As filed with the Securities and Exchange Commission on February 24, 2004
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 3 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FIDELITY FEDERAL BANCORP
(Exact name of registrant as specified in its charter)
INDIANA 35-1894432
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
18 N.W. Fourth Street, Evansville, Indiana 47706-1347
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Donald R. Neel, President Timothy M. Harden, Esq.
Fidelity Federal Bancorp John W. Tanselle, Esq.
18 N.W. Fourth Street Krieg DeVault LLP
P. O. Box 1347 One Indiana Square, Suite 2800
Evansville, Indiana 47706-1347 Indianapolis, Indiana 46204-2079
(812) 424-0921 (317) 636-4341
(Name, address, including zip code, (Copy to)
of agent for service)
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Approximate date of commencement of the proposed sale of the
securities to the public: As soon as practicable after the
effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
============================================================================================
Title of each class Amount Proposed maximum Proposed maximum Amount of
of securities to be offering price aggregate offering registration
to be registered registered per unit (1) price (1) fee
9% Senior
Subordinated Notes
due _________, 2009 $2,500,000 $1,000 $2,500,000 $202.25*
============================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
* Previously paid.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion February 24, 2004
Prospectus
FIDELITY FEDERAL BANCORP
----------------------------------
9.00% SENIOR SUBORDINATED NOTES DUE , 2009
----------------------------------
MATERIAL TERMS OF THE RIGHTS OFFERING
We are distributing subscription rights to persons who own our common
stock as of the close of business on to purchase $2,500,000
principal amount of our 9.00% unsecured senior subordinated notes due
. The subscription rights for the notes are exercisable beginning on
the date of this prospectus and will expire at 5:00 p.m., Central time, on
.
You will receive one basic subscription right, rounded down to the
nearest whole number, for every 3,847 shares of our common stock that you own
on the close of business on , , the record date. Each basic
subscription right will entitle you to purchase $1,000 principal amount of the
notes. To the extent that you do not have a sufficient amount of shares to
otherwise receive a basic subscription right, you will still receive one basic
subscription right to subscribe for the purchase of a note in the minimum
$1,000 principal issuance amount. The basic subscription right also includes
the right to over-subscribe, subject to availability and proration, for
additional notes if not all of the notes offered are purchased pursuant to the
basic subscription rights. Your subscription, once made, is irrevocable.
The directors, executive officers of Fidelity and their affiliates
currently beneficially own approximately 7,181,408 of our outstanding shares of
our common stock (not including stock options exercisable within 60 days) and
intend to purchase notes in the amount of at least $2.0 million. As a result,
we expect to receive subscriptions for at least $2.0 million of the $2.5
million principal amount of the notes being offered.
There is no minimum amount of notes that must be subscribed for as a
condition to accepting subscriptions and closing the offering. Interest will
accrue beginning on the date of our receipt of amounts submitted by you as
payment for the notes. However, if we cancel the offering, any money received
will be refunded promptly, without interest.
The amounts we receive as payment for the notes will not be deposited
into a segregated escrow account. There is no guarantee that we will have these
funds available to return to you. In this event, we expect to draw upon an
existing line of credit to borrow funds for this purpose.
MATERIAL TERMS OF THE NOTES
Interest on the senior notes accrues at the rate of 9.00% per year,
based upon a 360-day year, and is payable semi-annually, in arrears, in cash or
by check every and , with the first payment on , .
The notes will mature on , 2009. We have the option to redeem the notes in
whole or in part at any time prior to maturity with no redemption premium. The
redemption price will be equal to the principal amount of the note being
redeemed, plus accrued but unpaid interest. The notes are unsecured, senior
subordinated obligations of Fidelity Federal.
-------------------------------
Neither the notes nor the subscription amounts are savings or deposit
accounts or other obligations of United Fidelity Bank or any non-bank affiliate
of Fidelity and they are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.
-------------------------------
See "Risk Factors" beginning on page 7 to read about factors you should
consider before exercising your subscription privileges to purchase notes.
-------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is , 2004.
Table of Contents
Prospectus Summary...................................................................................................1
Questions and Answers About the Rights Offering.............................................................1
Fidelity Federal Bancorp....................................................................................6
Risk Factors.........................................................................................................7
Risk Factors Relating to the Rights Offering and the Notes..................................................7
We may not be able to pay interest on or repay the notes...........................................7
We may not be able to raise all the capital we need................................................8
There is no established market for the notes and they may be difficult to sell.....................8
Our secured and other unsecured debt and the liabilities of our operating
company may be effectively senior to the notes............................................8
Once you exercise your subscription rights, you may not revoke the exercise........................8
United Fidelity Bank is subject to the restrictions and conditions of a
Supervisory Agreement with the Office of Thrift Supervision...............................9
Risk Factors Related to Fidelity Federal....................................................................9
Because our business is only in Vanderburgh County, a downturn in the economy
in our market area may adversely affect our business......................................9
We must achieve sufficient earnings in order to realize our $6.0 million
deferred income tax receivable............................................................9
Our accomplishments are largely dependent upon the skill and experience of our
senior management team...................................................................10
The existence of controlling shareholders may limit the ability of other
shareholders to influence the outcome of matters requiring
stockholder approval, could discourage potential acquisitions of our
business by third parties, and could impact the price of our shares......................10
United Fidelity Bank's consumer loan concentration increases the risk of
defaults by our borrowers, which may result in increased expenses and
the need for additional capital..........................................................10
We may need additional funds for debt service, which could result in dilution
of your ownership position or result in additional interest expense......................10
Special Note Regarding Forward-Looking Statements...................................................................11
United Fidelity Bank is Subject to a Supervisory Agreement with the Office of Thrift Supervision....................11
Use of Proceeds.....................................................................................................12
We Do Not Anticipate Paying Dividends...............................................................................12
Ratio of Earnings to Fixed Charges..................................................................................13
Price Range of Common Stock.........................................................................................14
Capitalization......................................................................................................15
The Rights Offering.................................................................................................16
Material Federal Income Tax Considerations..........................................................................22
Description of the Notes............................................................................................23
Description of Capital Stock........................................................................................25
Plan of Distribution................................................................................................26
Legal Matters.......................................................................................................26
Experts ...........................................................................................................26
Where You Can Find More Information.................................................................................26
-------------------------------
Fidelity has not authorized any person to give you information that
differs from the information in this prospectus. You should rely solely on the
information contained in this prospectus. This prospectus is not an offer to
sell these securities, and we are not soliciting offers to buy these securities,
in any state where the offer or sale of these securities is not permitted. The
information in this prospectus is accurate only as of the date of this
prospectus, even if the prospectus is delivered to you after the prospectus
date, or you buy our common stock after the prospectus date.
Until , all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus.
TO CALIFORNIA RESIDENTS ONLY: The exemption afforded by Section 2104(h)
has been withheld by the Commissioner of Corporations.
PROSPECTUS SUMMARY
This section answers in summary form some questions you may have about
Fidelity Federal Bancorp and this rights offering and highlights some of the
information in this prospectus. Because this section is a summary, it does not
contain all of the information that you should consider before exercising your
subscription rights. You should read the entire prospectus carefully, including
the "Risk Factors" section and the documents listed under "Where You Can Find
More Information."
Questions and Answers About the Rights Offering
-----------------------------------------------
Q: Will Fidelity return money received from shareholders if it cancels the
rights offering?
A: If we cancel the rights offering, any money received from shareholders
will be refunded promptly, without interest. However, there is no
guarantee that we will have these funds available to return to
shareholders who have submitted payment for notes. In this event, we
expect to draw upon our existing $500,000 line of credit with CIB Bank.
As long as funds are available under our line of credit, we may draw
funds at any time and for any purpose we deem appropriate. However, we
are not required to hold this line of credit open in order to repay
subscribers.
Q: What is the rights offering?
A: The rights offering is an opportunity for you to purchase $1,000
principal amount notes for every 3,847 shares of Fidelity common stock
you own.
Q: Why are we engaging in a rights offering?
A: Because United Fidelity Bank is restricted in its ability to pay
dividends to us, we believe it is in our best interests to raise
additional capital. We have $1.8 million of senior subordinated debt
which matures in June 2005. We are undertaking this rights offering to
raise additional capital, without paying underwriting commissions and
expenses, for the purposes set forth under the following question
entitled "What will we do with the proceeds of the rights offering?".
Q: How many notes will directors and executive officers of Fidelity
purchase?
A: The directors, executive officers of Fidelity and their affiliates
currently beneficially own approximately 7,181,408 of our outstanding
shares of our common stock (not including stock options exercisable
within 60 days) and intend to purchase notes in the amount of at least
$2.0 million. As a result, we expect to receive subscriptions for at
least $2.0 million of the $2.5 million principal amount of the notes
being offered.
Q: How much money will Fidelity receive from the rights offering?
A: The gross proceeds from the rights offering will depend on the
principal amount of the notes purchased. If we sell all notes which may
be purchased upon exercise of the rights offered by this prospectus,
then we will receive proceeds of $2,500,000, before deducting expenses
payable by us, which are estimated to be approximately $36,250.
Q: What will we do with the proceeds of the rights offering?
1
A: We anticipate that we will use a portion of the proceeds to repay $1.0
million of the $1.8 million in senior subordinated debt currently
outstanding that matures in June 2005. We also anticipate that we will
contribute $1.0 million of capital to our subsidiary, United Fidelity
Bank. The remainder will be utilized to make interest payments on this
and other outstanding debt, and to fund the limited operations of
Fidelity. Although we expect to use the proceeds in the manner
discussed above, we reserve the right to use the proceeds in any manner
which we consider appropriate.
Q: What are the material terms of the notes?
A: The notes have an interest rate of 9.00% per annum beginning on
, , based upon a 360-day year, and mature on , 2009.
On at least 15 but not more than 60 days' notice, we have the option to
redeem the notes in whole or in part at any time prior to maturity. If
we redeem the notes in part, all principal payments on the notes will
be made pro rata to the holders of the notes based on the aggregate
outstanding principal balance of the notes to be redeemed.
Q: How did Fidelity arrive at the interest rate on the notes?
A: A special committee of our board of directors (excluding any control
directors) was established to determine the appropriate interest rate.
The special committee considered a variety of factors in determining
the interest rate, including the maturity date of the notes, the
financial condition of Fidelity and United Fidelity Bank, spreads to
treasury bonds for similarly rated companies, and the ability of
Fidelity to prepay at any time.
Q: What is a basic subscription right?
A: We are distributing to you, at no charge, one basic subscription right,
rounded down to the nearest whole number, for every 3,847 shares of
common stock that you owned on , the record date. Each basic
subscription right entitles you to purchase $1,000 principal amount of
the notes.
Q: What does it mean to exercise a basic subscription right?
A: When you "exercise" a subscription right, that means that you choose to
purchase the principal amount of the notes which that subscription
right entitles you to purchase. You may exercise any number of your
subscription rights, or you may choose not to exercise any subscription
right. The basic subscription right carries with it an
over-subscription privilege. You must, however, fully exercise your
basic subscription right if you wish to exercise your over-subscription
privileges. You cannot give or sell your subscription rights to anybody
else; only you can exercise them.
Q: What if I don't own enough shares to entitle me to a basic subscription
right?
A: If you do not own a sufficient number of shares to otherwise receive a
basic subscription right, you will still receive a basic subscription
right to allow you to purchase one note in the principal amount of
$1,000.
Q: What is the over-subscription privilege?
2
A: This privilege is available only if you fully exercise your basic
subscription privilege. We do not expect that all of our shareholders
will exercise all of their basic subscription rights. By extending
over-subscription privileges to our shareholders, we are providing for
the purchase of those notes which are not purchased through exercise of
basic subscription rights. The over-subscription privilege entitles
you, if you fully exercise your basic subscription right, to subscribe
for additional notes, in $1,000 increments, not acquired by other
holders of basic subscription rights. As described below, there are
limitations on your over-subscription privilege.
Q: What are the limitations on the over-subscription privilege?
A: We will issue up to $2,500,000 aggregate principal amount of the notes.
The principal amount of notes available for over-subscription
privileges will be $2,500,000 minus the aggregate principal amount of
the notes purchased upon exercise of all basic subscription rights.
If the principal amount of the notes available for sale pursuant to the
exercise of all over-subscription privileges is not sufficient to
satisfy in full all over-subscription privileges, the additional
principal amount of the notes that you will be entitled to purchase if
you exercise your over-subscription privilege will be limited.
In this situation, you will be entitled to purchase upon the exercise
of your over-subscription privilege a principal amount of the notes
equal to the product, rounded down to the nearest $1,000, of:
o the number of shares of our common stock owned by you on the
close of business on , divided by the total number of
shares of our common stock owned by all shareholders
exercising their over-subscription privileges to purchase
notes on the close of business on ; and
o the principal amount of notes available for sale pursuant to
the exercise of all over-subscription privileges.
For example, if we sell $2,000,000 principal amount of the notes
pursuant to the exercise of basic subscription rights, we then would
have remaining $500,000 principal amount of the notes available for
purchase by individuals exercising over-subscription privileges. If
individuals exercising over-subscription privileges subscribe for
$500,000 or less in principal amount of the notes by use of their
over-subscription privileges, then all over-subscription privileges
would be honored.
If individuals exercising over-subscription privileges subscribe for
more than $500,000 in principal amount of the notes by use of their
over-subscription privileges, then over-subscription privileges would
be limited. For example, assume that individuals exercising
over-subscription privileges subscribe for $600,000 principal amount of
the notes by use of their over-subscription privileges, you own 10,000
shares of our common stock and shareholders who are exercising their
over-subscription privileges own 100,000 shares. In this example, your
over-subscription privilege would be equal to $50,000 principal amount
of the notes. This was calculated by dividing the number of shares you
own, or 10,000, by the total number of shares owned by all shareholders
exercising their over-subscription privileges with respect to the
notes, or 100,000, and then multiplying this by the principal amount of
the notes available for sale pursuant to the exercise of all
over-subscription privileges, or $500,000.
3
In certain circumstances, in order to comply with applicable state
securities laws, we may not be able to honor all over-subscription
privileges.
Q: Must all holders of rights pay the subscription price in cash?
A: All shareholders granted rights, who wish to participate in the rights
offering, must timely pay the subscription price by wire transfer,
certified or cashier's check drawn on a U.S. bank, or personal check
that clears before expiration of the rights.
Q: Has the board of directors made a recommendation regarding this rights
offering?
A: Our board of directors does not make any recommendation to you about
whether you should exercise any rights.
Q: How long will the rights offering last?
A: You will be able to exercise your subscription rights only during a
limited period. If you do not exercise your subscription rights before
5:00 p.m., Central time, on , , your basic subscription
rights will expire.
Q: After I exercise my subscription rights, can I change my mind?
A: No. Once you send in your shareholder rights agreement and payment, you
cannot revoke the exercise of either your basic subscription rights,
even if you later learn information about us that you consider to be
unfavorable, and we will have immediate use of the funds sent as
payment. You should not exercise your subscription rights unless you
are certain that you wish to purchase the notes.
Q: When will I receive my notes?
A: If you purchase the notes through the rights offering, you will receive
the notes as soon as practicable after . Subject to state
securities laws and regulations, we have the discretion to delay
allocation and distribution of any notes you may elect to purchase by
exercise of your basic subscription right or any over-subscription
privileges in order to comply with state securities laws.
Q: How and by what date must I exercise my subscription rights?
A: You must properly complete the attached shareholder rights agreement
and deliver it to us before 5:00 p.m., Central time, on . Our address,
for delivery purposes, is on page . Your shareholder rights agreement
must be accompanied by proper payment for the notes that you wish to
purchase.
Q: What should I do if I want to participate in the rights offering but my
shares are held in the name of my broker or a custodian bank?
A: If you hold shares of Fidelity common stock through a broker, dealer
or other nominee, we will ask your broker, dealer or nominee to notify
you of the rights offering. If you wish to exercise your rights, you
will need to have your broker, dealer or nominee act for you. To
indicate your decision with respect to your rights, you should
complete and return to your broker, dealer or
4
nominee the form entitled "Beneficial Owner Election Form." You should
receive this form from your broker, dealer or nominee with the other
rights offering materials.
Q: Is exercising my subscription rights risky?
A: The exercise of your subscription rights involves certain risks.
Exercising your subscription rights means buying the notes and should
be carefully considered as you would view other investments. Among
other things, you should carefully consider the risks described under
the heading "Risk Factors," beginning on page 7.
Q: Can I sell or give away my subscription rights?
A: No. The basic subscription rights are not transferable.
Q: Must I exercise any subscription rights?
A: No.
Q: What are the federal income tax consequences of owning the notes?
A: The receipt of interest on the notes will generally be taxable as
ordinary interest income to the owners of the notes. Furthermore, any
subsequent sale of the notes prior to their maturity will generally be
a taxable event to the owners of the notes. You should review the
federal income tax discussion concerning the rights offering and the
notes under the heading "Material Federal Income Tax Considerations,"
beginning on page 22. You should also review the tax opinion of our
legal counsel, Krieg DeVault LLP, also under the heading "Material
Federal Income Tax Considerations," beginning on page 22. However, you
should consult your own tax advisors in determining the federal, state,
local, foreign and any other tax consequences to you of the rights
offering and the purchase, ownership and disposition of the notes.
Q: Can Fidelity cancel the rights offering?
A: Yes. Our board of directors may cancel the rights offering in its
discretion at any time on or before . We don't expect to
cancel the rights offering and are not aware of any facts or
circumstances which would cause us to do so. We have reserved this
right in the event we determine that facts of which we are currently
unaware or future events would cause us to determine that the rights
offering is not in the best interests of Fidelity. These reasons may
include the institution or threat of litigation against us with respect
to the rights offering.
Q: Will interest accrue on amounts that I submit as payment for notes
prior to the date that the notes are issued?
A: Yes. Interest will accrue beginning on the date of our receipt of
amounts submitted as payment for the notes at the rate of 9% per year,
based upon a 360-day year. However, if we cancel the rights offering,
any money received from shareholders will be refunded promptly, without
interest. Further, if you exercise your over-subscription privilege and
are allocated less than all of the principal amount of notes for which
you wished to subscribe, the excess funds you paid for the notes will
be returned to you as soon as practicable, without interest. However,
the subscription amounts we receive for principal amount of notes
requested through your over-subscription privileges will not be
deposited into an escrow account and will be available immediately for
use by Fidelity. As a consequence, there is no guarantee that we will
have these
5
funds available to return to you. In this event, we expect to draw upon
our existing $500,000 line of credit with CIB Bank. As long as funds
are available under our line of credit, we may draw funds at any time
and for any purpose we deem appropriate. However, we are not required
to hold this line of credit open in order to repay subscribers.
Q: What if I have more questions?
A: If you have more questions about the rights offering, please contact
Mark A. Isaac, Vice President, at (812) 424-0921.
Fidelity Federal Bancorp
------------------------
Fidelity was incorporated as a savings and loan holding company under
the laws of the State of Indiana in 1993. Fidelity owns all of the issued and
outstanding stock of United Fidelity Bank, fsb, its federally-chartered savings
bank subsidiary. United Fidelity Bank was formed in 1914 and maintains four
locations in Evansville, Indiana and one in Newburgh, Indiana. Our principal
executive offices are located at 18 NW Fourth Street, Evansville, Indiana 47708.
Our telephone number is (812) 424-0921.
We, through our savings bank subsidiary, are engaged in the business of
obtaining funds in the form of savings deposits and other borrowings and
investing these funds in consumer, commercial and mortgage loans, and in
investment and money market securities.
We are subject to a Supervisory Agreement with the Office of Thrift
Supervision. The Supervisory Agreement has been in place since February 1999 and
has created certain operational challenges. The Supervisory Agreement initially
restricted our ability to originate new commercial or multifamily loans and
limited the percentage of consumer loans outstanding to total assets. We are
also required to meet certain capital requirements set forth in our strategic
plan. The Supervisory Agreement also restricts the payment of dividends to us
from United Fidelity Bank, our subsidiary, which has negatively impacted our
ability to meet our debt service obligations. The Supervisory Agreement also
required that we reduce our classified assets, which primarily consisted of our
affordable housing assets. Our subsequent divestitures of these affordable
housing assets in recent years has caused us to incur additional expense,
utilized available cash and created significant net losses.
Despite these operational challenges, we have been able to meet all of
our debt service obligations. This has been accomplished primarily by raising
capital through debt and equity offerings and by the divestiture of our
affordable housing assets. We last raised capital in February 2002. In that
month, we closed our previous rights offering of junior subordinate notes and
warrants to purchase our common stock. In that offering, we sold 1,002 notes and
500,000 warrants, and raised total proceeds, after expenses, of approximately
$1,225,000. Because of our improving financial condition and continued
compliance with the Supervisory Agreement, commercial lending authority was
reinstated in February 2002 and a higher concentration limit of consumer loans
to total assets was approved in connection with United Fidelity Bank's strategic
plan. United Fidelity Bank believes that it currently is in compliance with the
Supervisory Agreement, including the capital targets established in its
strategic plan.
6
RISK FACTORS
You should carefully consider the risks and uncertainties described
below which we believe are material to the offering and the other information in
this prospectus before deciding whether to invest in the rights offering. If any
of the following risks identified actually occur, our business, financial
condition and operating results could be materially adversely affected. In such
case, we may be unable to satisfy the notes or the trading price of our common
stock could decline and you may lose part or all of your investment.
Risk Factors Relating to the Rights Offering and the Notes
----------------------------------------------------------
We may not be able to pay interest on or repay the notes.
o We are a holding company and our operating company has no
obligations to the holders of the notes.
We conduct substantially all of our business through our
operating company, United Fidelity Bank. Although we have the ability
to raise capital, such as through the sale of additional shares of
stock or the issuance of additional debt, our cash flow and,
consequently, our ability to pay interest in cash to service our debt,
including the notes, are largely dependent upon the cash flow of United
Fidelity Bank and the payment of funds by United Fidelity Bank to us.
United Fidelity Bank is a separate and distinct legal entity and has no
obligation, contingent or otherwise, to pay any amounts due on the
notes or to make cash available for that purpose.
o Our operating company is restricted in making dividends to us.
The terms of the Supervisory Agreement require Office of
Thrift Supervision approval for United Fidelity Bank to pay us
dividends. The OTS may agree to allow the payment of dividends from
United Fidelity Bank to us to assist in debt service, although it has
no obligation to do so and we cannot and do not offer any assurances
that the OTS will do so. Also, the OTS could continue to prohibit the
payment of dividends to us in the future if it considers such action
necessary for the safety and soundness of United Fidelity Bank. If we
do not receive any dividends from United Fidelity Bank, we may not be
able to make payments on the notes. If the current dividend
restrictions were removed and assuming the absence of any safety and
soundness concerns as determined by the OTS, United Fidelity Bank could
provide up to $5.1 million in dividends to Fidelity as of September 30,
2003.
o Dividend restrictions and terms of subsequent financings may
affect our ability to meet our debt obligations.
We cannot assure you that we will be able to meet our debt
obligations. We have engaged in equity and debt financings to allow us
to meet our debt service requirements and reduce the overall level of
our outstanding debt. Until the current dividend restrictions are no
longer in place, future equity or debt financings will be necessary for
us to continue to meet our debt service requirements. If we are unable
to generate sufficient cash through these financings to meet our
obligations or if we fail to satisfy the requirements of our debt
agreements, we will be in default. A default would permit certain debt
holders to require payment before the scheduled due date of the debt,
resulting in further financial strain on us and causing additional
defaults
7
under our other indebtedness. Our ability to meet our debt and other
obligations and to reduce our total debt also depends on economic,
financial, competitive, regulatory and other factors. Many of these
factors are beyond our control. Although we believe that our existing
current assets combined with working capital from our operations and
proceeds of future equity or debt financings will be adequate to meet
our existing financial obligations, we cannot assure you that our
business will generate sufficient cash flow or that future financings
will be available to provide sufficient proceeds to meet these
obligations.
We may not be able to raise all the capital we need.
There is no guarantee that we will be able to sell all or any of the
notes offered in this prospectus. There is no minimum of notes that we must sell
to complete the offering. In the event that we are unable to raise sufficient
capital from the offering, it is likely that we will need to obtain additional
capital so that we may execute successfully our business strategy. Any necessary
future raising of capital, if available, may be on terms which are not favorable
to us. Future financings on less favorable terms may be more costly which could
restrict our ability to make payments on the notes.
There is no established market for the notes and they may be difficult to sell.
We do not intend to list the notes for trading on any national
securities exchange or to cause them to be quoted in any inter dealer quotation
system. Whether a market develops for the notes, and if so, the liquidity of
such market will depend on the number of holders of the notes, our financial
performance, and the market for similar securities. We cannot assure you that an
active trading market for the notes will develop or, if it does, at what prices
the notes may trade. Therefore, you may not be able to sell the notes when you
want and, if you do, you may not be able to receive the price you want.
Our secured and other unsecured debt and the liabilities of our operating
company may be effectively senior to the notes.
The payment of principal and interest on the notes will be senior to
our 9% junior subordinated notes due February 1, 2009, and will rank PARI PASSU
with our senior subordinated debt due June 2005. In addition, the notes are
unsecured obligations of Fidelity and are senior to all other unsecured
indebtedness of Fidelity, including any future issues of subordinated notes or
debentures of Fidelity but not to common stock or preferred stock of Fidelity.
Fidelity anticipates that it will use a portion of the proceeds to repay $1.0
million of the $1.8 million in senior subordinated notes currently outstanding
that matures in June 2005. United Fidelity Bank has no obligation to pay amounts
due on the notes. At September 30, 2003, we had approximately $4.3 million of
long-term, unsecured indebtedness. We repaid $1.5 million of our 10% senior
notes outstanding in late October 2003. We and United Fidelity Bank may incur
additional debt, subject to limitations, and that additional debt may rank
senior to the notes. United Fidelity Bank may use the earnings it generates, as
well as its existing assets, to fulfill its own direct debt service
requirements, particularly because certain agreements may restrict its ability
to pay dividends to us or because the debt of United Fidelity Bank may be
secured by its assets.
Once you exercise your subscription rights, you may not revoke the exercise.
Once you exercise your subscription rights, you may not revoke the
exercise, even if less than all of the notes that we are offering are actually
purchased.
8
United Fidelity Bank is subject to the restrictions and conditions of a
Supervisory Agreement with the Office of Thrift Supervision.
United Fidelity Bank entered into a Supervisory Agreement with the OTS
on February 3, 1999, which requires it to take certain actions and restricts
certain of its operations, including its ability to pay dividends. If United
Fidelity Bank is unable to comply with the terms and conditions of the
Supervisory Agreement, the OTS could take additional regulatory action,
including the issuance of a cease and desist order requiring further corrective
action. Such corrective action could include, among other things, increasing the
allowance for loan and lease losses or valuation allowance for letters of
credit, obtaining additional or new management, and further restrictions on
dividends. Because we are dependent upon United Fidelity Bank for our income, we
may not be able to make payments on the notes and this could negatively impact
the price of our stock and prohibit the payment of future dividends.
Risk Factors Related to Fidelity Federal
----------------------------------------
Because our business is only in Vanderburgh County, a downturn in the economy in
our market area may adversely affect our business.
Substantially all of United Fidelity Bank's loans will be to businesses
and individuals in Vanderburgh County and the surrounding counties. Any decline
in the economy of these areas could have an adverse impact on United Fidelity
Bank. Like most banking institutions, United Fidelity Bank's net interest spread
and margin will be affected by general economic conditions and other factors
that influence market interest rates and United Fidelity Bank's ability to
respond to changes to such rates. Although we believe that economic conditions
in our market area have been generally favorable, we cannot assure you that such
conditions will continue to prevail.
We encounter strong competition from other financial institutions
operating in our market and elsewhere, including large national and
super-regional banking institutions. Unlike larger regional and multi-state
banking operations that do not depend upon only a few markets, United Fidelity
Bank's loan and deposit growth will rely predominately on Vanderburgh County and
the surrounding counties. Because of this competition, we may have to pay higher
rates of interest to attract deposits. In addition, because of our smaller size,
the amount we can loan to one borrower is less than that for most of our
competitors. This may impact our ability to seek relationships with larger
businesses in our market area.
We must achieve sufficient earnings in order to realize our $6.0 million
deferred income tax receivable.
We currently have a deferred income tax receivable of approximately
$6.0 deferred income tax receivable, net of a valuation allowance. We must
achieve sufficient annual earnings in order to be able to utilize this asset
within the federal and state carryforward periods. Our ability to utilize these
tax credit carryforwards will begin to expire in 2013 and continuing through
2025. We perform an analysis each fiscal quarter in order to estimate the future
expirations of existing federal and state tax carryforwards. This analysis takes
into consideration projected income in future years, our business plan and cost
reductions. We currently have estimated that not all of the tax credit
carryforwards will be utilized within the carryforward periods and a valuation
allowance of $500,000 has been established. If we are unable to achieve a
sufficient level of net income in future periods, we may need to establish an
additional valuation allowance for this deferred tax asset. Any additional
allowance would reduce the receivable and increase our expenses, thus reducing
our earnings.
9
Our accomplishments are largely dependent upon the skill and experience of our
senior management team.
The success of our business will depend upon the services of our senior
management team. Our business may suffer if we lose the services of any of these
individuals, including Bruce A. Cordingley and Donald R. Neel. We have entered
into a three year contract employment agreement with Mr. Neel, which expires on
May 19, 2005, subject to renewal. Mr. Cordingley's role with Fidelity is not
full time. He receives board fees, but he has no employment agreement with us,
does not receive a salary and has substantial business interests other than
Fidelity. Our future success also depends on our ability to identify, attract
and retain qualified senior officers and other employees in our identified
market.
The existence of controlling shareholders may limit the ability of other
shareholders to influence the outcome of matters requiring stockholder approval,
could discourage potential acquisitions of our business by third parties, and
could impact the price of our shares.
As of September 30, 2003 Bruce A. Cordingley, who is a director of
Fidelity, and entities and individuals affiliated with him own of record or
control 64.1% and beneficially own 65.9% of our issued and outstanding shares of
common stock. Our remaining directors, together with their respective
affiliates, own of record approximately 3.7% and beneficially 3.9% of our
outstanding common stock. Although we are not aware of any arrangement or
understanding, contractual or otherwise, that obligates our directors to act in
concert with respect to Fidelity, the level of stock ownership held by the
directors may allow them to elect all of their designees to the board of
directors and to control the outcome of virtually all matters submitted for a
vote of our shareholders. Either the equity interests of Mr. Cordingley and his
affiliates, or the combined equity interests of all of the directors in
Fidelity, could have the effect of delaying or preventing a change in control or
otherwise discouraging a potential acquirer from attempting to obtain control of
Fidelity, even on terms that a stockholder might consider favorable. This in
turn could harm the market price of our common stock or prevent our shareholders
from realizing a premium over the market price for their shares of common stock.
In addition, sales of a substantial amount of our common stock in the public
market, by our principal shareholders or otherwise, or the perception that these
sales may occur, could materially adversely affect the market price of our
common stock and impair our ability to raise funds in additional offerings.
United Fidelity Bank's consumer loan concentration increases the risk of
defaults by our borrowers, which may result in increased expenses and the need
for additional capital.
United Fidelity Bank makes various types of loans. Under the
Supervisory Agreement between the OTS and United Fidelity Bank, the consumer
loan portfolio was originally limited to 25% of total assets. Under a business
plan recently approved by the OTS, this limit was increased to 28% of total
assets. Consumer loans carry more risk as they rely primarily on borrower's
continuing financial stability and, thus, are more likely to be adversely
affected by circumstances such as job loss and personal bankruptcy, as well as
general economic conditions. In many cases, repossessed collateral for a
defaulted consumer loan will not provide an adequate source of repayment of the
outstanding loan balance because of a reduction in the value of the underlying
collateral. Because of this, the OTS may require United Fidelity Bank to
maintain a higher level of capital than a similarly sized institution with a
smaller exposure to this type of loan. Currently, approximately 21.2% of our
assets are comprised of consumer loans. As of September 30, 2003, $307,000 was
set aside for consumer loan losses. This represents approximately 0.94% of
consumer loans outstanding.
We may need additional funds for debt service, which could result in dilution of
your ownership position or result in additional interest expense.
10
We may need additional funds for servicing our debt, which could result
in dilution of your ownership position or result in additional interest expense,
because United Fidelity Bank is restricted from paying dividends without prior
approval of the OTS. As of September 30, 2003 we had $1.6 million available cash
for debt service and other needs. Debt service for the remainder of calendar
year 2003, is expected to be approximately $1.7 million which includes $1.5
million in principal in connection with the early retirement of our 10% senior
subordinated notes. Required debt service for calendar year 2004, consists of
interest payments of $90,000. It is anticipated that proceeds from the offering
will be used to repay $1.0 million in senior subordinated debt and paydown all
or a portion of any amounts outstanding on our line of credit.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus, including the risk factors
section, contains or incorporates by reference certain forward-looking
statements, within the meaning of the Private Securities Litigation Reform Act
of 1995, about our financial condition, results of operations and business that
are based on our current and future expectations. You can find many of these
statements by looking for words such as "may," "will," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential," or
"continue," or the negative of such terms and other comparable terminology. Such
statements reflect our current views with respect to future events and are
subject to risks and uncertainties, including those discussed under "Risk
Factors" and elsewhere in this prospectus that could cause actual results to
differ materially from those contemplated in such forward-looking statements. A
few uncertainties which could affect our future performance include, without
limitation, the effects of competition, technological changes and regulatory
developments; changes in fiscal, monetary and tax policies; market, economic
conditions, either nationally or regionally, resulting in, among other things,
credit quality deterioration; and changes in the securities markets. Investors
should consider these risks, uncertainties, and other factors in addition to
those mentioned by us in other filings from time to time when considering any
forward-looking statement.
We believe it is important to communicate our expectations to our
investors. However, you are cautioned that no forward-looking statement is a
guarantee of future performance and you should not place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus.
There may be events in the future that we are not able to predict accurately or
over which we have no control. We do not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events which may cause actual results to differ from those
expressed or implied by the forward-looking statements contained in this
prospectus.
The risk factors listed above, as well as any cautionary language in
this prospectus, provide examples of risks, uncertainties and events that may
cause our actual results to differ materially from the expectations we describe
in our forward-looking statements.
UNITED FIDELITY BANK IS SUBJECT TO A SUPERVISORY AGREEMENT WITH THE
OFFICE OF THRIFT SUPERVISION
United Fidelity Bank entered into a supervisory agreement with the OTS
on February 3, 1999. The supervisory agreement, as amended on November 18, 2003,
currently requires United Fidelity Bank to:
11
o refrain from paying dividends without OTS approval;
o continue to comply with its strategic plan, including its
capital targets, as updated, consistent with United Fidelity
Bank's business plan as approved by the OTS;
o refrain from engaging in any transaction with or distribution
of funds to Fidelity or its subsidiaries or selling any assets
to an affiliate without OTS approval; and
o not engage in new activities not included in its strategic
plan without OTS approval.
United Fidelity Bank believes that it currently is in compliance with
all provisions of the supervisory agreement.
USE OF PROCEEDS
Our net proceeds from the rights offering will depend upon the
principal amount of the notes that are purchased. If we sell all of the notes
which may be purchased upon exercise of the rights offered by this prospectus,
then we will receive proceeds of $2,500,000, before deducting expenses payable
by us, which are estimated to be approximately $36,250. Since our directors,
executive officers and their affiliates, who currently own approximately 67.8%
of our outstanding shares of common stock, without giving effect to the shares
that may be issued upon the exercise of outstanding warrants and stock options,
have agreed to exercise certain of their basic and over-subscription
subscription privileges, we expect to issue at least $2.0 million principal
amount of the notes and to receive proceeds of at least approximately $2.0
million from the rights offering, before deducting expenses.
We anticipate that we will use a portion of the proceeds to repay $1.0
million of the $1.8 million in senior subordinated debt currently outstanding
that matures in June 2005. We also anticipate that we will contribute $1.0
million of capital to our subsidiary, United Fidelity Bank. The remainder will
be utilized to make interest payments on this and other outstanding debt, and to
fund the limited operations of Fidelity. Although we expect to use the net
proceeds in the manner discussed above, we reserve the right to use the net
proceeds in any manner which we consider appropriate.
WE DO NOT ANTICIPATE PAYING DIVIDENDS
We have not paid any cash dividends on our common stock since July 6,
1998 and do not anticipate paying cash dividends in the foreseeable future,
since we are dependent upon United Fidelity Bank for funds for dividends and,
under the terms of the supervisory agreement, United Fidelity cannot pay a
dividend to us without approval of the OTS. For the foreseeable future, we
anticipate that United Fidelity Bank will retain any earnings which it generates
or, subject to OTS approval, pay a portion of these earnings to us in order for
us to service our existing debt. The declaration and payment in the future of
any cash dividends will be at the discretion of our board of directors and will
depend upon the receipt of dividends from United Fidelity Bank, earnings,
capital requirements and the financial position of Fidelity, general economic
conditions and other pertinent factors.
12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth certain information regarding our
consolidated ratios of earnings to fixed charges. Fixed charges represent
interest expense.
- ---------------------------------------------------------------------------------------------------------------------
Nine months Year ended Year ended Year ended Six months Year ended
ended December 31, December 31, December 31, ended June 30,
September 30, 2002 2001 2000 December 31, 1999
2003 1999
(unaudited)
- ---------------------------------------------------------------------------------------------------------------------
Earnings to fixed 1.01 .49 .98 .70 .12 1.03
charges
- ---------------------------------------------------------------------------------------------------------------------
Income before taxes $23 $(3,048) $(160) $(2,525) $(3,741) $287
- ---------------------------------------------------------------------------------------------------------------------
Fixed charges:
- ---------------------------------------------------------------------------------------------------------------------
Other interest 708 1,637 2,007 2,015 1,117 2,263
- ---------------------------------------------------------------------------------------------------------------------
Deposit Interest 2,263 4,385 6,494 6,442 3,151 7,467
- ---------------------------------------------------------------------------------------------------------------------
$2,971 $6,022 $8,501 $8,457 $4,268 $9,730
- ---------------------------------------------------------------------------------------------------------------------
13
PRICE RANGE OF COMMON STOCK
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "FFED". The following table sets forth the reported high and low bid
prices of our common stock for the periods indicated:
2001 High Low
----
First Quarter $ 1.81 $ 1.31
Second Quarter 1.75 1.50
Third Quarter 3.70 1.75
Fourth Quarter 2.55 2.00
2002
----
First Quarter $ 3.15 $ 2.30
Second Quarter 2.95 2.15
Third Quarter 2.50 1.75
Fourth Quarter 2.15 1.30
2003
----
First Quarter $ 1.75 $ 1.21
Second Quarter 1.53 1.12
Third Quarter 1.75 1.25
Fourth Quarter 1.88 1.50
The closing price of our common stock was $1.62 on December 30, 2003.
We urge you to obtain a current stock quote for our common stock.
14
CAPITALIZATION
The following table shows our indebtedness and capitalization as of
September 30, 2003. The table also shows our capitalization as adjusted for the
completion of the rights offering and assuming that all subscription rights are
exercised.
September 30, 2003
Actual As Adjusted
(dollars in thousands)
(unaudited)
Borrowings
- ----------
Junior subordinated notes, unsecured $ 5,002 5,002
Senior subordinated notes, unsecured 3,300 5,800
Federal Home Loan Bank Advances 17,000 17,000
Line of credit, $500,000 secured by 59,700
shares of United Fidelity Bank stock -0- -0-
-------- --------
Total Borrowings $ 25,302 27,802
Shareholders' Equity
- --------------------
Common Stock $ 9,619 9,619
Stock Warrants 261 261
Additional paid-in capital 16,635 16,635
Accumulated other comprehensive loss (141) (141)
Retained earnings (12,969) (12,969)
Total shareholders' equity 13,405 13,405
-------- --------
Total capitalization $ 38,707 $ 41,207
======== ========
15
THE RIGHTS OFFERING
Before exercising any subscription rights, you should read carefully
the information set forth under "Risk Factors."
Eligibility.
The rights offering is available only to our shareholders as of the
close of business on , , which is the record date for the
distribution of the rights. Eligibility for the offering could also be affected
as described under the caption "-- Legal Compliance" below.
The Rights.
We are distributing at no charge to each of our shareholders as of the
record date, one basic subscription "right" (rounded down to the nearest whole
number) for every 3,847 shares of common stock held. Each basic subscription
right will entitle you, for $1,000, to purchase $1,000 principal amount of the
notes. If you do not have a sufficient number of shares to entitle you to
otherwise receive a basic subscription right, you will still receive a basic
subscription right to purchase a note in the principal amount of $1,000. You are
not required to exercise any or all of your rights unless you wish to purchase
notes under your over-subscription privilege described below, in which case you
must exercise all of your basic subscription rights. You may not transfer rights
to any other person.
The Over-Subscription Privilege.
Subject to the limitations described below, shareholders who exercise
their rights to the fullest possible extent will have an "oversubscription
privilege," which will entitle them to subscribe for notes that other
shareholders declined to purchase. If you wish to exercise your
over-subscription privilege, you should indicate the principal amount of the
notes that you would like to purchase in the space provided on your shareholder
rights agreement. Notes will be issued in multiples of $1,000.
Notes will be available for purchase pursuant to the oversubscription
privilege only to the extent that other shareholders decline to subscribe for
the full amount of the notes available to them. If the number of notes available
for oversubscriptions is less than the total number requested by shareholders
who exercise their oversubscription privilege, we will allocate the amount of
available notes that you will be entitled to purchase if you exercise your
over-subscription privilege on a pro rata basis with other shareholders
exercising their over-subscription privileges. For example, assume that (1)
there are $500,000 in principal amount of notes available for over-subscription,
(2) individuals exercising over-subscription privileges subscribe for $600,000
principal amount of the notes by use of their over-subscription privileges, (3)
you own 10,000 shares of our common stock and (4) shareholders who are
exercising their over-subscription privileges own 100,000 shares. In this
example, your over-subscription privilege would be equal to $50,000 principal
amount of the notes. This was calculated by dividing the number of shares you
own, or 10,000, by the total number of shares owned by all shareholders
exercising their over-subscription privileges with respect to the notes, or
100,000, and then multiplying this by the principal amount of the notes
available for sale pursuant to the exercise of all over-subscription privileges,
or $500,000.
The formula for determining your over-subscription privilege will
entitle you to purchase a principal amount of the notes equal to the product of:
16
o the number of shares of our common stock owned by you on the
close of business on , divided by the total number of
shares of our common stock owned by all shareholders
exercising their over-subscription privileges on the close of
business on ; and
o the principal amount of notes available for sale pursuant to
the exercise of all over-subscription privileges.
If this results in a principal amount of notes greater than you
requested, you will receive only the principal amount of notes that you
requested, and the excess will be reallocated one or more times among those
shareholders whose over-subscription privileges are not fully satisfied on the
same principle, until all available notes have been allocated or all exercises
of over-subscription privileges are satisfied.
In certain circumstances, in order to comply with applicable state
securities laws, we may not be able to honor all over-subscription privileges.
Expiration Date.
The rights offering, including the oversubscription privilege, will
expire at the close of business on , . If you do not exercise
your subscription rights prior to that time, your basic subscription rights will
expire and will no longer be exercisable. We will not be required to issue notes
to you if we receive your shareholder rights agreement or your payment after
that time, regardless of when you sent the shareholder rights agreement and
payment.
No Minimum Condition.
There is no minimum amount of notes that must be subscribed for as a
condition to accepting subscriptions and closing the offering. We have the right
to accept any subscriptions validly tendered.
Exercise Procedures.
General. If you are a beneficial owner of shares of Fidelity common
stock that you hold through a nominee holder, we will ask your broker, dealer or
other nominee to notify you of this rights offering. If you wish to exercise
your rights, you will need to have your broker, dealer or other nominee act for
you. To indicate your decision with respect to your rights, you should complete
and return to your broker, dealer or other nominee the form entitled "Beneficial
Owner Election Form." You should receive this form from your broker, custodian
bank or other nominee with the other rights offering materials.
Basic Subscription Rights. You may exercise your subscription rights by
delivering to us on or prior to :
o A properly completed and duly executed shareholder rights
agreement;
o Any required signature guarantees; and
o Payment in full for the notes subscribed for by exercising
your basic subscription right and, if desired, your
over-subscription privileges.
You should deliver your shareholder rights agreement and payment to us
at the address shown on page 21. We will not pay you interest on funds delivered
to us pursuant to the exercise of rights.
17
Over-Subscription Privilege. When you send in your shareholder rights
agreement, you must also send the full purchase price for the principal amount
of notes that you have requested to purchase, in addition to the payment due for
the principal amount of notes requested through your over-subscription
privileges. If the principal amount of additional notes you are eligible to
purchase exceeds the principal amount of notes you requested, you will receive
only the principal amount of notes that you requested, and the remaining
principal amount of notes will be divided among other shareholders exercising
their over-subscription privileges.
To determine if you have fully exercised your basic subscription right,
we will consider only the rights held by you in the same capacity. For example,
suppose you were granted rights for shares of Fidelity common stock you own
individually and for shares of Fidelity common stock you own jointly with your
spouse. You only need to fully exercise your basic subscription right with
respect to your individually owned rights in order to exercise your
over-subscription privilege with respect to your individually owned rights. You
do not have to subscribe for any notes under the rights owned jointly with your
spouse to exercise your individual over-subscription privileges.
When you complete the portion of the shareholder rights agreement to
exercise the over-subscription privilege, you will be representing and
certifying that you have fully exercised your basic subscription rights received
in respect of shares of Fidelity common stock you hold in that capacity. You
must exercise your over-subscription privilege at the same time you exercise
your basic subscription right in full.
If you own your shares of Fidelity common stock through your broker,
dealer or other nominee holder who will exercise your over-subscription
privileges on your behalf, the nominee holder will be required to certify to us:
o the number of shares held on , the record date, on your
behalf;
o the number of rights you exercised under your basic
subscription right; and
o that your entire basic subscription right held in the same
capacity has been exercised in full.
Your nominee holder must also disclose to us certain other information
received from you.
If you exercised your over-subscription privilege and are allocated
less than all of the principal amount of notes for which you wished to
subscribe, the excess funds you paid for notes that are not allocated to you
will be returned in full by mail, without interest or deduction, as soon as
practicable after the expiration date of the rights. However, the subscription
amounts we receive for principal amount of notes requested through your
over-subscription privileges will not be deposited into an escrow account and
will be available immediately for use by Fidelity. As a consequence, there is no
guarantee that we will have these funds available to return to you. In this
event, we expect to draw upon our existing $500,000 line of credit with CIB
Bank. As long as funds are available under our line of credit, we may draw funds
at any time and for any purpose we deem appropriate. However, we are not
required to hold this line of credit open in order to repay subscribers.
Ambiguities in the Exercise of Subscription Rights. If you do not
specify the number of subscription rights and over-subscription privileges being
exercised on your shareholder rights agreement, or if your payment is not
sufficient to pay the total purchase price for all of the notes that you
indicated you wished to purchase, you will be deemed to have exercised the
maximum number of subscription rights and over-subscription privileges that
could be exercised for the amount of the payment that we
18
receive from you. If your payment exceeds the total purchase price for all of
the subscription rights shown on your shareholder rights agreement, your payment
will be applied, until depleted, to subscribe for notes in the following order:
o to subscribe for the principal amount of notes that you
indicated on the shareholder rights agreement that you wished
to purchase through your basic subscription right, until your
basic subscription right has been fully exercised; and
o to subscribe for additional principal amount of notes pursuant
to the over-subscription privilege, subject to any applicable
limitations.
Any excess payment remaining after the foregoing allocation will be returned to
you as soon as practicable by mail, without interest or deduction.
Signature Guarantee. Signatures on the shareholder rights agreement do
not need to be guaranteed if either the shareholder rights agreement provides
that the notes to be purchased are to be delivered directly to the record owner
of such subscription rights, or the shareholder rights agreement is submitted
for the account of a member firm of a registered national securities exchange or
a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States. If a signature guarantee is required, signatures on the shareholder
rights agreement must be guaranteed by a commercial bank, broker, dealer, credit
union, national securities exchange or savings association.
Payment for the Notes. Payment for the notes must be made in United
States dollars. We will consider payment to have been received only upon:
o actual receipt of any certified check or cashier's check drawn
upon a U.S. bank or of any postal, telegraphic or express
money order payable to the order of Fidelity Federal Bancorp;
o actual receipt of any funds transferred by wire transfer; or
o actual receipt of any funds through an alternative payment
method which we may approve.
Payment for notes also may be effected through wire transfer as
follows:
Wire to: Federal Home Loan Bank of Indianapolis
ABA#: 074 001 019
Further Credit: United Fidelity Bank, fsb
Account #: 8166-9994
Further Credit: Fidelity Federal Bancorp - Rights Offering
Account #: 0-01-45004609
You May Not Revoke the Exercise of a Subscription Right.
After you have exercised your basic subscription right or
over-subscription privilege, you may not revoke that exercise. You should not
exercise your subscription rights and over-subscription privilege unless you are
certain that you wish to purchase the notes.
19
Our Decision Is Binding on You.
All questions concerning the timeliness, validity, form and eligibility
of any exercise of subscription rights and over-subscription privileges will be
determined by us, and our determinations will be final and binding. In our sole
discretion, we may waive any defect or irregularity, or permit a defect or
irregularity to be corrected within such time as we may determine, or reject the
purported exercise of any subscription right and over-subscription privilege by
reason of any defect or irregularity in such exercise. Subscription rights and
over-subscription privileges will not be deemed to have been received or
accepted until all irregularities have been waived or cured within such time as
we determine in our sole discretion. We will be under no duty to notify you of
any defect or irregularity in connection with the submission of a shareholder
rights agreement or incur any liability for failure to give such notification.
Notice to Nominee Holders.
If you are a broker, a trustee or a depositary for securities who holds
shares of Fidelity common stock for the account of others as a nominee holder,
you should notify the respective beneficial owners of such shares of the
issuance of the rights as soon as possible to find out such beneficial owners'
intentions. You should obtain instructions from the beneficial owner with
respect to the rights, as set forth in the instructions we have provided to you
for your distribution to beneficial owners. If the beneficial owner so
instructs, you should complete the appropriate shareholder rights agreements
and, in the case of the over-subscription privilege, the related nominee holder
certification, and submit them to us with the proper payment. A nominee holder
that holds shares for the account(s) of more than one beneficial owner may
exercise the number of rights to which all such beneficial owners in the
aggregate otherwise would have been entitled if they had been direct record
holders of Fidelity common stock on the record date, so long as the nominee
submits the appropriate shareholder rights agreements and certifications and
proper payment to the subscription agent.
We Are Making No Recommendation to Rights Holders.
Neither Fidelity nor its board of directors is making any
recommendations to you as to whether or not you should exercise your
subscription rights or over-subscription privileges. You should make your
decision based on your own assessment of your best interests after reading this
prospectus.
Fidelity Has Reserved the Right to Withdraw or Cancel the Rights Offering.
Our board of directors may withdraw the rights offering in its sole
discretion at any time prior to or on the completion date. We don't expect to
withdraw the rights offering. We reserve the right to do so in the event we
later determine that facts of which we are currently unaware or future events
would cause us to believe that the rights offering is not in the best interests
of Fidelity. These reasons may include the institution or threat of litigation
against us with respect to the rights offering. We currently are not aware of
any facts or circumstances which would cause us to withdraw the rights offering.
If we cancel the rights offering, any money received from shareholders
will be refunded promptly, without interest. Because we will have immediate use
of funds received in the rights offering, if we withdraw the rights offering
there is no guarantee that we will have funds available to return to
shareholders who have submitted payment for shares. In the event that we would
have no funds available to return to shareholders, we expect to draw upon an
existing $500,000 line of credit with CIB Bank to obtain the funds for this
purpose. As long as funds are available under our line of credit, we may draw
funds at any time and for any purpose we deem appropriate. However, we are not
required to hold this line of credit open in order to repay subscribers.
20
Interest on Subscription Funds.
Interest will accrue beginning on the date of our receipt of amounts
submitted as payment for the notes at the rate of 9% per annum, based upon a
360-day year. However, if we cancel the rights offering, any money received from
shareholders will be refunded promptly, without interest. Further, if you
exercise your over-subscription privilege and are allocated less than all of the
principal amount of notes for which you wished to subscribe, the excess funds
you paid for the notes will be returned to you promptly, without interest.
Management and Director Participation.
Mr. Cordingley and his affiliates, and the other directors of Fidelity
and their respective affiliates, who currently own of record approximately 64.1%
and 3.7%, respectively, and beneficially own approximately 65.9% and 3.9%,
respectively, of our outstanding shares of common stock, have agreed to exercise
their basic subscription rights, and over-subscription privileges in the amount
of at least $2.0 million principal amount of the notes. As a result, we expect
that at least $2.0 million principal amount of the notes offered will be
subscribed for.
Legal and Regulatory Compliance.
We will not be required to issue you notes pursuant to the rights
offering if, in our opinion, you would be required to obtain prior clearance or
approval from any state or federal regulatory authorities to own or control such
notes if, at the time the subscription rights expire, you have not obtained such
clearance or approval.
The rights offering is not being made in any state or other
jurisdiction in which it is unlawful to do so, nor are we selling or accepting
any offers to purchase any notes to you if you are a resident of any such state
or other jurisdiction. We may delay the commencement of the rights offering in
certain states or other jurisdictions in order to comply with the securities law
requirements of such states or other jurisdictions. In certain circumstances, in
order to comply with applicable state securities laws, we may not be able to
honor all over-subscription privileges even if we have notes available. It is
not anticipated that there will be any changes in the terms of the rights
offering. In our sole discretion, we may decline to make modifications to the
terms of the rights offering requested by certain states or other jurisdictions,
in which case shareholders who live in those states or jurisdictions will not be
eligible to participate in the rights offering.
Fees and Expenses.
You are responsible for paying any commissions, fees, taxes or other
expenses incurred in connection with the exercise of the subscription rights. We
will not pay such expenses.
If You Have Questions.
If you have questions or need assistance concerning the procedure for
exercising subscription rights or if you would like additional copies of this
prospectus, the instructions, or forms for use in connection with the rights
offering, you should contact Deb Merritt, Assistant Vice President, Shareholder
Relations, of Fidelity, at:
Fidelity Federal Bancorp
18 NW Fourth Street, PO Box 1347
Evansville, Indiana 47706-1347
21
Telephone: (812) 424-0921, extension 2226
(800) 280-8280, extension 2226
Important: Please carefully read the instructions accompanying the
shareholder rights agreement and follow those instructions in detail. You are
responsible for choosing the payment and delivery method for your shareholder
rights agreement, and you bear the risks associated with such delivery. If you
choose to deliver your shareholder rights agreement and payment by mail, we
recommend that you use registered mail, properly insured, with return receipt
requested. We also recommend that you allow a sufficient number of days to
ensure delivery to us prior to .
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is the opinion of our tax counsel, Krieg
DeVault LLP, as to the application of existing material federal income tax law
to facts as presented in this prospectus relating to the rights offering and
sale of the notes. Krieg DeVault's opinion is based on the Internal Revenue Code
of 1986, as amended (the "Code"), the Treasury regulations promulgated
thereunder, judicial authority and administrative rulings and practice, all of
which are subject to change at any time, possibly with retroactive effect.
Moreover, there can be no assurance that this opinion will not be challenged by
the Internal Revenue Service or that a court considering the issues will not
hold contrary to such opinion.
This discussion may not address federal income tax consequences
applicable to shareholders subject to special treatment under federal income tax
law, such as financial institutions, broker-dealers, life insurance companies or
traders in securities that elect to mark to market. Also, this discussion does
not address applicable tax consequences if you hold Fidelity common stock as
part of a hedging, straddle, constructive sale, conversion or other risk
reduction transaction. This summary assumes that investors will hold their notes
as "capital assets" (generally property held for investment) pursuant to Section
1221 of the Code. This summary does not address the tax consequences of the
rights offering under applicable state, local or foreign tax laws. You should
consult your own tax advisors in determining the federal, state, local or
foreign and any other tax consequences to you of the rights offering and
ownership of the notes.
Interest Income on the Notes. This discussion assumes that all payments
on the notes are denominated in U.S. dollars and that the interest formula for
the notes meets the requirements for "qualified stated interest" under
applicable Treasury regulations (the "OID Regulations") relating to original
issue discount ("OID"), and that any OID on the notes (i.e., any excess of the
principal amount of the notes over their issue price) does not exceed a de
minimis amount (i.e., 0.25% of their principal amount multiplied by the number
of full years included in their term), all within the meaning of the OID
Regulations. Based on the above assumption that the notes will not be considered
to be issued with OID, the stated interest thereon will be taxable to a note
holder as ordinary interest income when received or accrued in accordance with
such note holder's method of tax accounting.
Sale or Other Disposition. A holder will generally recognize capital
gain or loss upon the sale, exchange or other disposition of a note equal to the
difference between the amount realized from such sale and the holder's tax basis
in the note that was sold. Under Section 1222 of the Code, gain or loss from the
sale or exchange of a capital asset is characterized as either short-term or
long-term depending on how the asset was held by the taxpayer. Short-term
capital gains and losses arise on the sale or exchange of a capital assets held
for twelve (12) months or less. Conversely, long-term capital gains and losses
arise on the sale or exchange of capital assets held for more than twelve (12)
months. Long-term capital gains are generally taxed at a preferred rate.
22
DESCRIPTION OF THE NOTES
Principal, Interest Rate and Maturity.
The notes will mature on . The aggregate principal amount of
the notes is $2,500,000. However, we may issue additional notes from time to
time, without the consent of the holders of the notes.
Interest on the notes will:
o accrue at the rate of 9.00% per year, beginning on
2004, based upon a 360-day year;
o be payable semiannually, in arrears, on each and
, with the initial interest payment payable on
, ; and
o be payable to the person in whose name the notes are
registered at the close of business on and
preceding the applicable interest payment date,
which we refer to as "regular record dates."
Optional Redemption.
On at least 15 but not more than 60 days' notice, we may redeem the
notes, in whole or in part, at any time on or after , 2004 and prior
to maturity with no redemption premium. If we redeem the notes in part, all
principal payments on the notes will be made pro rata to the holders of the
notes based on the aggregate outstanding principal balance of the notes to be
redeemed.
If we redeem the notes in part, we will select the notes for redemption
on a pro rata basis. We will only redeem the notes in multiples of $1,000 in
original principal amount. A note in principal amount equal to the unredeemed
portion of the original note will be issued upon the cancellation of the
original note.
Ranking of the Notes.
The notes rank senior to Fidelity's 9% junior subordinated notes due
February 2009, and rank and are PARI PASSU with the senior subordinated notes
due June 2005. In addition, the notes are unsecured obligations of Fidelity and
are senior to all other unsecured indebtedness of Fidelity, including any future
issues of subordinated notes or debentures of Fidelity but not to common stock
or preferred stock of Fidelity.
We presently have the following unsecured debt as of September 30,
2003:
Junior subordinated notes, 9.00%, interest
paid semi-annually, due February 2004 unsecured 1,002,000*
Senior subordinated notes, 10.00%, interest
paid semi-annually, due June 2005, unsecured 3,300,000*
==========
Total unsecured debt $4,302,000*
==========
23
*Unaudited.
The notes are not directly subordinated to indebtedness of United
Fidelity Bank or its subsidiaries. However, there are no contractual limitations
on the amount of indebtedness which may be incurred by United Fidelity Bank or
its subsidiaries which could impact the ability of United Fidelity Bank to pay
dividends to us, from which we would make payments on the notes.
Sinking Fund.
We are not obligated to make mandatory redemption or sinking fund
payments with respect to the notes.
Payment.
We will pay interest on the notes to the persons in whose names the
notes are registered at the close of business on the regular record date for
each interest payment. However, we will pay the interest payable on the notes at
their stated maturity to the persons to whom we pay the principal amount of the
notes. The initial payment of interest on the notes will be payable on
, .
We will pay principal and interest on the notes at the offices of
Fidelity or at any other office maintained by us for such purposes. We may pay
interest by cash or by check mailed to the address of the person entitled to the
payment as it appears in the security register.
Non-Payment.
If we fail to pay the interest on, or principal of the notes when due,
and which failure continues for thirty days, the principal and interest of the
notes may be declared due and payable by the holder and payment may be enforced
in accordance with Indiana law.
Waiver.
No holder of any note and no director, officer, employee, agent,
manager, partner or other interest holder of Fidelity shall have any liability
for any obligation of Fidelity under the notes or for any claim based on, in
respect of or by reason of such obligations. Each holder, by accepting a note,
waives and releases all such liability. Such waiver and release shall be part of
the consideration for the issuance of the notes. Notwithstanding the foregoing,
this shall not be construed as a waiver or release of any claim under the
federal securities laws.
Form, Exchange and Transfer of the Notes.
We will issue the notes in registered form, without coupons. We will
only issue the notes in denominations of integral multiples of $1,000.
Holders may present the notes for exchange or for registration of
transfer at our principal executive offices or at any other office or agency
maintained by Fidelity for such purpose. We will exchange or transfer the notes
if the notes are duly endorsed by, or accompanied by a written instrument of
transfer in a form satisfactory to us. We will not charge a service charge for
any exchange or registration of transfer of the notes. However, we may require
payment of a sum sufficient to cover any tax or other governmental charge
payable for the registration of transfer or exchange.
24
Title.
We may treat the person in whose name a note is registered on the
applicable record date as the owner of the note for all purposes, whether or not
it is overdue.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the terms of our capital stock and
highlights some of the provisions of our amended and restated articles of
incorporation and by-laws. Since we are only providing a general summary of
certain terms of our amended and restated articles of incorporation and by-laws,
you should only rely on the actual provisions of the amended and restated
articles of incorporation or the by-laws. If you would like to read the articles
of incorporation or by-laws, they are on file with the Securities and Exchange
Commission.
Authorized and Outstanding Capital Stock.
Our authorized capital stock consists of 15,000,000 shares of common
stock, no par value, and 5,000,000 shares of preferred stock. As of September
30, 2003, there were 9,618,658 shares of common stock outstanding and
approximately 440 beneficial holders of common stock of record. All outstanding
shares of common stock are fully paid and non-assessable. We have two issues of
outstanding warrants to purchase 18,282 and 9,471 shares of our common stock at
a price of $6.22 and $8.93 per share, respectively. The warrants expire on April
30, 2004 and January 31, 2005, respectively. The warrants may be exercised in
whole or in part at any time prior to expiration. Fidelity has reserved 27,753
shares of common stock for the possible exercise of these warrants. None of the
warrants have been exercised as of September 30, 2003. As of September 30, 2003,
we also had outstanding, under our stock option plans, options to purchase
381,996 shares of our common stock. We have reserved 470,279 shares of common
stock for the possible exercise of options under these option plans.
Common Stock.
The holders of common stock are entitled to dividends in such amounts
and at such times as may be declared by the board of directors out of funds
legally available therefore. Holders of common stock are entitled to one vote
per share for the election of directors and other corporate matters. Such
holders are not entitled to vote cumulatively for the election of directors. In
the event of liquidation, dissolution or winding up of Fidelity, holders of
common stock would be entitled to share ratably in all of our assets available
for distribution to the holders of common stock. The common stock carries no
preemptive rights.
Preferred Stock.
Our board of directors is authorized to issue from time to time,
without shareholder authorization, in one or more designated series, shares of
preferred stock with such dividend, redemption, conversion and exchange
provisions as are provided in the particular series. The issuance of preferred
stock could have the effect of delaying or preventing a change in control of
Fidelity. Your rights as a holder of our common stock may be affected by any
preferred stock that we may issue. Our board of directors has no present plans
to issue any preferred stock.
25
Transfer Agent.
We act as our own transfer agent for our common stock.
PLAN OF DISTRIBUTION
On or about , we will distribute the subscription rights,
shareholder rights agreements and copies of this prospectus to individuals who
owned shares of common stock on . We have not employed any brokers,
dealers or underwriters in connection with the rights offering and will not pay
any underwriting commissions, fees or discounts in connection with the rights
offering. Certain of our directors or officers may assist in the rights
offering. These individuals will not receive any commissions or compensation
other than their normal directors' fees or employment compensation and will not
register with the Securities and Exchange Commission as brokers in reliance on
certain safe harbor provisions contained in Rule 3a4-1 under the Securities
Exchange Act of 1934.
If you wish to exercise your subscription rights and purchase the
notes, you should complete the shareholder rights agreement and return it with
payment for the notes, to us, at the address below. If you have any questions,
you should contact Deb Merritt, Assistant Vice President, Shareholder Relations,
of Fidelity at:
Fidelity Federal Bancorp
18 NW Fourth Street, PO Box 1347
Evansville, Indiana 47706-1347
Telephone: (812) 424-0921, extension 2226
(800) 280-8280, extension 2226
LEGAL MATTERS
The validity of the notes offered by this prospectus and the tax
matters discussed under "Material Federal Income Tax Considerations" has been
passed upon for us by Krieg DeVault LLP, Indianapolis, Indiana.
EXPERTS
BKD LLP (formerly known as Olive LLP), independent auditors, have
audited our financial statements and schedule included in our Annual Report on
Form 10-K for the year ended December 31, 2002, as set forth in their report,
which is incorporated by reference into this prospectus and elsewhere in the
registration statement. Our financial statements are incorporated by reference
in reliance on the report of BKD LLP (formerly known as Olive LLP), given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports and other information with the SEC. You may read and
copy any document we file with the SEC at the SEC's public reference room
located at 450 Fifth Street, N.W., Washington, D.C.
26
20549. You may obtain further information regarding the operation of the SEC's
Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings are also
available to the public on the SEC's Internet site located at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus
information we file with the SEC. This means we can disclose important
information to you by referring you to the documents containing such
information. The information we incorporate by reference is considered to be
part of this prospectus, unless we update or supersede that information by the
information contained in this prospectus or information we file subsequently
that is incorporated by reference into this prospectus. We are incorporating by
reference into this prospectus the following documents that we have filed with
the SEC, and our future filings with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until the rights offering is
completed:
o our annual report on Form 10-K for the fiscal year ended
December 31, 2002;
o our quarterly report on Form 10-Q for the fiscal quarter ended
March 31, 2003;
o our quarterly report on Form 10-Q for the fiscal quarter ended
June 30, 2003;
o our quarterly report on Form 10-Q for the fiscal quarter ended
September 30, 2003;
o our definitive proxy statement filed April 1, 2003 in
connection with our 2003 annual shareholder meeting.
Our SEC file number is 0-22880.
This prospectus is part of a registration statement on Form S-3 we have
filed with the SEC relating to the securities that we are offering under this
prospectus. As permitted by SEC rules, this prospectus does not contain all of
the information included in the registration statement and the accompanying
exhibits and schedules we file with the SEC. You should read the registration
statement and the exhibits and schedules for more information about us and the
notes and the warrants. The registration statement, exhibits and schedules are
also available at the SEC's Public Reference Room or through its Internet site.
This document incorporates by reference important business, financial
and other information about us that is not included in or delivered with this
document. Documents incorporated by reference and any other copies of our
filings with the SEC are available from us upon written or oral request and
without charge to each person, including any beneficial owner, to whom a
prospectus is delivered, excluding all exhibits unless specifically incorporated
by reference as exhibits in this document.
Written and telephone requests for any of these documents should be
directed to us as indicated below:
Fidelity Federal Bancorp
18 NW Fourth Street
P.O. Box 1347
Evansville, Indiana 47706-1347
Attn.: Mark A. Isaac, Vice President
Telephone: (812) 424-0921
27
PART II
-------
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution.
- -------- -------------------------------------------
The following are actual or estimated expenses incurred or to be
incurred by the Company in connection with this offering:
Fees Amount (in $)
---- ------
Filing Fee 750
Printing Expenses 2,000*
Legal Fees, Blue Sky Fees and Expenses 30,000*
Accounting Fees and Expenses 3,000*
Miscellaneous Expenses 500*
Total 36,250*
*Estimated.
Item 15. Indemnification of Directors and Officers.
- ------- -----------------------------------------
Chapter 23-1-37 of the Indiana Business Corporation Law gives
corporations the power to indemnify officers and directors under certain
circumstances.
The Company's Articles of Incorporation provide that the Company will
indemnify any person who is or was a director or officer of the Company or of
any other corporation for which such director or officer is or was serving in
any capacity at the request of the Company against all liability and expense
that may be incurred in connection with any claim, action, suit or proceeding
with respect to which such director or officer is wholly successful or acted in
good faith in a manner such director or officer reasonably believed to be in, or
not opposed to, the best interests of the Company or such other corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe that such conduct was unlawful. A director or officer of the Company is
entitled to be indemnified as a matter of right with respect to those claims,
actions, suits or proceedings in which such director or officer has been wholly
successful. In all other cases, such director or officer, shall be entitled to
indemnification as a matter of right unless (i) the director or officer has
breached or failed to perform the person's duties in compliance with the
standard of conduct set forth above and (ii) such breach of failure to perform
constituted willful misconduct or recklessness as determined by the Board of
Directors of the Company, a committee of the Board of Directors, independent
legal counsel, or a committee of disinterested persons selected by the Board of
Directors. The foregoing is a summary of detailed provisions for indemnification
found at Article VI, Section 2 of the Articles of Incorporation of the Company
which are incorporated by reference into this Registration Statement as Exhibit
3.1.
The Company also has policies insuring its officers and directors
against certain liabilities for action taken in such capacities, including
liabilities under the Securities Act of 1933, as amended.
28
See "Item 17. Undertakings" for a description of the SEC's position
regarding the indemnification of directors and officers for liabilities arising
under the Securities Act of 1933, as amended.
Item 16. Exhibits.
- ------- --------
The exhibits to this registration statement are listed in the attached
Exhibit Index.
Item 17. Undertakings.
- -------- ------------
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
29
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Evansville, State of Indiana, on February 24,
2004.
FIDELITY FEDERAL BANCORP
By: /s/ DONALD R. NEEL
-----------------------------
Donald R. Neel, President and
Chief Executive Officer
POWER OF ATTORNEY
-----------------
Each person signing below hereby makes, constitutes and appoints Bruce A.
Cordingley and Donald R. Neel, and each of them, his true and lawful
attorneys-in-fact to execute and file any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-3 as such
attorney-in-fact may deem appropriate.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated below as of February 24, 2004.
By: /s/ BRUCE A. CORDINGLEY By: /s/ BARRY A. SCHNAKENBURG*
------------------------------------ -------------------------------
Bruce A. Cordingley, Director and Barry Schnakenburg, Director
Chair of the Executive Committee
By: /s/ DONALD R. NEEL By: /s/ PHILLIP J. STOFFREGEN*
------------------------------------ -------------------------------
Donald R. Neel, Director, Phillip J. Stoffregen, Director
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ GERALD K. PEDIGO* By: /s/ JACK CUNNINGHAM*
------------------------------------ -------------------------------
Gerald K. Pedigo, Director Jack Cunningham, Director
By: /s/ PAUL E. BECKER*
------------------------------------
Paul E. Becker, Director
By: /s/ DONALD R. NEEL*
------------------------------------
Donald R. Neel, Attorney-in-fact
30
EXHIBIT INDEX
-------------
Report or Registration
Exhibit Number Document Description Statement
-------------- -------------------- ---------
* 3.1 Articles of Incorporation; Articles of Annual Report on Form 10-K for the fiscal
Amendment of the Articles of Incorporation year ended June 30, 1995; Registration
Statement on Form S-3, dated January 12,
2001, SEC File No. 333-53668
* 3.2 By-Laws of the Company Registration Statement on Form S-3, dated
January 12, 2001, SEC File No. 333-53668
*** 5.1 Opinion of Krieg DeVault LLP regarding
legality of shares
*** 8.1 Opinion of Krieg DeVault LLP regarding tax
matters
*** 23.1 Consent of Krieg DeVault LLP (contained in
Exhibits 5.1 and 8.1)
** 23.2 Consent of BKD LLP
*** 24.1 Power of Attorney (included on the
signature page of the registration
statement)
*** 99.1(a) Shareholder Rights Agreement
*** 99.1(b) Instructions for Use of Shareholders Rights
Agreement
*** 99.2 Letter to Record Shareholders
*** 99.3 Letter to Nominee Holders
*** 99.4 Letter to Clients of Nominee Holders
*** 99.5 Beneficial Owner Election Form
*** 99.6 Nominee Holder Certification
*** 99.7 Substitute Form W-9
*** 99.8 Form of 9.00% Senior Subordinated Note due
________, 2009
* Incorporated herein by reference as indicated.
** Filed herewith.
*** Previously filed.
31