change in Control, Executive shall be entitled to
receive the compensation and benefits set forth below:
Corporation, Bank or their successor shall pay Executive a lump
sum amount equal to and no greater than 1.5 times the Executive's
Annual Direct Salary as defined in Section 4(a), minus applicable
taxes and withholdings. Executive shall not be entitled to receive
payments pursuant to Section 13 (b) in addition to payments under
this Section 14(c). In addition, for a period of one (1)year from
the date of termination of employment, or until Executive secures
substantially similar benefits through other employment,
whichever shall first occur, Executive shall receive a continuation
of health care, life and disability insurance in effect with respect to
Executive at the time of his termination of employment. If
Corporation, Bank or their successor cannot provide such benefits
under the terms of the plans or contracts, Corporation, Bank or
their successor shall pay to Executive, a dollar amount (minus
applicable taxes and withholdings) equal to the cost to Bank of
such benefits at the time of termination of Executive. However, in
the event the payments described herein, when added to all other
amounts or benefits provided to or on behalf of the Executive in
connection with his termination of employment, would result in the
imposition of an excise tax under Code Section 4999, such
payments shall be retroactively (if necessary) reduced to the extent
necessary to avoid such excise tax imposition. Upon written notice
to Executive, together with calculations of Corporation, Bank or
their successor's independent auditors, Executive shall remit to
Corporation, Bank or their successor the amount of the reduction,
plus such interest, as may be necessary to avoid the imposition of
such excise tax. Notwithstanding the foregoing or any other
provision of this contract to the contrary, if any portion of the
amount herein payable to the Executive is determined to be non-
deductible pursuant to the regulations promulgated under Section
280G of the Internal Revenue Code of 1986, as amended (the
"Code"), the Bank, Corporation or their successor shall be required
only to pay to Executive the amount determined to be deductible
under Section 280G.
In addition, notwithstanding the payments to Executive contemplated by
this Section 14(c) if Executive is requested by the Corporation, Bank or
a successor thereto to remain in the employ of the Corporation or Bank
following the Date of Change of Control, the Executive expressly agrees,
to remain in the employ of the Corporation, Bank, or successor for not less
than six months following the Date of Change of Control. The
corporation or Bank shall have the right to request the Executive remain in
the employ of the Corporation, Bank, or successor for a period of less than
six months following the Date of Change of Control. Executive agrees to
remain an employee of the Corporation, Bank, or successor pursuant to
their request conditioned upon the Executive being compensated in the
same amount and on the same terms as he was compensated immediately
prior to the Date of Change of Control, including participation in all
employee benefit plans to which he would otherwise be entitled. In such
case the payment contemplated by this Section 14(c) shall be paid after
termination of the employment relationship.
15. DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement,
the term "Change in Control" shall mean:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Corporation or Bank or any "person" who
on the date hereof is a director or officer of the Corporation or Bank is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation or
Bank representing thirty-five percent (35%) or more of the combined
voting power of the Corporation's or Bank's then outstanding securities,
or
(b) during any period of two (2) consecutive years during the term of
Executive's employment under this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the
Corporation 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, excluding from both the
numerator and the denominator of such calculation persons who no longer
are directors due to death, normal retirement, or Act of God.
(c) a merger, consolidation or business combination with the Corporation
and/or Bank occurs.
16. DEFINITION OF DATE OF CHANGE IN CONTROL. For purposes of this
Agreement, the Date of Change in Control shall mean:
(a) the first date on which a single person and/or entity, or group of affiliated
persons and/or entities, acquire the beneficial ownership of thirty-five
percent (35%) or more of the Corporation's voting securities, or
(b) the date of the closing of an Agreement, transferring all or substantially all
of the Bank or Corporation's assets, or
(c) the date on which a merger, consolidation or business combination is
consummated, as applicable, or
(d) the date on which individuals who formerly constituted a majority of the
Board of Directors of the Bank or Corporation under Section 15(b) hereof,
ceased to be a majority.
17. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this
Agreement by the Corporation, Bank or the Executive resulting in damages to another
party to this Agreement, that party may recover from the party breaching the Agreement,
only those damages as set forth herein. In no event shall any party be entitled to the
recovery of attorney's fees or costs.
18. ARBITRATION. Corporation, Bank and Executive recognize that in the event a
dispute should arise between them concerning the interpretation or implementation of this
Agreement, lengthy and expensive litigation will not afford a practical resolution of the
issues within a reasonable period of time. Consequently, with the exception of the Engagement
in Other Employment provisions in Section 3, the Unauthorized Disclosure
provisions of Section 8, the Return of Company Property and Documents provisions of
Section 10, and the Restrictive Covenant provisions in Section 11, which the Corporation
or Bank may seek to enforce in any court of competent jurisdiction, each party agrees that
all disputes, disagreements and questions of interpretation concerning this Agreement are
to be submitted for resolution, in Scranton, Pennsylvania, to the American Arbitration
Association (the "Association") in accordance with the Association's National Rules for the
Resolution of Employment Disputes or other applicable rules then in effect ("Rules").
Corporation, Bank or Executive may initiate an arbitration proceeding at any time by
giving notice to the other in accordance with the Rules. Corporation, Bank and Executive
may, as a matter or right, mutually agree on the appointment of a particular arbitrator from
the Association's pool. The arbitrator shall not be bound by the rules of evidence
and procedure of the courts of the Commonwealth of Pennsylvania but shall be bound by
the substantive law applicable to this Agreement. The arbitration proceeding and all
filing, testimony, documents, and information, relating to or presented during the
evaluation proceeding, shall be disclosed exclusively for the purpose of facilitating the
arbitration process and for no other purpose and shall be deemed to be information
subject to the confidentiality provisions of this Agreement. The decision of the arbitrator,
absent fraud, duress, incompetence or gross and obvious error of fact, shall be final and
binding upon the parties and shall be enforceable in courts of proper jurisdiction.
Following written notice of a request for arbitration, Corporation, Bank and Executive
shall be entitled to an injunction restraining all further proceedings in any pending or
subsequently filed litigation concerning this Agreement, except as otherwise provided
herein.
19. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to
have been duly given when hand-delivered or mailed by United States certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Steven C. Ackmann
857 Viewmont Avenue
Johnstown, PA 15905
If to the Bank: Patrick Dempsey, Chairman
The Fidelity Deposit and Discount Bank
Blakely and Drinker Streets
Dunmore, PA 18512
If to the Corporation: Patrick Dempsey, Chairman
Fidelity D&D Bancorp, Inc.
Blakely and Drinker Streets
Dunmore, PA 18512
or to such other address as any party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective only
upon receipt.
20. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
the Executive, his personal representatives, heirs or assigns and to the
Bank and/or the Corporation and any of their successors or assigns. Executive expressly agrees
to the assignment of the covenants contained in Sections 8, 10 and 11 by the Corporation and
Bank.
21. SEVERABILITY. If any provision of this Agreement is declared unenforceable
for any reason, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect.
22. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing.
23. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of
Executive's death, any monies that may be due him from the Corporation or Bank under
this Agreement as of the date of death, shall be paid to the person designated by him in
writing for this purpose, or in the absence of any such designation, to his estate.
24. LAW GOVERNING. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania. Further, subject to
Section 18, the parties agree to the exclusive jurisdiction and venue of the Court of
Common Pleas in Lackawanna County Pennsylvania and the United States District Court
for the Middle District of Pennsylvania for all disputes between the parties not subject to
Arbitration, and for purposes of appeal from any Arbitration Award.
25. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements,
either oral or in writing, between the parties with respect to the employment of the
Executive by the Corporation and Bank, this Agreement contains all the covenants and
agreements between the parties with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have
caused this Agreement to be duly executed in their respective names and, in the case of the
Corporation and Bank, by its authorized representatives the day and year above mentioned.
ATTEST: THE FIDELITY DEPOSIT AND DISCOUNT BANK
/s/Michael J. McDonald By: /s/Patrick J. Dempsey
Michael J. McDonald Patrick J. Dempsey, Chairman
ATTEST: FIDELITY D&D BANCORP, INC.
/s/Michael J. McDonald By: /s/Patrick J. Dempsey
Michael J. McDonald Patrick J. Dempsey, Chairman
WITNESS:
/s/ Brian J.Cali /s/Steven C. Ackmann
Brian J. Cali Steven C. Ackmann
"Executive"
EXHIBIT A
TERMINATION CERTIFICATE
This is to certify that I do not have in my possession, nor have I failed to return, any keys,
security codes or passes, mobile telephones, pagers, computers, devices, confidential
information, records, data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, or reproductions of any aforementioned items belonging to Fidelity D&D
Bancorp, Inc., The Fidelity Deposit and Discount Bank or any of their affiliates or subsidiaries,
or any of their respective successors or assigns (together, the "Company").
I further certify that I have complied and will continue to comply with all the terms of the
Executive Employment Agreement entered by me, Fidelity D&D Bancorp, Inc. and The Fidelity
Deposit and Discount Bank, with respect to my employment that began on -------- 2004.
Without limiting the generality of the preceding paragraph, I will, in accordance with my
Employment Agreement, preserve as confidential, all proprietary and confidential information,
trade secrets and know-how of Fidelity D&D Bancorp, Inc., The Fidelity Deposit and Discount
Bank or any of their affiliates or subsidiaries, including, but not limited to, research, product or
business plans, products, services, projects, proposals, customer lists or customers (including, but
not limited to, customers of Fidelity D&D Bancorp, Inc., The Fidelity Deposit and Discount
Bank or any of their affiliates or subsidiaries on whom I called or with whom I became
acquainted during the term of my employment), markets, software, developments, inventions,
processes, formulas, technology, designs or styles, drawings, engineering, marketing,
distribution, and sales methods and systems, sales and profit figures, finances and other business
information disclosed to me by Fidelity D&D Bancorp, Inc., The Fidelity Deposit and Discount
Bank or any of their affiliates or subsidiaries, either directly or indirectly in writing, orally or by
drawings or inspection of documents or on other tangible property.
Date:______________________________ ____________________________________
Signature
___________________________________ ____________________________________
Witness Steven C. Ackmann
Exhibit 99.2
STEVEN C. ACKMANN NAMED PRESIDENT AND CHIEF EXEXCUTIVE OFFICER
OF THE FIDELITY DEPOSIT & DISCOUNT BANK
DUNMORE, PA, June 22 - Patrick Dempsey, Chairman of the Board of Fidelity Deposit &
Discount Bank, a subsidiary of Fidelity D&D Bancorp Inc. (OTC Bulletin Board: FDBC),
announced today the appointment of Steven C. Ackmann as the Bank's President and Chief
Executive Officer. In this role, Mr. Ackmann will oversee the strategic and management
responsibilities and all business objectives for the community bank.
"This is an exciting time for Fidelity Bank. We are pleased that Steve has joined our team and
will lead us into our second century of service to this community. He is a strong community
banker who understands the important role an independent community bank plays in the
communities it serves," explained Mr. Dempsey.
Mr. Ackmann brings extensive banking and management experience to Fidelity. He has more
than thirty years of banking industry experience in Pennsylvania in areas including lending and
lending administration, operations, and executive management. He began his banking career
with First National Bank & Trust Company in Washington, PA. More recently, as President and COO
of Promistar Financial Corporation, Mr. Ackmann was a key member of the management team
that grew the bank from its Johnstown roots to encompass twelve counties and Eighty-three
branches throughout Western Pennsylvania. With the acquisition of Promistar by First National
Bank of Pennsylvania, Mr. Ackmann had the overall responsibility for managing the merger and
integrating Promistar into FNB.
Mr. Ackmann attended the University of Washington, Robert Morris University and Washington
and Jefferson College and received his MBA from the University of Pittsburgh-the Katz
Graduate School of Business.
He recently served as Chairman of the Pennsylvania Bankers Association Political Action
Committee, Director of the American Bankers Association Bank PAC, and as a member of the
PA Bankers Association State Government Relations Policy Committee. He currently serves
as Chairman of Johnstown Area Regional Industries, (JARI, the economic development agency for
Greater Johnstown area), Director of the United Way of the Laurel Highlands, Chairman, The
Jacob Fend Foundation, Member, The President's Advisory Counsel of Mt. Aloysius College,
and Trustee and Treasurer of Sunnehanna Country Club.
Mr. Ackmann and his wife, Cindy, will be relocating to the area in the near future. Their son,
Evan, is a senior at Lehigh University.
The Fidelity Deposit and Discount Bank has been serving Northeastern Pennsylvania since 1903
and operates 12 branches throughout Lackawanna and Luzerne County.
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