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 §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] No fee required.
[ ] 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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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:________________________________________________
2) Form Schedule or Registration Statement No.:___________________________
3) Filing Party:__________________________________________________________
4) Date Filed:____________________________________________________________
<PAGE>
[FIDELITY FEDERAL BANCORP LOGO]
-----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held October 15, 1997
-----------------------------
Notice is hereby given that the Annual Meeting of Shareholders of
Fidelity Federal Bancorp (the "Company") will be held on October 15, 1997, at
10:00 o'clock a.m., local time, at the downtown office of United Fidelity
Bank, fsb, 18 N.W. Fourth Street, Evansville, Indiana.
The purposes of the meeting are:
(1) To elect two directors to the Board of Directors to serve for the
ensuing term of three years and until their successors are duly
elected and qualified;
(2) To ratify the appointment of Geo. S. Olive & Co. LLC., Certified
Public Accountants, as independent public accountants of the Company
for the fiscal year ending June 30, 1998; and
(3) 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 3, 1997, 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 15, 1997
IMPORTANT -- PLEASE MAIL YOUR PROXY PROMPTLY
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YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED, REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING,
YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY
YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
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The date of this Proxy Statement is September 15, 1997.
<PAGE>
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. . . . . . . . . . . . . . . . . . . . . . . 8
Board Committees. . . . . . . . . . . . . . . . . . . . . . 8
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 Table . . . . . . . . . . . . . . . . . . 14
Other Employee Benefit Plans. . . . . . . . . . . . . . . . 15
Compensation of Directors . . . . . . . . . . . . . . . . . 17
Security Ownership of Management. . . . . . . . . . . . . . 17
Security Ownership Reporting. . . . . . . . . . . . . . . . 19
RATIFICATION OF THE APPOINTMENT OF AUDITORS OF THE COMPANY . . 19
SHAREHOLDER PROPOSALS. . . . . . . . . . . . . . . . . . . . . 19
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . 20
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 20
<PAGE>
[FIDELITY FEDERAL BANCORP LOGO]
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF FIDELITY FEDERAL BANCORP
TO BE HELD ON OCTOBER 15, 1997
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 15, 1997, at 10:00 a.m., local time, at the
downtown office of United Fidelity Bank, fsb, 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 is a discount brokerage.
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, Village
Capital Corporation ("VCC") (formerly Fidelity Federal Capital Corporation),
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 two 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), to ratify the appointment of Geo. S. Olive
& Co. LLC., Certified Public Accountants, as independent public accountants of
the Company for the fiscal year ending June 30, 1998, and to transact such
other business as may properly come before the meeting or any adjournment
thereof.
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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.
The Proxy Statement, the attached Notice and the enclosed proxy card are
being first mailed to shareholders of the Company on or about September 15,
1997.
VOTING RIGHTS
Only holders of shares of Common Stock of record at the close of business
on September 3, 1997 (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 2,487,382 shares of Common Stock issued and outstanding. Such shares
were held of record by approximately 450 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 (2 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, shall 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 1, 1997 by the only persons known by
the Company to beneficially own 5% or more of the issued and outstanding
shares of Common Stock.
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership (1)
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Bruce A. Cordingley 285,321 (2) 10.3%
8888 Keystone Crossing
Suite 900
Indianapolis, IN 46240
M. Brian Davis 763,888 (3) 27.5%
700 S. Green River Road
Suite 2000
Evansville, IN 47715
Barry A. Schnakenburg 262,338 (4) 10.2%
8701 Petersburg Road
Evansville, IN 47711
Rahmi Soyugenc 171,720 6.9%
119 LaDonna Blvd.
Evansville, IN 47711
First Financial Fund, Inc. 202,900 (5) 8.1%
c/o Wellington Management
75 State St.
Boston, MA 02109
Wellington Management Co. 202,900 (6) 8.1%
75 State St.
Boston, MA 02109
(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 1, 1997, 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 3,483 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,
27,720 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, 157,059 shares which Mr. Cordingley, Pedcor
Investments, and Mr. Cordingley's wife are entitled to purchase upon
exercise of 567 warrants acquired pursuant to the 1994 Rights Offering and
56,826 shares which Mr. Cordingley, Pedcor Investments and Mr.
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Cordingley's wife are entitled to purchase upon exercise of 246 warrants
acquired in the 1995 Rights Offering.
(3) Includes 11,353 shares which Mr. Davis holds as custodian for his minor
daughter and 10,698 shares which Mr. Davis holds as custodian for his
minor son. Also includes 115,509 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 16,632 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,
as to which shares Mr. Davis has authority to vote pursuant to a Power of
Attorney and 14,127 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. Also includes 796 shares owned by Mr. Davis'
wife.
(4) 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 66,990 shares entitled to be
purchased upon exercise of 290 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.
(5) First Financial Fund, Inc. reports that it had sole voting power and
shared dispositive power with respect to the reported shares. These
shares are also included in the shares beneficially owned by Wellington
Management Company, as investment adviser to First Financial Fund, Inc.,
as explained in footnote 6.
(6) Wellington Management Company ("WMC"), in its capacity as investment
adviser, may be deemed to have beneficial ownership of these shares, which
are owned by First Financial Fund, Inc. As of December 31, 1996, WMC
reported that it had sole/shared voting power as to 0 shares, and shared
dispositive power as to 202,900 shares.
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
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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.
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.
ITEM 1. ELECTION OF DIRECTORS
------------------------------
The Board of Directors of the Company is currently composed of seven
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 Curt
J. Angermeier and Barry A. Schnakenburg expire at the 1997 Annual Meeting of
Shareholders. Each of these directors has been nominated for re-election to a
three-year term to expire at the 2000 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, 1997, 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.
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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.
CURT J. ANGERMEIER Age - 43, 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 - 76, 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 - 50, 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 1995, to March 1996. 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, VCC 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. 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 Flagship Bank, fsb (San
Diego, California) and International City Bank, N.A. (Long Beach, California).
JACK CUNNINGHAM Age - 67, term expires in 1999.
- ---------------
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. He served
as President of the Company from May 1994 through October 1994 and as
President of the Savings Bank from May 1994 through December 1994. Mr.
Cunningham resumed serving as President and CEO of the Savings Bank in March
1997. Mr. Cunningham is a director of Village Management Corporation, Village
Community Development Corporation, and Village Housing Corporation (the three
service
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corporation subsidiaries of the Savings Bank involved in the development of
affordable housing units) and Village Insurance Corporation and is also the
Vice Chairman and a Director of VCC. Mr. Cunningham has been a Director of the
Savings Bank since 1985 and an officer of the Savings Bank since 1974.
M. BRIAN DAVIS Age - 42, 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 and CEO since November 1996. 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, Village Insurance Corporation, Village Community Development
Corporation, Village Housing Corporation, VCC and Village Securities
Corporation. 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 - 77, term expires in 1999.
- -----------------
Mr. Doerter is a Director of the Company, and has been a Director of the
Savings Bank since 1968. Mr. Doerter is currently retired.
BARRY A. SCHNAKENBURG Age - 49, 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
VCC 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 10 years. U.S.
Industries Group, Inc. is a sheet metal and roofing contractor located in
Evansville, Indiana.
DONALD R. NEEL Age - 34.
- --------------
Mr. Neel is the Executive Vice-President, Chief Financial Officer, and
Treasurer of the Company and the Executive Vice President and Chief Operating
Officer of the Savings Bank. Mr. Neel also serves as Treasurer of Village
Management Corporation, Village Insurance Corporation, and as Executive Vice
President and Treasurer of VCC and as Senior Vice President and Treasurer of
Village Securities Corporation, Village Community Development Corporation and
Village Housing Corporation. Prior to joining the Savings Bank and the
Company in 1993, Mr. Neel served as Vice-President and Controller of INB
Banking Company, Southwest (successor to Peoples Bank) from May 1987 through
April 1993.
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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.
BOARD MEETINGS
The Company had 14 Board of Directors meetings during its fiscal year ended
June 30, 1997. 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 M.
Brian Davis (Chairman), Jack Cunningham, and Robert F. Doerter. 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, 1997. 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.
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The Board of Directors also has an Audit Committee consisting of Curt J.
Angermeier (Chairman), William R. Baugh, Robert F. Doerter and Barry A.
Schnakenburg. 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, 1997. 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, 1997.
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 each of the periods assumes that $100 was
invested on July 1, 1992, 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.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FIDELITY FEDERAL BANCORP,
NASDAQ MARKET INDEX AND SIC CODE INDEX
[CHART APPEARS BELOW]
ASSUMES $100 INVESTED ON JULY 1, 1992
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING JUNE 30, 1997
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
NASDAQ MARKET
INDEX 100 122.76 134.61 157.88 198.73 239.40
SIC CODE INDEX 100 125.43 145.77 169.86 214.06 335.51
FIDELITY FEDERAL 100 122.76 279.75 508.27 528.88 517.06
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 1997 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 1997.
Mr. Davis' 1997 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. Davis' salary is determined in the same manner as discussed
above for other senior executives. The Executive Committee believes that Mr.
Davis has managed the Company well. Mr. Davis 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 1997 Executive Committee:
Bruce A. Cordingley
M. Brian Davis
Jack Cunningham
Barry A. Schnakenburg
11
<PAGE>
COMPENSATION COMMITTEE INSIDER PARTICIPATION
During the past fiscal year, Messrs. Davis, Cordingley and Cunningham, all
of whom are Directors and executive officers of the Company, 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, 1997,
1996 and 1995, 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, 1997 and the executive officers of the Company whose salary and
bonus exceeded $100,000 during the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL FISCAL ANNUAL SECURITIES ALL OTHER
POSITION YEAR COMPENSATION UNDERLYING COMPEN-
ENDED (1)(2) OPTION SATION(3)
JUNE 30, SALARY GRANTS IN
YEAR
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bruce A. Cordingley 1997 $251,293 -0- $ 2,004
Chairman 1996 $292,519 -0- $ 1,496
and Director 1995 $137,000 46,200 -0-
M. Brian Davis 1997 $236,383 -0- $ 1,671
President, CEO, 1996 $197,280 -0- $ 977
and Director 1995 $ 85,800 27,720 -0-
Jack Cunningham 1997 $127,946 -0- $ 1,631
Vice Chairman, 1996 $121,097 -0- $ 1,539
Secretary 1995 $ 96,193 6,930 $ 1,244
and Director
</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 $17,600 paid to Mr. Cunningham and $15,600
paid to Mr. Cordingley and Mr. Davis for the fiscal year ended June 30,
1997. Also includes Directors' fees of $13,600 paid to Mr. Cunningham
and $12,000 paid to Mr. Cordingley and Mr. Davis for the fiscal year
ended June 30, 1996, and $12,000 paid during the fiscal year ended June
30, 1995, to 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.
The 1987 Plan will expire on November 17, 1997, except outstanding options
shall remain in effect until they have been exercised, terminated, forfeited,
or have expired. As such, options may be outstanding under the 1987 Plan
through November 17, 2007. The number of shares and option exercise prices
under the 1987 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.
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 shall 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.
13
<PAGE>
1995 KEY EMPLOYEES' STOCK OPTION PLAN
The Key Employees Plan provides for the grant of incentive stock options
and non-qualified stock options to acquire shares of common stock of 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 236,500 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
There were no stock options granted to the named executive officers for the
fiscal year ended June 30, 1997.
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, 1997. 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.
<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 ($) 06/30/97 06/30/97
NAME EXERCISE --------------------------- ---------------------------
(#) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bruce A. Cordingley None N/A 39,916 -0- $100,987(1) N.A.
exercised 27,720 18,480 N.A. (2) N.A.(2)
M. Brian Davis None N/A 39,916 -0- $100,987(3) N.A.
exercised 16,632 11,088 N.A.(4) N.A.(4)
Jack Cunningham 407 326 3,831 2,692 N.A.(5) N.A.(5)
</TABLE>
14
<PAGE>
(1) Represents the bid value of the Company's Common Stock at June 30, 1997
($8.75 per share), less the exercise price ($6.22 per share).
(2) Represents the bid value of the Company's Common Stock at June 30, 1997
($8.75 per share), less the exercise price ($10.60 per share).
(3) Represents the bid value of the Company's Common Stock at June 30, 1997
($8.75 per share), less the exercise price ($6.22 per share).
(4) Represents the bid value of the Company's Common Stock at June 30, 1997
($8.75 per share), less the exercise price ($10.60 per share).
(5) Represents the bid value of the Company's Common Stock at June 30, 1997
($8.75 per share), less the exercise price ($9.63 per share).
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 work a minimum of 1000 hours per year 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
the individual's 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
15
<PAGE>
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 $64,000 in contributions were required to be made to the
Pension Plan by the Company for the plan year ended June 30, 1997.
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 the years of service set forth below with no
deduction for Social Security or other offset amounts. The maximum
compensation which may be taken into account for any purpose under the Pension
Plan is limited by the Internal Revenue Code to $160,000 for 1997. As of July
1, 1997, Bruce A. Cordingley had 2 years of service, Jack Cunningham had 40
years of service and M. Brian Davis had 2 years of service under the Pension
Plan.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
ANNUAL BENEFIT AT NORMAL RETIREMENT
YEARS OF SERVICE
---------------------------------------------------------------------
HIGHEST FIVE- 10 15 20 25 30 35 40
YEAR AVERAGE -- -- -- -- -- -- --
ANNUAL SALARY
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$50,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
$75,000 15,000 22,500 30,000 37,500 45,000 52,500 60,000
$100,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
$125,000 25,000 37,500 50,000 62,500 75,000 87,500 100,000
$150,000 30,000 45,000 60,000 75,000 90,000 105,000 120,000
$175,000 35,000 52,500 70,000 87,500 105,000 122,500 140,000
</TABLE>
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 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 $28,000 for the fiscal year ended June 30,
1997.
16
<PAGE>
COMPENSATION OF DIRECTORS
The Directors of the Savings Bank are compensated for their services in the
amount of $1,000 per month (or $12,000 per year) plus an additional $200 per
month if the Director attends that month's regularly scheduled Board meeting.
Directors receive an additional $200 for attending special meetings of the
Board of Directors or committee meetings. The maximum compensation received
by any Director for his or her service on the Board was $17,600 for the
current year.
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 1, 1997,
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.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES BENEFICIALLY OWNED (1) PERCENT OF CLASS (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
William R. Baugh 26,600 1.1%
Bruce A. Cordingley (2) 285,321 10.3%
Jack Cunningham (3) 31,954 1.3%
M. Brian Davis (4) 763,888 27.5%
Robert F. Doerter 8,593 0.4%
Barry A. Schnakenburg (5) 262,338 10.2%
Curt J. Angermeier (6) 26,938 1.1%
All Executive Officers and
Directors as a Group
(8 persons) (7) 1,409,459 44.9%
</TABLE>
(1) The information contained in this column is based upon information
furnished to the Company by the individuals named above as of September
1, 1997. The nature of beneficial ownership for shares shown in this
column represent sole or shared voting and investment unless otherwise
noted. At September 1, 1997, the Company had 2,487,382 shares of common
stock outstanding.
(2) Includes 3,483 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
17
<PAGE>
exercise of stock options granted under the Company's 1993 Directors'
Stock Option Plan, 27,720 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, 157,059 shares which Mr.
Cordingley, Pedcor Investments, and Mr. Cordingley's wife are entitled to
purchase upon exercise of 567 warrants acquired pursuant to the 1994
Rights Offering and 56,826 shares which Mr. Cordingley, Pedcor
Investments and Mr. Cordingley's wife are entitled to purchase upon
exercise of 246 warrants acquired in the 1995 Rights Offering.
(3) Includes 13,319 shares held 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 3,831 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 11,353 shares which Mr. Davis holds as custodian for his minor
daughter and 10,698 shares which Mr. Davis holds as custodian for his
minor son. Also includes 115,509 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 16,632 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, as to which shares Mr. Davis has authority to vote pursuant to a
Power of Attorney. Also includes 14,127 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. Also includes 796 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 66,990 shares
entitled to be purchased upon exercise of 290 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 14,968 shares held in a Family Trust of Mr. Angermeier. Also
includes 3,047 shares which Mr. Angermeier and the Family Trust are
entitled to purchase upon exercise of 11 warrants acquired pursuant to
the 1994 Rights Offering, and 1,386 shares which Mr. Angermeier and the
Family Trust are entitled to purchase upon exercise of 6 warrants
acquired pursuant to the 1995 Rights Offering. Also includes 831 shares
which Mr. Angermeier is entitled to purchase upon exercise of 3 warrants
acquired pursuant to the
18
<PAGE>
1994 Rights Offering, and 462 shares which Mr. Angermeier is entitled to
purchase upon exercise of 2 warrants acquired pursuant to the 1995 Rights
Offering.
(7) Includes 3,319 shares beneficially owned by Donald R. Neel, Executive
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, 1997, 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.
ITEM 2. RATIFICATION OF THE APPOINTMENT OF
-------------------------------------------
AUDITORS OF THE COMPANY
-----------------------
The Board of Directors of the Company proposes that the shareholders ratify
the appointment of the firm of Geo. S. Olive & Co. LLC., Certified Public
Accountants, as independent public accountants for the Company for the fiscal
year ending June 30, 1998. 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. In the event the appointment of Geo. S. Olive & Co.
LLC. is not ratified by the shareholders, the Board of Directors will consider
appointment of other independent public accountants for the fiscal year ending
June 30, 1998.
SHAREHOLDERS PROPOSALS
----------------------
Any proposal which a shareholder intends to bring before the next Annual
Meeting of Shareholders to be held in 1998 must be received by the Company no
later than May 18, 1998 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.
19
<PAGE>
ADDITIONAL INFORMATION
----------------------
The 1997 Annual Report to Shareholders, containing financial statements for
the year ended June 30, 1997, and other information concerning the operations
of Company is enclosed herewith, but is not to be regarded as proxy soliciting
material.
UPON WRITTEN REQUEST, FIDELITY FEDERAL BANCORP WILL PROVIDE WITHOUT CHARGE
TO EACH SHAREHOLDER A COPY OF 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, 1997. ALL REQUESTS SHOULD BE ADDRESSED TO:
DONALD R. NEEL, CHIEF FINANCIAL OFFICER
FIDELITY FEDERAL BANCORP
700 S. GREEN RIVER ROAD, SUITE 2000
P.O. BOX 5584
EVANSVILLE, INDIANA 47716-5584
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
/s/ JACK CUNNINGHAM
---------------------------
JACK CUNNINGHAM
VICE CHAIRMAN AND SECRETARY
20
<PAGE>
FIDELITY FEDERAL BANCORP
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 the downtown office of United Fidelity Bank, fsb, 18. N.W. Fourth Street,
Evansville, Indiana, on October 15, 1997 at 10:00 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 and ratification of Geo. S. Olive LLC., as independent
public accountants for the Company for the fiscal year ending June 30, 1998.
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.
Curt J. Angermeier Barry A. Schnakenburg
(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. Ratification of Geo. S. Olive & Co. LLC., as independent public
accountants for the Company for the fiscal year ending June 30, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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 AND FOR
RATIFICATION OF GEO. S. OLIVE & CO.
LLC., AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE COMPANY FOR THE
FISCAL YEAR ENDING JUNE 30, 1998.
PLEASE COMPLETE, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY.
DATED:________________________________, 1997
TAX IDENTIFICATION NUMBER:__________________
