EXHIBIT 10.14 FIDELITY FEDERAL SAVINGS BANK EMPLOYEE SEVERANCE
COMPENSATION PLAN
PLAN PURPOSE
The purpose of the Fidelity Federal Savings Bank Employee Severance
Compensation Plan is to assure for Fidelity Federal Savings Bank
(the "Bank") the services of the employees of the Bank in the event
of a Change in Control (capitalized terms are defined in section
2.1) of Fidelity Bancorp, Inc. (the "Holding Company") or the Bank.
The benefits contemplated by the Plan recognize the value to the
Bank of the services and contributions of the employees of the Bank
and the effect upon the Bank resulting from the uncertainties of
continued employment, reduced employee benefits, management changes
and employee relocations that may arise in the event of a Change in
Control of the Bank or the Holding Company. The Bank's and the
Holding Company's Boards of Directors believe that it is in the
best interests of the Bank and the Holding Company to provide
employees of the Bank with such benefits in order to defray the
costs and changes in employee status that could follow a Change in
Control. The Board of Directors believes that the Plan will also
aid the Bank in attracting and retaining highly qualified
individuals who are essential to its success and the Plan's
assurance of fair treatment of the Bank's employees will reduce the
distractions and other adverse effects on employees' performance in
the event of a Change in Control.
ARTICLE I
ESTABLISHMENT OF PLAN
1.1 Establishment of Plan
As of the Effective Date of the Plan as defined herein, the Bank
hereby establishes a severance compensation plan to be known as the
"Fidelity Federal Savings Bank Employee Severance Compensation
Plan." The purposes of the Plan are as set forth above.
1.2 Applicability of Plan
The benefits provided by this Plan shall be available to all
Employees (as defined in Section 2.1(e) below) of the Bank, who, at
or after the Effective Date, meet the eligibility requirements of
Article III, except for those executive officers who have entered
into and continue to be subject to an employment or special
termination agreement with the Employer.
1.3 Contractual Right to Benefits
This Plan establishes and vests in each Participant a contractual
right to the benefits to which each Participant is entitled
hereunder, enforceable by the Participant against the Employer,
Bank, or both.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions
Whenever used in the Plan, the following terms shall have the
meanings set forth below.
(a) "Weekly Compensation" of a Participant means with respect to:
(i) a salaried Participant, such Participant's weekly base salary
paid or accrued as consideration for the Participant's service
during the twelve (12) months ending on the date as of which such
compensation is to be determined, which is or would be includable
in the gross income of the Participant receiving the same for
federal income tax purposes; provided that, Weekly Compensation
shall not include any amount paid as a bonus, commission or as
extraordinary compensation; and (b) an hourly Participant, such
Participant's average weekly earnings based on such Participant's
wages paid for the twelve (12) month period ending on the date as
of which such compensation is to be determined, which is or would
be includable in the gross income of the Participant receiving the
same for federal income tax purposes, provided that Weekly
Compensation shall not include overtime, commissions, bonuses,
extraordinary compensation or other non-hourly compensation
payments.
(b) "Bank" means Fidelity Federal Savings Bank or any successor as
provided for in Article VII hereof.
(c) "Change in Control" for purposes of determining under the Plan
whether there as been a change in control of the Bank or the
Holding Company, a "Change in Control" of the Bank or Holding
Company shall mean an event of a nature that: (i) would be required
to be reported in response to 1(a) of the current report on Form
8-K, as in effect of the date hereof, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
or (ii) results in a Change in Control of the Bank or the Holding
Company within the meaning of the Home Owners' Loan Act of 1933 and
the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of change in
control or presumptive change in control or acting in concert or
presumptive acting in concert as set forth under the Rules and
Regulations of the OTS, ownership by a person or group, including
a presumptive group, of at least 15% of the voting stock of the
Bank or the Holding Company shall be required, and provided further
that ownership of stock by a tax qualified employee benefit plan of
the Bank or the Holding Company shall not be subject to
presumptions of control or acting in concert); or (iii) without
limitation, such a Change in Control shall be deemed to have
occurred at such time as (a) any "person" (as the term is used in
Section 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, or securities of the Bank or Holding
Company representing 20% or more of the combined voting power of
the Bank's or Holding Company's outstanding securities except for
any securities purchased by the Bank's employee stock ownership
plan or trust; or (b) individuals who constitute the Board of
Directors of the Holding Company on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to
the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Holding Company's stockholders
was approved by the Holding Company's Nominating Committee, shall
be, for purposes of this clause (b), considered as though he were
a member of the Incumbent Board; or (c) a plan of reorganization,
merger, consolidation sale of all or substantially all the assets
of the Bank or Holding Company or similar transaction occurs in
which the Bank or the Holding Company is not the surviving entity.
(d) "Effective Date" means April 1, 2002.
(e) "Employee" means an employee employed by an Employer on a
full-time basis, which for purposes of this Plan shall mean that
the employee regularly works at least an average of thirty-five
(35) hours a week, excluding the chief executive officer and any
executive officer of the Bank who is covered by an employment
contract or a special termination agreement with an Employer.
(f) "Employer" means the Bank or a subsidiary of the Bank or a
parent of the Bank which has adopted the Plan pursuant to Article
VI hereof.
(g) "Holding Company" means Fidelity Bancorp, Inc., the holding
company of the Bank.
(h) "Cause" The term "Cause" shall mean termination of the
Participant's employment because of the Participant's (i) personal
dishonesty; (ii) material incompetence; (iii) willful misconduct;
(iv) breach of fiduciary duty involving personal profit; (v)
intentional failure to perform stated duties; or (vi) willful
violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease and desist order.
In determining material incompetence, the acts of omissions shall
be measured against standards generally prevailing in the savings
institutions industry. For purposes of this subsection, no act, or
failure to act, on an Employee's part shall be "willful" unless
done, or omitted to be done, not in good faith and without
reasonable belief that the action or omission was in the best
interests of the Bank or its affiliates.
(i) "Payment" means the payment of severance compensation as
provided in Article IV hereof.
(j) "Participant" means an Employee who meets the eligibility
requirements of Article III.
(k) "Plan" means the Fidelity Federal Savings Bank Employee
Severance Compensation Plan.
2.2 Applicable Law
To the extent not preempted by the laws of the United States as now
or hereafter in effect, the laws of the State of Illinois shall be
the controlling law in all matters relating to the Plan.
2.3 Severability
If a provision of this Plan shall be held illegal or invalid, the
illegality or invalidity shall not affect the remaining parts of
the Plan and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
ARTICLE III
ELIGIBILITY
3.1 Participation
Each Employee who as of the date of a Change in Control is a
regular full-time Employee shall be a Participant under the Plan.
3.2 Duration of Participation
A Participant shall cease to be a Participant in the Plan when the
Participant ceases to be an Employee of an Employer, unless such
Participant is entitled to a Payment as provided in the Plan. A
Participant entitled to receipt of a Payment shall remain a
Participant in this Plan until the full amount of such Payment has
been paid to the Participant.
ARTICLE IV
SEVERANCE BENEFITS
4.1 Right to Payment
A Participant shall be entitled to receive from his or her
respective Employer a Payment in the amount provided in Section 4.3
if there has been a Change in Control and if, within one (1) year
thereafter, the Participant's employment by an Employer shall
terminate for any reason specified in Section 4.2. A Participant
shall not be entitled to a Payment if termination occurs by reason
of death, voluntary retirement, voluntary termination other than
for reasons specified in Section 4.2, total and permanent
disability, or for Cause.
4.2 Reasons for Termination
Subject to Section 4.1, following a Change in Control, a
Participant shall be entitled to a Payment if employment by an
Employer is terminated, voluntarily or involuntarily, for any one
or more of the following reasons:
(a) The Employer reduces the Participant's base salary (for
salaried employees) or hourly base rate of compensation (for hourly
employees) as in effect immediately prior to the Change in Control,
or as the same may have been increased thereafter.
(b) The Employer assigns to the Participant any duties
inconsistent with the Participant's duties, responsibilities or
status with the Employer immediately prior to the Change in Control
which causes or has the effect of causing the Participant's
position to be one of lesser importance.
(c) The Employer requires the Participant to change the location
of the Participant's job or office, so that such Participant will
be based at a location more than thirty (30) miles from the
location of the Participant's job or office immediately prior to
the Change in Control provided that such new location is not closer
to Participant's home.
(d) The Employer fails to continue in effect or provide
substantially similar benefits under any pension plan, life
insurance plan, health, accident or disability plan in which the
Participant is participating immediately prior to the Change in
Control, or the Employer takes any action which would adversely
affect participation or reduce benefits under any of such plans.
(e) A successor bank or company fails or refuses to assume the
Bank's obligations under this Plan, as required by Article VII.
(f) The Bank or any successor company breaches any other
provisions of this Plan.
(g) The Employer terminates the employment of a Participant at or
after a Change in Control other than for Cause.
4.3 Amount of Payment
(a) Each Participant entitled to a Payment under this Plan shall
receive from the Bank or its successor a lump sum cash payment, in
an amount determined as follows:
(1) if the Participant has, as of the date of termination of
employment, completed at least ten (10) years of continuous
employment with an Employer (including any period of employment
with a successor of an Employer), the Payment shall be equal to
such Participant's Weekly Compensation multiplied by 52; and
(2) if the Participant has, as of the date of termination of
employment, not completed at least ten (10) years of continuous
employment with an Employer (including any period of employment
with a successor of an Employer), the Payment shall be equal to one
week of such Participant's Weekly Compensation for each year of
service up to a maximum of 9 years of service.
(b) Notwithstanding the provisions of (a) above, if a Payment to
a Participant who is a Disqualified Individual shall be in an
amount which includes an Excess Parachute Payment, the payment
hereunder to that Participant shall be reduced to the maximum
amount which does not include an Excess Parachute Payment. The
terms "Disqualified Individual" and "Excess Parachute Payment"
shall have the same meaning as defined in Section 280G of the
Internal Revenue Code of 1986, as amended, or any successor section
of similar import.
(c) The Participant shall not be required to mitigate damages on
the amount of the Payment by seeking other employment or otherwise,
nor shall the amount of such payment be reduced by any compensation
earned by the Participant as a result of employment after
termination of employment hereunder.
4.4 Time of Payment
The Payment to which a Participant is entitled shall be paid to the
Participant by the Employer or the successor to the Employer, in
cash and in full, not later than twenty (20) business days after
the termination of the Participant's employment. If any Participant
should die after termination of the employment but before all
amounts have been paid, such unpaid amounts shall be paid to the
Participant's named beneficiary, if living, otherwise to the
personal representative on behalf of or for the benefit of the
Participant's estate.
4.5 Suspension of Payment
Notwithstanding the foregoing, no payments or portions thereof
shall be made under this Plan, if such payment or portion would
result in the Bank failing to meet its minimum capital requirements
as required by 12 C.F.R. section 567.2 of the Office of Thrift
Supervision Regulations. Any payments or portions thereof not paid
shall be suspended until such time as their payment would not
result in a failure to meet the Bank's minimum capital
requirements. Any portion of benefit payments which have not been
suspended will be paid on an equitable basis, pro rata based upon
amounts due each participant, among all eligible participants.
ARTICLE V
OTHER RIGHTS AND BENEFITS NOT AFFECTED
5.1 Other Benefits
Neither the provisions of this Plan nor the Payment provided for
hereunder shall reduce any amounts otherwise payable, or in any way
diminish the Participant's rights as an Employee of an Employer,
whether existing now or hereafter, under any benefit, incentive,
retirement, stock option, stock bonus, stock ownership or other
plan.
5.2 Employment Status
This Plan does not constitute a contract of employment or impose on
the Participant or the Participant's Employer any obligation to
retain the Participant as an Employee, to change the status of the
Participant's employment, or to change the Employer's policies
regarding termination of employment.
ARTICLE VI
PARTICIPATING EMPLOYERS
6.1 Upon approval by the Board of Directors of the Bank, this Plan
may be adopted by any Subsidiary or Parent of the Bank. Upon such
adoption, the Subsidiary or Parent shall become an Employer
hereunder and the provisions of the Plan shall be fully applicable
to the Employees of that Subsidiary or Parent. The term
"Subsidiary" means any corporation in which the Bank, directly or
indirectly, holds a majority of the voting power of its outstanding
shares of capital stock. The term "Parent" means any corporation
which holds a majority of the voting power of the Bank's
outstanding shares of capital stock.
ARTICLE VII
SUCCESSOR TO THE BANK OR THE HOLDING COMPANY
7.1 The Bank and the Holding Company shall require any successor
or assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the
business or assets of the Bank or the Holding Company, expressly
and unconditionally to assume and agree to perform the Bank's and
the Holding Company's obligations under this Plan, in the same
manner and to the same extent that the Bank or the Holding Company
would be required to perform if no such succession or assignment
had taken place.
ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION
8.1 Duration
If a Change in Control occurs, this Plan shall continue in full
force and effect, and shall not terminate or expire until such date
as all Participants who become entitled to Payments hereunder shall
have received such Payments in full.
8.2 Amendment and Termination
The Plan may be terminated or amended in any respect by resolution
adopted by a majority of the Board of Directors of the Bank, unless
a Change in Control has previously occurred. If a Change in Control
occurs, the Plan no longer shall be subject to amendment, change,
substitution, deletion, revocation or termination in any respect
whatsoever.
8.3 Form of Amendment
The form of any proper amendment or termination of the Plan shall
be a written instrument signed by a duly authorized officer or
officers of the Bank, certifying that the amendment or termination
has been approved by the Board of Directors. A proper amendment of
the Plan automatically shall effect a corresponding amendment to
all Participant's rights hereunder. A proper termination of the
Plan automatically shall effect a termination of all Participants'
rights and benefits hereunder.
ARTICLE IX
LEGAL FEES AND EXPENSES
9.1 Subject to the notice provision in section 9.2 hereof, the
Bank shall pay all legal fees, costs of litigation, and other
expenses incurred by each Participant as a result of the Bank's
refusal to make the Payment to which the Participant becomes
entitled under this Plan, or as a result of the Bank's
unsuccessfully contesting the validity, enforceability or
interpretation of the Plan.
9.2 A Participant must provide the Bank with 10 (ten) business
days notice of a complaint of entitlement under thus Plan before
the Bank shall be liable for the payment of any legal fees, costs
of litigation or other expenses referred to in section 9.1 hereof.
ARTICLE X
ARBITRATION
10.1 Any dispute or controversy arising under or in connection with
the Plan shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators sitting in a location selected
by the Participant within fifty (50) miles from the location of the
Bank, in accordance with rules of the American Arbitration
Association then in effect. Judgment may be entered on the award of
the arbitrator in any court having jurisdiction. All expenses of
such arbitration, including the fees and expenses of the counsel
for the Participant, shall be borne by the Bank.
ARTICLE XI
REQUIRED PROVISIONS
11.1 The Bank may terminate the Executive's employment at any time,
but any termination by the Bank, other than termination for Cause,
shall not prejudice Executive's right to compensation or other
benefits under this Agreement. Executive shall not have the right
to receive compensation or other benefits for any period after
termination for Cause as defined in Section 2.1 hereinabove.
11.2 If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) (12 USC 1818(e)(3)) or
8(g) (12 USC 1818(g)) of the Federal Deposit Insurance Act, the
Bank's obligations under this contract shall be suspended as of the
date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank may in its discretion
(i) pay the Executive all or part of the compensation withheld
while their contract obligations were suspended and (ii) reinstate
(in whole or in part) any of the obligations which were suspended.
11.3 If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (12 USC section 1818(e)) or 8(g) (12 USC section
1818(g)) of the Federal Deposit Insurance Act, all obligations of
the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties
shall not be affected.
11.4 If the Bank is in default as defined in Section 3(x)(1)(12 USC
1813(x)(1)) of the Federal Deposit Insurance Act, all obligations
of the Bank under this contract shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of
the contracting parties.
11.5 All obligations of the Bank under thus contract shall be
terminated, except to the extent determined that continuation of
the contract is necessary for the continued operation of the
institution, (i) by the Federal Deposit Insurance Corporation
("FDIC"), at the time FDIC enters into an agreement to provide
assistance to or on behalf of the Bank under the authority
contained in Section 13(c) (12 USC section 1823(c)) of the Federal Deposit
Insurance Act; or (ii) by the Office of Thrift Supervision ("OTS")
at the time the OTS or its Regional Director approves a supervisory
merger to resolve problems related to the operations of the Bank or
when the Bank is determined by the OTS or FDIC to be in an unsafe
or unsound condition. Any rights of the parties that have already
vested, however, shall not be affected by such action.
Having been adopted by its Board of Directors on March 18, 2002 and
effective as of April 1, 2002, this Plan is executed by its duly
authorized officers as of the 1st day of April, 2002.
Attest FIDELITY FEDERAL SAVINGS BANK
/s/ Judith K. Leaf By: /s/ Raymond S. Stolarczyk
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Secretary Raymond S. Stolarczyk
Chairman of the Board and
Chief Executive Officer
Having been adopted by its Board of Directors on March 18, 2002 and
effective as of April 1, 2002, this Plan is executed by its duly
authorized officers this 1st of April, 2002.
Attest FIDELITY FEDERAL SAVINGS BANK
/s/ Judith K. Leaf By: /s/ Raymond S. Stolarczyk
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Secretary Raymond S. Stolarczyk
Chairman of the Board and
Chief Executive Officer