SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of
1934 [Amendment No. ]
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Fidelity Federal Bancorp
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(Name of Registrant as Specified in Its Charter)
Not Applicable
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and state
how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form Schedule or Registration Statement No.:
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4) Date Filed:
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[LOGO OF FIDELITY FEDERAL BANCORP]
18 N.W. Fourth Street o Evansville, IN 47708 o Telephone (812) 424-0921
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held April 30, 2002
Notice is hereby given that the Annual Meeting of Shareholders of Fidelity
Federal Bancorp will be held on April 30, 2002, at 10:00 o'clock a.m., local
time, at the Sheraton Keystone Crossing, 8787 Keystone Crossing, Indianapolis,
Indiana.
The purposes of the meeting are:
(1) Election of Directors: To elect eight directors to the Board of
Directors to serve for the ensuing term of one year until their
successors are duly elected and qualified;
(2) Selection of Public Accountants: To ratify the selection of BKD LLP,
Certified Public Accountants, as independent public accountants of
Fidelity for the year ending December 31, 2002; and
(3) Other Business: To transact such other business as may properly come
before the meeting or any adjournment thereof.
Other than with respect to procedural matters incident to the conduct of
the meeting, management is not aware of any other matters which may properly
come before the meeting. The Board of Directors of Fidelity has fixed the close
of business on February 28, 2002, as the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting and at
any adjournment of the Annual Meeting.
By Order of the Board of Directors
JACK CUNNINGHAM
Chairman of the Board of Directors
March 27, 2002
Important--Please mail your proxy promptly.
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You are cordially invited to attend the Annual Meeting. It is important that
your shares be represented, regardless of the number you own. Even if you plan
to be present, you are urged to complete, sign, date and return the enclosed
proxy promptly in the envelope provided. If you attend the meeting, you may vote
either in person or by proxy. Any proxy given may be revoked by you in writing
or in person at any time prior to the exercise thereof.
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The date of this Proxy Statement is March 27, 2002.
TABLE OF CONTENTS
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Page
INTRODUCTORY STATEMENT.......................................................1
Proposals Presented..........................................................1
Voting Rights................................................................1
Beneficial Ownership.........................................................2
Proxies......................................................................2
Solicitation of Proxies......................................................3
ELECTION OF DIRECTORS........................................................3
INFORMATION CONCERNING NOMINEES, DIRECTORS AND
EXECUTIVE OFFICERS...........................................................3
Certain Transactions and Other Matters Between Management and Fidelity.......5
Board Meetings...............................................................5
Board Committees.............................................................5
EXECUTIVE COMPENSATION AND OTHER INFORMATION.................................5
Five Year Total Shareholder Return...........................................5
Compensation Committee Report................................................6
Compensation Committee Insider Participation.................................7
Summary Compensation Table...................................................7
1993 Directors' Stock Option Plan............................................8
1995 Key Employees' Stock Option Plan........................................8
Options Grants in Last Fiscal Year...........................................9
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-end...........9
Other Employee Benefit Plans.................................................9
Annual Benefit of Normal Retirement Years of Service........................10
Compensation of Directors...................................................10
Employment Contracts........................................................10
Security Ownership of Management............................................11
Section 16(a) Beneficial Ownership Reporting Compliance.....................12
RATIFICATION OF THE SELECTION OF AUDITORS OF FIDELITY.......................12
REPORT OF THE AUDIT COMMITTEE...............................................12
AUDIT FEES..................................................................13
SHAREHOLDERS PROPOSALS......................................................13
ADDITIONAL INFORMATION......................................................13
OTHER MATTERS...............................................................13
[LOGO OF FIDELITY FEDERAL BANCORP]
18 N.W. Fourth Street o Evansville, IN 47708 o Telephone (812) 424-0921
PROXY STATEMENT
for the
Annual Meeting of Shareholders
to be held on April 30, 2002
INTRODUCTORY STATEMENT
This Proxy Statement is being furnished to the shareholders of Fidelity
Federal Bancorp ("Fidelity") in connection with the solicitation of proxies by
the Board of Directors of Fidelity for use at the Annual Meeting of Shareholders
to be held on April 30, 2002, at 10:00 a.m., local time, at Sheraton Keystone
Crossing, 8787 Keystone Crossing Indianapolis, Indiana and any adjournment
thereof (the "Annual Meeting").
Fidelity is a unitary savings and loan holding company based in Evansville,
Indiana which owns all of the issued and outstanding stock of United Fidelity
Bank ("United"), its savings bank subsidiary. United maintains four locations in
Evansville and one location in Warrick County.
Proposals Presented
At the Annual Meeting, shareholders of Fidelity will be asked to consider
and vote upon the following matters:
(1) Election of Directors. The election of eight directors to the Board of
Directors of Fidelity to serve until their successors are duly elected
and qualified in accordance with Fidelity's Articles of Incorporation.
(2) Ratification of Public Accountants. To ratify the selection of BKD
LLP, Certified Public Accountants, as independent public accountants
of Fidelity for the year ending December 31, 2002.
If any other matters should properly come before the meeting, the proxies
will be voted, with respect to these matters, in accordance with the
recommendations of the Board of Directors. Except with respect to procedural
matters incident to the conduct of the meeting, management of Fidelity does not
know of any additional matters that may properly come before the Annual Meeting.
The Proxy Statement, the attached Notice and the enclosed proxy card are
being first mailed to shareholders of Fidelity on or about April 1, 2002.
Voting Rights
Only holders of shares of common stock of Fidelity of record at the close
of business on February 28, 2002 (the "Record Date") will be entitled to notice
of and to vote at the Annual Meeting. At the close of business on the Record
Date there were 5,987,009 shares of common stock of Fidelity issued and
outstanding. Such shares were held of record by approximately 462 shareholders.
There are no other outstanding securities of Fidelity entitled to vote.
The presence, either in person or by proxy, of the holders of a majority of
the shares of Common Stock issued and outstanding as of the Record Date is
necessary to constitute a quorum at the Annual Meeting. The
1
inspectors of election will treat abstentions as shares that are present and
entitled to vote for purposes of determining the presence of a quorum but as
unvoted for purpose of determining the approval of any matters submitted to the
shareholders for a vote. If a broker indicates on the proxy that it does not
have discretionary authority to vote certain shares on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to that matter.
The nominees for election as director of Fidelity named in this Proxy
Statement will be elected by a plurality of the votes cast. Action on the other
items or matters to be presented at the Annual Meeting will be approved if the
votes cast in favor of the action exceed the votes cast opposing the action.
Fidelity shareholders of record on the Record Date are entitled to one vote
per share on any matter that may properly come before the Annual Meeting.
Ballots will be available at the Annual Meeting for shareholders desiring to
vote in person.
Beneficial Ownership
The following table sets forth information regarding the beneficial
ownership of Fidelity's common stock as of February 28, 2002 by the only person
known by Fidelity to beneficially own 5% or more of the issued and outstanding
shares of common stock of Fidelity.
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Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership (1)
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Bruce A. Cordingley 4,638,479 (2) 58.5%
8888 Keystone Crossing, Suite 900
Indianapolis, IN 46240
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M. Brian Davis 691,901 (3) 11.5%
7731 Newburgh Road
Evansville, IN 47715
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(1) This information is based on Schedule 13D and 13G Reports filed by the
beneficial owner with the Securities and Exchange Commission ("SEC")
pursuant to applicable provisions of the Securities Exchange Act of 1934
("Exchange Act"), as of February 28, 2002, and any other information
provided to Fidelity by the beneficial owner. It does not reflect any
changes in those shareholdings which may have occurred since that date.
Beneficial ownership is direct except as otherwise indicated by footnote.
(2) Includes 2,239,787 shares held by Pedcor Holdings, LLC, of which Mr.
Cordingley is the President; 299,158 shares held by Pedcor Bancorp, of
which Mr. Cordingley is the President and CEO; 6,895 shares held by Denise
Cordingley, the wife of Mr. Cordingley, 127,957 shares held by Gerald
Pedigo and 10,000 shares held by Phil Stoffregen, who together with Mr.
Cordingley, has filed a schedule 13D as a "group" under Section 13(d)(3) of
the Securities Exchange Act of 1934. The total also includes 46,516 shares,
4,800 shares, and 6,600 shares which Mr. Cordingley, Gerald Pedigo, and
Phillip Stoffregen, respectively, have the right to acquire pursuant to the
exercise of stock options granted under Fidelity's 1993 Directors' Stock
Options Plan; 8,585 shares which Mr. Cordingley, Pedcor Investments, and
Denise Cordingley are entitled to purchase upon exercise of 31 warrants
acquired pursuant to the 1994 Rights Offering; and 1,872,659 shares which
Pedcor Holdings, LLC, Pedcor Bancorp or their permitted assigns have the
right to purchase, base upon the option from Fidelity to acquire such
shares.
(3) Includes 3,000 shares owned by the spouse of Mr. Davis, 16,226 shares which
Mr. Davis holds as custodian for his minor daughter (Elizabeth Davis);
15,294 shares which Mr. Davis holds as custodian for his minor son
(Christopher Davis); and 5,580 shares which Mr. Davis holds as custodian
for his minor daughter (Gabrielle Davis). Also includes 39,916 shares which
Mr. Davis has the right to acquire pursuant to the exercise of stock
options granted under the 1993 Directors' Stock Option Plan. Also includes
516 shares of Fidelity owned by the late Maybelle R. Davis, the mother of
Mr. Davis, as to which shares Mr. Davis has authority to vote pursuant to a
power of attorney.
Proxies
Each properly executed and returned proxy will be voted at the Annual
Meeting in accordance with the instructions thereon. If no instructions are
given, the proxy will be voted by the individuals designated as proxies
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"FOR" the matter set forth as items one and two in the attached "Notice of
Annual Meeting of Shareholders," in their discretion with respect to all other
matters.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by (i) attending the Annual Meeting, filing a written notice of
revocation with the Secretary of the Annual Meeting and voting in person; (ii)
executing a written instrument to that effect and delivering it to the Secretary
of Fidelity prior to the Annual Meeting; or (iii) duly executing and delivering
a later dated proxy to the Secretary of Fidelity prior to the Annual Meeting.
Solicitation of Proxies
In addition to use of the mails, proxies may be solicited personally or by
telephone or facsimile by officers, directors and certain employees who will not
be specially compensated for such activity. Fidelity will request brokerage
houses, nominees, fiduciaries and other custodians to forward soliciting
materials to beneficial owners. Fidelity will bear all expenses in connection
with the solicitation of proxies for the Annual Meeting.
ITEM 1. ELECTION OF DIRECTORS
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As of the date of this proxy, the Board of Directors of Fidelity is
composed of eight members. Fidelity's Articles of Incorporation provide that all
directors shall have a term of office of one year.
The Nominating Committee of the Board of Directors has nominated Messrs.
Baugh, Becker, Cordingley, Cunningham, Neel, Pedigo, Schnakenburg, and
Stoffregen, each an incumbent Director, for re-election to a one-year term to
expire at the 2003 Annual Meeting of Shareholders.
If for any reason any of the above-named nominees becomes unable or are
unwilling to serve at the time of the Annual Meeting, the person named in the
enclosed proxy card will have discretionary authority to vote for a substitute
nominee or nominees. It is anticipated that Messrs. Baugh, Becker, Cordingley,
Cunningham, Neel, Pedigo, Schnakenburg, and Stoffregen will be available for
election.
The Board of Directors recommends that the shareholders vote FOR the
election of Messrs. Baugh, Becker, Cordingley, Cunningham, Neel, Pedigo,
Schnakenburg, and Stoffregen.
INFORMATION CONCERNING NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth information as to each Director continuing in
office after the Annual Meeting, and each executive officer of Fidelity as of
February 28, 2002. Each Director serves for a term of one year and until his
successor is duly elected and qualified. Each individual's service with Fidelity
began at the formation of Fidelity in 1993, unless otherwise noted.
WILLIAM R. BAUGH
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Mr. Baugh, 81 years of age, is a Director of Fidelity and has been Chairman
Emeritus of the Board of Directors since October 1994. Mr. Baugh served as
Chairman of the Board of Directors of Fidelity from its formation in 1993 until
October 1994. He served as a Director of United from 1955 until 2000, was
Chairman of the Board of United from 1979 until October 1994, and was President
of United from 1970 until 1981 and from 1983 until 1986.
PAUL E. BECKER
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Mr. Becker, 43 years of age, is a Director of Fidelity and a member of the Audit
Committee. He is President of Gaither Technologies STC of Evansville, which
designs, installs and maintains data systems and advance telephone systems. Mr.
Becker joined the Board in 2001.
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BRUCE A. CORDINGLEY
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Mr. Cordingley, 55 years of age, is a Director of Fidelity and served as
Chairman of the Board of Directors from October 1994 until April 1998, and
served as Chief Executive Officer of Fidelity from June 1995 to March 1996. He
continues to serve as a Director of Fidelity and as Chairman of the Company's
Executive Committee and in the other positions discussed below.
Mr. Cordingley serves as President and CEO and Director of Village Housing
Corporation. Except for the period from December 27, 1999 through May 18, 2000,
Mr. Cordingley has been a Director of United since 1992. Mr. Cordingley is
President of Pedcor Investments, a limited liability company, located in
Indianapolis, Indiana, the principal business of which is real estate-oriented
investment and development. In 1997 he became President of Pedcor Bancorp, the
holding company of International City Bank, N.A., Long Beach, California. He is
also a Director of International City Bank, N.A. Mr. Cordingley is an attorney
and was a partner in the law firm of Ice, Miller, Donadio and Ryan in
Indianapolis, Indiana from 1973 to February 1992.
JACK CUNNINGHAM
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Mr. Cunningham, 71 years of age, is a Director of Fidelity and has served as
Chairman of Fidelity and United since April 1998. Mr. Cunningham also serves as
Secretary of Fidelity and United. He served as President of Fidelity from May
1994 through October 1994 and as President of United from May 1994 through
December 1994. Mr. Cunningham again served as President and CEO of United from
March 1997 until January 1998. Mr. Cunningham is Chairman of the Board of
Village Housing Corporation. Mr. Cunningham has been a Director of United since
1985 and an officer of United since 1974.
DONALD R. NEEL
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Mr. Neel, 38 years of age, is a Director of Fidelity and also serves as its
President, Chief Financial Officer, and Treasurer. He has been Fidelity's Chief
Financial Officer since 1993 and its President since October 2001. Mr. Neel
served as Fidelity's Executive Vice President prior to his appointment as
President. Mr. Neel also has served as President and Chief Executive Officer of
United since July 2000. Prior to joining United and Fidelity in 1993, Mr. Neel
served as Vice-President and Controller of INB Banking Company, Southwest
(successor to Peoples Bank) from May 1987 through April 1993.
GERALD K. PEDIGO
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Mr. Pedigo, 64 years of age, is a Director of Fidelity and has served as a
member of the Executive Committee since his election to the Board in May 2000.
He has been Chairman of Pedcor Investments, a limited liability company, since
1987. In 1997 he became Chairman of Pedcor Bancorp, the holding company of
International City Bank, N.A., Long Beach, California. He is also a Director of
International City Bank, N.A.
BARRY A. SCHNAKENBURG
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Mr. Schnakenburg, 54 years of age, is a Director of Fidelity and has served as a
Director of United since 1990. Mr. Schnakenburg has served as the President of
U.S. Industries Group, Inc. for the past 10 years. U.S. Industries Group, Inc.
is a sheet metal and roofing contractor located in Evansville, Indiana.
PHILLIP J. STOFFREGEN
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Mr. Stoffregen, 43 years of age, is a Director of Fidelity and has served as a
member of the Executive Committee since his election to the Board in May 2000.
Mr. Stoffregen was an associate and then a partner with the law firm Ice Miller
in Indianapolis from 1984 to 1992. Since 1992, Mr. Stoffregen has served as
Executive Vice President of Pedcor Investments where he is responsible for
development and financing matters. He also was a director of Martin Luther King
Community Development Corporation from 1991-1997 and from 1998 to present.
4
Certain Transactions and Other Matters Between Management and Fidelity
Directors and executive officers of Fidelity and United and their
associates are customers of, and have had transactions with, Fidelity and United
in the ordinary course of business. Comparable transactions may be expected to
take place in the future. Directors of Fidelity may not obtain extensions of
credit from Fidelity or United. Loans made to non-director officers were made in
the ordinary course of business on substantially the same terms as those
prevailing at the time for comparable transactions with other persons. These
loans did not involve more than the normal risk of collectibility or present
other unfavorable features.
Board Meetings
Fidelity had four regularly scheduled Board of Directors meetings during
the year ended December 31, 2001. During 2001 no incumbent director attended
fewer than 75 percent of the aggregate number of board meetings and meetings of
committees on which he served.
Board Committees
The Board of Directors has a Nominating Committee which consists of Bruce
A. Cordingley (Chairman), Barry Schnakenburg, and Phillip J. Stoffregen. The
Nominating Committee, whose purpose is to nominate directors for election to the
Board of Directors, met once during the year ended December 31, 2001. Under
Fidelity's by-laws, any shareholder desiring to make a nomination for the
election of directors at the annual meeting of the shareholders must submit
written notice thereof to the Secretary of Fidelity not less than sixty (60)
days prior to the date of such meeting. If less than seventy (70) days notice or
prior public disclosure of the date of such meeting is given or made to
shareholders, the notice by the shareholder to Fidelity, to be considered
timely, must be so received not later than the close of business on the 10th day
following the day on which notice by Fidelity of the date of such meeting was
mailed to shareholders or such public disclosure was made.
The Board of Directors also has an Audit Committee consisting of William R.
Baugh, Paul E. Becker and Barry A. Schnakenburg (Chairman). The Audit Committee,
whose purpose is to review audit reports, loan review reports, and related
matters to ensure effective compliance with regulatory and internal policies and
procedures, met four times during the year ended December 31, 2001. The members
of the Audit Committee also serve as the committee authorized to direct the
grant of options to eligible Directors and Key Employees under the 1993
Directors' Stock Option Plan and the 1995 Key Employees' Stock Option Plan.
The Executive Committee of the Board of Directors serves as the
Compensation Committee. The Executive Committee is currently composed of Bruce
A. Cordingley (Chairman), Barry Schnakenburg, and Phillip J. Stoffregen. The
Executive Committee met two times during the year ended December 31, 2001.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Five-Year Total Shareholder Return
The following indexed graph indicates Fidelity's total return to its
shareholders on its common stock for the past five years, assuming dividend
reinvestment, as compared to total return for the NASDAQ Market Index and the
Peer Group Index (which is a line-of-business index prepared by an independent
third party consisting of savings and loan holding companies or federally
chartered savings institutions with the same SIC number as Fidelity and which
have been publicly traded for at least six years). The comparison of total
return on investment for each of the periods assumes that $100 was invested on
January 1, 1996, in each of Fidelity, the NASDAQ Market Index, and the Peer
Group Index.
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Comparative 5-Year Cumulative Total Return
Among Fidelity Federal Bancorp,
NASDAQ Market Index and SIC Code Index
[PERFORMANCE CHART APPEARS HERE]
Assumes $100 Invested on January 1, 1996
And Dividends Reinvested
Year Ended December 31, 2001
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1996 1997 1998 1999 2000 2001
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Fidelity Federal $100 $110.61 $36.81 $13.63 $15.00 $26.61
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SIC Code Index 100 169.52 144.03 122.55 189.91 206.68
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NASDAQ 100 122.32 172.52 304.29 191.25 152.46
Market Index
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Compensation Committee Report
Decisions on compensation of Fidelity's executives are made by the
Executive Committee of the Board of Directors of Fidelity, which also serves as
the Compensation Committee. All decisions of the Executive Committee relating to
the compensation of Fidelity's officers are reviewed by the full board. Set
forth below is a report submitted by Messrs. Cordingley, Schnakenburg, and
Stoffregen, in their capacity as the Board's Executive Committee, addressing
Fidelity's compensation policies for the year ended December 31, 2001 as they
affected Fidelity's executive officers.
Compensation Policies Toward Executive Officers.
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The Executive Committee's executive compensation policies are designed to
provide competitive levels of compensation to the executive officers and to
reward officers for satisfactory individual performance and for satisfactory
performance of Fidelity as a whole. There are no established goals or standards
relating to performance of Fidelity which have been utilized in setting
compensation of individual employees.
Base Salary.
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Each executive officer is reviewed individually by the Executive Committee,
which includes an analysis of the performance of Fidelity. In addition, the
review includes, among other things, an analysis of the individual's performance
during the past fiscal year, focusing primarily upon the following aspects of
the individual's job or characteristics of the individual exhibited during the
most recent fiscal year: quality and quantity of work; supervisory skills;
dependability; initiative; attendance; overall skill level; and overall value to
Fidelity.
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Other Compensation Plans.
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At various times in the past Fidelity has adopted certain broad based
employee benefit plans in which the senior executives are permitted to
participate on the same terms as non-executive employees who meet applicable
eligibility criteria, subject to any legal limitations on the amount that may be
contributed or the benefits that may be payable under the plans.
Benefits.
--------
Fidelity provides medical, defined benefit, and defined contribution plans
to the senior executives that are generally available to the other Fidelity
employees. The amount of perquisites, as determined in accordance with the rules
of the SEC relating to executive compensation, did not exceed 10% of salary and
bonus for year 2001.
Mr. Neel's 2001 Compensation.
----------------------------
Regulations of the Securities and Exchange Commission require that the
Executive Committee disclose the Committee's basis for compensation reported for
any individual who served as the Chief Executive Officer during the last fiscal
year. Mr. Neel's salary was determined in the same manner as discussed above for
other senior executives. Mr. Neel served as the President of Fidelity from
October 2001 to present. The Executive Committee of the Board currently serves
in a non-compensated capacity as CEO.
Current Members of the Executive Committee:
Bruce A. Cordingley (Chairman)
Barry A. Schnakenburg
Phillip J. Stoffregen
Compensation Committee Insider Participation
During the past fiscal year, no executive officer served on the Executive
Committee, which serves as the Compensation Committee. No executive officer
participated in any discussion or voting with respect to his respective salary
as an executive officer and was not present in the room during the discussion by
the Executive Committee of his respective compensation.
Summary Compensation Table
The following table sets forth, for the 12 months ended December 31, 2001,
2000, and 1999, the cash compensation paid by Fidelity or its subsidiaries, as
well as certain other compensation paid or awarded during those years, to the
Chief Executive Officer of Fidelity at any time during the year ended December
31, 2001 and the executive officers of Fidelity whose salary and bonus exceeded
$100,000 during the year ended December 31, 2001.
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Annual Compensation Long-Term Compensation
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Other Annual Securities
Name and Principal Compensation Underlying All Other
Position Year (1) Salary (1) Bonus (2)(3) Options/SARs Compensation (4)
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Donald R. Neel, 12/31/01 $168,727 0 0 0 $1,497
President, CFO, 12/31/00 $131,483 0 $1,200 40,000 $1,361
Treasurer and Director 12/31/99 $118,917 0 $14,400 0 $1,917
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(1) On December 31, 1999, Fidelity changed its fiscal year-end from June 30 to
December 31. Figures for December 31, 1999 reflect amounts for the six
month ended December 31, 1999.
(2) While officers enjoy certain perquisites, such perquisites do not exceed
the lesser of $50,000 or 10% of such officer's salary and bonus and are not
required to be disclosed by applicable rules of the SEC.
(3) Consists of Directors' fees paid to Mr. Neel for the fiscal years
indicated. Effective January 1, 2000, Mr. Neel, an employee of Fidelity, no
longer receives Directors' fees. Directors fees paid in January 2000 were
earned in December 1999 but paid in January 2000.
(4) Consists of contributions by Fidelity under Fidelity's Retirement Savings
401(k) Plan.
1993 Directors' Stock Option Plan
The 1993 Directors' Stock Option Plan ("Directors' Plan") which provides
for the grant of non-qualified stock options to individuals who are directors of
Fidelity or any of its subsidiaries to acquire shares of common stock of
Fidelity for a price of not less than $2 above the average of the high and low
bid quotations as reported by NASDAQ for the common stock of Fidelity for the
five trading days immediately preceding the date the option is granted. As of
February 28, 2002 there were options for 143,573 shares outstanding.
1995 Key Employees' Stock Option Plan
The Key Employees' Plan provides for the grant of incentive stock options
and non-qualified stock options to acquire shares of common stock of Fidelity
for a price of not less than the fair market value of the share on the date
which the option is granted. A total of 236,500 shares were reserved for
issuance under the Key Employees Plan. The option price per share for each
incentive stock option granted to an employee must not be less than the fair
market value of the share of common stock on the date the option is granted. The
option price per share for an incentive stock option granted to an employee
owning 10% or more of the common stock of Fidelity must not be less than 110% of
the fair market value of the share on the date that the option is granted. The
option price per share for non-qualified stock options will be determined by the
Administrative Committee of the Key Employees' Plan, but may not be less than
100% of the fair market value of a share of common stock on the date of the
grant of the option.
The Key Employees' Plan will expire on March 15, 2005, except outstanding
options will remain in effect until they have been exercised, terminated,
forfeited, or have expired. As such, options may be outstanding under the Key
Employees' Plan through March 15, 2015. As of February 28, 2002 there were
options for 186,643 shares outstanding.
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Options Grants in Last Fiscal Year
No options were granted to Mr. Neel in 2001.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-end Option Values
Table
The following table shows for the named executive officer the shares
covered by both exercisable and non-exercisable stock options as of December 31,
2001. Mr. Neel did not exercise any options during the last year.
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Number of Unexercised Stock Options Value of Unexercised In-the-Money Options
12/31/01 at 12/31/01
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Name Exercisable Unexercisable Exercisable Unexersiable
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7,500 (1) 0 N/A N/A
Donald R. Neel 5,923 (2) 0 N/A N/A
25,000 (3) 0 N/A N/A
6,000 9,000 $13,800 $20,700
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(1) The bid price of Fidelity's Common Stock at December 31, 2001 ($2.30 per
share) was less than the exercise price ($10.81 per share).
(2) The bid price of Fidelity's Common Stock at December 31, 2001 ($2.30 per
share) was less than the exercise price ($2.88) per share).
(3) The bid price of Fidelity's Common Stock at December 31, 2001 (2.30 per
share) was less than the exercise price ($4.00 per share).
Other Employee Benefit Plans
Pension Plan
------------
Fidelity currently participates in a defined benefit pension plan sponsored
by the Financial Institutions Retirement Fund, a non-profit, tax qualified,
tax-exempt pension plan and trust in which Federal Home Loan Banks, savings and
loan associations and similar institutions participate ("Pension Plan"). All
employees of Fidelity or its subsidiaries who work a minimum of 1,000 hours per
year are covered by the Pension Plan and become active participants upon
completion of one year of service and attainment of age 21. Participants are not
required or allowed to make contributions to the Pension Plan.
A participant in the Pension Plan is entitled to receive benefits based
upon years of service for Fidelity or its subsidiaries and a percentage of the
individual's career average salary, without deduction for Social Security
benefits. For purposes of computing benefits, "salary" includes an employee's
regular base salary or wage inclusive of bonuses and overtime but is exclusive
of special payments such as fees, deferred compensation, severance payments and
contributions by Fidelity to the Pension Plan.
Participants become fully vested in their benefits after completion of five
(5) years of service. Upon attaining age sixty-five (65), participants become
one hundred percent (100%) vested in their benefits provided by Fidelity under
the Pension Plan, regardless of years of service. Benefits are payable at normal
retirement age (65). The Pension Plan also contains provisions for the payment
of benefits on early retirement, late retirement or death of a participant.
The regular benefit under the Pension Plan to be paid on a participant's
retirement is a monthly pension for the life of a participant with a minimum
guaranteed benefit. The Pension Plan provides that married participants will
receive the regular retirement benefit in the form of an actuarially equivalent
joint and survivor annuity.
9
Optional forms of payment are available to all participants; however, married
participants must obtain written spousal consent to the distribution of benefits
in a form other than a joint and survivor annuity.
Contributions of $52,000 were made to the Pension Plan by Fidelity for the
plan year ended June 30, 2001.
The following table shows estimated annual benefits payable at normal
retirement to persons in specified remuneration classifications. The benefit
amounts presented in the totals are annual pension amounts for the life of the
participant, with a minimum guaranteed benefit for ten (10) years, for a
participant at normal retirement (age 65) with the years of service set forth
below with no deduction for Social Security or other offset amounts. The maximum
compensation which may be taken into account for any purpose under the Pension
Plan is limited by the Internal Revenue Service to $170,000 for 2001. As of
December 31, 2001, Donald R. Neel had eight and one-half years of service under
the Pension Plan.
Annual Benefit of Normal Retirement Years of Service
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Career Average Salary 10 15 20 25 30 35 40
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$50,000 $7,500 $11,250 $15,000 $18,750 $22,500 $26,250 $30,000
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$75,000 $11,250 $16,875 $22,500 $28,125 $33,750 $39,375 $45,000
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$100,000 $15,000 $22,500 $30,000 $37,500 $45,000 $52,500 $60,000
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$125,000 $18,750 $28,125 $37,500 $46,875 $56,250 $65,625 $75,000
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$150,000 $22,500 $33,750 $45,000 $56,250 $67,500 $78,750 $90,000
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Retirement Savings Plan.
-----------------------
In 1994 Fidelity adopted a defined contribution plan under Internal Revenue
Code Section 401(k) in which substantially all employees may participate. Under
this plan, employees may contribute up to 15% of pay, and contributions up to 6%
are supplemented by Fidelity contributions. Fidelity contributions are made at
the rate of 25 cents for each dollar contributed by the participant.
Participants may elect to have all or a portion of their contributions made on a
tax-deferred basis pursuant to provisions in the plan meeting the requirements
of Section 401(k) of the Internal Revenue Code. Fidelity's expense for the plan
was $16,000 for the years ended December 31, 2001 and 2000.
Compensation of Directors
The Directors of Fidelity and United were compensated for their services in
each capacity in the amount of $200 for each company Board served per month in
the amount of $400 or $4,800 per year. The five Directors of United for the
twelve months ended December 31, 2001 were also Directors of Fidelity. Executive
Committee members receive an additional $100 per month for their services. The
maximum compensation received by any Director for his or her service on the
Board was $6,000 for the year ended December 31, 2001. Effective January 1,
2000, Directors who are also salaried employees receive no director fees.
Employment Contracts
Mr. Neel entered into an Employment Agreement with Fidelity in May 2000.
The term of the Employment Agreement is 3 years, which may be extended annually
for successive 1 year periods. Effective May 19, 2000 Mr. Neel earned an annual
base salary equal to $140,000, subject to any increases which may be approved by
the Board of Directors. In addition, Mr. Neel was granted options to purchase
25,000 shares, at an option price of $4.00 per share. If during the one year
period following a prospective change in control, as defined in the Employment
Agreement, he is terminated for any reason other than cause, disability,
retirement or death, or if he resigns due to a material breach of the Employment
Agreement by Fidelity, he is entitled to an amount equal to 2.99 times his
average annual base salary and bonus for the previous five (5) years. In
addition, Fidelity must maintain for three
10
years following termination all employee welfare plans and programs in which he
was entitled to participate prior to termination, and reimburse him for the cost
of obtaining such benefits for the first 24 months following termination. If Mr.
Neel is terminated for any reason other than cause, disability, retirement or
death, or if he resigns due to a material breach of the Employment Agreement by
Fidelity, and such termination or resignation does not follow a change in
control, he is entitled to an amount equal to his base salary during the
remaining term of the Employment Agreement. In addition, Fidelity must maintain
for the remainder of the term of the Employment Agreement all employee welfare
plans and programs in which he was entitled to participate prior to termination,
and reimburse him for the cost of obtaining such benefits. No payments may be
made pursuant to the Employment Agreement if the payments would, among other
things, be considered by a federal or state regulatory authority having
jurisdiction over Fidelity an unsafe or unsound practice. The Employment
Agreement also provides a 3-year covenant not to compete and covenants regarding
confidentiality.
Security Ownership of Management
The following table sets forth certain information as of February 28, 2002,
with respect to the common stock of Fidelity beneficially owned by each Director
of Fidelity and by all executive officers and directors as a group.
- --------------------------------------------------------------------------------------------
Name Number of Shares Percent of Class (1)
Beneficially Owned
- --------------------------------------------------------------------------------------------
William R. Baugh (2) 30,000 0.5%
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Bruce A. Cordingley (3)
Gerald K. Pedigo (3) 4,638,479 58.5%
Phillip J. Stoffregen (3)
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Paul E. Becker 1,828 0.03%
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Jack Cunningham (4) 52,974 0.9%
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Donald R. Neel (5) 119,854 2.0%
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Barry A. Schnakenburg (6) 229,456 3.8%
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All Executive Officers and Directors as a Group 5,072,621 63.2%
(8 Persons)
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(1) The information contained in this column is based upon information
furnished to Fidelity as of February 28, 2002, by the individuals named
above. The nature of beneficial ownership for shares shown in this column
represents sole voting and investment power unless otherwise noted. At
February 28, 2002, Fidelity had 5,987,009 shares of common stock
outstanding.
(2) Includes 28,030 shares beneficially owned by Mr. Baugh. Also includes 1,970
shares which Mr. Baugh has the right to acquire pursuant to the exercise of
stock options granted under the 1993 Directors' Stock Option Plan.
(3) Includes 2,239,787 shares held by Pedcor Holdings, LLC, of which Mr.
Cordingley is the President; 299,158 shares held by Pedcor Bancorp, of
which Mr. Cordingley is the President and CEO; 6,895 shares held by Denise
Cordingley, the wife of Mr. Cordingley, 127,957 shares held by Gerald
Pedigo and 10,000 shares held by Phil Stoffregen, who together with Mr.
Cordingley, has filed a schedule 13D as a "group" under Section 13(d)(3) of
the Securities Exchange Act of 1934. The total also includes 46,516 shares,
4,800 shares, and 6,600 shares which Mr. Cordingley, Gerald Pedigo, and
Phillip Stoffregen, respectively, have the right to acquire pursuant to the
exercise of stock options granted under Fidelity's 1993 Directors' Stock
Options Plan; 8,585 shares which Mr. Cordingley, Pedcor Investments, and
Denise Cordingley are entitled to purchase upon exercise of 31 warrants
acquired pursuant to the 1994 Rights Offering; and 1,872,659 shares which
Pedcor Holdings, LLC, Pedcor Bancorp or their permitted assigns have the
right to purchase, base upon the option from Fidelity to acquire such
shares.
11
(4) Includes 9,744 shares held in the name of Mr. Cunningham's wife and 23,674
shares which Mr. Cunningham has the right to acquire pursuant to the
exercise of stock options granted under Fidelity's 1993 Directors' Stock
Option Plan.
(5) Includes 7,884 shares owned jointly with his spouse, Jamie Neel, 24,642
shares held in Mrs. Neel's IRA, and 33,905 shares held in Mr. Neel's IRA.
Also includes 53,423 shares which Mr. Neel has the right to acquire
pursuant to the exercise of the stock options granted under Fidelity's 1995
Key Employees' Stock Option Plan.
(6) Includes 5,775 shares held by the spouse of Mr. Schnakenburg, 24,948 shares
held by U.S. Industries Group, Inc., 63,263 shares held by Barry, Inc. and
40,378 shares held by BOAH Associates. The total also includes 20,097
shares which Mr. Schnakenburg has the right to acquire through the exercise
of stock options granted under Fidelity's 1993 Directors' Stock Option
Plan. The total also includes 27,887 shares of Fidelity pursuant to which
Mr. Schnakenburg may exercise voting and investment power pursuant to a
Power of Attorney.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Fidelity's directors and
executive officers, and persons who own more than 10% of a registered class of
Fidelity's equity securities to file with the SEC initial reports of ownership
and reports of changes in ownership of Fidelity common stock and other equity
securities of Fidelity. Officers, directors and greater than 10% shareholders
are required by SEC regulations to furnish Fidelity with copies of all Section
16(a) forms they file.
ITEM 2. RATIFICATION OF INDEPENDENT AUDITORS OF FIDELITY
--------------------------------------------------------
The Board of Directors of Fidelity proposes that the shareholders ratify
the selection of the firm of BKD, LLP ("BKD") Certified Public Accountants, as
independent public accounts for Fidelity for the year ending December 31, 2002,
subject to acceptance of the engagement by BKD. Representatives of BKD are
expected to be present at the meeting and available to respond to appropriate
questions. They will be given an opportunity to make a statement if they desire
to do so. BKD (formerly Olive LLP) has been the independent auditors of Fidelity
since 1982. In the event the selection of BKD is not ratified by the
shareholders, the Board of Directors will consider selection of other
independent public accountants for the year ending December 31, 2002.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has:
1. Reviewed and discussed the audited financial statements with management;
2. Discussed with the independent auditors the matters required to be
discussed by SAS 61;
3. Received the written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1, and has
discussed with the independent auditors the auditors' independence.
4. Based on the review and discussions above, recommended to the Board of
Directors that the audited financial statements be included in Fidelity's
Annual Report on Form 10-K for the last fiscal year for filing with the
Securities and Exchange Commission.
12
The Board of Directors has determined that the members of the Audit
Committee are "independent", as defined in the listing standards of the National
Association of Securities Dealers. The Audit Committee has adopted a written
charter, a copy of which is available upon request.
Members of the Audit Committee:
Barry A. Schnakenburg (Audit Committee Chairman)
William R. Baugh
Paul E. Becker
AUDIT FEES
For the fiscal year ended December 31, 2001, Fidelity's principal
accounting firm, BKD, Certified Public Accountants, billed Fidelity $40,000 for
professional services rendered for the audit of Fidelity's financial statements
for the fiscal year ended December 31, 2001 and for the review of Fidelity's
financial statements included in its Forms 10-Q for 2001. BKD, LLP also billed
Fidelity during the last fiscal year $82,632 for loan review services, tax
preparation, review of filings filed with the Securities and Exchange Commission
and other non-audit services (collectively referred to as "All Other Fees").
The Audit Committee has considered whether, and determined that, the
provision of the services covered for the fees billed under "All Other Fees" is
compatible with maintaining the principal accountant's independence.
SHAREHOLDERS PROPOSALS
Any proposal which a shareholder intends to bring before the next Annual
Meeting of Shareholders to be held in 2003 must be received by Fidelity no later
than November 29, 2002 for inclusion in next year's proxy statement. Such
proposals should be addressed to Jack Cunningham, Chairman of Fidelity, at 18 NW
Fourth Street, PO Box 1347, Evansville, Indiana 47706-1347. If notice of any
other shareholder proposal intended to be presented at the Annual Meeting of
Shareholders to be held in 2003 is not received by Fidelity on or before
February 12, 2003, the proxies will have discretionary authority to vote on the
matter. All proposals and notifications should be addressed to the Chairman of
Fidelity.
ADDITIONAL INFORMATION
The 2001 Annual Report to Shareholders, containing financial statements for
the year ended December 31, 2001, and other information concerning the
operations of Fidelity is enclosed herewith, but is not to be regarded as proxy
soliciting material.
Upon written request, Fidelity Federal Bancorp will provide without charge
to each shareholder a copy of Fidelity's annual report on Form 10-K which is
required to be filed with the Securities and Exchange Commission for the year
ended December 31, 2001. All requests should be addressed to:
Debbie Fritz, Shareholder Relations
Fidelity Federal Bancorp
18 NW Fourth Street, PO Box 1347
Evansville, Indiana 47706-1347
OTHER MATTERS
The Annual Meeting is called for the purposes set forth in the Notice. The
Board of Directors of Fidelity does not know of any matters for action by
shareholders at the Annual Meeting other than the matters described in the
Notice. However, the enclosed Proxy will confer discretionary authority with
respect to matters which are not known to the Board of Directors at the time of
the printing hereof and which may properly come before the Annual Meeting. It is
the intention of the persons named in the Proxy to vote pursuant to the Proxy
with respect to such matters in accordance with the recommendations of the Board
of Directors.
13
[FIDELITY FEDERAL BANCORP]
Annual Meeting of Shareholders
April 30, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF FIDELITY FEDERAL BANCORP
The undersigned shareholder of Fidelity Federal Bancorp, an Indiana
corporation ("Fidelity"), hereby appoints Mark A. Isaac and Thomas D. Wuerth, or
either of them, with full power to act alone, the true and lawful
attorney-in-fact and proxy of the undersigned, with the full power of
substitution and revocation, and hereby authorizes him to represent and to vote
all shares of Common Stock of Fidelity held of record on February 28, 2002,
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of Fidelity to be held at the Sheraton Keystone Crossing, 8787 Keystone
Crossing, Indianapolis, Indiana on April 30, 2002, at 10:00 a.m., local time,
and at any adjournment thereof, with all powers the undersigned would possess if
personally present as follows:
Please specify choices by clearly marking the appropriate line.
ITEM 1. Election of Directors
---------------------
William R. Baugh Paul E. Becker Bruce A. Cordingley
Donald R. Neel Gerald K. Pedigo Barry A. Schnakenburg
Jack Cunningham
Phillip J. Stoffregen
FOR the nominees listed above (except vote withheld from the
----- following nominees, if any).
--------------------------------------------------------------
WITHHOLD AUTHORITY to vote for the nominees listed above
-----
ITEM 2. Ratification of Accountants
---------------------------
Ratify the selection of BKD LLP, as independent public accountants for
Fidelity for the year ending December 31, 2002.
FOR AGAINST ABSTAIN
------ ------ ------
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE MATTERS LISTED
ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears hereon. If signing as a representative,
please include capacity.
- ------------------------------------------
Signature of Shareholder
Dated: _____________________________, 2002
Tax Identification Number: _______________
- ------------------------------------------
Signature of Shareholder (if jointly held)
Dated: _____________________________, 2002
Tax Identification Number: _______________