SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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)
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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 Rule O-11(c)(1)(ii), 14a-6(i)(l), 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 O-11.
1) Title of each class of securities to which transaction applies:
Not applicable
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2) Aggregate number of securities to which transaction applies:
Not applicable
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule O-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
Not applicable
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4) Proposed maximum aggregate value of transaction:
Not applicable
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5) Total fee paid:
Not applicable
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[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-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: Not applicable
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2) Form Schedule or Registration Statement No.: Not applicable
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3) Filing Party: Not applicable
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4) Date Filed: Not applicable
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[FIDELITY FEDERAL BANCORP LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held April 24, 2003
Notice is hereby given that the Annual Meeting of Shareholders of
Fidelity Federal Bancorp will be held on April 24, 2003, at 9:00 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) 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, 2003; 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 14, 2003, 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 24, 2003
Important--Please mail your proxy promptly.
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You are 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 24, 2003.
TABLE OF CONTENTS
Page
INTRODUCTORY STATEMENT......................................................1
Proposals Presented.........................................................1
Voting Rights...............................................................1
Beneficial Ownership........................................................2
Proxies.....................................................................3
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................................6
Five Year Total Shareholder Return..........................................6
Compensation Committee Report...............................................6
Compensation Committee Insider Participation................................7
Summary Compensation Table..................................................8
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...............................................10
Annual Benefit of Normal Retirement Years of Service.......................11
Compensation of Directors..................................................11
Employment Contracts.......................................................12
Equity Compensation Plan Information.......................................12
Security Ownership of Management...........................................13
Section 16(a) Beneficial Ownership Reporting Compliance....................14
RATIFICATION OF INDEPENDENT AUDITORS OF FIDELITY...........................14
REPORT OF THE AUDIT COMMITTEE..............................................14
AUDIT FEES.................................................................15
SHAREHOLDERS PROPOSALS.....................................................15
ADDITIONAL INFORMATION.....................................................15
OTHER MATTERS..............................................................15
[FIDELITY FEDERAL BANCORP LETTERHEAD]
PROXY STATEMENT
for the
Annual Meeting of Shareholders
to be held on April 24, 2003
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 24, 2003, at 9:00 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, 2003.
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 March 24, 2003.
Voting Rights
Only holders of shares of common stock of Fidelity of record at the
close of business on February 14, 2003 (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 6,840,883 shares of common stock of Fidelity issued and
outstanding. Such shares were held of record by approximately 445 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 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
1
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 14, 2003 by the only
shareholders 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 7,019,063 (2) 67.02%
Gerald K. Pedigo
Phillip J. Stoffregen
8888 Keystone Crossing, Suite 900
Indianapolis, IN 46240
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M. Brian Davis
7731 Newburgh Road 788,901 (3) 11.30%
Evansville, IN 47715
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Wellington Management Company, LLP 413,565 6.05%
75 State Street
Boston, MA 02109
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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 14, 2003, 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) This amount represents shares beneficially owned by Messrs. Cordingley,
Pedigo and Stoffregen and Pedcor Holdings, LLC, and Pedcor Bancorp,
which have filed a Schedule 13D with the Securities and Exchange
Commission as a "group." Each of these individuals and entities have
expressly disclaimed beneficial ownership with respect to shares of
common stock covered by the Schedule 13D not owned by him or it of
record. These shares consist of (i) 15,580 shares held directly by Mr.
Cordingley; 6,835 shares held directly by Mr. Cordingley's wife, Denise
Cordingley; 227,957 shares owned directly by Mr. Pedigo; and 10,000
shares owned directly by Mr. Stoffregen; (ii) 8,587 shares which Mr.
Cordingley has the right to acquire upon exercise of warrants acquired
pursuant to Fidelity's 1994 Rights Offering; 56,516 shares which Mr.
Cordingley has the right to acquire upon exercise of stock options
granted under Fidelity's 1993 Director's Stock Option Plan; 9,800
shares which Mr. Pedigo has the right to acquire upon exercise of stock
options granted under Fidelity's 1993 Director's Stock Option Plan; and
11,600 shares which Mr. Stoffregen has the right to acquire pursuant to
stock options granted from Fidelity's 1993 Director's Stock Option
Plan. This amount also includes (i) 311,658 shares owned by Pedcor
Bancorp (of which Mr. Cordingley is the President and Chief Executive
Officer and 46.0% owner and Mr. Pedigo is the Chairman and 46% owner);
(ii) 2,814,958 shares owned by Pedcor Holdings, LLC (of which Mr.
Cordingley is the President and 34.31% owner and Mr. Pedigo is the
Chairman and 34.31% owner); (iii) 3,134,287 shares which Pedcor
Holdings, LLC, has the right to acquire upon exercise of an option
granted by Fidelity pursuant to the terms of the Amended and Restated
Stock Purchase Agreement effective January 21, 2000 approved by
shareholders on May 19, 2000 which allows Pedcor Holdings, LLC to
acquire up to approximately $4,388,002 worth of Fidelity's common
stock; and (iv) 386,619 shares and 24,666 shares which Pedcor Holdings,
LLC and Pedcor Bancorp, respectively, have the right to acquire upon
exercise of warrants acquired pursuant to Fidelity's 2002 Rights
Offering.
2
(3) Includes 139,916 shares which Mr. Davis has the right to acquire
pursuant to the exercise of stock options.
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 "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 2004 Annual Meeting of Shareholders and until their successors are
duly elected and qualified.
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 14, 2003. 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, 82 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.
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PAUL E. BECKER
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Mr. Becker, 44 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 advanced telephone systems. Mr.
Becker joined the Board in 2001.
BRUCE A. CORDINGLEY
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Mr. Cordingley, 56 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.
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, 72 years of age, is a Director of Fidelity and serves as
Chairman of Fidelity and United since April 1998. Mr. Cunningham 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 has been a Director of United
since 1985 and an officer of United since 1974.
DONALD R. NEEL
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Mr. Neel, 39 years of age, is a Director of Fidelity and also serves as its
President and CEO. He previously served as Fidelity's Chief Financial Officer
from 1993 to September 2002. Mr. Neel has served as President since October 2001
and CEO since October 2002. 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, 65 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 he became Chairman of Pedcor Bancorp, the holding
company of International City Bank, Long Beach, California. He is also a
Director of International City Bank, N.A.
BARRY A. SCHNAKENBURG
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Mr. Schnakenburg, 55 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 11 years. U.S. Industries Group, Inc.
is a building contractor located in Evansville, Indiana.
PHILLIP J. STOFFREGEN
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Mr. Stoffregen, 44 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.
As discussed in the Form 8-K filed with the SEC on February 20, 2003,
on December 27, 2002 Fidelity and United completed the sale to Pedcor Funding
Corporation for cash in the amount of approximately $1.7 million of the assets
connected to their affordable housing activities which began in the mid-1990's.
The assets consisted of the stock of Village Housing Corporation (a wholly-owned
subsidiary of United), the stock of Village Affordable Housing Corporation (a
wholly-owned subsidiary of Fidelity), an interest rate swap, and notes from
affordable housing limited partnerships in which Village Housing Corporation is
the general partner. The purchaser, Pedcor Funding Corporation, is a company
controlled by Bruce A. Cordingley, Gerald K. Pedigo, and Phillip J. Stoffregen,
directors of Fidelity and members of a group which beneficially owns, including
stock options and warrants, approximately 67% of Fidelity's issued and
outstanding stock. Messrs. Cordingley, Pedigo, and Stoffregen did not
participate in either the discussion or the vote by the boards of directors of
Fidelity and United regarding the sale. The sale was unanimously approved by all
other members of the respective Boards of Directors of Fidelity and United and
was completed following receipt of all necessary regulatory approvals and a
fairness opinion. Fidelity determined to pursue the sale of these assets in
order to further focus on its community banking activities. It also determined
that the elimination of the contingent liabilities associated with the ownership
of the affordable housing general partnerships interests would improve its
overall risk profile. During 2002, upon completion of a bidding process, Pedcor
Funding Corporation also purchased from Fidelity for $300,000 a second mortgage
note payable by a real estate partnership, which Fidelity had previously charged
off. Payments on the outstanding note are required only in the event that the
debtor partnership generates positive cash flow after servicing first mortgage
debt outstanding and paying expenses. The purchase price of the note was
$560,000.
Board Meetings
Fidelity had four regularly scheduled Board of Directors meetings
during the year ended December 31, 2002. During 2002 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, 2002. 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 in accordance with its written charter adopted in June
2000, is to review audit reports, loan review reports, and related matters to
ensure effective compliance with regulatory and internal policies and
procedures, met five times during the year ended December 31, 2002. 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.
5
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 once during the year ended December 31, 2002.
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, 1998, in each of Fidelity, the NASDAQ Market Index, and the Peer
Group Index.
[PERFORMANCE CHART APPEARS HERE]
Assumes $100 Invested on January 1, 1998
Assumes Dividends Reinvested
Year Ended December 31, 2002
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1997 1998 1999 2000 2001 2002
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Fidelity Federal 100.00 33.28 12.33 13.56 24.06 14.79
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SIC Code Index 100.00 84.96 72.29 112.03 121.92 146.55
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NASDAQ
Market Index 100.00 141.04 248.76 156.35 124.64 86.94
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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
6
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, 2002 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.
-----------
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.
Other Compensation Plans.
------------------------
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 2002.
Mr. Neel's 2002 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 has served as CEO of Fidelity from October
2002 to present. The Executive Committee of the Board served in a
non-compensated capacity as CEO during 2002 prior to the appointment of Mr. Neel
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.
7
Summary Compensation Table
The following table sets forth, for the 12 months ended December 31,
2002, 2001, and 2000, 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, 2002 and the executive officers of Fidelity whose salary and
bonus exceeded $100,000 during the year ended December 31, 2002.
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Annual Compensation Long-Term Compensation
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Other Annual Securities All Other
Name and Principal Year Salary Bonus Compensation Underlying Compensation
Position (1)(2) Options/SARs (3)
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Donald R. Neel, 12/31/02 $180,318 0 0 25,000 $1,804
President, CEO 12/31/01 $168,727 0 0 0 $1,497
and Director 12/31/00 $131,483 0 $1,200 40,000 $1,361
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United Fidelity Bank, 12/31/02 $107,308 0 0 15,000 $ 467
Thomas D. Wuerth, 12/31/01 $ 99,949 0 0 0 $1,347
Senior Vice President, 12/31/00 $82,274 0 0 10,000 $ 808
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(1) 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.
(2) Consists of Directors' fees paid to Mr. Neel for the fiscal years
indicated. After January 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.
(3) 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 14, 2003 there were options for 198,573 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,
8
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 14, 2003
there were options for 183,423 shares outstanding.
Options Grants in Last Fiscal Year
The following table provides details regarding stock options granted to Mr. Neel
and Mr. Wuerth in 2002. In addition, in accordance with the rules of the
Securities and Exchange Commission, there are shown the hypothetical gains or
"options spreads" that would exist for respective options. These gains are based
on assumed rates of annual compound stock price appreciation of five percent
(5%) and ten percent (10%) from the date the options were granted over the full
option term. Gains are reported net of the option exercise price, but before any
effect of taxes. In assessing these values, it should be kept in mind that no
matter what value is placed on a stock option on the date of grant, its ultimate
value will be dependent on the market value of Fidelity's stock at a future
date, and that value would depend on the efforts of such executive to foster the
future success of Fidelity for the benefit of all shareholders. The amounts
reflected in the table may not necessarily be achieved.
- ----------------------------------------------------------------------------------------------------
Percent of
total
Number of options Market
Shares granted to Price on Potential Realizable Value
Underlying employees Exercise or Date of at Assumed Rates of Stock
Options in Fiscal Base Price Grant Expiration Price Appreciation for
Name Granted Year (%) ($/Share) ($/Share) Date Option Term
- ----------------------------------------------------------------------------------------------------
5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------
Donald R. Neel 25,000 56.2 3.17 3.17 5/31/12 49,840 126,304
- ----------------------------------------------------------------------------------------------------
Thomas D. Wuerth 15,000 33.7 3.17 3.17 5/31/12 29,904 75,782
- ----------------------------------------------------------------------------------------------------
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,
2002. Neither Mr. Neel, nor Mr. Wuerth exercised any options during the last
year.
- ---------------------------------------------------------------------------------------------------
Number of Unexercised Stock Options Value of Unexercised In-the-Money Options
12/31/02 at 12/31/02
- ---------------------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexersiable
- ---------------------------------------------------------------------------------------------------
Donald R. Neel 7,500 0 N/A (1) N/A
- ---------------------------------------------------------------------------------------------------
5,923 0 N/A (2) N/A
- ---------------------------------------------------------------------------------------------------
25,000 0 N/A (3) N/A
- ---------------------------------------------------------------------------------------------------
9,000 6,000 N/A (4) N/A
- ---------------------------------------------------------------------------------------------------
5,000 20,000 N/A (5) N/A
- ---------------------------------------------------------------------------------------------------
9
(1) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($10.81 per share).
(2) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($2.88 per share).
(3) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($4.00 per share).
(4) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($1.53 per share).
(5) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($3.17 per share).
- -----------------------------------------------------------------------------------------------------
Number of Unexercised Stock Options Value of Unexercised In-the-Money Options
12/31/02 at 12/31/02
- -----------------------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexersiable
- -----------------------------------------------------------------------------------------------------
Thomas D. Wuerth 4,000 1,000 N/A (1) N/A
- -----------------------------------------------------------------------------------------------------
6,000 4,000 N/A (2) N/A
- -----------------------------------------------------------------------------------------------------
3,000 12,000 N/A (3) N/A
- -----------------------------------------------------------------------------------------------------
1) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($3.69 per share).
2) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($1.53 per share).
3) The bid price of Fidelity's Common Stock at December 31, 2002 ($1.40
per share) was less than the exercise price ($3.17 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 annual 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 (age
10
65). The Pension Plan also contains provisions for the payment of benefits on
the 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
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. Optional forms of payments 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 $110,000 were made to the Pension Plan by Fidelity for
the plan year ended June 30, 2002.
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 of 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 Code to $200,000 for 2002. As of
December 31, 2002, Donald R. Neel had nine and one-half years of service and
Thomas D. Wuerth had two and one-half years of service under the Pension Plan.
Annual Benefit of Normal Retirement Years of Service
- --------------------------------------------------------------------------------------------------------------------
Career Average 10 years 15 years 20 years 25 years 30 years 35 years 40 years
Salary
- --------------------------------------------------------------------------------------------------------------------
$ 100,000 5,000 7,500 10,000 12,500 15,000 17,500 20,000
- --------------------------------------------------------------------------------------------------------------------
$ 125,000 6,250 9,375 12,500 15,625 18,750 21,875 25,000
- --------------------------------------------------------------------------------------------------------------------
$ 150,000 7,500 11,250 15,000 18,750 22,500 26,250 30,000
- --------------------------------------------------------------------------------------------------------------------
$ 175,000 8,750 13,125 17,500 21,875 26,250 30,625 35,000
- --------------------------------------------------------------------------------------------------------------------
$200,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
- --------------------------------------------------------------------------------------------------------------------
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 $21,000 for the year ended December 31,
2002.
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, 2002 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, 2002. Effective
January 1, 2000 Directors who are also salaried employees receive no director
fees.
11
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. Mr. Neel's Employment Agreement was
extended another year to May 2004. 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 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 Agreements also provide a 3-year
covenant not to compete and covenants regarding confidentiality.
Equity Compensation Plan Information
The following table provides information on all existing Stock Option Plans of
Fidelity as of December 31, 2002.
- ----------------------------------------------------------------------------------------------------------------
Plan category Number of securities to be Weighted average exercise Number of securities
issued upon exercise of price of outstanding remaining available for
outstanding options, options, warrants and future issuance
warrants and rights rights
(a) (b) (c)
- ----------------------------------------------------------------------------------------------------------------
Equity compensation plans
approved by security holders:
- ----------------------------------------------------------------------------------------------------------------
Directors Plan 198,573 $6.29 35,206
- ----------------------------------------------------------------------------------------------------------------
1995 Key Employee Plan 183,423 3.50 53,077
- ----------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders: -0- N/A -0-
- ----------------------------------------------------------------------------------------------------------------
Total 381,996 $4.95 87,876
- ----------------------------------------------------------------------------------------------------------------
12
Security Ownership of Management
The following table sets forth certain information as of February 14,
2003, 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) 35,000 0.51%
- --------------------------------------------------------------------------------------------------
Bruce A. Cordingley (3)
Gerald K. Pedigo (3) 7,019,063 67.02%
Phillip J. Stoffregen (3)
- --------------------------------------------------------------------------------------------------
Paul E. Becker (4) 13,036 0.19%
- --------------------------------------------------------------------------------------------------
Jack Cunningham (5) 64,497 0.94%
- --------------------------------------------------------------------------------------------------
Donald R. Neel (6) 144,854 2.09%
- --------------------------------------------------------------------------------------------------
Barry A. Schnakenburg (7) 241,986 3.52%
- --------------------------------------------------------------------------------------------------
All Executive Officers and Directors as a Group
(9 Persons) 7,536,493 70.83%
- --------------------------------------------------------------------------------------------------
(1) The information contained in this column is based upon information
furnished to Fidelity as of January 31, 2003, 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 14, 2003, Fidelity had 6,840,883 shares of common
stock outstanding.
(2) Includes 28,030 shares beneficially owned by Mr. Baugh. Also includes
6,970 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) This amount represents shares beneficially owned by Messrs. Cordingley,
Pedigo and Stoffregen and Pedcor Holdings, LLC, and Pedcor Bancorp,
which have filed a Schedule 13D with the Securities and Exchange
Commission as a "group." Each of these individuals and entities have
expressly disclaimed beneficial ownership with respect to shares of
common stock covered by the Schedule 13D not owned by him or it of
record. These shares consist of (i) 15,580 shares held directly by Mr.
Cordingley; 6,835 shares held directly by Mr. Cordingley's wife, Denise
Cordingley; 227,957 shares owned directly by Mr. Pedigo; and 10,000
shares owned directly by Mr. Stoffregen; (ii) 8,587 shares which Mr.
Cordingley has the right to acquire upon exercise of warrants acquired
pursuant to Fidelity's 1994 Rights Offering; 56,516 shares which Mr.
Cordingley has the right to acquire upon exercise of stock options
granted under Fidelity's 1993 Director's Stock Option Plan; 9,800
shares which Mr. Pedigo has the right to acquire upon exercise of stock
options granted under Fidelity's 1993 Director's Stock Option Plan; and
11,600 shares which Mr. Stoffregen has the right to acquire pursuant to
stock options granted from Fidelity's 1993 Director's Stock Option
Plan. This amount also includes (i) 311,658 shares owned by Pedcor
Bancorp (of which Mr. Cordingley is the President and Chief Executive
Officer and 46.0% owner and Mr. Pedigo is the Chairman and 46% owner);
(ii) 2,814,958 shares owned by Pedcor Holdings, LLC (of which Mr.
Cordingley is the President and 34.31% owner and Mr. Pedigo is the
Chairman and 34.31% owner); (iii) 3,134,287 shares which Pedcor
Holdings, LLC, has the right to acquire upon exercise of an option
granted by Fidelity pursuant to the terms of the Amended and Restated
Stock Purchase Agreement effective January 21, 2000 approved by
shareholders on May 19, 2000 which allows Pedcor Holdings, LLC to
acquire up to approximately $4,388,002 worth of Fidelity's common
stock; and (iv) 386,619 shares and 24,666 shares which Pedcor Holdings,
LLC and Pedcor Bancorp, respectively, have the right to acquire upon
exercise of warrants acquired pursuant to Fidelity's 2002 Rights
Offering.
(4) Includes 10,000 shares which Mr. Becker has the right to acquire
pursuant to the exercise of stock options granted under Fidelity's 1993
Directors' Stock Option Plan.
13
(5) Includes 9,744 shares held in the name of Mr. Cunningham's wife and
33,675 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.
(6) Includes 7,884 shares owned jointly with his spouse, Jamie Neel, and
24,642 shares held in Mrs. Neel's IRA, and 33,905 shares held in Mr.
Neel's IRA. Also includes 78,423 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.
(7) 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 30,097 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 26,487 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. Based solely upon a review of Forms 3, 4 and 5 and
amendments thereto furnished to Fidelity, to the best knowledge of Fidelity
during its most recent fiscal year all officers, directors and greater than 10%
beneficial owners of Fidelity timely filed all reports required by Section 16(a)
of the Securities Exchange Act.
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, Certified Public Accountants, as
independent public accounts for Fidelity for the year ending December 31, 2003,
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, 2003.
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.
14
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, 2002, Fidelity's principal
accounting firm, BKD, Certified Public Accountants, billed Fidelity $31,600 for
professional services rendered for the audit of Fidelity's financial statements
for the fiscal year ended December 31, 2002 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 $68,776 for tax preparation, review of
filings filed with the Securities 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 2004 must be received by Fidelity
no later than November 25, 2003 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 2004 is not received by Fidelity on or before
February 8, 2004, 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 2002 Annual Report to Shareholders, containing financial statements
for the year ended December 31, 2002, 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, 2002. All requests should be addressed to:
Debbie Merritt, 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.
15
[FIDELITY FEDERAL BANCORP LETTERHEAD]
Annual Meeting of Shareholders
April 24, 2003
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 14, 2003,
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 24, 2003, at 9:00 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
Jack Cunningham
Donald R. Neel Gerald K. Pedigo Barry A. Schnakenburg
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, 2003.
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 Signature of Shareholder
(if jointly held)
Dated:_______________________, 2003 Dated:_______________________, 2003
Tax Identification Number:___________ Tax Identification Number:___________