Exhibit 99.1(b)
INSTRUCTIONS FOR USE OF FIDELITY FEDERAL BANCORP
SHAREHOLDER RIGHTS AGREEMENT
CONSULT THE COMPANY OR YOUR BANK OR BROKER
AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the "Rights
Offering") by Fidelity Federal Bancorp (the "Company"), to the holders of its
common stock (the "Common Stock"), as described in the Company's prospectus
dated December 28, 2001 (the "Prospectus"). Holders of record of shares of the
Common Stock at the close of business on December 19, 2001 (the "Record Date")
are receiving one (1) subscription right, rounded down to the nearest whole
number, for every 3,991 shares of the Common Stock held by them on the Record
Date (the "Basic Subscription Right"). Each Basic Subscription Right is
exercisable, upon payment of $1,000 in cash (the "Basic Subscription Price"), to
purchase $1,000 principal amount of notes. For each $1,000 principal amount of
notes purchased you will receive warrant subscription rights to purchase 333 1/3
warrants at the price of $0.50 per warrant (the "Warrant Subscription Price").
Each warrant represents the right of the holder to purchase one (1) share of
common stock of Fidelity Federal at $3.00 per share less the purchase price of
the warrant (the "Warrant Subscription Right").
In addition, subject to availability and proration, and the limitations
described in the Prospectus, each rights holder who fully exercises the Basic
Subscription Right as to notes, or the Warrant Subscription Right as to
warrants, may also subscribe at the Basic Subscription Price or at the Warrant
Subscription Price, as the case may be, for additional notes or warrants
(respectively, the Basic Over-Subscription Privilege" and the "Warrant
Over-Subscription Privilege"). Only the notes and warrants not subscribed for
through the exercise of the Basic Subscription Right and the Warrant
Subscription Right by the Expiration Date, as defined below, will be available
for purchase pursuant to the Basic Over-Subscription Privilege or the Warrant
Over-Subscription Privilege.
Nominee holders of Common Stock that hold, on the Record Date, shares for
the account(s) of more than one beneficial owner may exercise the number of
Basic Subscription Rights and Warrant Subscription Rights (collectively, the
"Rights") to which all such beneficial owners in the aggregate would otherwise
have been entitled if they had been direct record holders of Common Stock on the
Record Date; provided such nominee holder makes a proper showing to the Company,
as determined in the Company's sole and absolute discretion.
The Rights will expire at 5:00 p.m., Central time, on February 28, 2002
(the "Expiration Date").
You should calculate the number of Rights to which you are entitled in the
manner set forth on the face of your Shareholder Rights Agreement. You should
indicate your elections with regard to the exercise of your Rights by completing
the appropriate form or forms on your Shareholder Rights Agreement and returning
it to the Company in the envelope provided. Your Shareholder
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Rights Agreement must be received by the Company, including final clearance of
any checks on or before 5:00 p.m., Central time, on February 28, 2002. You may
not revoke any exercise of your Rights.
1. Subscription Privilege.
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To exercise Rights, complete the Shareholder Rights Agreement and deliver
your properly completed and executed Shareholder Rights Agreement, together with
payments in full to the Company of both the Basic Subscription Price for each
$1,000 principal amount of notes subscribed for pursuant to the Basic
Subscription Right and the Basic Over-Subscription Privilege, and the Warrant
Subscription Price for each Warrant Subscription Right and the Warrant
Over-Subscription Privilege (collectively, the "Total Subscription Price") to
the Company.
Payment of the Total Subscription Price must be made in U.S. dollars for
the full number of notes and warrants being subscribed for by (a) check or bank
draft (cashier's check) drawn upon a United States bank or a postal, telegraphic
or express money order payable to the order of Fidelity Federal Bancorp, or (b)
wire transfer of same day funds to the account maintained by the Company for
such purpose at the Federal Home Loan Bank of Indianapolis, ABA# 074 001 019
further credit United Fidelity Bank, fsb (marked: Fidelity Federal Bancorp -
Rights Offering).
The Subscription Price will be deemed to have been received by the Company
only upon (i) the clearance of any uncertified check, (ii) the receipt by the
Company of any certified check or bank draft drawn upon a U.S. bank or of any
postal, telegraphic or express money order, (iii) receipt by the Company of any
funds transferred by wire transfer, or (iv) receipt of funds by the Company
through an alternative payment method approved by the Company.
If paying by uncertified personal check, please note that the funds paid
thereby may take five business days or more to clear. Accordingly, Rights
holders who wish to pay the Total Subscription Price by means of an uncertified
personal check are urged to make payment sufficiently in advance of the
Expiration Date to ensure that such payment is received and clears by such date
and are urged to consider payment by means of certified or cashier's check,
money order or wire transfer of funds. Banks, brokers, trusts, depositories or
other nominee holders of the Rights who exercise the Basic Subscription Right
and the Basic Over-Subscription Privilege, or the Warrant Subscription Right and
the Warrant Over-Subscription Privilege on behalf of beneficial owners of Rights
will be required to certify to the Company on a Nominee Holder Certification
Form, in connection with the exercise of either the Basic Over-Subscription
Privilege or the Warrant Over-Subscription Privilege, as to the aggregate number
of Rights that have been exercised, and the number of notes or warrants that are
being subscribed for pursuant to the over-subscription privileges by each
beneficial owner of Rights on whose behalf such nominee holder is acting.
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The address and facsimile numbers of the Company are as follows:
Fidelity Federal Bancorp
18 NW Fourth Street
PO Box 1347
Evansville, Indiana 47706-1347
Attention: Mark A. Isaac, Vice President
Telephone: (812) 424-0921
Facsimile: (812) 421-2931
Delivery of the Shareholders Rights Agreement to an address other than as
set forth above or transmission via a facsimile machine other than as set forth
above does not constitute a valid delivery.
The telephone numbers of the Company, for inquiries, information or
requests for additional documentation are as follows:
Fidelity Federal Bancorp
Attention: Mark A. Isaac, Vice President
18 NW Fourth Street, PO Box 1347
Evansville, Indiana 47706-1347
Telephone: (812) 424-0921
If you do not specify the number of subscription rights and
over-subscription privileges being exercised, or if your payment is not
sufficient to pay the total purchase price for all of the notes and warrants
that you indicated you wished to purchase, you will be deemed to have exercised
the maximum number of subscription rights and over-subscription privileges that
could be exercised for the amount of the payment that we received from you. If
your payment exceeds the total purchase price for all of the subscription rights
shown on this shareholder rights agreement, your payment will be applied, until
depleted, to subscribe for notes and warrants in the following order:
(1) to subscribe for the principal amount of notes and the number of
warrants, if any, that you indicated on the shareholder rights
agreement that you wished to purchase through your basic subscription
right and warrant subscription right, until your basic subscription
right and warrant subscription right have been fully exercised;
(2) to subscribe for additional principal amount of notes pursuant to the
basic over-subscription privilege, subject to any applicable
limitation; and
(3) to subscribe for additional warrants pursuant to the warrant
over-subscription privilege, subject to limitation.
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Any excess payment remaining after the foregoing allocation will be returned to
you as soon as practicable by mail, without interest or deduction.
2. Conditions to Completion of the Rights Offering.
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There are no conditions to the completion of the Rights Offering. However,
the board of directors of the Company may withdraw the Rights Offering in its
sole discretion at any time prior to or on February 28, 2002 for any reason
(including, without limitation, a change in the market price of the Company's
common stock). If the board of directors of the Company withdraws the Rights
Offering, any funds you paid will be promptly refunded, without interest or
penalty.
3. Delivery of notes and warrants.
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The following deliveries and payments will be made to the address shown on
the face of your Shareholders Rights Agreement unless you provide instructions
to the contrary on the Shareholders Rights Agreement.
(a) Basic Subscription Right and Warrant Subscription Right. As soon as
practicable after the valid exercise of the Rights, the Company will
mail to each exercising Rights holder certificates representing notes
and warrants purchased pursuant to the Basic Subscription Right and
Warrant Subscription Right.
(b) Basic Over-Subscription Privilege and Warrant Over-Subscription
Privilege. As soon as practicable after the Expiration Date, the
Company will mail to each Rights holder who validly exercises the
Basic or Warrant Over-Subscription Privilege the number of notes and
warrants allocated to such Rights holder pursuant to the respective
over-subscription privilege.
(c) Cash Payments. As soon as practicable after the Expiration Date, the
Company will mail to each Rights holder who exercises the
over-subscription privilege with respect to notes or warrants any
excess funds, without interest or deduction, received in payment of
the Subscription Price for each note or warrant that was subscribed
for by, but not allocated to, such Rights holder pursuant to the
relevant over-subscription privilege.
4. Execution.
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(a) Execution by Registered Holder(s). The signature on the Shareholder
Rights Agreement must correspond with the name of the registered
holder exactly as it appears on the Shareholders Rights Agreement
without any alteration or change whatsoever. If the Shareholder Rights
Agreement is registered in the names of two or more joint owners, all
of such owners must sign. Persons who sign the Shareholder Rights
Agreement in a representative or other fiduciary capacity must
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indicate their capacity when signing and, unless waived by the Company
in its sole and absolute discretion, must present to the Company
satisfactory evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Shareholder
Rights Agreement is executed by a person other than the holder named
on the face of the Shareholder Rights Agreement, proper evidence of
authority of the person executing the Shareholder Rights Agreement
must accompany the same unless, for good cause, the Company dispenses
with proof of authority.
(c) Signature Guarantees. Your signature must be guaranteed by an Eligible
Institution if you wish to specify special delivery instructions
pursuant to the Shareholder Rights Agreement.
5. Method of Delivery.
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The method of delivery of Shareholder Rights Agreements and payment of the
Subscription Price to the Company will be at the election and risk of the Rights
holder, but, if sent by mail, it is recommended that they be sent by registered
mail, properly insured, with return receipt requested, and that a sufficient
number of days be allowed to ensure delivery to the Company and the clearance of
any checks sent in payment of the Subscription Price prior to the Expiration
Date.
6. Substitute Form W-9.
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Each Rights holder who elects to exercise Rights through the Company should
provide the Company with a correct Taxpayer Identification Number ("TIN") and,
where applicable, certification of such Rights holder's exemption from backup
withholding on Substitute Form W-9. Each foreign Rights holder who elects to
exercise the Rights through the Company should provide the Company with
certification of foreign status on Form W-8. Copies of Form W-8 and additional
copies of Substitute Form W-9 may be obtained upon request from the Company at
the address, or by calling the telephone number indicated above. Failure to
provide the information on the form may subject such holder to 31% federal
income tax withholding with respect to interest and dividends that may be paid
by the Company on notes and warrants purchased upon the exercise of Rights (for
those holders exercising Rights).
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