As filed with the Securities and Exchange Commission on April 20, 2001
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FIDELITY FEDERAL BANCORP
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(Exact name of registrant as specified in its charter)
INDIANA 35-1894432
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 South Green River Road, Evansville, Indiana 47715
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Donald R. Neel, Executive Vice President, Timothy M. Harden, Esq.
CFO and Treasurer John W. Tanselle, Esq.
Fidelity Federal Bancorp Krieg DeVault Alexander &
18 NW Fourth Street Capehart, LLP
PO Box 1347 One Indiana Square, Suite 2800
Evansville, Indiana 47706-1347 Indianapolis, Indiana 46204-2017
(812) 429-0921 (317) 636-4341
(Name, address, including zip code, (Copy to)
of agent for service)
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The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Subject to Completion, dated _________, 2001
Prospectus
Fidelity Federal Bancorp
1,000,000 shares of common stock
$_____ per share
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We are distributing, together with this prospectus, subscription rights
to purchase shares of our common stock to persons who own our common stock as of
the close of business on April ___, 2001, the record date. You will receive
__________ (_____) subscription right for each share of our common stock that
you own on the record date. Each subscription right will entitle you to purchase
one share of our common stock at the subscription price of $_____ per share. The
subscription rights are exercisable beginning on the date of this prospectus and
will expire at 5:00 p.m., Evansville, Indiana time, on _____, 2001.
If you timely exercise all of your subscription rights, your ownership
interest in Fidelity will not be diluted and you may be entitled to exercise
over-subscription privileges to purchase additional shares of our common stock
at the same subscription price, subject to the limitations set forth in this
prospectus. If you purchase stock in the rights offering, you will be able to
purchase shares of our common stock without incurring broker's commissions.
We are undertaking this rights offering to raise additional capital
without paying underwriting commissions and expenses. Directors, executive
officers and their affiliates, who own of record approximately 60.6% of our
outstanding common stock, have committed to purchase between ____ and ____
shares through the exercise of their subscription rights and over-subscription
privileges, subject to the limitations set forth in this prospectus. If no other
stockholders exercise their subscription rights, directors, executive officers
and their affiliates will own of record in the aggregate between approximately
___% and ___% of our outstanding common stock. Accordingly, we expect to receive
proceeds from the offering of at least $710,000 and up to $1,490,000, before
deducting expenses payable by us, and to issue at least ____________ and up to
____________ shares of common stock in the offering.
We are not required to sell any minimum number of shares in order to
complete the rights offering and will have immediate use of any funds received
as payment for the shares purchased. We may cancel the rights offering at any
time and will return all funds received without interest. If this occurs, there
is no guarantee that we will have funds available to return to shareholders who
have submitted payment for shares. In this event, we would expect to draw upon
an existing line of credit to borrow funds for this purpose.
Shareholders who do not participate in the rights offering will
continue to own the same number of shares, but will own a smaller percentage of
the total shares outstanding. The subscription rights may not be sold,
transferred or assigned, and will not be listed for trading on any stock
exchange.
Shares of our common stock are currently listed for quotation on the
Nasdaq SmallCap Market under the symbol "FFED." On April ____, 2001, the closing
price of a share of our common stock on Nasdaq was $_____.
See "Risk Factors" beginning on page 1 to read about factors you should
consider before buying additional shares of our common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ____________, 2001
Table of Contents
Summary ...................................................................i
Questions and Answers About Fidelity Federal Bancorp...............i
Questions and Answers About the Rights Offering..................iii
Risk Factors................................................................1
Risk Factors Relating to Our Common Stock..........................1
Risks Related to the Rights Offering...............................5
Special Note Regarding Forward-Looking Statements...........................7
We are Subject to a Supervisory Agreement with the Office of
Thrift Supervision..........................................................7
Use of Proceeds.............................................................8
We Do Not Anticipate Paying Dividends.......................................9
Price Range of Common Stock.................................................9
Capitalization.............................................................10
The Rights Offering........................................................11
Material Federal Income Tax Considerations.................................19
Description of Capital Stock...............................................20
Plan of Distribution.......................................................21
Legal Matters..............................................................22
Experts ..................................................................22
Where You Can Find More Information........................................22
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Fidelity has not authorized any person to give you information that
differs from the information in this prospectus. You should rely solely on the
information contained in this prospectus. This prospectus is not an offer to
sell these securities, and we are not soliciting offers to buy these securities,
in any state where the offer or sale of these securities is not permitted. The
information in this prospectus is accurate only as of the date of this
prospectus, even if the prospectus is delivered to you after the prospectus
date, or you buy our common stock after the prospectus date.
Until ________, 2001, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus.
Prospectus Summary
This section answers in summary form some questions you may have about Fidelity
Federal Bancorp and this rights offering and highlights some of the information
in this prospectus. Because this section is a summary, it does not contain all
of the information that you should consider before exercising your
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subscription rights. You should read the entire prospectus carefully, including
the "Risk Factors" section and the documents listed under "Where You Can Find
More Information."
Questions and Answers About Fidelity Federal Bancorp
Q: What is Fidelity Federal Bancorp?
A: Fidelity is a savings and loan holding company which owns all of the issued
and outstanding stock of United Fidelity Bank, fsb, its federally-chartered
savings bank subsidiary. United Fidelity Bank maintains four locations in
Evansville, Indiana and also participates in various real estate
activities, including owning housing developments through its wholly-owned
subsidiaries.
Q: Where are we located?
A: Our principal executive offices are located at 18 NW Fourth Street,
Evansville, Indiana 47708. Our telephone number is (812) 424-0921.
Q: When were we formed?
A: We were incorporated under the laws of the State of Indiana in 1993. United
Fidelity Bank was formed in 1914.
Q: What recent financial or operational challenges face us?
A: In February 1999, United Fidelity Bank entered into a supervisory agreement
with its regulator, the Office of Thrift Supervision, because of the
then-deteriorating capital and financial condition of United Fidelity Bank
and Fidelity. This deterioration was caused primarily by:
o dwindling cash reserves at Fidelity,
o low net interest margins,
o a high level of debt at Fidelity which required debt service,
o high non-interest expenses, and
o a decline in the quality of United and Fidelity's multifamily
housing loan and letter of credit portfolio.
These factors caused significant losses and reductions of capital in 1998
and 1999. The majority of the multifamily housing portfolio consisted of
letters of credit which backed bonds issued by governmental authorities.
Some of these letters of credit were issued by Fidelity and had fixed
expiration dates. If the bonds were not successfully re-sold at these
maturity dates, Fidelity would have been required to fund the letters of
credit. The total letters of credit significantly exceeded the amount of
Fidelity's available cash, creating, when coupled with the inability of
United Fidelity Bank to pay dividends, significant liquidity risk for
Fidelity. The letters of credit issued by United Fidelity Bank were
collateralized in favor of the Federal Home Loan Bank by mortgage loans
originated by United Fidelity Bank. The use of these mortgage loans as
collateral substantially reduced the ability of United Fidelity Bank to
borrow funds from the Federal Home Loan Bank in the event a liquidity
shortfall occurred at United.
In January 2000, United Fidelity Bank and Fidelity adopted a plan to
substantially reduce its expenses, reduce Fidelity's high level of debt
outstanding, and increase its net interest margin. At that point, United
Fidelity Bank had accumulated approximately 15% of its total assets in cash
and cash equivalents, significantly improving its liquidity position. In
May 2000, Fidelity raised $3 million by issuing one million shares of
common stock to Pedcor Investments, a limited liability company, and
changed top management of United Fidelity Bank. In addition to the cash
received for shares, Pedcor also agreed to provide $1.5 million in
operating deficit guarantees on
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a portion of Fidelity and United Fidelity Bank's multifamily housing
portfolio, and to manage that portion of the portfolio, in exchange for
460,000 shares of Fidelity common stock. As a part of this transaction,
Fidelity also changed the management of Village Housing Corporation, a
subsidiary of United Fidelity that owns general partnership interests in a
portion of the multifamily housing portfolio. Village Housing's new
management has been instrumental in obtaining commitments for alternative
sources of financing for a portion of the portfolio, which Fidelity
anticipates will, when completed, significantly reduce the level of
classified assets of and further improve United Fidelity Bank's liquidity
situation based on the release of the outstanding letters of credit and the
mortgage loan collateral. Village Housing is also pursuing alternative
sources of financing for letters of credit issued by Fidelity, which
management expects, when completed, to significantly improve Fidelity's
asset quality and reduce its liquidity risk.
Q: What are the provisions of the supervisory agreement with the OTS?
A: We describe the supervisory agreement in more detail at page ___ under
"Description of the Supervisory Agreement". In general, the supervisory
agreement imposes operating restrictions on United Fidelity Bank and
restricts its ability to grow and pay dividends without prior approval of
the OTS. United Fidelity currently is in compliance with the supervisory
agreement, including the capital targets established in its strategic plan.
United Fidelity was not in compliance with the requirement that it reduce
its level of classified assets to core capital and allowance for loan and
lease losses to 50% or less by December 31, 1999, but this deadline was
extended by the OTS to March 31, 2001. United Fidelity was in full
compliance on March 31, 2001.
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Questions and Answers About the Rights Offering
Q: What is a rights offering?
A: A rights offering is an opportunity for you to purchase additional shares
of our common stock at a fixed price of $_____ per share and in an amount
proportional to your existing interest, which enables you to maintain your
current percentage ownership in Fidelity.
Q: Why are we engaging in a rights offering?
A: We are undertaking this rights offering to raise additional capital,
without paying underwriting commissions and expenses, for the purposes set
forth under the following question entitled "What will we do with the
proceeds of the rights offering?". Because United Fidelity Bank is
restricted in its ability to pay dividends to us, we believe it is in our
bests interests to raise additional capital. We determined that a rights
offering was the best way to raise this capital because if you exercise
your subscription privileges in full, your ownership interests in Fidelity
will not be diluted, and you will be able to purchase shares of our common
stock without incurring broker's commissions.
Q: What will we do with the proceeds of the rights offering?
A: We anticipate that we will use the proceeds to:
o repay one of our lines of credit which we anticipate that we will
draw upon in order to redeem at maturity the portion of our
9.125% junior subordinated notes which come due on April 30,
2001and which are not extended by the holders of these notes; and
o refinance certain letters of credit which we issued in connection
with the financing of affordable housing developments.
We may also use a portion of the proceeds to refinance other affordable
housing developments or for general corporate purposes. Although we expect
to use the proceeds in the manner discussed above, we reserve the right to
use the proceeds in any manner which we consider appropriate.
Q: What is a subscription right?
A: We are distributing to you, at no charge, one (1) subscription right for
every _____ shares of common stock that you owned on ____________, 2001,
the record date. Each subscription right entitles you to purchase one share
of our common stock for $_____. When you "exercise" a subscription right,
that means that you choose to purchase the common stock that the
subscription right entitles you to purchase. You may exercise any number of
your subscription rights, or you may choose not to exercise any
subscription rights. Each right carries with it a basic subscription
privilege and an over-subscription privilege. You cannot give or sell your
subscription rights to anybody else; only you can exercise them.
Q: What is the basic subscription privilege?
A: The basic subscription privilege of each subscription right entitles you to
purchase one (1) share of our common stock at a subscription price of
$_____.
Q: What is the over-subscription privilege?
A: We do not expect that all of our shareholders will exercise all of their
basic subscription privileges. By extending over-subscription privileges to
our shareholders, we are providing for the purchase of those shares which
are not purchased through exercise of basic subscription
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privileges. The over-subscription privilege entitles you, if you fully
exercise your basic subscription privilege, to subscribe for additional
shares of common stock not acquired by other holders of rights at the same
subscription price of $_____ per share. As described below, there are
limitations on your over-subscription privilege.
Q: What are the limitations on the over-subscription privilege?
A: We will issue up to 1,000,000 shares of common stock in the rights
offering. The number of shares available for over-subscription privileges
will be 1,000,000 minus the number of shares purchased upon exercise of all
basic subscription privileges. If the number of shares available for sale
pursuant to the exercise of all over-subscription privileges is not
sufficient to satisfy in full all over-subscription privileges, the number
of additional shares of our common stock that you will be entitled to
purchase if you exercise your over-subscription privilege will be limited.
In this situation, you will be entitled to purchase upon the exercise of
your over-subscription privileges a number of shares equal to the product
of:
o the number of shares of our common stock owned by you on the
close of business on _____, 2001, divided by the total number of
shares of our common stock owned by all shareholders exercising
their over-subscription privileges on the close of business on
__________ __, 2001, and
o the number of shares available for sale pursuant to the exercise
of all over-subscription privileges, rounded down to the nearest
whole number.
For example, if we sell 500,000 shares of common stock pursuant to the
exercise of basic subscription privileges, we then would have the remaining
500,000 shares available for purchase by individuals exercising
over-subscription privileges. If individuals exercising over-subscription
privileges subscribe for 500,000 or fewer shares by use of their
over-subscription privileges, then all over-subscription privileges would
be honored.
If individuals exercising over-subscription privileges subscribe for more
than 500,000 shares by use of their over-subscription privileges, then
over-subscription privileges would be limited. For example, assume that
individuals exercising over-subscription privileges subscribe for 600,000
shares by use of their over-subscription privileges, you own 10,000 shares
of our common stock and shareholders who are exercising their
over-subscription privileges own 100,000 shares. In this example, your
over-subscription privilege would be equal to 50,000 shares. This was
calculated by dividing the number of shares you own, or 10,000, by the
total number of shares owned by all shareholders exercising their
over-subscription privileges, or 100,000, and then multiplying this by the
number of shares available for sale pursuant to the exercise of all
over-subscription privileges, or 500,000.
In certain circumstances, in order to comply with applicable state
securities laws, we may not be able to honor all over-subscription
privileges even if we have shares available.
Q: How many shares may I purchase?
A: You will receive one (1) subscription right for every _____ shares of
common stock that you owned on ____________, 2001, the record date. We will
not issue any fractional shares of common stock for the exercise of any
rights. Each subscription right entitles you to purchase one share of
common stock for $_____. If you exercise all of the subscription rights
that you receive, you may have the opportunity to purchase additional
shares of common stock. On the enclosed shareholder rights agreement, you
may exercise your over-subscription privilege by indicating the number of
additional shares that you wish to purchase for $_____ per share. However,
we may not be able to honor your over-subscription privilege for as many
additional shares as you request on your shareholder rights agreement if
the number of shares available for sale pursuant
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to the exercise of all over-subscription privileges is not sufficient to
satisfy in full all over-subscription privileges. Subject to state
securities laws and regulations, we have the discretion to issue less than
the total number of shares that may be available for over-subscription
requests in order to comply with state securities laws.
Q: Must all holders of rights pay the subscription price in cash?
A: All shareholders granted rights who wish to participate in the rights
offering must timely pay the subscription price by wire transfer, certified
or cashier's check drawn on a U.S. bank, or personal check that clears
before expiration of the rights.
Q: How did Fidelity arrive at the $_____ per share price?
A:
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We believe that this meets our objective of raising the maximum amount of
net proceeds while providing you with an opportunity to make an additional
investment in our common stock. In determining this price, our board of
directors considered several factors, including the historic and current
market price of the common stock, general conditions in the securities
market, our need for capital, alternatives available to us for raising
capital, the amount of proceeds desired, and the need to offer shares at a
price that would be attractive to our investors relative to the then
current trading price of our common stock. Because the price of shares in
the rights offering is less than the exercise price per share for
Fidelity's outstanding options, Fidelity will receive less for shares
purchased in the rights offering by shareholders with options than it would
have received if these shareholders had purchased shares from Fidelity by
exercising their outstanding options at the higher exercise price. We did
not seek or obtain any opinion of financial advisors or investment bankers
in establishing the subscription price.
Q: How and by what date must I exercise my subscription price?
A: You must properly complete the attached shareholder rights agreement and
deliver it to us before 5:00 p.m., Evansville, Indiana time, on
____________, 2001. Our address, for delivery purposes, is on page _____.
Your shareholder rights agreement must be accompanied by proper payment for
each share that you wish to purchase.
Q: What should I do if I want to participate in the rights offering but my
shares are held in the name of my broker or a custodian bank?
A: If you hold shares of Fidelity common stock through a broker, dealer or
other nominee, we will ask your broker, dealer or nominee to notify you of
the rights offering. If you wish to exercise your rights, you will need to
have your broker, dealer or nominee act for you. To indicate your decision
with respect to your rights, you should complete and return to your broker,
dealer or nominee the form entitled "Beneficial Owner Election Form." You
should receive this form from your broker, dealer or nominee with the other
rights offering materials.
Q: Has the Board of Directors made a recommendation regarding this rights
offering?
A: Our Board of Directors does not make any recommendation to you about
whether you should exercise any rights.
Q: How long will the rights offering last?
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A: You will be able to exercise your subscription rights only during a limited
period. If you do not exercise your subscription rights before 5:00 p.m.,
Evansville, Indiana time, on ____________, 2001, your subscription rights
will expire.
Q: After I exercise my subscription rights, can I change my mind?
A: No. Once you send in your shareholder rights agreement and payment, you
cannot revoke the exercise of your subscription rights, even if you later
learn information about us that you consider to be unfavorable, and we will
have immediate use of the funds sent as payment. You should not exercise
your subscription rights unless you are certain that you wish to purchase
additional shares of our common stock at a price of $_____ per share.
Q: Is exercising my subscription right risky?
A: The exercise or your subscription rights involves certain risks. Exercising
your subscription rights means buying additional shares of our common
stock, and should be carefully considered as you would view other equity
investments. Among other things, you should carefully consider the risks
described under the heading "Risk Factors," beginning on page 1.
Q: What happens if I choose not to exercise my subscription rights?
A: You will retain your current number of shares of common stock in Fidelity
even if you do not exercise your subscription rights. However, if other
shareholders exercise their subscription rights and you do not, your
relative percentage ownership of Fidelity will decrease, and your relative
voting rights and economic interests will be diluted. Because our
directors, executive officers, and their respective affiliates, which own
of record in the aggregate approximately 60.6% of our common stock, have
agreed to exercise their respective basic subscription privileges and
over-subscription privileges in the amount of $_____, your percentage
ownership in Fidelity will be reduced and your economic interest will be
diluted if you do not exercise your basic subscription privileges.
Q: Can I sell or give away my subscription rights?
A: No. Subscription rights are not transferable.
Q: Must I exercise any subscription rights?
A: No.
Q: What are the federal income tax consequences of exercising my subscription
rights?
A: The receipt and exercise of your subscription rights are nontaxable. You
should review the tax opinion of our legal counsel, Krieg DeVault Alexander
& Capehart, LLP, under the heading "Material Federal Income Tax
Considerations," beginning on page __. You should seek specific tax advice
from your personal tax advisor.
Q: When will I receive my new shares?
A: If you purchase shares of common stock through the rights offering, you
will receive shares as soon as practicable after ____________, 2001.
Subject to state securities laws and regulations, we have the discretion to
delay allocation and distribution of any shares you may elect to purchase
by exercise of your basic or over-subscription privilege in order to comply
with state securities laws.
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Q: Can Fidelity cancel the rights offering?
A: Yes. Our board of directors may cancel the rights offering in their
discretion at any time on or before July ____, 2001. We don't expect to
cancel the rights offering and are not aware of any facts or circumstances
which would cause us to do so. We have reserved this right in the event we
determine that facts of which we are currently unaware or future events
would cause us to determine that the rights offering is not in the best
interests of Fidelity. These reasons may include a material change in the
price for our shares or the institution or threat of litigation against us
with respect to the rights offering.
Q: Will Fidelity return money received from shareholders if it cancels the
rights offering?
A: If we cancel the rights offering, any money received from shareholders will
be refunded promptly, without interest. However, there is no guarantee that
we will have funds available to return to shareholders who have submitted
payment for shares. In this event, we expect to draw upon an existing line
of credit to borrow funds for this purpose.
Q: How much money will Fidelity receive from the rights offering?
A: Our gross proceeds from the rights offering will depend on the number of
shares that are purchased. If we sell all 1,000,000 shares which may be
purchased upon exercise of the rights offered by this prospectus, then we
will receive proceeds of $__ million, before deducting expenses payable by
us, estimated to be $__________. Since our directors, executive officers,
and their respective affiliates, who currently own approximately 60.6% of
our outstanding common stock, without giving effect to the shares that may
be issued upon the exercise of outstanding warrants and stock options, have
agreed to exercise their basic subscription privileges and
over-subscription privileges in the amount of $_______, we expect to issue
at least _____ shares and to receive proceeds of at least $__________ from
the rights offering, before deducting expenses.
Q: How many shares of common stock will be outstanding after the rights
offering?
A: The number of shares of common stock that will be outstanding after the
rights offering depends on the number of shares that are purchased. We
expect to issue at least __________ shares to directors during this rights
offering, and if we sell all of the shares offered by this prospectus, then
we will issue 1,000,000 new shares of common stock. As a result, we expect
to have between approximately __________ and 5,607,658 shares of common
stock outstanding immediately after the rights offering. The following
table sets forth certain information assuming all 1,000,000 shares are sold
and that only directors and their affiliates subscribe for shares in the
rights offering.
Shares Percentage Shares Percentage Aggregate Aggregate Aggregate Net
Currently Currently Outstanding Owned by Proceeds Expenses Net Proceeds per
Outstanding Owned by After the Directors and Incurred Proceeds Share
Directors and Rights their Affiliates
their Offering After the
Affiliates Rights Offering
4,607,658 60.6% 5,607,658 $ $ $ $
Q: What if I have more questions?
viii
A: If you have more questions about the rights offering, please contact Mark
A. Isaac, Vice President and Controller, at (812) 424-0921.
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Risk Factors
You should carefully consider the risks and uncertainties described
below and the other information in this prospectus before deciding whether to
invest in shares of our common stock. Additional risks and uncertainties not
presently known to us or that we currently deemed immaterial may also impair our
business operations. If any of the following risks identified actually occur,
our business, financial condition and operating results could be materially
adversely affected. In such case, the trading price of our common stock could
decline and you may lose part or all of your investment.
Risk Factors Relating to Our Common Stock
The success of Fidelity, in part, is dependent upon United Fidelity Bank.
Our financial condition and results of operations are dependent upon
the successful operation of our savings bank subsidiary, United Fidelity Bank.
We do not generate sufficient income to service our indebtedness and are
dependent upon dividends, interest income and other fees and income paid to us
by United Fidelity Bank. At the present time, United Fidelity Bank is subject to
certain operating restrictions and cannot pay a dividend to us without approval
of the Office of Thrift Supervision.
United Fidelity Bank is subject to the restrictions and conditions of a
Supervisory Agreement with Office of Thrift Supervision.
United Fidelity Bank entered into a Supervisory Agreement with the OTS
on February 3, 1999, which requires it to take certain actions and restricts
certain of its operations, including its ability to pay dividends. If United
Fidelity is unable to comply with the terms and conditions of the Supervisory
Agreement, the OTS could take additional regulatory action, including the
issuance of a cease and desist order requiring further corrective action. Such
corrective action could include, among other things, increasing the allowance
for loan and lease losses, obtaining additional or new management, and further
restrictions on dividends. Because we are dependent upon United Fidelity Bank
for our income, this could negatively impact the price of our stock and prohibit
the payment of future dividends.
We do not expect to pay cash dividends on our common stock.
We have not paid any cash dividends on our common stock since July 6,
1998 and do not anticipate paying cash dividends in the foreseeable future,
since we are dependent upon United Fidelity Bank for funds for dividends and,
under the terms of the Supervisory Agreement, United Fidelity cannot pay a
dividend to us without approval of the OTS. For the foreseeable future, we
anticipate that United Fidelity Bank will retain any earnings which it generates
or, subject to OTS approval, pay a portion of these earnings to us in order for
us to service our existing debt. If we generate any earnings, we expect that
these earnings will also be used to service our existing debt.
We may need additional funds for debt service, which could result in dilution of
your ownership position or result in additional interest expense.
We may need additional funds for servicing our debt because United
Fidelity Bank is restricted from paying dividends without prior approval of the
OTS. As of December 31, 2000 we had $971,000 in available cash for debt service
and other needs. Debt service for calendar year 2001, net of subordinated debt
interest payments due to us from United Fidelity Bank, is expected to be
approximately $2.1 million. The OTS has not permitted United Fidelity Bank to
pay us dividends under the terms of the Supervisory Agreement. The OTS may agree
to allow the payment of dividends from United Fidelity Bank to us to assist in
debt service, although it has no obligation to do so and we can not and do not
offer any assurances that the OTS will do so. Also, the OTS could, if it
considers necessary for the safety and soundness of United Fidelity Bank,
prohibit the payment of dividends to us in the future. If we raise
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additional capital through the sale of additional shares of stock other than in
this rights offering, your ownership interest in us may be diluted. In addition,
if we obtain funds through the issuance of additional debt, our earnings may be
negatively impacted as a result of the additional interest expense, which could
have an adverse effect on the price of our stock.
We must achieve sufficient earnings in order to realize our $7.1 million
deferred income tax receivable.
We currently have a deferred income tax receivable of approximately $7.1
million. In order to be able to utilize this asset within the federal and state
carryforward periods, we must execute our current business plan and achieve
sufficient annual earnings. If we are unable to achieve a sufficient level of
net income, and subsequent increases we may need to establish a valuation
allowance for this deferred tax asset. This allowance would be the estimate of
future expirations of existing federal and state tax carryforwards. Such an
allowance would reduce the receivable and increase our expenses, thus reducing
our earnings.
Our accomplishments are largely dependent upon the skill and experience of our
senior management team.
The success of our business will depend upon the services of our senior
management team. Our business may suffer if we lose the services of any of these
individuals, including Bruce A. Cordingley and Donald R. Neel. We have entered
into a 3 year contract employment agreement with Mr. Neel. Mr. Cordingley's role
with Fidelity is not full time. He receives board fees, but he has no employment
agreement with us, does not receive a salary, and has substantial business
interests other than Fidelity. Our future success also depends on our ability to
identify, attract and retain qualified senior officers and other employees in
our identified market. On September 29, 2000 we announced that M. Brian Davis
would cease to serve as our president and CEO. The Executive Committee of the
Board is currently functioning as interim CEO until a permanent replacement is
appointed, which we anticipate will occur by the fourth quarter of 2001. Because
the main activity of Fidelity is to own the stock of United Fidelity Bank, we do
not believe that the timing of this should adversely impact us.
We may not continue to satisfy the requirements for continued listing of our
common stock on Nasdaq.
Our shares of common stock are traded on the Nasdaq SmallCap Market,
which has adopted rules that establish criteria for initial and continued
listing of securities. Under the Nasdaq rules for continued listing, a company
must satisfy certain requirements for continued listing on Nasdaq, including
among others a minimum bid price for the stock of $1.00. As of ____, 2001 our
minimum bid was ___ in the calendar year 2001.
If we suffer substantial future losses from operations, our minimum bid
could decline below the Nasdaq listing criteria. If our common stock is delisted
by Nasdaq, trading in the common stock could thereafter be conducted on the
over-the-counter market or on an electronic bulletin board established for
securities that do not meet the Nasdaq listing requirements, which could
materially affect your ability to sell your shares in the secondary market.
Anti-takeover provisions in our charter documents may delay or prevent a
takeover of Fidelity, which could prohibit you from receiving a price for your
shares at a premium to current market price.
Certain provisions of our charter documents may make it more difficult
for a third party to acquire control of us, even on terms that a stockholder
might consider favorable. Our amended and restated certificate of incorporation
authorizes our board of directors to issue preferred stock without stockholder
approval. The issuance of preferred stock could make it more difficult for a
third party to acquire us because the preferred stock could have dividend,
redemption, liquidation, conversion, voting
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or other rights that could adversely affect the voting power or other rights of
holders of our common stock. Our board of directors does not currently have any
intent to issue shares of preferred stock. Because of the existence of these
provisions, you may not receive an acquisition offer for your shares, which
typically is at a premium price to current market price, since third parties may
be less inclined to make an offer to acquire control of us.
The existence of controlling shareholders may limit your ability to influence
the outcome of matters requiring stockholder approval, could discourage
potential acquisitions of our business by third parties, and could impact the
price of our shares.
Bruce A. Cordingley , who is a director of Fidelity, and entities and
individuals affiliated with him own of record or control 37.6% of our issued and
outstanding shares of common stock, excluding options and warrants for the
purchase of common stock. He and his affiliates have agreed to purchase at least
$__________ worth of our common stock in the rights offering if such shares are
available. Our remaining directors, together with their respective affiliates,
own approximately 23% of our outstanding common stock and have agreed to
purchase at least $______ worth of our common stock in the rights offering if
such shares are available. As a result, unless all shareholders exercise their
basic subscription privileges, which we believe is highly unlikely, Mr.
Cordingley and his affiliates, and the remaining directors, will increase their
respective ownership interests in Fidelity as a result of this rights offering.
If no other shareholders exercise their subscription rights, Mr. Cordingley and
his affiliates and the remaining directors will in aggregate own approximately
___% of our outstanding common stock.
Although we are not aware of any arrangement or understanding,
contractual or otherwise, that obligates our directors to act in concert with
respect to Fidelity, the level of stock ownership held by the directors may
allow them to elect all of their designees to the board of directors and to
control the outcome of virtually all matters submitted for a vote of our
shareholders. Either the equity interests of Mr. Cordingley and his affiliates,
or the combined equity interests of all of the directors in Fidelity, could have
the effect of delaying or preventing a change in control or otherwise
discouraging a potential acquirer from attempting to obtain control of Fidelity,
even on terms that a stockholder might consider favorable. This in turn could
harm the market price of our common stock or prevent our shareholders from
realizing a premium over the market price for their shares of common stock.
In addition, sales of a substantial amount of our common stock in the
public market, by our principal shareholders or otherwise, or the perception
that these sales may occur, could materially adversely affect the market price
of our common stock and impair our ability to raise funds in additional stock
offerings.
The existence of outstanding options could discourage potential acquisitions of
our business by third parties and could impact the price of our shares.
In May 2000 our shareholders approved a stock purchase agreement
between us and affiliates of Mr. Cordingley. Under the terms of the stock
purchase agreement, Mr. Cordingley and his affiliates have an option to purchase
from us up to $5 million worth of additional shares of common stock through May
19, 2003. For shares purchased on or prior to May 19, 2001 Mr. Cordingley and
his affiliates must pay $3.00 per share, and for shares purchased under the
terms of this option after May 19, 2001 Mr. Cordingley and his affiliates will
pay the "fair market value" of the shares, as defined in the Stock Purchase
Agreement. In addition, there currently are options outstanding to directors and
employees for 248,736 shares.
The existence of these option could have the effect of delaying or
preventing a change in control or otherwise discouraging a potential acquirer
from attempting to obtain control of Fidelity, even on terms that a stockholder
might consider favorable. This in turn could harm the market price of our common
stock or prevent our shareholders from realizing a premium over the market price
for their
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shares of common stock. Because our common stock has no pre-emptive rights, this
would also dilute your ownership position.
If this rights offering is completed, our book value per share will be reduced,
which can affect the market price of your shares.
Because the shares will be sold in the rights offering at less than the
book value of Fidelity, our book value per share will be reduced, which could
affect the market price of your shares.
We compete with many larger financial institutions that have far greater
financial resources than we have.
We encounter strong competition from other financial institutions
operating in our market and elsewhere. We compete with other competitors which
are larger than us and have greater financial and personnel resources than we
have. Because of this competition, we may have to pay higher rates of interest
to attract deposits. In addition, because of our smaller size, the amount we can
loan to one borrower is less than that for most of our competitors. This may
impact our ability to seek relationships with larger businesses in our market
area. Trends toward the consolidation of the banking industry and the lifting of
interstate banking and branching restrictions may make it more difficult for us
to compete effectively with large national and super-regional banking
institutions.
United Fidelity Bank's consumer loan concentration increases the risk of
defaults by our borrowers, which may result in increased expenses and the need
for additional capital.
United Fidelity Bank makes various types of loans. Currently,
approximately 25% of our assets are comprised of consumer loans. These types of
loans are more risky than residential mortgage lending because of the impact on
these types of loans of unemployment rates and the general economy. For example,
delinquencies are typically low on these types of loans when unemployment rates
are low, and increase when unemployment rates increase. Because of this, the OTS
may require United Fidelity Bank to maintain a higher level of capital than a
similarly sized institution with a smaller exposure to this type of loan.
Risks Related to the Rights Offering
If you do not participate in this rights offering or do not exercise all of your
subscription rights, you may suffer significant dilution of your percentage
ownership of our common stock.
This rights offering is designed to enable Fidelity to raise capital
while allowing all shareholders on the record date to maintain their relative
proportionate voting and economic interests. Mr. Cordingley and his affiliates,
and our remaining directors and their respective affiliates, have agreed to
purchase, if available, at least $___ worth of stock in the rights offering
pursuant to the exercise their respective basic subscription privileges and
over-subscription privileges. To the extent that you do not exercise your
subscription rights and shares are purchased by other shareholders in the rights
offering, your proportionate voting interest will be reduced, and the percentage
that your original shares represent of our expanded equity after exercise of the
subscription rights will be disproportionately diluted. If no shareholders other
than Mr. Cordingley and his affiliates and the remaining directors and their
affiliates exercise their basic subscription privileges, Mr. Cordingley and his
affiliates' record ownership interest in Fidelity will increase to approximately
____% from approximately 37.6% and the record ownership interest of the
remaining directors and their respective affiliates in Fidelity will increase to
approximately ___% from approximately 23.0%, and the record ownership interest
of the remaining shareholders, who currently own in the aggregate approximately
39.4% of our common stock, will decrease to approximately ___%, without giving
effect to the shares that may be issued upon the exercise of outstanding
warrants and stock options.
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The price of our common stock may decline before or after the subscription
rights expire.
We cannot assure you that the public trading market price of our common
stock will not decline after you elect to exercise your subscription rights. If
that occurs, you will have committed to buy shares of common stock at a price
above the prevailing market price and you will have an immediate unrealized
loss. Moreover, we cannot assure you that following the exercise of subscription
rights you will be able to sell your shares of common stock at a price equal to
or greater than the subscription price. Until shares are delivered upon
expiration of the rights offering, you may not be able to sell the shares of our
common stock that you purchase in the rights offering. Certificates representing
shares of our common stock purchased will be delivered as soon as practicable
after expiration of the rights offering. We will not pay you interest on funds
delivered pursuant to the exercise of rights.
Once you exercise your subscription rights, you may not revoke the exercise.
Once you exercise your subscription rights, you may not revoke the
exercise, even if less than all of the shares that we are offering are actually
purchased.
The subscription price is not an indication of the value of Fidelity, and you
may be unable to sell shares purchased in the rights offering at a price equal
to or greater than $___.
We cannot assure you that the market price of the common stock will not
decline during or after the rights offering or that you will be able to sell
shares of common stock purchased during the rights offering at a price equal to
or greater than $_____ per share. The subscription price was set by our board of
directors after considering a variety of factors. We have neither sought nor
obtained a valuation opinion from an outside financial consultant or investment
banker. The subscription price does not necessarily bear any relationship to the
book value of our assets, past operations, cash flows, earnings, financial
condition or any other established criteria for value. You should not consider
the subscription price as an indication of the present or future value of
Fidelity. Our board of directors has established the subscription price at
_______ to encourage all shareholders to exercise their subscription rights and
thereby raise capital without diluting the interests of current shareholders.
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Special Note Regarding Forward-Looking Statements
Some of the information in this prospectus, including the above risk
factors section, contains or incorporates by reference certain forward-looking
statements, within the meaning of the Private Securities Litigation Reform Act
of 1995, about our financial condition, results of operations and business that
are based on our current and future expectations. You can find many of these
statements by looking for wards such as "may," "will," "should," "expects,"
"plans," "anticipates,""believes," "estimates," "predicts," "potential," or
"continue," or the negative of such terms and other comparable terminology. Such
statements reflect our current views with respect to future events and are
subject to risks and uncertainties, including those discussed under "Risk
Factors"and elsewhere in this prospectus that could cause actual results to
differ materially from those contemplated in such forward-looking statements.
We believe it is important to communicate our expectations to our
investors. However, you are cautioned that no forward-looking statement is a
guarantee of future performance and you should not place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus.
There may be events in the future that we are not able to predict accurately or
over which we have no control. These statements are representative only on the
date hereof.
The risk factors listed above, as well as any cautionary language in
this prospectus, provide examples of risks, uncertainties and events that may
cause our actual results to differ materially from the expectations we describe
in our forward-looking statements. Before you invest in our common stock, you
should be aware that the occurrence of the events described in these risk
factors and elsewhere in this prospectus could have a material adverse effect on
our business, operating results and financial condition.
We Are Subject to a Supervisory Agreement with Office of Thrift Supervision
United Fidelity Bank entered into a supervisory agreement with the OTS
on February 3, 1999. The supervisory agreement currently requires United
Fidelity Bank to:
o reduce its level of classified assets to core capital and
allowance for loan and lease losses to 50% or less by December
31, 1999, which was extended to March 31, 2001;
o refrain from making any commercial loans without OTS approval;
o refrain from engaging in any "sub prime" lending activity;
o not increase the size of the consumer loan portfolio in excess of
30% of United Fidelity's assets;
o refrain from paying dividends without OTS approval;
o adopt a strategic plan including:
oo capital targets, which United Fidelity set at 8.1% for
tangible, leverage and core capital ratios and 13.75% for
total risk-based capital;
oo establish concentration limits for all assets; and
oo develop a plan to reduce its concentration of high risk
assets.
o refrain from making additional investments in equity securities
or real estate for development without OTS approval;
o develop a plan to divest real estate held for development;
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o develop a plan to reduce employee turnover and obtain OTS
approval before hiring any additional or replacing any directors
or senior executive officers;
o develop a conflicts of interests policy and refrain from engaging
in any transaction with or distribution of funds to Fidelity or
its subsidiaries or selling any assets to an affiliate without
OTS approval;
o develop a plan to increase liquidity and manage liquidity and
cash flow;
o refrain from increasing the level of executive compensation in
excess of the greater of $5,000 or the annual cost of living;
o not increase its assets in excess of net interest credited on its
deposit liabilities without OTS approval;
o not engage in new activities not included in its strategic plan
without OTS approval;
o maintain a fully-staffed and functioning internal audit
department and internal loan review process;
o adopt a policy to administer the general partnerships held by the
subsidiaries of United Fidelity; and
o adopt a policy to administer its mortgage brokerage activities.
United Fidelity currently is in compliance with all provisions of the
supervisory agreement. It was not in compliance with the requirement that it
reduce its level of classified assets to core capital and allowance for loan and
lease losses to 50% or less by December 31, 1999, but this deadline was extended
by the OTS to March 31, 2001. United Fidelity was in compliance with this
requirement on March 31, 2001. In addition, it has ceased its mortgage brokerage
activities and it has outsourced the internal audit function and internal loan
review process.
Use of Proceeds
Our net proceeds from the rights offering will depend upon the number
of shares that are purchased. If we sell all 1,000,000 shares which may be
purchased upon exercise of the rights offered by this prospectus, then we will
receive net proceeds of $___ million, before deducting expenses payable by us,
estimated to be $_____. Since our directors, executive officers, and their
affiliates, who currently own approximately 60.6% of our outstanding shares of
common stock, without giving effect to the shares that may be issued upon the
exercise of outstanding warrants and stock options, have agreed to exercise
their basic subscription privileges and over-subscription privileges in the
aggregate amount of $_____, we expect to issue at least ____ shares and to
receive proceeds of at least $______ from the rights offering, before deducting
expenses.
We expect to use the proceeds to:
o repay one of our lines of credit which we anticipate that we
will draw upon in order to redeem at maturity the portion of
our 9.125% junior subordinated notes which come due on April
30, 2001and which are not extended by the holders of these
notes; and
o refinance certain letters of credit which we issued in
connection with the financing of affordable housing
developments.
The interest rate on the line of credit which will be repaid is 9.50%
and the line matures on September 30, 2001.
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We may also use a portion of the net proceeds to refinance affordable
housing developments. None of the proceeds are expected to be used to increase
the capital of United Fidelity Bank.
Although we expect to use the net proceeds in the manner discussed
above, we reserve the right to use the net proceeds in any manner which we
consider appropriate.
We Do Not Anticipate Paying Dividends
We have not paid any cash dividends on our common stock since July 6,
1998 and do not anticipate paying cash dividends in the foreseeable future,
since we are dependent upon United Fidelity Bank for funds for dividends and,
under the terms of the supervisory agreement, United Fidelity cannot pay a
dividend to us without approval of the OTS. For the foreseeable future, we
anticipate that United Fidelity Bank will retain any earnings which it generates
or, subject to OTS approval, pay a portion of these earnings to us in order for
us to service our existing debt. If we generate any earnings, we expect that
these earnings will also be used to service our existing debt. The declaration
and payment in the future of any cash dividends will be at the discretion of our
board of directors and will depend upon the earnings, capital requirements and
financial position of Fidelity, general economic conditions and other pertinent
factors.
Price Range of Common Stock
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "FFED". The following table sets forth the reported high and low bid
prices of our common stock for the periods indicated:
1998 High Low
---- ---- ---
First Quarter $ 10 3/8 $ 8 3/4
Second Quarter 9 3/8 6 1/16
Third Quarter 61/2 31/2
Fourth Quarter 5 3 1/4
1999
----
First Quarter $ 4 $ 21/2
Second Quarter 3 7/8 2 3/4
Third Quarter 3 1/16 2 5/8
Fourth Quarter 2 7/8 1 1/4
2000
----
First Quarter $ 3 5/16 $ 1 1/4
Second Quarter 2 7/8 1 3/4
Third Quarter 2 5/8 2
Fourth Quarter 2 1/8 1 1/4
The closing price of our common stock was $______ on ______, 2001, the
last full trading day before we publicly announced the rights offering. The
closing price of our common stock was $__________ on ____________, 2001, the
last full trading day before the date of this prospectus. We urge you to obtain
a current stock quote for our common stock.
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Capitalization
The following table shows our capitalization as of December 31, 2000.
The table also shows our capitalization as adjusted for the completion of the
rights offering, including application of net proceeds as described on page __
under the heading "Use of Proceeds", at the subscription price of $____ per
share and assuming that all subscription rights are exercised.
December 31, 2000
----------------------
Actual As Adjusted
--------- -----------
(dollars in thousands)
Borrowings
- ----------
Notes payable, secured by specified
multifamily mortgages $2,469
Note Payable, secured by United stock 1,500
-----------
Junior subordinated notes, unsecured 2,970
-----------
Senior subordinated notes, unsecured 7,000
Federal Home Loan Bank advances
and other borrowings 9,902
Total Borrowings $23,842
Shareholders' Equity
- --------------------
Common Stock 4,607
Stock Warrants 11
Additional paid-in capital 13,674
Retained earnings (8,981)
Valuation Allowance for Securities (536)
--------- -----------
Total shareholders' equity 8,775
--------- -----------
Total capitalization $ 32,617 $
========= ===========
The Rights Offering
Before exercising any subscription rights, you should read carefully
the information set forth under "Risk Factors.
What is a Subscription Right?
We are distributing non-transferable subscription rights to
shareholders who owned shares of our common stock on ____________, 2001, the
record date, at no cost to the shareholders. We will give you one (1)
subscription right for each share of common stock that you owned on the record
date. Each subscription right will entitle you to purchase one share of common
stock for $____. If you wish to exercise your subscription rights, you must do
so before 5:00 p.m., ________ time, on ____________, 2001. After that date, the
subscription rights will expire and will no longer be exercisable.
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What is the Basic Subscription Privilege?
Each subscription right will entitle you to receive, upon payment of
$____, one (1) share of common stock. You will receive the shares that you
purchase pursuant to your basic subscription privilege as soon as practicable
after ____________, 2001, whether you exercise your subscription rights
immediately prior to that date or earlier. You are not required to exercise any
or all of your rights unless you wish to purchase shares under your
over-subscription privilege described below, in which case you must exercise all
of your rights.
What is the Over-Subscription Privilege?
Subject to the limitations described below, each subscription right
also grants you an over-subscription privilege to purchase additional shares of
common stock that are not purchased by other shareholders. You are entitled to
exercise your over-subscription privilege only if you exercise your basic
subscription privilege in full. If you wish to exercise your over-subscription
privilege, you should indicate the number of additional shares that you would
like to purchase in the space provided on your shareholder rights agreement.
You may not be able to purchase as many additional shares as you
requested on your shareholder rights agreement if the number of shares available
for sale pursuant to the exercise of all over-subscription privileges is not
sufficient to satisfy in full all over-subscription privileges. If this occurs,
we will reallocate the number of additional shares of our common stock that you
will be entitled to purchase if you exercise your over-subscription privilege on
a pro rata basis with other shareholders exercising their over-subscription
privileges. In this situation, your over-subscription privilege will entitle you
to purchase a number of shares equal to the product of:
o the number of shares of our common stock owned by you on the
close of business on _____, 2001, divided by the total number
of shares of our common stock owned by all shareholders
exercising their over-subscription privileges on the close of
business on __________ __, 2001, and
o the number of shares available for sale pursuant to the
exercise of all over-subscription privileges, rounded down to
the nearest whole number.
If this results in a number of shares greater than the number of shares
you requested, you will receive only the number of shares that you requested,
and the excess will be reallocated one or more times among those shareholders
whose subscriptions are not fully satisfied on the same principle, until all
available shares have been allocated or all exercises of over-subscription
privileges are satisfied.
How Do I Exercise My Over-Subscription Privilege?
When you send in your shareholder rights agreement, you must also send
the full purchase price for the number of additional shares that you have
requested to purchase, in addition to the payment due for shares purchased
through your basic subscription privilege. If the number of additional shares
you are eligible to purchase exceeds the number of shares you requested, you
will receive only the number of shares that you requested, and the remaining
shares will be divided among other shareholders exercising their
over-subscription privileges. In certain circumstances, however, in order to
comply with applicable state securities laws, we may not be able to honor all
over-subscription privileges even if we have shares available.
To determine if you have fully exercised your basic subscription
privilege, we will consider only the basic subscription privileges held by you
in the same capacity. For example, suppose you were granted rights to purchase
shares of Fidelity common stock you own individually and for shares of
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Fidelity common stock you own jointly with your spouse. You only need to fully
exercise your basic subscription privilege with respect to your individually
owned rights in order to exercise your over-subscription privilege with respect
to your individually owned rights. You do not have to subscribe for any shares
under the basic subscription privilege owned jointly with your spouse to
exercise your individual over-subscription privilege.
When you complete the portion of the shareholder rights agreement to
exercise the over-subscription privilege, you will be representing and
certifying that you have fully exercised your basic subscription privilege
received in respect of shares of Fidelity common stock you hold in that
capacity. You must exercise your over-subscription privilege at the same time
you exercise your basic subscription privilege in full.
If you own your shares of Fidelity common stock through your broker,
dealer or other nominee holder who will exercise your over-subscription
privilege on your behalf, the nominee holder will be required to certify to us:
o the number of shares held on ____________, 2001, the record date,
on your behalf;
o the number of rights you exercised under your basic subscription
privilege;
o that your entire basic subscription privilege held in the same
capacity has been exercised in full; and
o the number of shares of Fidelity common stock you subscribed for
pursuant to the over-subscription privilege.
Your nominee holder must also disclose to us certain other information
received from you.
If you exercised your over-subscription privilege and are allocated
less than all of the shares of Fidelity common stock for which you wished to
subscribe, the excess funds you paid for shares of Fidelity common stock that
are not allocated to you will be returned in full by mail, without interest or
deduction, as soon as practicable after the expiration date of the rights.
How Much Will Directors and Management Purchase?
Mr. Cordingley and his affiliates, and the other directors of Fidelity
and their respective affiliates, who currently own of record approximately 37.6%
and 23.0%, respectively, of our outstanding shares of common stock, without
giving effect to the shares that may be issued upon the exercise of outstanding
warrants and stock options, have agreed to exercise their basic subscription
privileges and over-subscription privileges in the amount of at least $______.
As a result, we expect that at least ______ of the _____ shares offered in this
rights offering will be subscribed for.
We Are Making No Recommendation to Rights Holders.
Neither Fidelity nor its Board of Directors is making any
recommendations to you as to whether or not you should exercise your
subscription rights. You should make your decision based on your own assessment
of your best interests after reading this prospectus.
How Long Do I Have to Exercise My Rights?
The rights will expire at 5:00 p.m., _______ time, on ____________,
2001. If you do not exercise your subscription rights prior to that time, your
subscription rights will expire and will no longer be exercisable. We will not
be required to issue shares of common stock to you if we receive your
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shareholder rights agreement or your payment after that time, regardless of when
you sent the shareholder rights agreement and payment, unless you send the
documents in compliance with the guaranteed delivery procedures described below.
Fidelity Has Reserved the Right to Withdraw or Cancel the Rights Offering.
Our board of directors may withdraw the rights offering in its sole
discretion at any time prior to or on July __, 2001. We don't expect to withdraw
the rights offering. We reserved the right to do so in the event we later
determine that facts of which we are currently unaware or future events would
cause us to believe that the rights offering is not in the best interests of
Fidelity. These reasons may include a material change in the price for our
shares or the institution or threat of litigation against us with respect to the
rights offering. We currently are not aware of any facts or circumstances which
would cause us to withdraw the rights offering.
If we cancel the rights offering, any money received from shareholders
will be refunded promptly, without interest. Because we will have immediate use
of funds received in the rights offering, if we withdraw the rights offering
there is no guarantee that we will have funds available to return to
shareholders who have submitted payment for shares. In the event that we would
have no funds available to return to shareholders, we expect to draw upon an
existing line of credit to obtain the funds for this purpose.
How Did Fidelity Determine the Subscription Price?
We computed the price at which a share of stock could be purchased in
the rights offering by _________________________________________. Our board of
directors chose the $____ per share subscription price after considering a
variety of factors, including the following:
o the historic and current market price of the common stock;
o our need for capital;
o alternatives available to us for raising capital;
o the amount of proceeds desired; and
o the book value of our stock.
We have neither sought, nor obtained, any valuation opinion from
outside financial advisors or investment bankers.
The $____ per share subscription price should not be considered an
indication of the actual value of Fidelity or of our common stock. We cannot
assure you that the market price of the common stock will not decline during or
after the rights offering. We also cannot assure you that you will be able to
sell shares of common stock purchased during the rights offering at a price
equal to or greater than $___ per share. We urge you to obtain a current quote
for our common stock before exercising your rights. Our common stock is traded
on the Nasdaq SmallCap Market under the symbol "FFED".
Are the Subscription Privilege and Over-Subscription Privilege Transferable?
Both the basic subscription privileges and over-subscription privileges
are non-transferable and non-assignable. Only you may exercise these
subscription rights.
How Do I Exercise My Subscription Privileges?
You may exercise your subscription privileges by delivering to us on or
prior to ____________, 2001:
o A properly completed and duly executed shareholder rights
agreement;
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o Any required signature guarantees; and
o Payment in full of $_____ per share for the shares of common
stock subscribed for by exercising your basic subscription
privileges and, if desired, your over-subscription privileges.
You should deliver your shareholder rights agreement and payment to us
at the address shown on page ___. We will not pay you interest on funds
delivered to us pursuant to the exercise of rights.
How Can I Pay for the Shares I Purchase?
Payment for the shares must be made in United States dollars. We will
consider payment to have been received only upon:
o actual receipt of any certified check or cashier's check drawn
upon a U.S. bank or of any postal, telegraphic or express
money order payable to the order of Fidelity Federal Bancorp;
o actual receipt of any funds transferred by wire transfer; or
o actual receipt of any funds through an alternative payment
method which we may approve.
Payment for basic subscription privileges and over-subscription privileges may
be effected through wire transfer as follows:
Wire to: Federal Home Loan Bank of Indianapolis
ABA#: 074 001 019
Further Credit: United Fidelity Bank, fsb
Account #: 8166-9994 CMS
Further Credit: Fidelity Federal Bancorp - Rights Offering
Account #: 0-01-45004609
What If I Can't Deliver the Shareholder Rights Agreement by _______?
If you want to exercise your subscription rights, but time will not
permit your shareholder rights agreement to reach us on or prior to
____________, 2001, you may exercise your subscription rights if you satisfy the
following guaranteed delivery procedures:
(1) You send, and we receive, payment in full for each share of
common stock being subscribed for through the basic
subscription privilege and the over-subscription privilege, on
or prior to ____________, 2001;
(2) You send, and we receive, on or prior to ____________, 2001, a
notice of guaranteed delivery, substantially in the form
provided to you with your shareholder rights agreement, from a
member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office
or correspondent in the United States. The notice of
guaranteed delivery must state your name, the number of
subscription rights that you hold, the number of shares of
common stock that you wish to purchase pursuant to the basic
subscription privilege and the number of shares, if any, you
wish to purchase pursuant to the over-subscription privilege.
The notice of guaranteed delivery must guarantee the delivery
of your shareholder rights agreement to us within three Nasdaq
National Market trading days following the date of the notice
of guaranteed delivery; and
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(3) You send, and we receive, your properly completed and duly
executed shareholder rights agreement, including any required
signature guarantees, within three Nasdaq National Market
trading days following the date of your notice of guaranteed
delivery. The notice of guaranteed delivery may be delivered
to us in the same manner as your shareholder rights agreement
at the addresses set forth on page ____, or may be transmitted
to us by facsimile transmission, to facsimile number (812) 421
- 2931, Attention: Mark A. Isaac, Vice President. You can
obtain additional copies of the form of notice of guaranteed
delivery by requesting them from us at the address set forth
on page
------.
When Do I Need to Obtain a Signature Guarantee?
Signatures on the shareholder rights agreement do not need to be
guaranteed if either the shareholder rights agreement provides that the shares
of common stock to be purchased are to be delivered directly to the record owner
of such subscription rights, or the shareholder rights agreement is submitted
for the account of a member firm of a registered national securities exchange or
a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States. If a signature guarantee is required, signatures on the shareholder
rights agreement must be guaranteed by a commercial bank, broker, dealer, credit
union, national securities exchange or savings association.
Notice to Nominee Holders.
If you are a broker, a trustee or a depositary for securities who holds
shares of Fidelity common stock for the account of others as a nominee holder,
you should notify the respective beneficial owners of such shares of the
issuance of the rights as soon as possible to find out such beneficial owners'
intentions. You should obtain instructions from the beneficial owner with
respect to the rights, as set forth in the instructions we have provided to you
for your distribution to beneficial owners. If the beneficial owner so
instructs, you should complete the appropriate shareholder rights agreements
and, in the case of the over-subscription privilege, the related nominee holder
certification, and submit them to us with the proper payment. A nominee holder
that holds shares for the account(s) of more than one beneficial owner may
exercise the number of rights to which all such beneficial owners in the
aggregate otherwise would have been entitled if they had been direct record
holders of Fidelity common stock on the record date, so long as the nominee
submits the appropriate shareholder rights agreements and certifications and
proper payment to the Subscription Agent.
How Do I Exercise My Rights if I Am a Beneficial Owner but not a Record Holder?
If you are a beneficial owner of shares of Fidelity common stock or
rights that you hold through a nominee holder, we will ask your broker, dealer
or other nominee to notify you of this rights offering. If you wish to exercise
your rights, you will need to have your broker, dealer or other nominee act for
you. To indicate your decision with respect to your rights, you should complete
and return to your broker, dealer or other nominee the form entitled "Beneficial
Owner Election Form." You should receive this form from your broker, custodian
bank or other nominee with the other rights offering materials.
What if There Are Ambiguities in the Exercise of Subscription Rights?
If you do not specify the number of subscription rights being exercised
on your shareholder rights agreement, or if your payment is not sufficient to
pay the total purchase price for all of the shares that you indicated you wished
to purchase, you will be deemed to have exercised the maximum number of
subscription rights that could be exercised for the amount of the payment that
we receive from you. If your payment exceeds the total purchase price for all of
the subscription rights shown on your
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shareholder rights agreement, your payment will be applied, until depleted, to
subscribe for shares of common stock in the following order:
(1) to subscribe for the number of shares, if any, that you indicated
on the shareholder rights agreement that you wished to purchase
through your basic subscription privilege, until your basic
subscription privilege has been fully exercised; and
(2) to subscribe for additional shares of common stock pursuant to
the over-subscription privilege, subject to any applicable
limitation.
Any excess payment remaining after the foregoing allocation will be returned to
you as soon as practicable by mail, without interest or deduction.
Regulatory Limitation.
We will not be required to issue you shares of common stock pursuant to
the rights offering if, in our opinion, you would be required to obtain prior
clearance or approval from any state or federal regulatory authorities to own or
control such shares if, at the time the subscription rights expire, you have not
obtained such clearance or approval.
State and Foreign Securities Laws.
The rights offering is not being made in any state or other
jurisdiction in which it is unlawful to do so, nor are we selling or accepting
any offers to purchase any shares of common stock to you if you are a resident
of any such state or other jurisdiction. We may delay the commencement of the
rights offering in certain states or other jurisdictions in order to comply with
the securities law requirements of such states or other jurisdictions. It is not
anticipated that there will be any changes in the terms of the rights offering.
In our sole discretion, we may decline to make modifications to the terms of the
rights offering requested by certain states or other jurisdictions, in which
case shareholders who live in those states or jurisdictions will not be eligible
to participate in the rights offering.
Our Decision Is Binding on You.
All questions concerning the timeliness, validity, form and eligibility
of any exercise of subscription rights will be determined by us, and our
determinations will be final and binding. In our sole discretion, we may waive
any defect or irregularity, or permit a defect or irregularity to be corrected
within such time as we may determine, or reject the purported exercise of any
subscription right by reason of any defect or irregularity in such exercise.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as we determine in our
sole discretion. We will be under no duty to notify you of any defect or
irregularity in connection with the submission of a shareholder rights agreement
or incur any liability for failure to give such notification.
You May Not Revoke the Exercise of a Subscription Right.
After you have exercised your basic subscription privilege or
over-subscription privilege, you may not revoke that exercise. You should not
exercise your subscription rights unless you are certain that you wish to
purchase additional shares of our common stock.
Shares of Common Stock Outstanding after the Rights Offering.
Assuming we issue all of the shares of common stock offered in the
rights offering, approximately 5,607,658 shares of common stock will be issued
and outstanding. This would represent a
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21.7% increase in the number of outstanding shares of common stock. If you do
not exercise your basic subscription rights, the percentage of common stock that
you hold will decrease if shares are purchased by other shareholders in the
rights offering.
Fees and Expenses.
You are responsible for paying any commissions, fees, taxes or other
expenses incurred in connection with the exercise of the subscription rights. We
will not pay such expenses.
If You Have Questions.
If you have questions or need assistance concerning the procedure for
exercising subscription rights or if you would like additional copies of this
prospectus, the instructions, or forms for use in connection with the rights
offering, you should contact Deb Fritz, Assistant Vice President, Shareholder
Relations, of Fidelity, at:
Fidelity Federal Bancorp
18 NW Fourth Street, PO Box 1347
Evansville, Indiana 47706-1347
Telephone: (812) 424-0921 (extension 2226)
(800) 280-8280 (extension 2226)
Important: Please carefully read the instructions accompanying the
shareholder rights agreement and follow those instructions in detail. You are
responsible for choosing the payment and delivery method for your shareholder
rights agreement, and you bear the risks associated with such delivery. If you
choose to deliver your shareholder rights agreement and payment by mail, we
recommend that you use registered mail, properly insured, with return receipt
requested. We also recommend that you allow a sufficient number of days to
ensure delivery to us prior to ____________, 2001.
Material Federal Income Tax Considerations
The following discussion is the opinion of our tax counsel, Krieg
DeVault Alexander & Capehart, LLP ("Krieg DeVault"), as to the application of
existing material federal income tax law to the facts as presented in this
Prospectus relating to the rights offering. Krieg DeVault's opinion is based on
the Internal Revenue Code of 1986, as amended, the Treasury regulations
thereunder, judicial authority and administrative rulings and practice, all of
which are subject to change at any time, possibly with retroactive effect.
Moreover, there can be no assurance that this opinion will not be challenged by
the Internal Revenue Service or that a court considering the issues will not
hold contrary to such opinion.
This discussion may not address federal income tax consequences
applicable to shareholders subject to special treatment under federal income tax
law, such as financial institutions, broker-dealers, life insurance companies or
traders in securities that elect to mark to market. Also, this discussion does
not address applicable tax consequences if you hold Fidelity common stock as
part of a hedging, straddle, constructive sale, conversion or other risk
reduction transaction. In addition, this discussion does not address the tax
consequences of the rights offering under applicable state, local or foreign tax
laws.
You should consult your tax advisor to determine the tax consequences
to you of the rights offering in light of your particular circumstances,
including any state, local and foreign tax consequences.
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Taxation of Shareholders
The receipt and exercise of the subscription rights distributed
pursuant to the rights offering is nontaxable to the shareholders.
Receipt of a Subscription Right. You will not recognize any gain or
other income upon receipt of a subscription right.
Tax Basis and Holding Period of Subscription Rights. Your tax basis in
each subscription right will effectively depend on whether you exercise the
subscription right or allow the subscription right to expire.
If you exercise a subscription right, your tax basis in the
subscription right will be determined by allocating the tax basis of your common
stock on which the subscription right is distributed between the common stock
and the subscription right, in proportion to their relative fair market values
on the date of distribution of the subscription right. However, if the fair
market value of your subscription rights is less than 15% of the fair market
value of your existing shares of common stock, then the tax basis of each
subscription right will be deemed to be zero, unless you elect, by attaching an
election statement to your federal income tax return for the taxable year in
which you receive the subscription rights, to allocate tax basis to your
subscription rights.
If you allow a subscription right to expire, it will be treated as
having no tax basis.
Your holding period for a subscription right will include your holding
period for the shares of common stock upon which the subscription right is
issued.
Expiration of Subscription Rights. You will not recognize any loss
upon the expiration or lapse of a subscription right.
Exercise of Subscription Rights. You will not recognize a gain or loss
on the exercise of a subscription right. The tax basis of any share of common
stock that you purchase through the rights offering will be equal to the sum of
your tax basis, if any, in the subscription right exercised and the price paid
for the share. The holding period of the shares of common stock purchased
through the rights offering will begin on the date that you exercise your
subscription rights.
Sale or Exchange of Shares Acquired Upon Exercise of Subscription Rights
If you sell or exchange shares of Fidelity common stock, you will
generally recognize gain or loss on the transaction. The gain or loss you
recognize is equal to the difference between the amount you realize on the
transaction and your basis in the shares you sold. Such gain or loss generally
will be capital gain or loss so long as you held the shares as a capital asset
at the time of the sale or exchange. Gain or loss from an asset held for more
than 12 months will generally be taxable as long-term capital gain or loss. If
you are an individual, any long-term capital gain is generally taxed at a
maximum federal income tax rate of 20%.
Taxation of Fidelity
Fidelity will not recognize any gain, other income or loss upon the
issuance of the subscription rights, the lapse of the subscription rights, or
the receipt of payment for shares of common stock upon exercise of the
subscription rights.
Description of Capital Stock
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The following is a summary of the terms of our capital stock and
highlights some of the provisions of our amended and restated certificate of
incorporation and bylaws. Since we are only providing a general summary of
certain terms of our amended and restated certificate of incorporation and
bylaws, you should only rely on the actual provisions of the amended and
restated certificate of incorporation or the bylaws. If you would like to read
the certificate of incorporation or bylaws, they are on file with the Securities
and Exchange Commission.
Authorized and Outstanding Capital Stock
Our authorized capital stock consists of 15,000,000 shares of common
stock, no par value, and 5,000,000 shares of preferred stock. As of December 31,
2000, there were 4,607,658 shares of common stock outstanding and approximately
492 beneficial holders of common stock of record. All outstanding shares of
common stock are fully paid and non-assessable. We have two issues of
outstanding warrants to purchase 18,282 and 9,471 shares of our common stock at
a price of $6.22 and $8.93 per share, respectively. The warrants expire on April
30, 2004 and January 31, 2005, respectively. The warrants may be exercised in
whole or in part at any time prior to expiration. Fidelity has reserved 27,753
shares of common stock for the possible exercise of these warrants. None of the
warrants have been exercised as of December 31, 2000. As of December 31, 2000,
we also had outstanding, under our stock option plans, options to purchase
248,736 shares of our common stock. All of the options have an exercise price in
excess of $2.88 per share. We have reserved 469,872 shares of common stock for
the possible exercise of options under these option plans.
Common Stock
The holders of common stock are entitled to dividends in such amounts
and at such times as may be declared by the board of directors out of funds
legally available therefor. Holders of common stock are entitled to one vote per
share for the election of directors and other corporate matters. Such holders
are not entitled to vote cumulatively for the election of directors. In the
event of liquidation, dissolution or winding up of Fidelity, holders of common
stock would be entitled to share ratably in all of our assets available for
distribution to the holders of common stock. The common stock carries no
preemptive rights. All outstanding shares of common stock are, and the shares of
common stock to be sold by Fidelity in the rights offering when issued will be,
duly authorized, validly issued, fully paid and non-assessable.
Preferred Stock
Our board of directors is authorized to issue from time to time,
without stockholder authorization, in one or more designated series, shares of
preferred stock with such dividend, redemption, conversion and exchange
provisions as are provided in the particular series. The issuance of preferred
stock could have the effect of delaying or preventing a change in control of
Fidelity. Your rights as a holder of our common stock may be affected by any
preferred stock that we may issue. Our board of directors has no present plans
to issue any preferred stock.
Transfer Agent
We act as our own transfer agent for the common stock.
Plan of Distribution
On or about ____________, 2001, we will distribute the subscription
rights, shareholder rights agreements and copies of this prospectus to
individuals who owned shares of common stock on ____________, 2001. We have not
employed any brokers, dealers or underwriters in connection with the rights
offering and will not pay any underwriting commissions, fees or discounts in
connection with the rights offering. Certain of our directors or officers may
assist in the rights offering. These individuals
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will not receive any commissions or compensation other than their normal
directors' fees or employment compensation and will not register with the
Securities and Exchange Commission as brokers in reliance on certain safe harbor
provisions contained in Rule 3a4-1 under the Exchange Act.
If you wish to exercise your subscription rights and purchase shares of
common stock, you should complete the shareholder rights agreement and return it
with payment for the shares, to us, at the address on page ___. If you have any
questions, you should contact Deb Fritz, Assistant Vice President, Shareholder
Relations, of Fidelity at:
Fidelity Federal Bancorp
18 NW Fourth Street, PO Box 1347
Evansville, Indiana 47706-1347
Telephone: (812) 424-0921 (extension 2226)
(800) 280-8280 (extension 2226).
Legal Matters
The validity of the shares of common stock offered by this prospectus
and the tax matters discussed under "Material Federal Income Tax Considerations"
has been passed upon for us by Krieg DeVault Alexander & Capehart, LLP,
Indianapolis, Indiana.
Experts
Olive LLP, independent auditors, have audited our financial statements
and schedule included in our Annual Report on Form 10-K for the year ended
December 31, 2000, as set forth in their report, which is incorporated by
reference into this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Olive LLP's
report, given on their authority as experts in accounting and auditing.
Where You Can Find More Information
We file reports and other information with the SEC. You may read and
copy any document we file with the SEC at the SEC's public reference room
located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the SEC located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York
10048. You may obtain further information regarding the operation of the SEC's
Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings are also
available to the public on the SEC's Internet site located at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus
information we file with the SEC. This means we can disclose important
information to you by referring you to the documents containing the information.
The information we incorporate by reference is considered to be part of this
prospectus, unless we update or supersede that information by the information
contained in this prospectus or information we file subsequently that is
incorporated by reference into this prospectus. We are incorporating by
reference into this prospectus the following documents that we have filed with
the SEC, and our future filings with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until the rights offering is
completed:
o our annual report on Form 10-K for the fiscal year ended December
31, 2000, and
o our definitive proxy statement filed March 29, 2001 in connection
with our 2001 annual shareholder meeting.
Our SEC file number is 0-22880.
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This prospectus is part of a registration statement on form S-3 we have
filed with the SEC relating to the securities that we are offering under this
prospectus. As permitted by SEC rules, this prospectus does not contain all of
the information included in the registration statement and the accompanying
exhibits and schedules we file with the SEC. You should read the registration
statement and the exhibits and schedules for more information about us and the
new notes. The registration statement, exhibits and schedules are also available
at the SEC's Public Reference Room or through its Internet site.
This document incorporates by reference important business, financial
and other information about us that is not included in or delivered with this
document. Documents incorporated by reference and any other copies of our
filings with the SEC are available from us upon written or oral request and
without charge to each person, including any beneficial owner, to whom a
prospectus is delivered, excluding all exhibits unless specifically incorporated
by reference as exhibits in this document. Written and telephone requests for
any of these documents should be directed to us as indicated below:
Fidelity Federal Bancorp
18 NW Fourth Street
P.O. Box 1347
Evansville, Indiana 47706-1347
Attn.: Mark A. Isaac, Vice President
Telephone: (812) 424-0921
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
- -------- -------------------------------------------
The following are actual or estimated expenses incurred or to be
incurred by the Company in connection with this offering:
Fees Amount (in $)
---- -------------
Filing Fee 383
Printing Expenses 2,000*
Legal Fees, Blue Sky Fees and Expenses 20,000*
Accounting Fees and Expenses 3,000*
Miscellaneous Expenses 500*
---------
Total 25,883*
=========
*Estimated.
Item 15. Indemnification of Directors and Officers.
- ------- -----------------------------------------
The Company's Articles of Incorporation provide that the Company will
indemnify any person who is or was a director or officer of the Company or of
any other corporation for which such director or officer is or was serving in
any capacity at the request of the Company against all liability and expense
that may be incurred in connection with any claim, action, suit or proceeding
with respect to which such director or officer is wholly successful or acted in
good faith in a manner such director or officer reasonably believed to be in, or
not opposed to, the best interests of the Company or such other corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe that such conduct was unlawful. A director or officer of the Company is
entitled to be indemnified as a matter of right with respect to those claims,
actions, suits or proceedings in which such director or officer has been wholly
successful. In all other cases, such director or officer, shall be entitled to
indemnification as a matter of right unless (i) the director or officer has
breached or failed to perform the person's duties in compliance with the
standard of conduct set forth above and (ii) such breach of failure to perform
constituted willful misconduct or recklessness as determined by the Board of
Directors of the Company, a committee of the Board of Directors, independent
legal counsel, or a committee of disinterested persons selected by the Board of
Directors. The foregoing is a summary of detailed provisions for indemnification
found at Article VI, Section 2 of the Articles of Incorporation of the Company
which are incorporated by reference into this Registration Statement as Exhibit
4.1.
-1-
Item 16. Exhibits. The following exhibits are filed as part of this
- ------- -------- Registration Statement:
Exhibit Number Exhibit
-------------- -------
4.1* Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3(a) of the
Company's Annual Report on Form 10-K [Commission
File No. 0-22880] for the year ended June 30, 1995)
and Articles of Amendment.
4.2 * By-Laws of the Company
5 Opinion of Krieg DeVault Alexander & Capehart, LLP
re: legality
8 Opinion of Krieg DeVault Alexander & Capehart, LLP
re: tax matters
23.1 Consent of Krieg DeVault Alexander & Capehart, LLP
(included in Exhibit 5 and 8)
23.2* (1) Consent of Olive LLP
24 * Powers of Attorney (included in Signature Page)
99.1(a)* Shareholder Rights Agreement
99.1(b) * Instructions for Use of Shareholders Rights Agreement
99.2 * Notice of Guaranteed Delivery
99.3 * Letter to Record Holders
99.4 * Letter to Beneficial Holders
99.5 * Letter to Clients of Beneficial Holders
99.6 * Beneficial Owner Election Form
99.7 * Nominee Holder Certification
99.8 * Substitute Form W-9
* Previously filed.
(1) Consent to incorporation by reference of the report dated January 12, 2001
on the financial statements of Fidelity is included as Exhibit 23 to Fidelity's
Annual Report on Form 10-K for the year ended December 31, 2000
Item 17. Undertakings.
- -------- ------------
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other
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than the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
-3-
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Evansville, State of Indiana, on April 19, 2001.
FIDELITY FEDERAL BANCORP
By: /S/ DONALD R. NEEL
-------------------
Donald R. Neel, Executive Vice
President and Chief Financial
Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated below as of April 19, 2001.
By /S/ BRUCE A. CORDINGLEY By /S/ JACK CUNNINGHAM*
---------------------------------- ---------------------------------
Bruce A. Cordingley Director, Jack Cunningham Director and
Chair of the Executive Committee Chairman of the Board
and Acting Principal Executive Officer
By
By /S/ DONALD R. NEEL ---------------------------------
---------------------------------- M. Brian Davis Director
Donald R. Neel Director,
Executive Vice President, Treasurer By /S/ GERALD K. PEDIGO *
and Chief Financial Officer (Principal ---------------------------------
Accounting Officer) Gerald K. Pedigo Director
By By /S/ BARRY A. SCHNAKENBURG*
---------------------------------- ---------------------------------
Curt J. Angermeier Director Barry A. Schnakenburg Director
By /S/ WILLIAM R. BAUGH * By /S/ PHILLIP J. STOFFREGEN*
---------------------------------- ---------------------------------
William R. Baugh Director Phillip J. Stoffregen Director
*By: /S/ DONALD R. NEEL
----------------------------------
Attorney-in-fact
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