Exhibit 10.1


AMENDED
AND RESTATED


EXECUTIVE EMPLOYMENT AGREEMENT


This Amended and Restated Executive Employment
Agreement (“Agreement”) is made this 11th day of July, 2007, between Fidelity D&D
Bancorp, Inc. (“Corporation”) and Fidelity Deposit and Discount Bank (“Bank”),
and Steven C. Ackmann (“Executive”).


WITNESSETH:


WHEREAS, the parties entered into a certain
Executive Employment Agreement dated June 21, 2004 (“Original Agreement”); and


WHEREAS, pursuant to Section 1(a) of the Original
Agreement, Executive’s employment term would terminate effective July 6, 2007
absent an extension of the Original Agreement or implementation of another
written employment agreement between the parties; and


WHEREAS, Bank is a subsidiary of Corporation; and


WHEREAS, Corporation and Bank desire to continue to
employ Executive under the terms and conditions set forth herein; and


WHEREAS, Executive desires to continue to serve
Corporation and 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.   Corporation and Bank hereby shall employ
Executive, and Executive hereby accepts employment with Corporation and Bank,
for a term of three (3) years beginning on July 6, 2007, and ending three years
later, subject,



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however,
to prior termination of this Agreement as set forth below.  Executive shall notify Corporation and Bank
in writing, on or before the date that is nine (9) months prior to expiration
of the original three-year term of this Agreement, or any renewal term, and no
earlier than the date that is twelve (12) months prior to expiration of such
term, that Executive desires to negotiate an extension of Executive’s
employment beyond the end of the then current term.  Provided such notice is given, this Agreement
shall automatically renew for a term of one (1) year upon the same terms and
conditions unless another written agreement for Executive’s continued
employment is entered into on or before the date that is six (6) months prior
to expiration of the then current term or Corporation and Bank notify Executive
in writing by such date that Executive’s employment will not be continued
beyond the then current term.  For
purposes of this Agreement, “Employment Period” shall mean any period during
which Executive is employed by Corporation and/or Bank.


2.          POSITION AND DUTIES.  Executive shall serve as the President and
Chief Executive Officer of both Corporation and Bank, reporting only to the
Board of Directors of each, and shall have supervision and control over, and
responsibility for, the general management and operation of Corporation and
Bank, and shall have such other powers and duties as may from time to time be
prescribed by the Board of Directors of Corporation and Bank consistent with
Executive’s management and operational responsibilities.  Corporation agrees to appoint Executive to
Corporation’s Board of Directors at the meeting of such Board of Directors next
following or coincident with the date of this Agreement, such appointment to
become effective immediately.


3.          ENGAGEMENT IN OTHER EMPLOYMENT.   Executive will devote his
full attention, time and energies to the business of Corporation, Bank and any
of their



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subsidiaries
or affiliates.  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 or
enterprise without written approval from the Board of Directors of
Corporation.  Executive shall notify the
Board of Directors of Corporation prior to entering into any significant
engagement, including serving as a director or officer, with any philanthropic
organization.  All such positions and the
expected period of service for each, as of the date of this Agreement, are
identified on Exhibit “A” hereto. 
Executive shall provide as of each anniversary date of this Agreement an
updated list reflecting Executive’s then current positions and expected terms
of service with any organizations other than Corporation or Bank.


4.             COMPENSATION.


(a)             Annual Direct Salary.  As
compensation for services rendered Corporation and Bank under this Agreement,
Executive shall be entitled to receive from Corporation or Bank an annual
direct salary of Two Hundred Thirty Thousand Dollars ($230,000) per year (“Annual
Direct Salary”), payable in substantially equal weekly installments (or such
other intervals, consistent with Bank’s payroll policy), prorated for any
partial employment period.   After July
2007, the Annual Direct Salary shall be reviewed annually, no later than June
30 of the then calendar year and shall be subject to annual change in the
discretion of Corporation and Bank (but not reduced below Two Hundred Thirty
Thousand Dollars ($230,000), or the rate later established, without Executive’s
written consent, except in cases of national financial depression or emergency
when compensation reduction has been



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implemented by the Board of
Directors for Bank’s senior management), as may be set by the Board of
Directors of Corporation and Bank taking into account the position and duties
of Executive and the performance of Corporation and Bank under Executive’s
leadership.


(b)             Bonus.  The Board of Directors of
Corporation or Bank, in its sole discretion, may provide for payment of a
periodic bonus to Executive in such an amount or nature as it may deem
appropriate as an incentive to Executive and to reward Executive for his
performance.  Any bonus amount shall be
paid after December 31 of the year in which the bonus is earned and on or
before March 15 of the year following the year in which the bonus is earned.


5.             FRINGE BENEFITS, VACATION,
EXPENSES AND PERQUISITES.


(a)             Employee Benefit Plans. 
Executive shall be eligible to participate in or receive benefits under
all Bank employee 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 Bank to its employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements, and subject to the right of Bank to modify, change or
eliminate such plans or arrangements.


(b)           Vacation, Holidays, Sick Days and Personal
Days.  Executive shall be entitled to the number of
twenty (20) paid vacation days in each calendar year. Executive shall also be
entitled to all paid holidays, sick days and personal days given by Corporation
and/or Bank to its employees.  



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Unused paid vacation,
holiday, sick or personal days may not be accumulated for use in any subsequent
year; nor may compensation be paid in lieu thereof.


(c)           Business Expenses. 
During the term of his employment hereunder, 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 Corporation and/or Bank for its senior executive officers.


(d)           Automobile.  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; provided, however, that Executive
may also employ such vehicle for personal use in accordance with applicable tax
rules and at Executive’s expense.


(e)           Club Memberships. 
Corporation shall provide payment of annual dues and monthly business
development expenses for 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 Corporation or Bank only if the membership is the property of
Corporation or Bank.


6.             INDEMNIFICATION.  Corporation and Bank will indemnify Executive
and advance expenses to the same degree as provided by the Bylaws of
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



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against him by reason of the
fact that he is or was a director, officer, employee or agent of Corporation or
Bank.


7.             LIABILITY INSURANCE.  Bank and/or Corporation shall use its best
efforts to obtain insurance coverage for Executive under an insurance policy
covering officers and directors of Bank and Corporation against lawsuits,
arbitrations or other legal or regulatory proceedings; however, nothing herein
shall be construed to require Bank and/or Corporation to obtain such insurance
if the Board of Directors of Bank and/or 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, Executive shall not, without the
written consent of the Board of Directors of 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 Corporation or Bank or a person to whom disclosure is reasonably necessary
or appropriate in connection with the performance by Executive of his duties as
an executive of Corporation or Bank, any confidential information, trade
secrets or know-how, obtained by him while in the employ of 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 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



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business information of
Corporation, Bank or any of their subsidiaries or affiliates, the disclosure of
which could be or will be materially damaging to 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 Executive or any person
with the assistance, consent or direction of 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 Corporation or Bank or any
information that must be disclosed as required by law.


9.         WORK MADE FOR HIRE.  Any work performed by 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, 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.  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



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any of the aforementioned
items developed or obtained by Executive during the course of his
employment.  Executive further agrees to
sign and return the “Termination Certificate” attached hereto as Exhibit “B,”
together with all company property within three (3) days of the date of
termination of Executive’s employment.


11.           RESTRICTIVE
COVENANT.


(a)             Non-Competition and Non-Solicitation.  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 a 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 a bank holding company), or (2) any other activity in which
Corporation, Bank or any of their subsidiaries



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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



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or any other restriction
contained in Section 11(a) is an unreasonable or otherwise unenforceable
restriction against 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 Executive’s employment; provided, however, that such period
shall be reduced by the number of whole months not exceeding six (6) that
Executive remains employed pursuant to the request of Corporation, Bank or a
successor in accordance with the provisions of Section 14(c).


(d)           Breach of Restrictive Covenant.  It
is expressly understood and agreed that if Executive violates or breaches any
provision of this Section 11, then the provisions of this Section 11 shall
apply to 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 successors 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



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equitable
remedies including attorneys’ 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, Executive 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
provision of this Agreement, this Agreement shall terminate automatically upon
Executive’s death, and Executive’s rights under this Agreement shall cease as
of the date of such termination.


(b)           Disability.  If, while employed hereunder,
Executive suffers a Disability such that he is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months, then all obligations of Bank and Corporation to
pay Executive an Annual Direct Salary as set forth in Section 4(a) of this
Agreement shall continue so long as Executive remains under such Disability;
provided, however, that the obligations of Bank and Corporation



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to make such payments shall
be limited as described below.  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 Bank and/or
Corporation shall be considered part of the compensation Executive shall
receive while under such Disability 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 for a period exceeding six (6) months after the
commencement of Executive’s Disability, Bank and/or Corporation will suffer an
undue hardship by continuing Executive in his position.  In this event, after the expiration of such
six-month period, all compensation and employment obligations of Bank and
Corporation under this Agreement shall cease (with the exception of Executive’s
rights under Bank’s then existing short term and/or long term disability plans
if any), and this Agreement shall terminate; provided, however, that nothing in
this Section 12(b) shall prohibit Bank and Corporation, in their sole
discretion, from continuing to pay Executive the regular amount of Executive’s
Annual Direct Salary or such other amount as Bank and Corporation may determine
after the expiration of such six-month period.


(c)           Cause.  Notwithstanding any other
provisions of this Agreement, Bank and/or Corporation may terminate Executive’s
employment hereunder for



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“Cause.” As used in this
Agreement, Bank and/or Corporation shall have “Cause” to terminate Executive’s
employment hereunder upon: (i) the willful failure by Executive to
substantially perform his duties hereunder (other than a failure resulting from
Executive’s incapacity because of physical or mental illness, as provided in
Section 12(b) hereof); (ii) the willful engaging by Executive in misconduct
injurious to Corporation or Bank; (iii) the willful violation by Executive of
the provisions of Sections 3, 8, 9 or 11 hereof; (iv) the dishonesty or gross
negligence of 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 Corporation or Bank; (viii)
unlawful discrimination by Executive, including harassment against Corporation’s
or Bank’s employees, customers, business associates, contractors or visitors;
(ix) theft or abuse by Executive of Corporation’s or Bank’s property or the
property of Corporation’s or Bank’s customers, employees, contractors, vendors
or business associates; (x) failure of 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 notice from the Board of Directors of such failure; (xi) the direction or recommendation of a
state or federal bank regulatory authority to remove Executive’s position with
Corporation and/or Bank as identified herein; 
(xii) any final removal or 



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prohibition order to which
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) 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 Executive to Bank or Corporation or any
representative of Bank or Corporation in connection with Executive’s employment
with Bank or Corporation; (xvii) the existence of any material conflict between
the interests of Corporation and Executive that is not disclosed in writing by
Executive to Bank or Corporation and approved in writing by the Board of
Directors of Bank or Corporation; or (xviii) an action by Executive that is
clearly contrary to the best interests of Bank or Corporation.


 (d)          Termination
by Executive.  Executive may terminate his employment
hereunder (i) for any or no reason or (ii) for Good Reason.  The term “Good Reason” shall mean (1) any
material diminution, without Executive’s consent, in Executive’s authority,
duties or responsibilities described in Section 2 hereof; (2) any removal of
Executive, without his consent, 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 Executive’s



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employment for Cause; (3)
any material breach of this Agreement by Corporation or Bank; (4) any reduction
in Executive’s Annual Direct Salary in violation of Section 4(a); or (5) any
assignment of Executive to a principal office location outside a radius of
fifty (50) miles from the intersection of Blakely & Drinker Streets,
Dunmore, Pennsylvania; provided, however, that a Good Reason termination shall
not have occurred unless Executive has notified Corporation or Bank, as
applicable, in writing within thirty (30) days of the initial existence of the
condition constituting such Good Reason and such condition is not cured within
thirty (30) days of such notice, or if said condition cannot be cured within
thirty (30) days, within a reasonable time thereafter if a diligent effort is
being made by Corporation and/or Bank to cure such condition, and further
provided that Executive actually terminates employment within twelve (12)
months of the initial existence of such condition.


(e)           Termination Without Cause. 
Nothing herein shall prohibit 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 Executive shall be limited to the remedies provided in
Section 13(b).


(f)            Directorships.  In
the event of Executive’s termination from employment for any reason, he shall
resign from any position held by him as a member of the Board of Directors of
Corporation and/or Bank effective on or before the date of such termination of
employment if requested or notified to do so by such Board(s).



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13.           PAYMENTS UPON TERMINATION ABSENT A CHANGE IN CONTROL.


(a)           Termination for Disability, Cause or
Executive Terminates for other than Good Reason.  If
Executive’s employment is terminated by Executive pursuant to Section 12(d)(i)
hereof, or if Executive’s employment is terminated by Bank or Corporation
pursuant to Section 12(b) (Disability) or Section 12(c)(Cause), Corporation or
Bank shall pay Executive the prorated amount of his Annual Direct Salary
through the date of termination of Executive’s employment at the rate in effect
at the time of termination and Corporation and Bank shall have no further
obligation to Executive under this Agreement, subject, in the case of Executive’s
Disability, to the terms of Section 12(b).


(b)           Termination without
Cause or for Good Reason.  If, before
the date that is twelve (12) months prior to expiration of the then current
term of this Agreement, Executive’s employment is terminated by Corporation or
Bank other than for Death, Disability or Cause, or Executive terminates his
employment for Good Reason, then Corporation or Bank shall pay Executive within
thirty (30) days after such termination an amount equal to his Annual Direct
Salary.  If, on or after the date that is
twelve (12) months prior to expiration of the then current term of this
Agreement, Executive has provided notice of Executive’s desire to negotiate an
extension of Executive’s employment beyond the end of the then current term in
accordance with the



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requirements of Section 1
hereof, and Executive’s employment terminates pursuant to notice given by
Corporation and Bank under Section 1 that Executive’s employment will not be
continued beyond the then current term, then Corporation or Bank shall continue
to pay Executive for his ongoing work, pursuant to Corporation’s or Bank’s
normal payroll schedule, Executive’s Annual Direct Salary through the
expiration date of the then current term plus an additional amount within
thirty (30) days after such expiration date equal to one-half Executive’s
Annual Direct Salary; provided, however, that Corporation and Bank will have no obligation
for any of such payments should Executive terminate his employment pursuant to
Section 12(d)(i) hereof prior to the expiration of the then current term except
for Annual Direct Salary earned up to the date of such termination.  If, on or after the date that is
twelve (12) months prior to expiration of the then current term of this
Agreement, Executive’s employment is terminated by Corporation or Bank other
than for Death, Disability or Cause or Executive terminates his employment for
Good Reason, then Corporation or Bank shall pay Executive, within thirty (30)
days after such termination, an amount equal to one-half Executive’s Annual
Direct Salary.  The
obligations of Corporation and Bank pursuant to this Section 13(b) in the event
Executive terminates his employment for Good Reason shall be contingent upon
receipt of thirty (30) days notice from Executive of Executive’s termination of
employment for Good Reason, and Executive’s best efforts during that thirty
(30) day period to assist in the transition to Executive’s successor, including



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training
of such successor if chosen. 
Notwithstanding anything in this Section 13(b) to the contrary,
Corporation or Bank shall not be liable for any payment that would otherwise
become due hereunder on or after the date Executive commences other
employment.  Except as specifically
provided in this Section 13(b), or as provided in Section 12(b) or Section 14
hereof, or as otherwise required by law, all benefits provided Executive under
this Agreement shall terminate effective the date of Executive’s termination of
employment.


14.           PAYMENTS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.


(a)           If a Change in Control shall occur, Executive may resign from employment
with Corporation and Bank effective as of the Date of Change of Control subject
to 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 (“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 and the Date of the Change in Control, Executive’s
employment may only be terminated by Corporation or by Bank for Cause.  If, during that period of time, Executive’s



 18
 









employment is terminated for
Cause, 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, 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 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
two (2) times 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 Executive’s 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 to the extent such benefits remain available under
the terms of any applicable contracts or policies.  To the extent such benefits are unavailable,
Executive shall receive comparable coverage on an individual policy basis,
limited to aggregate payments for such coverage not exceeding the applicable
dollar limitation under Section 402(g)(1)(B) of the Internal Revenue



 19
 









Code (“Code”) for the year
in which Executive terminates employment. 
In the event the payments described herein, when added to all other
amounts or benefits provided to or on behalf of 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 Executive is
determined to be non-deductible pursuant to the regulations promulgated under
Section 280G of the Code, then 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 Corporation, Bank or a
successor thereto to remain in the employ of Corporation, Bank or such
successor following the Date of Change of Control, Executive expressly agrees
to remain in the employ of Corporation, Bank or such successor for not less



 20
 









than six months, or such shorter period as Corporation, Bank or such
successor may request, following the Date of Change of Control.  Executive agrees to remain an employee of
Corporation, Bank or a successor pursuant to such request conditioned upon
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.


(d)           Payment pursuant to
Section 14(c) hereof shall be made on the first business day of the month
following the date that is six (6) months after Executive’s termination of
employment.


15.           DEFINITION OF CHANGE IN CONTROL.  For purposes of this
Agreement, the term “Change in Control” (other than one occurring by reason of
an acquisition of Bank or Corporation by Executive) shall be deemed to have
occurred if the Board of Directors of Corporation or Bank certifies on an
objective basis that one of the following has occurred:


(a)           a sale or other transfer of ownership of forty percent (40%) or more of
the total gross fair market value of the assets of Corporation and Bank to any
individual, corporation, partnership, trust or other entity or organization (“Person”)
or group of Persons acting in concert as a partnership or other group, other
than a Person controlling, controlled by or under common control with
Corporation or Bank;



 21
 









(b)           any Person or group of Persons acting in concert as a partnership or
other group, other than a Person controlling, controlled by or under common
control with Corporation or Bank, acquires ownership of stock in Corporation,
that together with stock held by such Person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of
Corporation, provided such Person or group did not own more than 50 percent of
the total fair market value or total voting power of the stock of Corporation
prior to such acquisition; or


(c)           the replacement of a majority of members of Corporation’s Board of
Directors over any period of one year or less by directors whose appointment or
election is not endorsed by a majority of the members of Corporation’s Board of
Directors prior to the date of the appointment or election.


16.           DEFINITION OF DATE OF CHANGE IN CONTROL.  For
purposes of this Agreement, the Date of Change in Control shall mean:


(a)           the date of closing of any agreement for the transfer of ownership of
forty percent (40%) or more of the total gross fair market value of the assets
of Corporation and Bank to any Person or group of Persons acting in concert as
a partnership or other group, other than a Person controlling, controlled by or
under common control with Corporation or Bank;


(b)           the first date on which any Person or group of Persons acting in
concert as a partnership or other group, other than a Person controlling,
controlled by or under common control with



 22
 









Corporation or Bank,
acquires ownership of stock in Corporation, that together with stock held by
such Person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of Corporation, provided such Person
or group did not own more than 50 percent of the total fair market value or
total voting power of the stock of Corporation prior to such acquisition; or


(c)           the date on which individuals who formerly constituted a majority of
the Board of Directors of Corporation under Section 15(c) hereof ceased to be a
majority.


17.           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 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 (“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



 23
 









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 filings, 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 or law, 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.


18.           NOTICE.  Notices and all other communications provided
for in this 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 Executive:

  	
  Steven C. Ackmann

  
	
   

  	
   

  	
  34 O’Neill Drive

  
	
   

  	
   

  	
  Moosic, PA 18507

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Bank:

  	
  Patrick J. Dempsey, Chairman

  
	
   

  	
   

  	
  The Fidelity
  Deposit and Discount Bank

  
	
   

  	
   

  	
  Blakely and
  Drinker Streets

  
	
   

  	
   

  	
  Dunmore, PA
  18512

  



 



 24
 









 


	
  

  	
  If to
  Corporation:

  	
  Patrick J. 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.


19.           SUCCESSORS.  This Agreement shall inure to the benefit of
and be binding upon Executive, his personal representatives, heirs or assigns
and to Bank and/or Corporation and any of their successors or assigns.


20.           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.


21.           AMENDMENT.  Except as otherwise provided herein, this
Agreement may be amended or terminated only by mutual agreement of the parties
in writing.


22.           PAYMENT OF MONEY DUE DECEASED EXECUTIVE.  In
the event of Executive’s death, any monies that may be due him from 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.


23.           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.  The provisions of this



 25
 









Agreement shall be construed
consistent with Section 409A of the Code and all applicable guidance thereunder
so as not to result in the inclusion in Executive’s income of any benefit under
this Agreement by reason of the application of such section.


24.           ENTIRE
AGREEMENT.  This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous agreements, oral or in writing,
between the parties with respect to the employment of Executive by Corporation
and Bank.


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 cases
of Corporation and Bank, by their authorized representatives the day and year
first above written.


	
  ATTEST:

  	
  THE FIDELITY DEPOSIT AND DISCOUNT BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
    s/
  Diane Davis

  	
   

  	
  By:

  	
   s/ Patrick J. Dempsey

  	
   

  
	
   

  	
   

  	
  Patrick J. Dempsey, Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
  FIDELITY D&D BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   s/ Diane
  Davis

  	
   

  	
  By:

  	
  s/ Patrick J. Dempsey

  	
   

  
	
   

  	
   

  	
  Patrick J. Dempsey, Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   s/ Barbara
  Shimkus

  	
   

  	
   

  	
   s/ Steven C. Ackmann

  	
   

  
	
   

  	
   

  	
  Steven C. Ackmann

  



 



 26
 









EXHIBIT A


OUTSIDE POSITIONS HELD BY EXECUTIVE


AS OF JULY 6, 2007


	
  ORGANIZATION

  	
   

  	
  POSITION

  	
   

  	
  TERM OF SERVICE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  United Way of
  Lackawanna County

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  St. Joseph’s
  Center

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  St. Francis of
  Assisi Food Kitchen

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Scranton
  Cultural Center

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jacob Fend
  Foundation

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Boy Scouts of
  America

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Scranton Chamber
  of Commerce

  	
   

  	
   

  	
   

  	
   

  



 



 27
 









EXHIBIT B


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 of the aforementioned items belonging to Fidelity
D&D Bancorp, Inc., Fidelity Deposit and Discount Bank or any of their
affiliates or subsidiaries, or any of their respective successors or assigns
(hereinafter collectively, “Companies”).


I further certify that I have complied and will continue to comply with
all the terms of the Amended and Restated Executive Employment Agreement (“Employment
Agreement”) entered by me, Fidelity D&D Bancorp, Inc. and Fidelity Deposit
and Discount Bank, with respect to my employment, which began thereunder
effective July 6, 2007.


Without limiting the generality of the preceding paragraph, I will, in
accordance with the Employment Agreement, preserve as confidential, all
proprietary and confidential information, trade secrets and know-how of
Companies, 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 Companies 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 Companies, either directly or indirectly in writing, orally or by
drawings or inspection of documents or otherwise.


	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
  Steven C. Ackmann

  



 



 28