EXHIBIT NO. 10.4 - FORM OF SPECIAL TERMINATION AGREEMENT, AS
AMENDED, BETWEEN FIDELITY FEDERAL SAVINGS BANK AND ELIZABETH
DOOLAN AND VARIOUS OFFICERS
The attached Special Termination Agreement dated December 3,
1993, as amended, between Fidelity Federal Savings Bank and
Elizabeth Doolan and is substantially identical in all material
respects (except as otherwise noted below) with the other
executive officer contracts listed below which are not being
filed. By action of the Board of Directors of
Fidelity Federal Savings Bank, the term of each of these
agreements has been extended to April 1, 2004.
Parties to Employment Agreement:
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Fidelity Federal Savings Bank and Glenn Kozeluh
Fidelity Federal Savings Bank and Robert Hoffman
Fidelity Federal Savings Bank and Lindalee Hansen
Fidelity Federal Savings Bank and Mary Mills
Fidelity Federal Savings Bank and Judith Leaf
FIDELITY FEDERAL SAVINGS BANK
SPECIAL TERMINATION AGREEMENT, AS AMENDED
This AGREEMENT is made effective as of April 1, 2002 by and
between Fidelity Federal Savings Bank (the "Bank"), a federally
chartered savings institution, with its office at 5455 West
Belmont Avenue, Chicago, Illinois and Elizabeth Doolan
("Executive"). The Bank is a wholly owned subsidiary of Fidelity
Bancorp, Inc. (the "Company"), a corporation organized under the
laws of the State of Delaware.
WHEREAS, the Bank and Executive have previously entered into that
certain Special Termination Agreement dated December 15, 1993;
and
WHEREAS, the Bank and the Executive desire to amend the Agreement
on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants therein
contained, and upon the other terms and conditions hereinafter
provided, the parties hereby agree as follows:
1. TERM OF AGREEMENT
The term of this Agreement shall be deemed to have commenced as
of the date first above written and shall continue for a period
of twenty-four (24) full calendar months thereafter. Commencing
on the first anniversary date of this Agreement and continuing at
each anniversary date thereafter, the Board of Directors of the
Bank (the "Board") may extend this Agreement for an additional
year; provided, however, that upon a Change in Control the term
shall be automatically renewed for a period of twenty-four (24)
full calendar months. The Board will review the Agreement and
the Executive's performance annually for purposes of determining
whether to extend the Agreement, and the results thereof shall be
included in the minutes of the Board's meeting.
2. DEFINITIONS
(a) Change in Control. The term "Change in Control" shall mean
a change in control of the Bank or the Company of a nature that:
(i) would be required to be reported in response to item 1(a) of
the current report on Form 8-K, as in effect on 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 Company within the meaning of the Home Owners'
Loan Act of 1933 and the Rules and Regulations promulgated by the
Office of Thrift Supervision ("OTS") (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 Company shall be required,
and provided further that ownership of stock by a tax qualified
employee benefit plan of the Bank or the 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 Sections 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, of securities of the
Bank or Company representing 20% or more of the combined voting
power of the Bank's or the Company's outstanding securities
except for any securities of the Bank purchased by the Company in
connection with the conversion of the Bank to the stock form and
any securities purchased by the Bank's employee stock ownership
plan and trust; or (b) individuals who constitute the Board of
Directors of the 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 Company's
stockholders was approved by the Company's Nominating Committee
serving under an Incumbent Board, 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 Company or similar transaction occurs in which the Bank
or the Company is not the surviving entity.
(b) Cause. The term "Cause" shall mean termination of the
Executive's employment because of the Executive'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; (vi) willful
violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease and desist order;
or (vii) material breach of any material provision of this
Agreement. 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 Executive'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.
Executive shall be entitled to thirty (30) days' prior written
notice (the "Notice of Termination") of the Bank's intention to
terminate Executive's employment for Cause, and such Notice of
Termination shall specify the grounds for such termination,
afford the Executive a reasonable opportunity to cure any conduct
or act (if curable) alleged as grounds for such termination;
provide the Executive with a reasonable opportunity to present to
the Board of Directors of the Bank, together with counsel, the
Executive's position regarding any dispute relating to the
existence of such Cause. Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the Board of
Directors of the Bank at a meeting of the Board called and held
for that purpose (after reasonable notice to the Executive),
finding that in the good faith opinion of the Board, the
Executive was guilty of conduct justifying termination for Cause
and specifying the particulars thereof in detail. The Executive
shall not have the right to receive compensation or other
benefits for any period after termination for Cause. Any stock
options or limited rights granted to Executive under any stock
option plan or any unvested awards granted under any other stock
benefit plan of the Bank, the Company or any subsidiary thereof,
shall become null and void effective upon Executive's Date of
Termination for Cause.
(c) Constructive Discharge. The term "Constructive Discharge"
shall mean the Executive's voluntary termination in connection
with or following a Change in Control during the term of this
Agreement, which termination is a result of: (i) any demotion, or
loss of title, office or significant authority; (ii) reduction in
annual compensation or benefits; or (iii) relocation of
Executive's principal place of employment by more than 30 miles
from its location immediately prior to the Change in Control.
3. TERMINATION BENEFITS
(a) The Executive shall be entitled to the severance and
benefits provided for in this Section 3 if either in connection
with or following a Change in Control (as herein defined) during
the term of this Agreement: (i) the Executive is terminated by
the Bank or its successor, other than for Cause, or (ii) the
Executive is Constructively Discharged. The Executive shall be
entitled to severance pay or liquidated damages, or both, equal
to two (2) times the sum of: (i) the average of the two preceding
years' base salary, calculated for the two year period
immediately preceding the date such amount is to be determined;
plus (ii) the highest bonus paid to the Executive during the two
preceding years, calculated for the two year period immediately
preceding the date such amount is to be determined; plus (iii)
the sum of the Bank's contributions to the Bank's Employee Stock
Ownership Plan and the Bank's 401(k) Plan (and not the
Executive's contributions to the 401(k) Plan) made on behalf of
the Executive for the two year period immediately preceding the
date such amount is to be determined, divided by two (2). For
purposes of determining base salary under this Subsection, the
Executive shall be deemed to have been paid during any period of
leave at the base salary rate in effect as of the date the leave
commenced.
(b) In addition to the amount determined under subsection (a)
the Bank shall cause to be continued the Executive's life,
medical, dental and disability coverage substantially identical
to the coverage maintained by the Bank for the Executive prior to
Executive's termination. Such coverage shall cease upon the
expiration of the earlier of: (i) twenty-four (24) months; or
(ii) Executive's employment by another employer and coverage
under plans that provided Executive with substantially identical
coverage.
(c) The amount payable under subsection (a) hereof shall be
paid to the Executive, or in the event of Executive's subsequent
death, his beneficiary or beneficiaries, or his estate as the
case may be. Payment shall be made in one lump sum within ten
(10) business days of the Executive's Date of Termination;
provided, however, that the Executive may elect, prior to
termination of employment and the right to receive any amounts
hereunder, to have the amount payable in equal monthly
installments over twenty-four (24) months.
(d) Notwithstanding the preceding paragraphs of this Section 3
and except as provided in this subsection (d), in the event that
it shall be determined that any payment, benefit or other
entitlement under this Agreement and any other plan or
arrangement of the Bank or the Company (the "Total Payments")
would constitute an "Excess Parachute Payment" within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") and thereby be subject to the excise tax imposed by
Section 4999 of the Code or any similar successor provision or
any interest or penalties with respect to such excise tax
(collectively the "Excise Tax"), then, except in the case of a de
Minimus Excess Amount (as defined below), the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by the Executive of all
taxes imposed upon the Gross-Up Payment (including any federal,
state and local income, payroll and excise taxes and any interest
or penalties imposed with respect to such taxes), the Executive
retains an amount of the Gross Up Payment equal to the Excise Tax
imposed upon the Total Payments (not including any Gross-Up
Payment). If, at a later date, the Internal Revenue Service
assesses a deficiency against the Executive for the Excise Tax
which is greater than that which was determined at the time such
amounts were paid, then the Bank shall pay to the Executive the
amount of such unreimbursed Excise Tax plus any interest,
penalties and reasonable professional fees or expenses incurred
by the Executive as a result of such assessment, including all
such taxes with respect to any such additional amount. The
highest marginal tax rate applicable to individuals at the time
of the payment of such amounts will be used for purposes of
determining the federal and state income and other taxes with
respect thereto. The Bank shall withhold from any amounts paid
under this Agreement the amount of any Excise Tax or other
federal, state or local taxes then required to be withheld.
Computations of the amount of the Gross-Up Payment paid under
this subparagraph shall be conclusively made by the Bank's
independent accountants, in consultation, if necessary, with the
Bank's independent legal counsel. If, after the Executive
receives any Gross-Up Payment or other amount pursuant to this
subparagraph, the Executive receives any refund with respect to
the Excise Tax, the Executive shall promptly pay the Bank the
amount of such refund within ten (10) days of receipt by the
Executive. Notwithstanding the foregoing, in the event that the
amount by with the present value of the Total Payments which
would constitute an Excess Parachute Payment is less than 3% of
the Total Payments, then such Excess Parachute Payment shall be
deemed to be a "de Minimus Excess Amount" and the Executive shall
not be entitled to a Gross-Up Payment. In such a case, the Total
Payments will be reduced to an amount (the "Non-Triggering
Amount"), the value of which is one dollar ($1.00) less than an
amount equal to three (3) times Executive's "base amount," as
determined in accordance with Code Section 280G; provided that
such reduction shall not be made unless the Non-Triggering Amount
would be greater than the aggregate value of the Total Payments
(without such reduction) minus the amount of Excise Tax required
to be paid by Executive thereon. The allocation of the reduction
required by the preceding sentence shall be determined by the
Executive.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Bank or by the Executive
shall be communicated by Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
(b) "Date of Termination" shall mean (a) if Executive's
employment is terminated for Disability, thirty (30) days after a
Notice of Termination is given (provided that Executive shall not
have returned to the performance of his or her duties on a
full-time basis during such thirty (30) day period), and (b) if
his or her employment is terminated for any other reason, the
date specified in the Notice of Termination.
(c) If, within thirty (30) days after any Notice of Termination
is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination,
except upon the occurrence of a Change in Control and voluntary
termination by the Executive in which case the Date of
Termination shall be the date specified in the Notice, the Date
of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by
a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal
there from having expired and no appeal having been perfected)
and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in
good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Bank will
continue to pay Executive his full compensation in effect when
the notice giving rise to the dispute was given (including, but
not limited to, Base Salary) and continue him as a participant in
all compensation, benefit and insurance plans in which he was
participating when the notice of dispute was given, until the
dispute is finally resolved in accordance with this Agreement.
Amounts paid under this Section are in addition to all other
amounts due under this Agreement and shall not be offset against
or reduce any other amounts due under this Agreement.
5. SOURCE OF PAYMENTS
All payments provided in this Agreement shall be paid in cash or
check from the general funds of the Bank. The Company guarantees
payment and provision of all amounts and benefits due hereunder
to the Executive and, if such amounts and benefits due from the
Bank are not timely paid or provided by the Bank for any reason
including the Bank being prohibited from making such payments,
such amounts and benefits shall be paid or provided by the
Company.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the
parties hereto and supercedes any prior agreement between the
Bank and the Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring
to the Executive of a kind elsewhere provided. No provision of
this Agreement shall be interpreted to mean that the Executive is
subject to receiving fewer benefits than those available to
Executive without reference to this Agreement.
7. NO ATTACHMENT
(a) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge,
pledge, or hypothecation, or to execution, attachment, levy, or
similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action
shall be null, void and of no effect.
(b) This Agreement shall be binding upon, and inure to the
benefit of, the Executive, the Bank and the Company and its and
their respective successors and assigns.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No
such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or
as to any act other than that specifically waived.
9. REQUIRED REGULATORY PROVISIONS
(a) 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 the Executive's right to compensation
or other benefits under this Agreement. The Executive shall not
have the right to receive compensation or other benefits for any
period after termination for Cause.
(b) 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) or
8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
section 1818(e)(3) or (g)(1)), 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.
(c) 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)(4) or 8(g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. section 1818(e)(4) or (g)(1)), 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.
(d) If the Bank is in default (as defined in Section 3(x)(1)
(12 U.S.C. section 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.
(e) All obligations of the Bank under this 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
(the "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 U.S.C. section 1823(c)) of the
Federal Deposit Insurance Act; or (ii) by the OTS at the time the
OTS or its District 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.
(f) Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon
compliance with 12 U.S.C. section 1828(k) and FDIC Regulation 12 CFR
Part 359, Golden Parachute and Indemnification Payments.
10. REINSTATEMENT OF BENEFITS UNDER SECTION 9(b)
In the event the Executive is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's
affairs by a notice described in Section 9(b) hereof (the
"Notice") during the term of this Agreement and a Change in
Control, as defined herein, occurs, the Bank will assume it
obligation to pay and the Executive will be entitled to receive
all of the termination benefits provided for under Section 3 of
this Agreement upon the Bank's receipt of a dismissal of charges
in the Notice.
11. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part
of any provision, is held invalid, such invalidity shall not
affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and
part thereof shall to the full extent consistent with law
continue in full force and effect.
12. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included
solely for convenience of reference and shall not control the
meaning or interpretation of any of the provisions of this
Agreement.
13. GOVERNING LAW
This Agreement shall be governed by the laws of the State of
Illinois, but only to the extent not superceded by Federal law.
14. ARBITRATION
Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators sitting in a
location selected by the Executive within fifty (50) miles from
the location of the Bank, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having
jurisdiction; provided, however, that Executive shall be entitled
to seek specific performance of his right to be paid until the
Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
In the event any disputes or controversy arising under or in
connection with Executive's termination is resolved in favor of
the Executive, whether by judgment, arbitration or settlement,
Executive shall be entitled to the payment of all back-pay,
including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under
this Agreement.
15. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by the Executive
pursuant to any dispute or question of interpretation relating to
this Agreement shall be paid or reimbursed by the Bank if the
Executive is successful on the merits pursuant to a legal
judgment, arbitration or settlement, which payments are
guaranteed by the Company pursuant to Section 5 hereof.
16. INDEMNIFICATION
The Bank shall provide the Executive (including Executive's
heirs, executors and administrators) with coverage under a
standard directors' and officers' liability insurance policy at
its expense, or in lieu thereof, shall indemnify the Executive
(and Executive's heirs, executors and administrators) to the
fullest extent permitted under Federal law against all expenses
and liability reasonably incurred by Executive in connection with
or arising out of any action, suit or proceeding in which
Executive may be involved by reason of Executive having been a
director or officer of the Bank (whether or not Executive
continues to be a director or officer at the time of incurring
such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR TO THE BANK OR THE COMPANY
The Bank and the 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 Company, expressly and unconditionally to assume
and agree to perform the Bank's and the Company's obligations
under this Agreement, in the same manner and to the same extent
that the Bank and the Company would be required to perform if no
such succession or assignment had taken place.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be executed by their duly authorized officers, and Executive has
signed this Agreement, as of the 1st day of April, 2002.
ATTEST: FIDELITY FEDERAL SAVINGS BANK
/s/ Lindalee Hansen BY: /s/ Raymond S. Stolarczyk
- ---------------- NAME: Raymond S. Stolarczyk
TITLE: Chairman and CEO
ATTEST: FIDELITY BANCORP, INC.
/s/ Lindalee Hansen BY: /s/ Raymond S. Stolarczyk
- ------------------- ------------------------------
NAME: Raymond S. Stolarczyk
TITLE: Chairman and CEO
ATTEST: /s/ Elizabeth Doolan
/s/ Lindalee Hansen ELIZABETH DOOLAN