SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[Amendment No. ]
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Fidelity Federal Bancorp
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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FIDELITY FEDERAL BANCORP
18 N.W. Fourth Street
Post Office Box 1347
Evansville, Indiana 47706-1347
(812) 424-0921
-------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held October 16, 1996
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Notice is hereby given that the Annual Meeting of Shareholders of
Fidelity Federal Bancorp (the "Company") will be held on October 16,
1996, at 11:00 o'clock a.m., local time, at the Company's principal
executive offices, 18 N.W. Fourth Street, Evansville, Indiana.
The purposes of the meeting are:
(1) To elect three directors to the Board of Directors to serve
for the ensuing term of three years and until their
successors are duly elected and qualified; and
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Other than with respect to procedural matters incident to the
conduct of the meeting, management is not aware of any other matters
which may properly come before the meeting. The Board of Directors of
the Company has fixed the close of business on September 4, 1996, as
the record date for determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting and at any adjournment of the
Annual Meeting.
By Order of the Board of Directors
JACK CUNNINGHAM
Vice Chairman of the Board of Directors
and Secretary
September 9, 1996
IMPORTANT -- PLEASE MAIL YOUR PROXY PROMPTLY
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED, REGARDLESS OF THE NUMBER
YOU OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE
PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR
BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN
PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
The date of this Proxy Statement is September 9, 1996.
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TABLE OF CONTENTS
Page
----
INTRODUCTORY STATEMENT . . . . . . . . . . . . . . . . . . . . . 1
Proposals Presented . . . . . . . . . . . . . . . . . . . . 1
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . 2
Beneficial Ownership . . . . . . . . . . . . . . . . . . . . 3
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . 5
ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . 5
INFORMATION CONCERNING NOMINEES,
DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . 5
Certain Transactions and Other Matters Between Management and
the Company . . . . . . . . . . . . . . . . . . . . . . . . 8
Board Meetings . . . . . . . . . . . . . . . . . . . . . . . 9
Board Committees . . . . . . . . . . . . . . . . . . . . . . 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION . . . . . . . . . . 9
Five-Year Total Shareholder Return . . . . . . . . . . . . . 9
Compensation Committee Report . . . . . . . . . . . . . . . . 10
Compensation Committee Insider Participation . . . . . . . . 12
Summary Compensation Table . . . . . . . . . . . . . . . . . 12
1987 Incentive Stock Option Plan . . . . . . . . . . . . 13
1993 Directors' Stock Option Plan . . . . . . . . . . . . 13
1995 Key Employees Stock Option Plan . . . . . . . . . . . . 14
Option Grants in Last Fiscal Year . . . . . . . . . . . . . . 14
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Value Table . . . . . . . . . . . 15
Other Employee Benefit Plans . . . . . . . . . . . . . . . . 16
Compensation of Directors . . . . . . . . . . . . . . . . . . 18
Security Ownership of Management . . . . . . . . . . . . 19
Security Ownership Reporting . . . . . . . . . . . . . . . . 21
AUDITORS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 21
SHAREHOLDERS PROPOSALS . . . . . . . . . . . . . . . . . . . . . 21
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . 21
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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FIDELITY FEDERAL BANCORP
18 N.W. Fourth Street
Post Office Box 1347
Evansville, Indiana 47706-1347
(812) 424-0921
PROXY STATEMENT
Annual Meeting of Shareholders of Fidelity Federal Bancorp
to be held on October 16, 1996
INTRODUCTORY STATEMENT
This Proxy Statement is being furnished to the shareholders of
Fidelity Federal Bancorp (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Shareholders to be held on October 16,
1996, at 11:00 a.m., local time, at the principal executive offices of
the Company, 18 N.W. Fourth Street, Evansville, Indiana and any
adjournment thereof (the "Annual Meeting").
The Company is a unitary savings and loan holding company which
owns all of the issued and outstanding stock of United Fidelity Bank,
fsb (the "Savings Bank") and Village Securities Corporation. The
Savings Bank is a federally-chartered stock savings bank with its main
office located in Evansville, Indiana. Village Securities Corporation
will operate as a discount brokerage and is anticipated to be
operational prior 1997.
The Savings Bank maintains four (4) locations in Evansville. The
Savings Bank participates in various real estate activities, including
mortgage banking and financing, as well as owning, developing,
building, renting, and managing housing developments through its
fully-owned subsidiaries, Fidelity Federal Capital Corporation
("FFCC"), Village Community Development Corporation, Village Housing
Corporation, and Village Management Corporation. The Company also
offers an array of insurance products through Village Insurance
Corporation.
PROPOSALS PRESENTED
At the Annual Meeting, shareholders of the Company will be asked
to consider and vote upon the election of three directors to the Board
of Directors of the Company to serve for an ensuing term of three
years in accordance with the Company's Articles of Incorporation
(which call for staggered terms for the Company's Board of Directors)
and to transact such other business as may properly come before the
meeting or any adjournment thereof.
If any other matters should properly come before the meeting, it
is intended that the proxies will be voted, with respect to these
matters, in accordance with the recommendations of the Board of
Directors. Except with respect to procedural matters incident to the
conduct of the meeting, management of the Company does not know of any
additional matters that may properly come before the Annual Meeting.
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The Proxy Statement, the attached Notice and the enclosed proxy
card are being first mailed to shareholders of the Company on or about
September 13, 1996.
VOTING RIGHTS
Only holders of shares of Common Stock of record at the close of
business on September 4, 1996 (the "Record Date") will be entitled to
notice of and to vote at the Annual Meeting. At the close of business
on the Record Date there were 2,495,516 shares of Common Stock issued
and outstanding. Such shares were held of record by approximately 433
shareholders. There are no other outstanding securities of the
Company entitled to vote. The presence, either in person or by proxy,
of the holders of a majority of the shares of Common Stock issued and
outstanding as of the Record Date is necessary to constitute a quorum
at the Annual Meeting. The inspectors of election will treat
abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as unvoted for
purposes of determining the approval of any matters submitted to the
shareholders for a vote. If a broker indicates on the proxy that it
does not have discretionary authority to vote certain shares on a
particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
Company shareholders of record on the Record Date are entitled to
one vote per share on any matter that may properly come before the
Annual Meeting, except for the ability to cumulate votes with respect
to the election of directors. The Articles of Incorporation of the
Company provide that shareholders are entitled to cumulate votes for
the election of directors. As such, each shareholder is entitled to
vote, in person or by proxy, the number of shares owned by the
shareholder for each nominee. Alternatively, each shareholder is
entitled to cumulate votes for nominees and give one nominee a number
of votes equal to the number of directors to be elected (3 for the
Annual Meeting) multiplied by the number of votes to which that
shareholder's shares are entitled, or distribute such votes on the
same principal among any number of the nominees as such shareholder
deems appropriate. However, a shareholder may only cumulate votes for
a nominee or nominees whose names have been properly placed in
nomination prior to the Annual Meeting. The nominees receiving the
highest number of votes, up to the number of directors to be elected,
will be elected. Voting on all other matters to be submitted at the
Annual Meeting is non-cumulative.
The proxies will have full discretion and authority to vote
cumulatively and to allocate votes among all or any of the nominees as
the Board of Directors may determine. Such grant of discretion and
authority to the proxy holders to vote cumulatively may be withheld by
checking the box marked "withhold authority" on the enclosed proxy
card. Ballots will be available at the Annual Meeting for
shareholders desiring to vote in person.
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BENEFICIAL OWNERSHIP
The following table sets forth information regarding the
beneficial ownership of Common Stock as of September 9, 1996 by the
only persons known by the Company to beneficially own 5% or more of
the issued and outstanding shares of Common Stock.
Title of Name and Address Amount and Percent of
Class of Beneficial Nature of Class
Owner Beneficial
Ownership (1)
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Common Bruce A. Cordingley 510,775 (2) 17.8%
8888 Keystone Crossing
Suite 900
Indianapolis, IN 46240
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Common M. Brian Davis 765,736 (3)(4) 27.4%
10266 Outer Lincoln Avenue
Newburgh, IN 47630
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Common Barry A. Schnakenburg 216,138 (5) 8.6%
8701 Petersburg Road
Evansville, IN 47711
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Common Rahmi Soyugenc 171,720 6.9%
119 LaDonna Blvd.
Evansville, IN 47711
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Common First Financial Fund, Inc. 202,900(6) 8.1%
One Seaport Plaza - 25th Fl.
New York, NY 10292
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Common Wellington Management Co. 202,900(6) 8.1%
75 State St.
Boston, MA 02109
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(1) This information is based on Schedule 13D and 13G Reports filed
by the beneficial owner with the Securities and Exchange
Commission ("SEC") pursuant to applicable provisions of the
Securities Exchange Act of 1934 ("Exchange Act"), as of September
4, 1996, and any other information provided to the Company by the
beneficial owner. It does not reflect any changes in those
shareholdings which may have occurred since that date.
Beneficial ownership is direct except as otherwise indicated by
footnote.
(2) Includes 127,924 shares held by Pedcor Investments, A Limited
Liability Company, as to which Mr. Cordingley is a 47.6% owner
and a co-chief executive officer and President. Also includes
39,916 shares which Mr. Cordingley has the right to acquire
pursuant to the exercise of stock options granted under the
Company's 1993 Directors Stock Option Plan, 46,200 shares which
Mr. Cordingley has the right to acquire pursuant to the exercise
of stock options granted under the Company's 1995 Key Employees
Stock Option Plan, 165,210 shares which Mr. Cordingley, Pedcor
Investments, and Mr. Cordingley's wife are entitled to purchase
upon exercise of 596 warrants acquired pursuant to the 1994
Rights Offering and 131,208 shares which Mr. Cordingley, Pedcor
Investments and Mr. Cordingley's wife are entitled to purchase
upon exercise of 568 warrants acquired in the 1995 Rights
Offering.
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(3) Includes 7,854 shares which Mr. Davis holds as custodian for his
minor daughter and 6,699 shares which Mr. Davis holds as
custodian for his minor son. Also includes 115,591 shares which
Mr. Davis is entitled to purchase for himself or his minor
children upon exercise of 417 warrants acquired pursuant to the
1994 Rights Offering and 93,093 shares entitled to be purchased
upon exercise of 403 warrants acquired in the 1995 Rights
Offering. Also includes 39,916 shares which Mr. Davis has the
right to acquire pursuant to the exercise of stock options
granted under the 1993 Directors Stock Option Plan and 27,720
shares which Mr. Davis has the right to acquire pursuant to the
exercise of stock options granted under the Company's 1995 Key
Employees Stock Option Plan. Also includes 84,315 shares of the
Company owned by Maybelle R. Davis, the mother of Mr. Davis, and
14,137 shares Mrs. Davis is entitled to purchase upon exercise of
51 warrants acquired in the 1994 Rights Offering, and 8,085
shares entitled to be purchased upon exercise of 35 Warrants
acquired in the 1995 Rights Offering, as to which shares Mr.
Davis has authority to vote pursuant to a Power of Attorney.
Also includes 462 shares owned by Mr. Davis wife.
(4) M. Brian Davis and Maybelle R. Davis (collectively the "Davis
Group") currently own approximately 18.7% of the issued and
outstanding Common Stock, excluding options and warrants for the
purchase of Common Stock. In March 1995, the OTS approved an
application by the Davis Group to acquire up to 40% of the issued
and outstanding Common Stock.
(5) Includes 1,617 shares held by the spouse of Mr. Schnakenburg,
8,316 shares held as custodian by Mr. Schnakenburg for his minor
children living in his home, 24,948 shares held by U.S.
Industries Group, Inc., 52,263 shares held by Barry, Inc. and
27,442 shares held by BOAH Associates. Also includes 6,930
shares which Mr. Schnakenburg has the right to acquire through
the exercise of stock options granted under the Company's 1993
Directors Stock Option Plan. Also includes 20,790 shares
entitled to be purchased upon exercise of 90 warrants acquired in
the 1995 Rights Offering. Also includes 73,832 shares of the
Company pursuant to which Mr. Schnakenburg may exercise voting
and investment power pursuant to a Power of Attorney.
(6) Wellington Management Company is the investment advisor for First
Financial Fund, Inc. Wellington is deemed the beneficial owner
of the shares only by virtue of the direct or indirect investment
and/or voting discretion it possesses pursuant to the provisions
of the investment advisory agreement with First Financial Fund,
Inc.
PROXIES
Each properly executed and returned proxy will be voted at the
Annual Meeting in accordance with the instructions thereon. If no
instructions are given, the proxy will be voted by the individuals
designated as proxies in their discretion and with authority to
cumulate votes.
Any shareholder giving a proxy may revoke it at any time before it
is exercised by (i) attending the Annual Meeting, filing a written
notice of revocation with the secretary of the Annual Meeting and
voting in person; (ii) executing a written instrument to that effect
and delivering it to the Secretary of the Company prior to the Annual
Meeting; or (iii) duly executing and delivering a later dated proxy to
the Secretary of the Company prior to the Annual Meeting.
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SOLICITATION OF PROXIES
In addition to use of the mails, proxies may be solicited
personally or by telephone or telegraph by officers, directors and
certain employees who will not be specially compensated for such
activity. Brokerage houses, nominees, fiduciaries and other
custodians will be requested by the Company to forward soliciting
materials to beneficial owners. The Company will bear all expenses in
connection with the solicitation of proxies for the Annual Meeting.
ELECTION OF DIRECTORS
The Board of Directors of the Company is currently composed of
nine members. The Company's Articles of Incorporation divide the
Board of Directors into three classes, as nearly equal in size as
possible, with one class of Directors elected each year for a three-
year term. The terms of David L. Maraman, Robert F. Doerter, and Jack
Cunningham expire at the 1996 Annual Meeting of Shareholders. Each of
these directors has been nominated for reelection to a three-year term
to expire at the 1999 Annual Meeting of Shareholders.
If for any reason any of these nominees becomes unable or is
unwilling to serve at the time of the Annual Meeting, the person named
in the enclosed proxy card will have discretionary authority to vote
for a substitute nominee or nominees. It is not anticipated that any
nominee will be unavailable for election.
At the Annual Meeting, proxies cannot be voted for a greater
number of persons than the number of nominees named.
The Board of Directors recommends that the shareholders vote FOR
the election of those individuals named as nominees in the
accompanying proxy.
INFORMATION CONCERNING NOMINEES,
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth information as to each nominee for
election at the Annual Meeting, each Director continuing in office,
and each executive officer of the Company as of June 30, 1996,
including their ages, present principal occupations, other business
experience during the last five years, directorships in other publicly
held companies, and the year they were first elected or appointed to
the Board of Directors (if applicable). Each individual's service
with the Company began at the formation of the Company in 1993, unless
otherwise noted. In addition, all current Directors of the Company
are also current Directors of the Savings Bank. All nominees are
currently members of the Board of Directors.
There are no arrangements or understandings between any of the
Directors, executive officers or any other person pursuant to which
any Director or executive officer has been selected for his or her
respective position.
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CURT J. ANGERMEIER Age - 42, term expires in 1997.
Mr. Angermeier was appointed to the Board of Directors of the Company
on March 21, 1996. Mr. Angermeier is a practicing attorney,
concentrating on insurance law matters. Mr. Angermeier is a member of
the Indiana Bar Association, Indiana Defense Lawyers Association and
the Evansville Bar Association.
WILLIAM R. BAUGH Age - 75, term expires in 1998.
Mr. Baugh is a Director of the Company and has been Chairman Emeritus
of the Board of Directors since October 1994. Mr. Baugh served as
Chairman of the Board of Directors of the Company from its formation
in 1993 until October 1994. He has been a Director of the Savings
Bank since 1955, was Chairman of the Board of the Savings Bank from
1979 until October 1994, and was President of the Savings Bank from
1970 until 1981 and from 1983 until 1986.
BRUCE A. CORDINGLEY Age - 49, term expires in 1998.
Mr. Cordingley is a Director of the Company and has served as Chairman
of the Board of Directors since October 1994 and served as Chief
Executive Officer of the Company from June 6, 1995, to March 1, 1996.
In March 1996 Mr. Cordingley resigned as Chief Executive Officer of
the Company in order to devote more attention to other business
interests outside of the Company. He continues to serve as Chairman
of the Board of Directors of the Company and in the other positions
discussed below and in these capacities continues to devote
significant time to the business of the Company.
Mr. Cordingley also serves as Chairman of the Board of Directors of
the Savings Bank, FFCC and Village Securities Corporation. Mr.
Cordingley is a Director of Village Management Corporation, Village
Community Development Corporation, and Village Housing Corporation
(the three service corporation subsidiaries of the Savings Bank
involved in the development of affordable housing units) and Village
Insurance Corporation. He is also the Vice-President of Village
Management Corporation and the President of Village Community
Development Corporation and Village Housing Corporation. Mr.
Cordingley has been a director of the Savings Bank since 1992. Mr.
Cordingley is an attorney and was a partner in the law firm of Ice
Miller Donadio and Ryan in Indianapolis, Indiana, from 1973 to
February 1992. Mr. Cordingley is President of Pedcor Investments, A
Limited Liability Company, located in Indianapolis, Indiana, the
principal business of which is real estate oriented investments and
developments. Mr. Cordingley is also a Director of Evansville Brewing
Company, Flagship Bank, fsb (San Diego, California), and International
City Bank, n.a. (Long Beach, California).
JACK CUNNINGHAM Age - 66, term expires in 1996.
Mr. Cunningham is a Director of the Company and has served as Vice-
Chairman and Secretary of the Company and the Savings Bank since June
1995 and served as President of the Company from May 1994 through June
1995. Mr. Cunningham is a Director of Village Management Corporation,
Village Community Development Corporation, and Village Housing
Corporation (the three service corporation subsidiaries of the Savings
Bank involved in the development of affordable housing units) and
Village Insurance Corporation and is also a Vice President and
Director of FFCC. Mr. Cunningham has been a Director of the Savings
Bank since 1985 and an officer of the Savings Bank since 1974.
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M. BRIAN DAVIS Age - 41, term expires in 1998.
Mr. Davis is a Director of the Company and has served as its President
and Chief Operating Officer since June 1995. Mr. Davis is also a
Director of Village Management Corporation, Village Community
Development Corporation, and Village Housing Corporation (the three
service corporation subsidiaries of the Savings Bank involved in the
development of affordable housing units). Mr. Davis is the President
of Village Management Corporation and Village Insurance Corporation,
the Executive Vice-President of Village Community Development
Corporation and Village Housing Corporation, and the Vice-Chairman of
the Board of Directors of FFCC. Mr. Davis has been a Director of the
Savings Bank since 1992. Mr. Davis is a partner in the Davis Brothers
Real Estate Partnership, located in Evansville, Indiana, which has
developed and managed commercial real estate throughout the Midwest.
He is also currently President of Southern Investment Corporation, a
real estate investment company, and a Director of Evansville Brewing
Company.
ROBERT F. DOERTER Age - 76, term expires in 1996.
Mr. Doerter is a Director of the Company, and has been a Director of
the Savings Bank since 1968. Mr. Doerter is currently retired.
DAVID L. MARAMAN Age - 48, term expires in 1996.
Mr. Maraman became a Director of the Company and the President, Chief
Executive Officer, and a Director of the Savings Bank in December
1994. Prior to this, he held various manager level positions with
National City Bank of Indiana (formerly Merchants National Bank and
Trust Company of Indianapolis) from 1987 to 1994. Mr. Maraman served
as manager, examiner, and examiner-in-charge with the Office of the
Comptroller of the Currency prior to joining Merchants National Bank.
MARK A. MATTINGLY Age - 47, term expires in 1997.
Mr. Mattingly is a Director of the Company and Chairman of the Audit
Committee. Mr. Mattingly became a Director of the Company and the
Savings Bank in February 1995. He currently serves as Chairman,
President and Chief Executive Officer of Evansville Brewing Company.
BARRY A. SCHNAKENBURG Age - 48, term expires in 1997.
Mr. Schnakenburg is a Director of the Company. He has been a Director
of the Savings Bank since 1990. Mr. Schnakenburg currently serves as
a Director of FFCC and as a Director and the Executive Vice-President
and Chief Operating Officer of Village Insurance Corporation. Mr.
Schnakenburg has served as the President of U.S. Industries Group,
Inc. for the past 9 years. U.S. Industries Group, Inc., is a sheet
metal and roofing contractor located in Evansville, Indiana.
7
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THERESA PHILLIPS BENNETT Age - 33.
Ms. Bennett became Vice-President of Village Community Development
Corporation and Village Housing Corporation, two wholly-owned
subsidiaries of the Savings Bank, in November 1993 and Senior Vice-
President in November 1994. She became President, Chief Executive
Officer and Director of FFCC in August 1994. Prior thereto she was
employed at Boston Capital Partners, Inc., Boston, Massachusetts, as
Acquisition Associate (January 1988 through March 1990) and Assistant
Vice President of Acquisitions (April 1990 through October 1990) and
was a portfolio manager for Safford Investment Counsel (formerly
Nicholas H. Safford & Co., Inc.), Rockport, Massachusetts (August 1991
through October 1993).
DONALD R. NEEL Age - 33.
Mr. Neel is the Senior Vice-President, Chief Financial Officer, and
Treasurer of the Company. Mr. Neel also serves as Treasurer of
Village Management Corporation, Village Community Development
Corporation, Village Housing Corporation, Village Insurance
Corporation, and FFCC and as Senior Vice President and Treasurer of
Village Securities Corporation. Prior to joining the Savings Bank and
the Company in 1993, he was employed at Peoples Bank, Evansville,
Indiana as Assistant Vice-President and Controller (December 1988
through January 1990) and Vice-President and Controller (January 1990
through November 1990). Upon the acquisition of Peoples Bank by INB
Financial Corporation, Mr. Neel served as Vice-President and
Controller of INB Banking Company, Southwest (successor to Peoples
Bank) from November 1990 through April 1993.
CERTAIN TRANSACTIONS AND OTHER MATTERS BETWEEN MANAGEMENT AND THE
COMPANY
Directors and executive officers of the Company and the Savings
Bank and their associates are customers of, and have had transactions
with, the Company and the Savings Bank in the ordinary course of
business. Comparable transactions may be expected to take place in
the future. Directors of the Company may not obtain extensions of
credit from the Company. Loans made to non-director officers were
made in the ordinary course of business on substantially the same
terms as those prevailing at the time for comparable transactions with
other persons. These loans did not involve more than the normal risk
of collectibility or present other unfavorable features.
The Office of Thrift Supervision ( OTS ), the primary federal
banking regulatory agency of the Savings Bank, by regulation has
provided that each director, officer, or affiliated person of a
savings association, such as the Savings Bank, has a fundamental duty
to avoid placing himself in a position which creates, or which leads
to or could lead to, a conflict of interest or appearance of a
conflict of interest having an adverse effect upon, among other
things, the interests of the members of the savings association or the
association's soundness. In addition, the OTS by regulation has
stated that the fiduciary relationship owed by a director or officer
of a savings association, such as the Savings Bank, includes the duty
to protect the association and that the OTS would consider this duty
to be breached if such individual would take advantage of a business
opportunity for his own or another person's personal benefit or profit
when the opportunity is within the corporate powers of the savings
association (or its service corporation) and when the opportunity is
of a present or potential practical advantage to the savings
association. The Board of Directors of the Company and the Savings
Bank are aware of these regulations and requirements of the OTS and
believe they have conducted, and intend to continue to conduct,
themselves in compliance with these requirements at all times.
8
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BOARD MEETINGS
The Company had 13 Board of Directors meetings during its fiscal
year ended June 30, 1996. Each of the incumbent Directors of the
Company attended at least 75% of the meetings of the Board of
Directors and any committees upon which he or she served during the
period which such individual served.
BOARD COMMITTEES
The Board of Directors has a Nominating Committee which consists
of William R. Baugh (Chairman), M. Brian Davis, and Curt J.
Angermeier. The Nominating Committee, whose purpose is to nominate
directors for election to the Board of Directors, met once during the
fiscal year ended June 30, 1996. Under the Company's By-Laws, no
nominations for director, except those made by the Nominating
Committee, shall be voted upon at the Annual Meeting, unless other
nominations by shareholders are made in writing and delivered to the
Secretary of the Company not later than the close of business on the
tenth day following the date the notice of the Annual Meeting was
mailed to shareholders. Shareholders who wish to recommend nominees
must do so in writing to the Secretary of the Company as described
above.
The Board of Directors also has an Audit Committee consisting of
Mark A. Mattingly (Chairman), William R. Baugh, Robert F. Doerter,
Barry A. Schnakenburg and Curt J. Angermeier. The Audit Committee,
whose purpose is to review audit reports and related matters to ensure
effective compliance with regulatory and internal policies and
procedures, met four times during the fiscal year ended June 30, 1996.
The members of the Audit Committee also serve as the committee
authorized to direct the grant of options to eligible Key Employees
under the 1987 Incentive Stock Option Plan of the Company, the 1993
Directors Stock Option Plan, and the 1995 Key Employees Stock Option
Plan.
The Executive Committee of the Board of Directors serves as the
Compensation Committee. The Executive Committee is currently composed
of Bruce A. Cordingley (Chairman), M. Brian Davis, Barry A.
Schnakenburg, and Jack Cunningham. The Executive Committee met
thirteen times during the fiscal year ended June 30, 1996.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
FIVE-YEAR TOTAL SHAREHOLDER RETURN
The following indexed graph indicates the Company's total return to
its shareholders on its common stock for the past five years, assuming
dividend reinvestment, as compared to total return for the NASDAQ Market
Index and the Peer Group Index (which is a line-of- business index
prepared by an independent third party consisting of savings and loan
holding companies or federally chartered savings institutions with the
same SIC number as the Company and which have been publicly traded for
at least six years). The comparison of total return on investment for
9
<PAGE>
each of the periods assumes that $100 was invested on July 1, 1991, in
each of the Company, the NASDAQ Market Index and the Peer Group Index.
The period prior to November 8, 1993 (the date the Company became the
sole shareholder of the Savings Bank pursuant to a reorganization in
which the Company exchanged one share of its common stock for each one
share of common stock of the Savings Bank outstanding) reflects the
stock of the Savings Bank.
COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FIDELITY FEDERAL BANCORP,
NASDAQ MARKET INDEX AND SIC CODE INDEX
[GRAPH]
1991 1992 1993 1994 1995 1996
NASDAQ MARKET INDEX 100.0 107.7 132.2 145.0 170.1 214.1
SIC CODE INDEX 100.0 132.7 166.4 193.4 225.4 284.1
FIDELITY FEDERAL 100.0 123.8 151.9 346.3 629.3 654.8
ASSUMES $100 INVESTED ON JULY 1, 1991
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING JUNE 30, 1996
COMPENSATION COMMITTEE REPORT
Decisions on compensation of the Company's executives are made by
the Executive Committee of the Board of Directors of the Company,
which also serves as the Compensation Committee. All decisions of the
Executive Committee relating to the compensation of the Company's
officers are reviewed by the full Board. Set forth below is a report
submitted by Messrs. Cordingley, Davis, Cunningham and Schnakenburg,
in their capacity as the Board's Executive Committee, addressing the
Company's compensation policies for 1996 as they affected the
Company's executive officers.
10
<PAGE>
Compensation Policies Toward Executive Officers.
The Executive Committee's executive compensation policies are
designed to provide competitive levels of compensation to the
executive officers and to reward officers for satisfactory individual
performance and for satisfactory performance of the Company as a
whole. There are no established goals or standards relating to
performance of the Company which have been utilized in setting
compensation of individual employees.
Base Salary.
Each executive officer is reviewed individually by the Executive
Committee, which includes an analysis of the performance of the
Company. In addition, the review includes, among other things, an
analysis of the individual's performance during the past fiscal year,
focusing primarily upon the following aspects of the individual's job
or characteristics of the individual exhibited during the most recent
fiscal year: quality and quantity of work; supervisory skills;
dependability; initiative; attendance; overall skill level; and
overall value to the Company.
Other Compensation Plans.
At various times in the past the Company has adopted certain broad
based employee benefit plans in which the senior executives are
permitted to participate on the same terms as non-executive employees
who meet applicable eligibility criteria, subject to any legal
limitations on the amount that may be contributed or the benefits that
may be payable under the plans.
Benefits.
The Company provides medical, defined benefit, and defined
contribution plans to the senior executives that are generally
available to other Company employees. The amount of perquisites, as
determined in accordance with the rules of the SEC relating to
executive compensation, did not exceed 10% of salary and bonus for
fiscal year 1996.
Mr. Cordingley's 1996 Compensation.
Regulations of the Securities and Exchange Commission require that
the Executive Committee disclose the Committee's basis for
compensation reported for any individual who served as the Chief
Executive Officer during the last fiscal year. Mr. Cordingley's
salary is determined in the same manner as discussed above for other
senior executives. The Executive Committee believes that Mr.
Cordingley has managed the Company well. Mr. Cordingley did not
participate in the deliberations of the Executive Committee with
respect to his compensation level. See "Compensation Committee
Insider Participation."
Current Members of the 1996 Executive Committee:
Bruce A. Cordingley
M. Brian Davis
Jack Cunningham
Barry A. Schnakenburg
11
<PAGE>
COMPENSATION COMMITTEE INSIDER PARTICIPATION
During the past fiscal year, Mr. Cordingley served as the
Company's Chief Executive Officer until March and served on the
Executive Committee, but did not participate in any discussion or
voting with respect to his respective salary as an executive officer
and was not present in the room during the discussion by the Executive
Committee of his compensation.
SUMMARY COMPENSATION TABLE
The following table sets forth, for the fiscal years ended June
30, 1996, 1995 and 1994, the cash compensation paid by the Company or
its subsidiaries, as well as certain other compensation paid or
awarded during those years, to the Chief Executive Officer of the
Company at any time during the fiscal year ended June 30, 1996 and the
executive officers of the Company whose salary and bonus exceeded
$100,000 during the fiscal year ended June 30, 1996.
<TABLE>
<CAPTION>
Fiscal Year Annual Securities All Other
Name and Principal Position ended Compensation (1)(2) Underlying Compensa-
June 30, Salary Option tion(3)
Grants in Year
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bruce A. Cordingley 1996 $292,519 -0- $1,496
Chairman 1995 $137,000 46,200 -0-
and Director 1994 $ 5,900 39,916 -0-
- - -------------------------------------------------------------------------------------------------------------------
M. Brian Davis 1996 $197,280 -0- $ 977
President, COO and 1995 $ 85,800 27,720 -0-
Director 1994 $ 5,900 39,916 -0-
- - -------------------------------------------------------------------------------------------------------------------
Jack Cunningham 1996 $121,097 -0- $1,539
Vice Chairman, Secretary 1995 $ 96,193 6,930 $1,244
and Director 1994 $ 66,828 -0- -0-
- - -------------------------------------------------------------------------------------------------------------------
David L. Maraman 1996 $128,444 6,930 $ 906
President, CEO, 1995 $ 74,875 6,930 -0-
Secretary 1994 N.A. N.A. N.A.
of Savings Bank
- - -------------------------------------------------------------------------------------------------------------------
Theresa Phillips Bennett 1996 $182,222 -0- $2,581
President, 1995 $100,412 -0- $1,484
CEO and Director of FFCC 1994 $ 42,994 3,780 -0-
- - -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) While officers enjoy certain perquisites, such perquisites do
not exceed the lesser of $50,000 or 10% of such officer's
salary and bonus and are not required to be disclosed by
applicable rules of the SEC.
(2) Includes Directors fees of $13,600 paid to Mr. Cunningham and
Mr. Maraman and $12,000 paid to Mr. Cordingley and Mr. Davis
for the fiscal year ended June 30, 1996. Also includes
Directors' fees of $12,000 during the fiscal year ended June
30, 1995, for Messrs. Cunningham, Cordingley, Maraman, and
Davis, and $5,900 during the fiscal year ended June 30, 1994,
for Messrs. Cunningham, Cordingley, and Davis.
12
<PAGE>
(3) Consists of Company contributions under the Company s
Retirement Savings Plan.
1987 INCENTIVE STOCK OPTION PLAN
The purpose of the 1987 Incentive Stock Option Plan ("1987
Plan"), is to promote the interests of the Company and its
shareholders by providing executives and key employees, upon whose
judgment, initiative and industry the Company is largely dependent for
the successful conduct and growth of its business, with the incentive
to continue their employment with the Company by providing additional
incentive through stock ownership, and thereby increasing their
proprietary interest in the Company and their personal interest in its
continued success and progress.
Only key employees and officers of the Company and Subsidiaries
("Key Employees") are eligible to participate in the 1987 Plan.
The 1987 Plan is administered by a committee of three or more
directors of the Company ("Committee"), who are not eligible to
receive options thereunder. The Committee is authorized to direct the
grant of the options to eligible Key Employees, in the amount and on
the terms and conditions determined by the Committee. The maximum
number of shares of the Company's Common Stock which may be issued
under the 1987 Plan is 129,901 which may be authorized but unissued
shares, reacquired shares or a combination thereof. The price at
which shares may be purchased under each option will be fixed by the
Committee but must be at least 100% of the fair market value of the
shares on the date the option is granted. The numbers of shares and
option exercise prices under the 1987 Plan have been adjusted to
reflect a twenty percent stock dividend in 1994, a 2.1 for 1 stock
split in 1995, and a 10% stock dividend in 1996.
1993 DIRECTORS' STOCK OPTION PLAN
The 1993 Directors Stock Option Plan ( Directors Plan ) provides
for the grant of non-qualified stock options to individuals who are
directors of the Company or any of its subsidiaries to acquire shares
of common stock of the Company for a price of not less than $2 above
the average of the high and low bid quotations as reported by NASDAQ
for the common stock of the Company for the five trading days
immediately preceding the date the option is granted. A total of
233,779 shares was reserved for issuance under the Directors Plan.
The Directors Plan will expire on August 1, 1998, except
outstanding options will remain in effect until they have been
exercised, terminated, forfeited, or have expired. As such, options
may be outstanding under the Directors Plan through August 1, 2008.
The number of shares and option exercise prices under the Directors
Plan have been adjusted to reflect a twenty percent stock dividend
distributed in 1994, a 2.1 for 1 stock split in 1995, and a 10% stock
dividend in 1996.
1995 KEY EMPLOYEES STOCK OPTION PLAN
On March 15, 1995, the Board of Directors of the Company adopted
a non-qualified Stock Option Plan (the "Key Employees Plan") which
provides for the grant of incentive stock options and non-qualified
stock options to individuals who are officers and key employees of the
Company or any of its subsidiaries. The Key Employees Plan was
approved by the shareholders of the Company on October 18, 1995, at
the Annual Shareholders Meeting.
13
<PAGE>
The Key Employees Plan provides for the grant of incentive stock
options and non-qualified stock options to acquire shares of common
stock of the Company for a price of not less than the fair market
value of the share on the date which the option is granted. A total
of 496,650 shares was reserved for issuance under the Key Employees
Plan. The option price per share for each incentive stock option
granted to an employee must not be less than the fair market value of
the share of common stock on the date the option is granted. The
option price per share for an incentive stock option granted to an
employee owning 10% or more of the common stock of the Company must
not be less than 110% of the fair market value of the share on the
date that the option is granted. The option price per share for
non-qualified stock options will be determined by the Administrative
Committee of the Key Employees Plan, but may not be less than 100% of
the fair market value of a share of common stock on the date of the
grant of the option.
The Key Employees Plan will expire on March 15, 2005, except
outstanding options will remain in effect until they have been
exercised, terminated, forfeited, or have expired. As such, options
may be outstanding under the Key Employees Plan through March 15,
2015. The number of shares and option exercise prices under the Key
Employees Plan have been adjusted to reflect a 2.1 for 1 stock split
in 1995, and a 10% stock dividend in 1996.
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table provides details regarding stock options
granted to the named executive officers for the fiscal year ended June
30, 1996. In addition, in accordance with rules of the Securities and
Exchange Commission, there are shown the hypothetical gains or "option
spreads" that would exist for respective options. These gains are
based on assumed rates of annual compound stock price appreciation of
five percent (5%) and ten percent (10%) from the date the options were
granted over the full option term.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
14
<PAGE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR
- - ---------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed Annual
Individual Grants Rates of Stock
Appreciation For Option
Term (1)
- - ---------------------------------------------------------------------------------------------------------------
Name Number Percent of Exercise Market Expiration 0% 5% 10%
of Total Options or Price Date
Shares Granted in Base on
Under- Fiscal Year Price Date
lying of
Options Grant
Granted
(#) (%) ($/Sh) ($/Sh) ($) ($) ($)
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David L. Maraman 6,930 100% $14.32 $14.32 12/5/05 -0- 62,439 158,143
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Gains are reported net of the option exercise price, but before
any effect of taxes. In assessing these values, it should be
kept in mind that no matter what value is placed on a stock
option on the date of grant, its ultimate value will be dependent
on the market value of the Company's stock at a future date, and
that value would depend on the efforts of such executives to
foster the future success of the Company for the benefit of not
only the executives, but all shareholders. The amounts reflected
in this table may not necessarily be achieved.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-end
Option Values Table
The following table shows for the named executive officers the
number of shares acquired on exercise and shares covered by both
exercisable and non-exercisable stock options as of June 30, 1996.
Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any such
existing stock options and the fiscal year-end price of Common Stock.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
15
<PAGE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
- - ---------------------------------------------------------------------------------------------------------------
Shares Value Number Of Unexercised Value of Unexercised
Acquired Realized Stock Options in-the-Money Options
on ($) 06/30/96 06/30/96
Name Exercise
(#)
Exercisable Unexercisable Exercisable Unexercisable
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bruce A. Cordingley 39,916 -0- $200,777(2) N.A.
18,480 27,720 $12,012(3) $18,013(3)
- - ---------------------------------------------------------------------------------------------------------------
M. Brian Davis 39,916 -0- $200,777(6) N.A.
11,088 16,632 $ 7,207(7) 10,811(7)
- - ---------------------------------------------------------------------------------------------------------------
Jack Cunningham 8,857 95,656 2,772 4,158 $ 4,491(1) 6,736(1)
- - ---------------------------------------------------------------------------------------------------------------
David L. Maraman 1,000 4,570 5,830 -0- $ 16,382(4)
2,772 4,158 -0-(5) -0-(5)
- - ---------------------------------------------------------------------------------------------------------------
Theresa Phillips Bennett 3,780 25,312 -0- -0- N.A. N.A.
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($9.63 per
share).
(2) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($6.22 per
share).
(3) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($10.60 per
share).
(4) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($8.44 per
share).
(5) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($14.32 per
share).
(6) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($6.22 per
share).
(7) Represents the bid value of the Company's Common Stock at June
30, 1996 ($11.25 per share), less the exercise price ($10.60 per
share).
16
<PAGE>
OTHER EMPLOYEE BENEFIT PLANS
Pension Plan.
The Company currently participates in a defined benefit pension
plan sponsored by the Financial Institutions Retirement Fund, a non-
profit, tax qualified, tax-exempt pension plan and trust in which
Federal Home Loan Banks, savings and loan associations and similar
institutions participate ("Pension Plan"). All employees of the
Company or its subsidiaries (which excludes non-employee Directors of
the Company) (i) who have not attained age sixty (60) prior to being
hired and (ii) who are compensated on a salaried basis are covered by
the Pension Plan and become participants upon completion of one year
of service and attainment of age 21. Participants are not required or
allowed to make contributions to the Pension Plan.
A participant in the Pension Plan is entitled to receive benefits
based upon years of service for the Company or its subsidiaries and a
percentage of his average annual salary during the five (5)
consecutive years of service which produce the highest such average
without deduction for Social Security benefits. For purposes of
computing benefits, "salary" includes an employee's regular base
salary or wage inclusive of bonuses and overtime but exclusive of
special payments such as fees, deferred compensation, severance
payments and contributions by the Company to the Pension Plan.
Participants become fully vested in their benefits after
completion of five (5) years of service. Upon attaining age sixty-
five (65), participants become one hundred percent (100%) vested in
their benefits provided by the Company under the Pension Plan,
regardless of the number of their years of service. Benefits are
payable at normal retirement age (age 65). The Pension Plan also
contains provisions for the payment of benefits on the early
retirement, late retirement, death or disability of a participant.
The regular benefit under the Pension Plan to be paid on a
participant's retirement is a monthly pension for the life of a
participant with a minimum guaranteed benefit of twelve (12) times the
participant's annual retirement benefit under the Pension Plan. Thus,
the regular form of all retirement benefits includes not only a
retirement allowance, but also a lump sum retirement death benefit
which is twelve (12) times the annual retirement benefit less the sum
of such retirement benefits made before death. The Pension Plan
provides that married participants will receive the regular retirement
benefit in the form of an actuarially equivalent joint and survivor
annuity. Optional forms of payments are available to all
participants; however, married participants must obtain written
spousal consent to the distribution of benefits in a form other than a
joint and survivor annuity.
According to the Pension Plan sponsor, the actuaries for the
Pension Plan have determined that due to the Pension Plan's funding
status no contributions were required to be made to the Pension Plan
by the Company for the plan year ended June 30, 1996.
17
<PAGE>
The following table shows estimated annual benefits payable at
normal retirement to persons in specified remuneration
classifications. The benefit amounts presented in the totals are
annual pension amounts for the life of the participant, with a minimum
guaranteed benefit of twelve (12) times the annual retirement benefit
under the Pension Plan, for a participant at normal retirement (age
65) with ten (10), twenty (20) and thirty (30) years of service with
no deduction for Social Security or other offset amounts. The maximum
compensation which may be taken into account for any purpose under the
Pension Plan is limited by the Internal Revenue Code to $150,000 for
1996. As of July 1, 1996, Bruce A. Cordingley had 1 year of service,
Jack Cunningham had 38 years of service, Theresa Phillips Bennett had
2 years of service, David L. Maraman had 1 year of service and M.
Brian Davis had 1 year of service under the Pension Plan.
- - ----------------------------------------------------------------------
Annual Benefit at Normal Retirement
- - ----------------------------------------------------------------------
Highest
Five-Year
Average 10 Years 15 Years 20 Years 25 Years 30 Years
Annual of of of of of
Salary Service Service Service Service Service
- - ----------------------------------------------------------------------
$50,000 10,000 15,000 20,000 25,000 30,000
- - ----------------------------------------------------------------------
$75,000 15,000 22,500 30,000 37,500 45,000
- - ----------------------------------------------------------------------
$100,000 20,000 30,000 40,000 50,000 60,000
- - ----------------------------------------------------------------------
$125,000 25,000 37,500 50,000 62,500 75,000
- - ----------------------------------------------------------------------
$150,000 30,000 45,000 60,000 75,000 90,000
- - ----------------------------------------------------------------------
Retirement Savings Plan.
In 1994 the Company adopted a defined contribution plan under
Internal Revenue Code Section 401(k) in which substantially all
employees may participate. Under this plan, employees may contribute
up to 15% of pay, and contributions up to 6% are supplemented by
Company contributions. Such Company contributions are made at the
rate of 25 cents for each dollar contributed by the participant.
Participants may elect to have all or a portion of their contributions
made on a tax-deferred basis pursuant to provisions in the plan
meeting the requirements of Section 401(k) of the Internal Revenue
Code. The Company expense for the plan was $27,000 for the fiscal
year ended June 30, 1996.
COMPENSATION OF DIRECTORS
The Directors of the Savings Bank are compensated for their
services in the amount of $1,000.00 per month (or $12,000 per year)
plus an additional $200.00 per month if the Director attends that
month's regularly scheduled Board meeting. Directors receive an
additional $200.00 for attending special meetings of the Board of
Directors or committee meetings. Board fees were adjusted to current
levels as of February. The maximum compensation received by any
Director for his or her service on the Board was $13,600.00 for the
current year.
18
<PAGE>
Directors of the Company do not receive compensation for their
services in such capacity. However, Directors of the Company may
receive stock options pursuant to the Directors Plan. See "EXECUTIVE
COMPENSATION AND OTHER INFORMATION -- 1993 Directors' Stock Option
Plan."
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of
September 4, 1996, with respect to the Common Stock of the Company
beneficially owned by each Director of the Company and by all
Executive Officers and Directors as a group.
- - -------------------------------------------------------------------------
Name Number of Shares Percent of
Beneficially Owned (1) Class (1)
- - -------------------------------------------------------------------------
William R. Baugh 26,600 1.1%
- - -------------------------------------------------------------------------
Bruce A. Cordingley (2) 510,775 17.8%
- - -------------------------------------------------------------------------
Jack Cunningham (3) 34,664 1.4%
- - -------------------------------------------------------------------------
M. Brian Davis (4) 765,736 27.4%
- - -------------------------------------------------------------------------
Robert F. Doerter 8,593 0.3%
- - -------------------------------------------------------------------------
Barry A. Schnakenburg (5) 216,138 8.6%
- - -------------------------------------------------------------------------
David L. Maraman (6) 13,238 0.5%
- - -------------------------------------------------------------------------
Mark S. Mattingly 231 Less than 0.1%
- - -------------------------------------------------------------------------
Curt J. Angermeier (7) 26,433 1.1%
- - -------------------------------------------------------------------------
All Executive
Officers and
Directors as
a Group
(11 persons) (8) 1,603,335 49.6%
- - -------------------------------------------------------------------------
(1) The information contained in this column is based upon
information furnished to the Company by the individuals named
above as of September 4, 1996. The nature of beneficial
ownership for shares shown in this column represent sole or
shared voting and investment unless otherwise noted. At
September 4, 1996, the Company had 2,495,516 shares of common
stock outstanding.
(2) Includes 127,924 shares held by Pedcor Investments, A Limited
Liability Company, as to which Mr. Cordingley is a 47.6% owner
and a co-chief executive officer and President. Also includes
39,916 shares which Mr. Cordingley has the right to acquire
pursuant to the exercise of stock options granted under the
Company's 1993 Directors Stock Option Plan, 46,200 shares which
Mr. Cordingley has the right to acquire pursuant to the exercise
of stock options granted under the Company's 1995 Key Employees
Stock Option Plan, 165,210 shares which Mr. Cordingley, Pedcor
Investments, and Mr. Cordingley's wife are entitled to purchase
upon exercise of 596 warrants acquired pursuant to the 1994
Rights Offering and 131,208 shares which Mr. Cordingley, Pedcor
Investments and Mr. Cordingley's wife are entitled to purchase
upon exercise of 568 warrants acquired in the 1995 Rights
Offering.
19
<PAGE>
(3) Includes 3,575 shares held in an IRA account in the name of Mr.
Cunningham's wife. Also includes 231 shares which Mr.
Cunningham's wife is entitled to purchase upon exercise of 1
warrant acquired pursuant to the 1995 Rights Offering and 6,730
shares which Mr. Cunningham has the right to acquire pursuant to
the exercise of stock options granted under the Company's 1995
Key Employees Stock Option Plan.
(4) Includes 7,854 shares which Mr. Davis holds as custodian for his
minor daughter and 6,699 shares which Mr. Davis holds as
custodian for his minor son. Also includes 115,591 shares which
Mr. Davis is entitled to purchase for himself or his minor
children upon exercise of 417 warrants acquired pursuant to the
1994 Rights Offering and 93,093 shares entitled to be purchased
upon exercise of 403 warrants acquired in the 1995 Rights
Offering. Also includes 39,916 shares which Mr. Davis has the
right to acquire pursuant to the exercise of stock options
granted under the 1993 Directors Stock Option Plan, and 27,720
shares which Mr. Davis has the right to acquire pursuant to the
exercise of stock options granted under the Company's 1995 Key
Employees Stock Option Plan. Also includes 84,315 shares of the
Company owned by Maybelle R. Davis, the mother of Mr. Davis, and
14,137 shares Mrs. Davis is entitled to purchase upon exercise of
51 warrants acquired in the 1994 Rights Offering, and 8,085
shares entitled to be purchased upon exercise of 35 Warrants
acquired in the 1995 Rights Offering, as to which shares Mr.
Davis has authority to vote pursuant to a Power of Attorney.
Also includes 462 shares owned by Mr. Davis wife.
(5) Includes 1,617 shares held by the spouse of Mr. Schnakenburg,
8,316 shares held as custodian by Mr. Schnakenburg for his minor
children living in his home, 24,948 shares held by U.S.
Industries Group, Inc., 52,263 shares held by Barry, Inc. and
27,442 shares held by BOAH Associates. Also includes 6,930
shares which Mr. Schnakenburg has the right to acquire through
the exercise of stock options granted under the Company's 1993
Directors Stock Option Plan. Also includes 20,790 shares
entitled to be purchased upon exercise of 90 warrants acquired in
the 1995 Rights Offering. Also includes 73,832 shares of the
Company pursuant to which Mr. Schnakenburg may exercise voting
and investment power pursuant to a Power of Attorney.
(6) Includes 12,760 shares which Mr. Maraman has the right to acquire
pursuant to the exercise of stock options granted under the 1987
Incentive Stock Option Plan.
(7) Includes 14,968 shares held in a Family Trust of Mr. Angermeier.
Also includes 3,603 shares which Mr. Angermeier and the Family
Trust are entitled to purchase upon exercise of 13 warrants
acquired pursuant to the 1994 Rights Offering, and 1,617 shares
which Mr. Angermeier and the Family Trust are entitled to
purchase upon exercise of 7 warrants acquired pursuant to the
1995 Rights Offering.
20
<PAGE>
(8) Includes 927 shares beneficially owned by Donald R. Neel, Senior
Vice-President, Chief Financial Officer and Treasurer of the
Company, 277 shares Mr. Neel is entitled to purchase upon
exercise of 1 warrant acquired in the 1994 Rights Offering, and
231 shares he is entitled to purchase upon exercise of one
warrant acquired in the 1995 Rights Offering.
SECURITY OWNERSHIP REPORTING
Section 16(a) of the Exchange Act requires the Company's
Directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities to
file with the SEC initial reports of ownership and reports of changes
in ownership of Company common stock and other equity securities of
the Company. Officers, directors and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file. To the best knowledge of the
Company, during the most recent fiscal year ended June 30, 1996, there
were no late filings with respect to the Section 16(a) filing
requirements applicable to its officers, Directors and greater than
10% beneficial owners.
AUDITORS OF THE COMPANY
The Board of Directors of the Company appointed the firm of Geo.
S. Olive & Co. LLC., Certified Public Accountants, to audit the
accounts of the Company and its subsidiaries for the fiscal year ended
June 30, 1996. Representatives of Geo. S. Olive & Co. LLC. are
expected to be present at the meeting and available to respond to
appropriate questions. They will be given an opportunity to make a
statement if they desire to do so. Geo. S. Olive & Co. LLC. have been
the independent auditors of the Company since 1982. The Board of
Directors has not yet completed the process of selecting an
independent public accounting firm to audit its books, records, and
accounts for the fiscal year ending June 30, 1997. It anticipates it
will do so in October 1996.
SHAREHOLDERS PROPOSALS
Any proposal which a shareholder intends to bring before the next
Annual Meeting of Shareholders to be held in 1997 must be received by
the Company no later than May 14, 1997 for inclusion in next year's
proxy statement. Such proposals should be addressed to Jack
Cunningham, Vice Chairman and Secretary of the Company, at 18 N.W.
Fourth Street, P.O. Box 1347, Evansville, Indiana 47706-1347.
ADDITIONAL INFORMATION
The 1996 Annual Report to Shareholders, containing financial
statements for the year ended June 30, 1996, and other information
concerning the operations of Company is enclosed herewith, but is not
to be regarded as proxy soliciting material.
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<PAGE>
UPON WRITTEN REQUEST, FIDELITY FEDERAL BANCORP WILL PROVIDE
WITHOUT CHARGE TO EACH SHAREHOLDER A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K WHICH IS REQUIRED TO BE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE YEAR ENDED JUNE 30, 1996. ALL
REQUESTS SHOULD BE ADDRESSED TO:
DONALD R. NEEL, CHIEF FINANCIAL OFFICER
FIDELITY FEDERAL BANCORP
18 N.W. FOURTH STREET
P.O. BOX 1347
EVANSVILLE, INDIANA 47706-1347
OTHER MATTERS
The Annual Meeting is called for the purposes set forth in the
Notice. The Board of Directors of the Company does not know of any
matters for action by shareholders at the Annual Meeting other than
the matters described in the Notice. However, the enclosed Proxy will
confer discretionary authority with respect to matters which are not
known to the Board of Directors at the time of the printing hereof and
which may properly come before the Annual Meeting. It is the
intention of the persons named in the Proxy to vote pursuant to the
Proxy with respect to such matters in accordance with the
recommendations of the Board of Directors.
By Order of the Board of Directors
JACK CUNNINGHAM
VICE CHAIRMAN AND SECRETARY
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<PAGE>
FIDELITY FEDERAL BANCORP
18 N.W. Fourth Street, Evansville, Indiana 47708
REVOCABLE PROXY -PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints M. Brian Davis, as proxy, with power of
substitution, to represent and to vote all shares of common stock of
Fidelity Federal Bancorp ("Fidelity Federal"), which the undersigned
would be entitled to vote at the Annual Meeting of Shareholders of
Fidelity Federal to be held at Fidelity Federal's principal executive
offices, 18. N.W. Fourth Street, Evansville, Indiana, on October 16,
1996 at 11:00 o clock A.M., local time, and at any adjournment thereof,
with all of the powers the undersigned would possess if personally
present, including the power to vote cumulatively for the Election of
Directors and to allocate votes among all or any of the nominees as the
Board of Directors may determine.
Management recommends a vote FOR approval of the election of the
nominees for directors listed below. On any other matters that may
properly come before the Annual Meeting, this Proxy will be voted in
accordance with the recommendations of management of Fidelity Federal.
1. Election of Directors: [ ] For any or either of the nominee(s)
listed below (except as marked
to the contrary below).
[ ] Withhold authority to vote for all of
the nominees listed below.
David L. Maraman Robert F. Doerter Jack Cunningham
(INSTRUCTION: To withhold authority to vote for an individual,
strike a line through the nominee's name in the list above)
This proxy, unless otherwise indicated, confers the authority upon the
proxy to cumulate votes among any or all of the nominees as the Board of
Directors may in their discretion determine. If you wish to withhold
this authority to cumulate votes, check the following box. [ ] In such
case, shares represented by this proxy will be voted for each of the
nominees for whom authority to vote is not withheld.
(continued on other side)
(continued from other side)
2. In his discretion on such other matters as may properly come before
the Annual meeting.
________________________________ _______________________________
Signature (Signature, if held jointly)
Please sign exactly as your name
appears hereon. Joint owners should
each sign personally. When signing
in a representative capacity, such as
a trustee, please indicate the
capacity in which you are signing.
THIS PROXY WILL BE VOTED AS DIRECTED,
BUT IF NOT OTHERWISE DIRECTED, THIS
PROXY WILL BE VOTED FOR THE ELECTION
OF ANY OR ALL OF THE NOMINEES LISTED
ABOVE. PLEASE COMPLETE, SIGN, DATE
AND RETURN THIS PROXY PROMPTLY.
DATED: , 1996
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TAX IDENTIFICATION NUMBER:
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