<PAGE>
FIDELITY BANCORP, INC.
5455 West Belmont Avenue
Chicago, Illinois 60641
(773) 736-4414
December 26, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Fidelity Bancorp, Inc. (the "Company"), the holding company for Fidelity
Federal Savings Bank (the "Bank"), which will be held on January 29, 1997 at
10:00 a.m., local time at the corporate offices of the Company, located at 5455
West Belmont, Chicago, Illinois.
As described in the enclosed Proxy Statement, matters scheduled to be presented
for stockholder action at the Annual Meeting include the election of two Class
I directors, and the ratification of KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year ending September 30, 1997. There
will also be a report on the operations of the Company and the Bank, a wholly
owned subsidiary of the Company. The Company's directors, executive officers
and representatives of the Company's independent auditors will be present to
respond to appropriate questions.
The Board of Directors of the Company has determined that approval of the
matters to be considered at the meeting is in the best interest of the Company
and its stockholders. For the reasons set forth in the Proxy Statement, the
Board unanimously recommends a vote "FOR" each matter to be considered.
We hope you will be able to attend the Annual Meeting in person. Whether or
not you expect to attend, we urge you to sign, date and return the enclosed
proxy card so that your shares will be represented.
On behalf of the Board of Directors and all of the employees of the Company and
the Bank, I wish to thank you for your interest and support. I look forward to
seeing you at the Annual Meeting.
Sincerely yours,
Raymond S. Stolarczyk
Chairman of the Board and Chief Executive Officer<PAGE>
<PAGE>
FIDELITY BANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 29, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Fidelity Bancorp, Inc. will be held on January 29, 1997, at 10:00
a.m. local time at the corporate offices of the Company, located at 5455 West
Belmont Avenue, Chicago, Illinois.
The Annual Meeting is for the purpose of considering and voting upon the
following matters:
1. The election of two Class I directors for terms of three years each;
2. The ratification of KPMG Peat Marwick LLP as independent auditors of the
Company for the fiscal year ending September 30, 1997; and
3. Such other matters as may properly come before the Annual Meeting or any
adjournment or postponements thereof.
The Board of Directors has fixed December 2, 1996 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting and at any adjournments or postponements thereof. Only holders of
record of the Company's Common Stock (the "Common Stock") as of the close of
business on that date will be entitled to vote at the Annual Meeting or any
adjournments or postponements thereof. In the event there are not sufficient
votes for a quorum or to approve or ratify any of the foregoing proposals at
the time of the Annual Meeting, the Annual Meeting may be adjourned or
postponed in order to permit further solicitation of proxies by the Company.
By Order of the Board of Directors
Grant M. Berntson
Corporate Secretary
Chicago, Illinois
December 26, 1996<PAGE>
<PAGE>
FIDELITY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
January 29, 1997
SOLICITATION AND VOTING OF PROXY
This Proxy Statement is being furnished to stockholders of the Company in
connection with the solicitation by the Board of Directors of the Company of
proxies to be used at the Annual Meeting to be held on January 29, 1997 at the
corporate offices of the Company, 5455 West Belmont Avenue, Chicago, Illinois
at 10:00 a.m. local time and any adjournments or postponements thereof. The
1996 Annual Report to Stockholders on Form 10-K, including the consolidated
financial statements for the fiscal year ended September 30, 1996, accompanies
this Proxy Statement, which is first being mailed to stockholders on or about
December 26, 1996.
It is important that holders of a majority of the outstanding shares be
represented by proxy or be present in person at the Annual Meeting.
Stockholders are requested to vote by completing the enclosed proxy card and
returning it, signed and dated, in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces provided on the
proxy card. All shares of Common Stock represented at the Annual Meeting by
properly executed proxies received prior to or at the Annual Meeting, and not
revoked, will be voted at the Annual Meeting in accordance with the
instructions thereon. If no instructions are indicated, properly executed
proxies will be voted for the nominees and for adoption of the proposal set
forth in this Proxy Statement.
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. Execution of a proxy, however, confers on
the designated proxyholders discretionary authority to vote the shares in
accordance with their best judgment on such other business, if any, that may
properly come before the Annual Meeting or any adjournments or postponements
thereof.
A proxy may be revoked at any time prior to its exercise by the filing of
written notice of revocation with the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person.
The cost of solicitation of proxies on behalf of management will be borne by
the Company. In addition to the solicitation of proxies by mail, Morrow & Co.,
Inc., a proxy solicitation firm, will assist the Company in soliciting proxies
for the Annual Meeting and will be paid a fee estimated to be $3,500, plus out-
of-pocket expenses. Proxies may also be solicited personally or by telephone
or telegraph by directors, officers and regular employees of the Company,
without additional compensation therefor. The Company will also request
persons, firms and corporations holding shares in their names, or in the name
of their nominees, which are beneficially owned by others, to send proxy
materials to and obtain proxies from such beneficial owners, and will reimburse
<PAGE>
such holders for their reasonable expenses in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares of
Common Stock with each share entitling its owner to one vote on all matters to
be voted on at the Annual Meeting, except as described below.
The close of business on December 2, 1996 has been fixed by the Board of
Directors as the record date for the determination of stockholders of record
entitled to notice of and to vote at the Annual Meeting and any adjournments or
postponements thereof. The total number of shares of Common Stock outstanding
on the record date was 2,784,078 shares.
As provided in the Company's Certificate of Incorporation, holders of Common
Stock who beneficially own in excess of 10% of the outstanding shares of Common
Stock (the "limit") are not entitled to any vote in respect of the shares held
in excess of the limit. A person or entity is deemed to beneficially own
shares owned by an affiliate of, as well as persons acting in concert with,
such person or entity. The Company's Certificate of Incorporation authorizes
the Board of Directors to: (i) make all determinations necessary to implement
and apply the limit, including determining whether persons or entities are
acting in concert, and (ii) to demand that any person who is reasonably
believed to beneficially own Common Stock in excess of the limit supply
information to the Company to enable the Board to implement and apply the
limit.
The presence, in person or by proxy, of holders of at least a majority of the
total number of shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the limit pursuant to the Company's Certificate of
Incorporation) is necessary to constitute a quorum at the Annual Meeting.
As to the election of directors, the proxy card being provided by the Board of
Directors enables a stockholder to vote for the election of the nominees
proposed by the Board, or to withhold authority to vote for one or more of the
nominees. Under Delaware law and the Company's Certificate of Incorporation
and bylaws, directors are elected by a plurality of votes cast, without regard
to broker non-votes or proxies as to which authority to vote for one or more of
the nominees is withheld.
Under the Company's Certificate of Incorporation and bylaws, unless otherwise
required by law, all such other matters voted on by stockholders at the Annual
Meeting shall be determined by a majority of the votes cast, without regard to
either broker non-votes or proxies marked "ABSTAIN" as to that matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to those persons believed
by the Company to be beneficial owners of more than 5% of the outstanding
shares of Common Stock on the record date based upon certain reports regarding
such ownership filed with the Company and with the Securities and Exchange
Commission (the "SEC") in accordance with Sections 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") by such
persons or group.
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
<S> <C> <C>
Fidelity Federal Savings Bank
Employee Stock Ownership
Plan and Trust ("ESOP")
5455 W. Belmont Avenue
Chicago, Illinois 60641 (1) 290,950 10.45%
First Manhattan Co.
437 Madison Avenue
New York, New York 10022 (2) 272,167 9.78%
</TABLE>
(1) The Human Resource Policy Committee of the Board of Directors has been
appointed to administer the ESOP. An unrelated third party, Harris Bank -
Palatine, has been appointed as the corporate trustee for the ESOP ("ESOP
Trustee"). The committee may instruct the ESOP Trustee regarding investment of
funds contributed to the ESOP. The ESOP Trustee must vote all allocated shares
held in the ESOP in accordance with the instructions of the participating
employees. As of the record date, 83,128 shares of Common Stock in the ESOP
had been allocated to participating employees. Under the ESOP, unallocated
shares will be voted by the ESOP Trustee in a manner calculated to most
accurately reflect the instructions received from participants regarding the
allocated shares so long as such vote is in accordance with the provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA".)
(2) Based upon information filed in a Schedule 13D by First Manhattan Co. on
May 14, 1996.
ELECTION OF DIRECTORS
Pursuant to its bylaws, the number of directors of the Company is set at six
unless otherwise designated by the Board of Directors. Each of the six members
of the Board of Directors also presently serves as a director of the Bank.
Directors are elected for staggered terms of three years each, with a term of
only one of the three classes of directors expiring each year. Directors serve
until their successors are elected and qualified.
The two nominees proposed for election at the Annual Meeting are Thomas E.
Bentel and Raymond S. Stolarczyk. Mr. Stolarczyk is an incumbent director and
Mr. Bentel is newly nominated to the Board. Such nominations are not being
proposed pursuant to any agreement or understanding between any person and the
Company.
In the event that any nominee is unable to serve or declines to serve for any
reason, the proxies will be voted for the election of such other person as may
be designated by the present Board of Directors. The Board of Directors has no
reason to believe that either of the nominees will be unable or unwilling to
serve. Unless authority to vote for the nominees is withheld, the shares
represented by the enclosed proxy card, if executed and returned, will be voted
FOR the election of the nominees proposed by the Board of Directors.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
NOMINEES NAMED IN THIS PROXY STATEMENT<PAGE>
<PAGE>
INFORMATION WITH RESPECT TO THE NOMINEES, CONTINUING DIRECTORS, RETIRING
DIRECTORS AND OTHER EXECUTIVE OFFICERS
The following table sets forth the names of the nominees, continuing directors,
retiring directors and executive officers, as well as their ages; a brief
description of their business experience for the past five years, including
present occupation and employment; certain directorships held by each; the year
in which each became a director and the year in which their term (or in the
case of the nominees, their proposed term) as director of the Company expires.
The table also sets forth the amount of Common Stock and the percent thereof
beneficially owned by each nominee, director, retiring director and executive
officer and all directors and executive officers as a group as of November 15,
1996. No director is related to any other director or executive officer of the
Company by blood, marriage or adoption, except that Bonnie Stolarczyk is the
wife of Raymond Stolarczyk, the Company's Chairman and Chief Executive Officer.
<TABLE>
<CAPTION>
Amount and
Name, Age and Principal Expiration Nature of
Occupation at Present Director of Term Beneficial Percent
and for the Past Five Years Since (1) as Director Ownership (2) of Class
Nominees
<S> <C> <C> <C>
Class I
Thomas E. Bentel (age 50) --(3) 2000 79,348(2) 2.78%
President and Chief Operating Officer
of the Company and the Bank.
Director of the Bank. President and
Director of Fidelity Corporation a
wholly owned subsidiary of the Bank.
Raymond S. Stolarczyk (age 58) 1981 2000 139,231(2)(4) 4.86%
Chairman of the Board and Chief
Executive Officer of the Company and
the Bank. Chairman of the Board of
Fidelity Corporation, a wholly-
owned subsidiary of the Bank. Director
of the Federal Home Loan Bank of Chicago,
past Chairman of the Illinois League
of Financial Institutions, and Trustee
of the Illinois League of Financial
Institutions Trust. Member of American
Institute of Certified Public Accountants
and the Illinois Institute of Certified
Public Accountants.
Class II
Paul Bielat (age 57) 1992 1998 31,229(2) 1.11%
Director of the Company and the Bank.
Principal in Compliance Assistance
Partners, Inc., a firm engaged in the
business of advising banks and thrift
institutions regarding regulatory
compliance. Senior Vice President and
Treasurer of the Federal Home Loan Bank
of Chicago from 1982 until 1991.
Bonnie Stolarczyk (age 50) 1978 1998 27,396(2)(5) 1.00%
Director of the Company and the Bank.
Self-employed as a certified public
accountant. Member of the National
Association of Tax Practitioners,
American Institute of Certified Public
Accountants and the Illinois Institute of
Certified Public Accountants.
<PAGE>
Amount and
Name, Age and Principal Expiration Nature of
Occupation at Present Director of Term Beneficial Percent
and for the Past Five Years Since (1) as Director Ownership (2) of Class
Class III
Patrick J. Flynn (age 54) 1993 1999 8,229(2) *
Director of the Company and the Bank.
Executive Vice President and Senior
Operating Officer of McDonalds USA.
Secretary and Director of Link Unlimited
and Inroads/Chicago, Inc., both non-profit
organizations.
Raymond J. Horvat (age 71) 1978 1999 30,343(2) 1.07%
Director of the Company and the Bank.
Co-founder and Senior Advisor of
Blackstone Enterprises, Inc. a company
engaged in the business of wholesale and
retail merchandising.
Retiring Director
Class I
Myron H. Dudek (age 74) 1981 1997 15,165(2) *
Director of the Company and the Bank.
Tax preparer and seasonal supervisor
with H&R Block. Formerly Administrator
for a retirement home.
Other Executive Officers
Grant M. Berntson, (age 52) 78,037(2) 2.76%
Senior Vice President Loan Investments
and Corporate Secretary of the Company
and the Bank. Director of the Bank.
Secretary and Director of Fidelity
Corporation.
James R. Kinney (age 50) 102,119(2) 3.62%
Senior Vice President Finance, Chief
Financial Officer and Treasurer of the
Company and the Bank. Treasurer of
Fidelity Corporation. Director of
Mission Aviation Fellowship, a non-profit
organization.
All directors and executive officers as a group 511,097 17.10%
(9 persons)
</TABLE>
*Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as a director of the Bank.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting and dispositive power as to shares reported.
Includes 4,982, 11,621, 4,982, 16,602 and 12,402 presently exercisable options
granted to Messrs. Bielat, Dudek, Flynn, Horvat and Ms. Stolarczyk,
respectively, under the Fidelity Bancorp, Inc. 1993 Stock Option Plan for
Outside Directors (the "Directors' Option Plan"). Includes 24,877, 14,839,
8,512 and 8,512 shares awarded to Messrs. Stolarczyk, Bentel, Berntson and
Kinney respectively under the Fidelity Federal Savings Bank Recognition and
Retention Plan for Officers and Employees ("RRP") and 749, 1,498, 749, 2,245
and 2,245 shares awarded to Messrs. Bielat, Dudek, Flynn and Horvat and Ms.
Stolarczyk under the Fidelity Federal Savings Bank Recognition and Retention
Plan for Outside Directors ("DRP"), which are not yet vested but as to which
voting may be directed. Awards for Messrs. Stolarczyk, Bentel, Berntson and
Kinney vest in five equal annual installments which began on December 15, 1994.
<PAGE>
Awards to outside directors vest in five equal annual installments which
commenced immediately upon the effective date of the award (December 15, 1993).
Includes 55,863, 43,206, 15,930 and 15,930 presently exercisable options
granted to Messrs. Stolarczyk, Bentel, Berntson and Kinney, respectively, under
the Company's 1993 Incentive Stock Option Plan (the "Incentive Option Plan").
Includes 6,000, 6,112, 4,486 and 4,711 shares awarded to Messrs. Stolarczyk,
Bentel, Berntson and Kinney respectively under the ESOP as of December 31,
1995.
(3) Director of the Bank since 1988. First time nominee for director of the
Company.
(4) Excludes 27,396 shares held by Bonnie J. Stolarczyk.
(5) Excludes 139,231 shares held by Raymond S. Stolarczyk.
Section 16(a) of the Exchange Act requires the Company's directors, executive
officers and 10% stockholders to file reports of ownership and changes in
ownership to the SEC and with the exchange on which the shares of Common Stock
are traded. Such persons are also required to furnish the Company with copies
of all Section 16(a) forms they file. Based solely upon the Company's review
of such forms, and if appropriate, representations to the Company by such
persons regarding whether a Form 5 was required to be filed for the past fiscal
year, the Company is not aware that any of its directors or executive officers
failed to comply with the requirements of Section 16(a) during the period from
October 1, 1995 through September 30, 1996.
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Board of Directors of the Company conducts its business through meetings of
the Board and through activities of its committees. The Board of Directors
meets monthly and may have additional meetings as needed. During fiscal 1996,
the Board of Directors held 13 meetings. Each of the directors of the Company
attended at least 75% of the total number of the Company's board meetings held
and committee meetings on which such director served during fiscal 1996. The
nature and composition of the committees of the Board are as follows:
Audit Committee. The Audit Committee consists of Messrs. Bielat (Chair),
Horvat and Flynn and Ms. Stolarczyk. The committee recommends independent
auditors to the Board, reviews the results of the auditors' services and
reviews with management the systems of internal control and internal audit
reports. The Audit committee met four times in fiscal 1996.
Nominating Committee. The Company's Nominating Committee for the 1997 Annual
Meeting consisted of Messrs. Bielat and Flynn and Ms. Stolarczyk. The
committee considers and recommends the nominees for director to stand for
election at the Company's Annual Meeting. The Company's Certificate of
Incorporation and bylaws also provide for stockholder nominations of directors.
Such nominations must be in writing and must otherwise comply with the
provisions of Section 6 of the Company's bylaws. See "Additional Information -
Notice of Business to Be Conducted at an Annual Meeting." The Nominating
Committee met once in fiscal 1996.
Human Resource Policy Committee. The Human Resource Policy Committee consists
of Messrs. Horvat (Chair), Dudek and Flynn. The purpose of the committee is to
recommend the compensation, pension, benefit and other human resource policies
and programs for key executive management personnel to the full Board, and to
monitor compliance with the Bank's policies and applicable laws and
regulations. This committee met one time in fiscal 1996.
<PAGE>
DIRECTORS' COMPENSATION
Directors' Fees. The Company pays no fees for service on the Board of
Directors. For calendar year 1996, each outside director of the Bank is paid a
monthly retainer of $575 plus a fee of $575 for each Board meeting attended.
The Chairperson of each committee of the Board of the Bank receives $225 for
each committee meeting attended; committee members receive a fee of $175 for
each meeting attended. Directors who are officers or executives of the Bank
receive no fees for meetings attended.
Executive Compensation
The following report of the compensation committee and stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 (the "Securities Act") or the Exchange Act, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Compensation Committee Report on Executive Compensation. Under rules
established by the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the
Company's Chief Executive Officer (CEO) and other executive officers. The
disclosure requirements for the CEO and executive officers include the use of
tables and a report explaining the rationale and considerations that led to
fundamental compensation decisions affecting those individuals. In fulfillment
of this requirement, the Human Resource Policy Committee, at the direction of
the Board of Directors, has prepared the following report for inclusion in this
Proxy Statement.
Compensation Report. The Human Resource Policy Committee is responsible for
establishing the compensation levels and benefits for the executive officers of
the Bank who also serve as executive officers of the Company. The committee
also is responsible for reviewing recommendations made by management regarding
benefits for other employees of the Bank.
In December, 1993, the Bank converted from a mutual to a stock form of
ownership and was acquired by the Company. The Company has four executive
officers whose salaries are paid by the Bank. The Company reimburses the Bank
for the portion of each officer's time and expense spent on Company business.
At the time of the Bank's conversion, the committee determined that in order to
align the interests and performance of its executives with the long-term
interests of its stockholders, the Bank and the Company needed to adopt stock
benefit programs which would reward the executives for delivering long-term
value to the Company. In this regard, the Company has established an Employee
Stock Ownership Plan, Incentive Stock Option Plan and a Recognition and
Retention Plan. When these plans were adopted, the committee assumed the
responsibility of supervising their administration.
Executive Compensation Policy. For the past fiscal year, the goals established
by the committee for executive officer compensation were:
* to continue the Company asset/liability structure and long-term
profitability;
* to provide a compensation package that is conservative in approach, based
upon financial performance and stockholder value of the Company, and that will
allow the Company to attract, motivate and retain executive officers important
<PAGE>
to the attainment of long-term business goals; and
* to maintain reasonable "fixed" compensation costs by targeting base salaries
within a competitive range.
When evaluating executive compensation, the committee took into consideration
several factors, including the internal value of the executives' functions to
the Company, the executives' performances for fiscal year ended September 30,
1995 and the results of a competitive compensation analysis, all of which are
described below.
The internal value of the executives' functions were weighted to reflect their
relative value to the Company and the impact on the Company's financial
condition. Weighted factors include the executives' impact on the Company's
profits and contributions to long range planning, experience, authority and
supervisory responsibilities. Specific point values were given to each of
those categories with greater values placed upon the executives' role in
impacting the Company's profitability and input into long range planning. As
a result of this analysis, the committee established salary ranges for the
Company's executive officers.
To evaluate the accomplishments achieved by the executives for fiscal year
1995, the committee developed a performance scorecard to summarize, on a
quarterly basis, the progress regarding targeted measurements as outlined in
the Company's Fiscal 1995 Financial Plan. The targeted measurements evaluated
the Company's performance from customer, financial and business development
perspectives. The committee evaluated performance measures as they related to
earning asset growth, quality of assets, development of a loan origination
program, stockholder return, dividend yield and earnings per share. Written
evaluations for each executive were prepared and discussed by the committee to
determine each executive's respective contribution to the performance measures.
In 1995, the committee commissioned the consulting firm of Towers Perrin to
conduct a compensation analysis for the Company's executive officers. The
analysis was based upon a review of the Company's compensation levels as
compared to a peer group of competitors established by the Company and Towers
Perrin. Towers Perrin concentrated their analysis on the competitiveness of
the Company's base salaries, annual incentives, if applicable, and long-term
incentive grants that the Company paid to its executives. Compensation data
from financial institutions of comparable asset size and geographic location
were given the greatest weight. Financial institutions surveyed in the
compensation surveys and the peer group mentioned above were not necessarily
the same as those in the peer group used for the Stock Performance Graph.
The results of the Towers Perrin executive compensation analysis, together with
the performance scorecard and the Company's internal value rating system, were
used as guides by the committee when they evaluated the performance of each
executive officer and determined what they considered to be a competitive base
salary for each member of that group.
Chief Executive Officer. In determining the Chief Executive Officer's
compensation for 1996, the committee took into consideration the CEO's
performance in relation to the accomplishment of the targeted measurements
outlined on the Company's performance scorecard and the compensation data
gathered by Towers Perrin. The committee determined that the Company's
targeted performance measurements for fiscal year ending September 30, 1995 had
been met. Therefore, taking all matters under advisement, the committee <PAGE>
<PAGE>
increased the salary of the CEO by 7.3%, which became effective January 1,
1996. The committee determined that this increase kept the CEO's direct
compensation just above the median of the established peer group. The CEO's
salary, for fiscal year ended September 30, 1996, was $199,142.
Other Executive Officers. The weighting system, performance scorecard and
Towers Perrin compensation analysis that were used by the committee to
determine the direct compensation of the CEO were also used to determine the
direct compensation of the other executive officers of the Company. These
executives were evaluated on the specific contributions they made to accomplish
the goals established in the Company's Financial Plan. The average salary
increase awarded to the Company's executive officers for fiscal year 1996 was
7.6%, which became effective January 1, 1996. This increase placed its
executive officer compensation in the third quartile of the peer group used in
the Towers Perrin analysis.
Human Resource Policy Committee:
Raymond J. Horvat (Chair)
Myron H. Dudek
Patrick J. Flynn
<PAGE>
<PAGE>
Stock Performance Graph
The following table shows a comparison of the Company's cumulative return since
its initial public offering with the cumulative total returns of both a broad
market and a peer group index. The broad market index chosen was the Nasdaq
Market Index and the peer group index chosen was the Media General Industry
Group, which is comprised of savings and loan holding companies securities.
The data was supplied by Media General Financial Services.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG FIDELITY BANCORP, INC., PEER GROUP INDEX
AND BROAD MARKET INDEX
FIDELITY PEER BROAD
BANCORP, GROUP GROUP
MEASUREMENT PERIOD INC. INDEX INDEX
<S> <C> <C> <C>
12/15/93 $100.00 $100.00 $100.00
12/31/93 112.50 100.00 100.00
3/31/94 107.50 95.46 101.61
9/30/94 122.50 109.62 106.12
3/31/95 112.94 108.53 107.06
9/30/95 143.94 142.35 130.50
3/31/96 157.81 153.21 133.72
9/30/96 166.74 171.19 147.58
/TABLE
<PAGE>
<PAGE>
Summary Compensation Table. The following table sets forth the compensation
paid by the Company, including any of its subsidiaries, for services during the
fiscal years ended September 30, 1996, 1995 and 1994, to the CEO and the three
other officers of the Company who received total annual salary and bonus in
excess of $100,000 for fiscal year ended September 30, 1996.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
Securities
Restricted Underlying All Other
Other Annual Stock Options/ LTIP Compen-
Name and Principal Fiscal Compensation Awards SARs Payouts sation
Position Year Salary($) Bonus($) ($) ($)(1) (#)(2) ($) ($)(3)
<S> <C> C> <C> <C> <C> <C> <C> <C>
Raymond S. Stolarczyk 1996 $199,142 $ 0 $-- -- -- -- $91,875
Chairman of the Board 1995 188,769 0 -- -- -- -- 30,750
and Chief Executive Officer 1994 187,479 0 -- $414,610 93,104 -- --
Thomas E. Bentel 1996 155,546 0 -- -- -- -- 93,590
President and Chief 1995 147,711 0 -- -- -- -- 30,279
Operating Officer 1994 149,171 0 -- 247,310 72,010 -- --
Grant M. Berntson 1996 114,523 0 -- -- -- -- 68,692
Senior Vice President 1995 109,731 0 -- -- -- -- 22,437
Loan Investments and Corporate 1994 116,517 0 -- 141,840 26,549 -- --
Secretary
James R. Kinney 1996 115,654 0 -- -- -- -- 72,137
Senior Vice President 1995 108,096 0 -- -- -- -- 23,555
Finance, Chief Financial Officer 1994 106,039 0 -- 141,840 26,549 -- --
and Treasurer
</TABLE>
(1) Pursuant to the RRP, Messrs. Stolarczyk, Bentel, Berntson and Kinney
held 24,877, 14,839, 8,512 and 8,512 shares of common stock, respectively,
which had a market value of $410,471, $244,844, $140,448 and $140,448,
respectively as of September 30, 1996. Such awards vest in five equal annual
installments commencing on December 15, 1994. When RRP shares become vested and
are distributed, the recipient will also receive an amount equal to accumulated
dividends and earnings thereon (if any). All awards vest immediately upon
termination of employment due to death, disability or normal retirement or
following a change in control.
(2) Represents options granted under the Incentive Stock Option Plan.
(3) Represents the fair market value of shares granted under the ESOP on the
respective allocation date.
Employment and Special Termination Agreements. The Bank and the Company have
employment agreements with Messrs. Stolarczyk, Bentel, Berntson and Kinney.
The employment agreements are intended to ensure that the Bank and the Company
will be able to maintain a stable and competent management.
The employment agreements with Messrs. Stolarczyk and Bentel provide for three
year terms and the employment agreements with Messrs. Berntson and Kinney
provide for two year terms. Commencing on the first anniversary date and
continuing each anniversary date thereafter, the term of each agreement is
automatically extended for an additional year unless written notice of non-
renewal is given by the Board of Directors after conducting a performance
evaluation of the respective executive. In addition to specifying base salary,
which is subject to annual review by the Board of Directors, the employment
agreements provide for, among other things, disability pay, participation in
stock benefit plans and other fringe benefits applicable to executive
personnel. The employment agreements provide for termination by the Bank or
the Company for cause at any time. In the event the Bank or the Company
chooses to terminate the executive's employment for reasons other than for
<PAGE>
cause or disability, or in the event of the executive's resignation from the
Bank and the Company upon: (i) failure to re-elect the executive to his
current office; (ii) a material change in the executive's functions, duties or
responsibilities, or relocation of his principal place of employment or
material reduction in benefits or perquisites; (iii) liquidation or dissolution
of the Bank or the Company; or (iv) a breach of the agreement by the Bank or
the Company, the executive or, in the event of death, his beneficiary, would be
entitled to receive an amount equal to the remaining payments, including base
salary, bonuses and other payments and health benefits due under the remaining
term of the agreement.
If termination of employment follows a change in control of the Bank or the
Company, as defined in the agreements, the executive or, in the event of death,
his beneficiary, would be entitled to a payment equal to the greater of: (i)
payments due for the remaining term of the agreement or (ii) three times his
average annual compensation over the three years preceding his termination of
employment, as to Messrs. Stolarczyk and Bentel, and two times his average
annual compensation over the previous two years for Messrs. Berntson and
Kinney. The Bank and the Company would also continue the executive's life,
health and disability coverage for the remaining unexpired term of the
agreement to the extent allowed by the plans or policies maintained by the
Company from time to time. In the event of a change in control, based upon the
past fiscal year's salary and bonus, Messrs. Stolarczyk, Bentel, Berntson and
Kinney would receive approximately $553,565; $420,604; $216,254; and $223,750,
respectively, in severance payments in addition to other cash and noncash
benefits provided for under the agreements. Payments to the executive under
the Bank's agreements are guaranteed by the Company in the event that payments
or benefits are not paid by the Bank.
Defined Benefit Plan. The Bank maintains a non-contributory defined benefit
plan ("Retirement Plan"). All employees who have been credited with 1,000 or
more hours of employment during a twelve month period with the Bank and have
attained age 21 are eligible to participate in the Retirement Plan.
At the normal retirement age of 65 years old, the Retirement Plan is designed
to provide a life annuity guaranteed for 10 years. The retirement benefit
provided is based on the highest consecutive five-year average salary and years
of benefit service, as shown in the following table. Retirement Plan benefits
are also payable upon termination due to late retirement and death. Upon
termination of employment other than as specified above, a participant who was
employed by the Bank for a minimum of five years is eligible to receive his or
her accrued benefit, reduced for early retirement, or a deferred retirement
benefit commencing on the participant's normal retirement date. Benefits are
payable in various annuity forms, as well as, in the form of a single lump sum
payment. Contributions of $83,860 were made to the plan for the fiscal year
ended September 30, 1996. Under FASB 87 the Bank accrued $113,398 with respect
to the Retirement Plan for the twelve month period ended September 30, 1996.
The following table indicates the annual retirement benefit that would be
payable under the plan upon retirement at age 65 to a participant electing to
receive his or her retirement benefit in the standard form, assuming various
specified levels of plan compensation and various specified years of credited
service.
<TABLE>
<CAPTION>
<PAGE>
15 Years 20 Years 25 Years 30 Years 35 Years
Average Credited Credited Credited Credited Credited
Compensation Service Service Service Service Service
<S> <C> <C> <C> <C> <C>
$25,000 $3,750 $5,000 $6,250 $7,000 $8,750
50,000 7,500 10,000 12,500 15,000 17,500
75,000 11,250 15,000 18,750 22,500 26,250
100,000 15,000 20,000 25,000 30,000 35,000
150,000 22,500 30,000 37,500 45,000 52,500
</TABLE>
The following table sets forth the years of credit service (i.e., benefit
service) as of the fiscal year ended September 30, 1996 for each of the
individuals named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Credited Service
Years Months
<S> <C> <C>
Raymond S. Stolarczyk 20 0
Thomas E. Bentel 14 0
Grant M. Berntson 27 0
James R. Kinney 9 0
</TABLE>
Supplemental Executive Retirement Plan. The Bank also maintains a Supplemental
Executive Retirement Plan ("SERP"), a nonqualified, unfunded retirement program
within the meaning of ERISA. The SERP is intended to provide retirement
benefits and preretirement death and disability benefits to those employees
named in the Summary Compensation Table.
The Bank accrued $121,000 with respect to the SERP for the fiscal year ended
September 30, 1996.
At the normal retirement age of 65 years old, the SERP is designed to provide a
20 year certain annuity payable monthly. This amount shall represent 55% of
the average compensation of the participant as of his normal retirement date,
reduced by the actuarial equivalent of the benefit actually payable to the
participant under the Retirement Plan.
A participant who separates from service prior to the normal retirement date
shall be entitled to a benefit equal to the actuarial equivalent of the
participant's accrued benefit determined at the time of separation. Accrued
benefit shall mean the supplemental benefit of a participant payable in the
normal form which is multiplied by a fraction, the numerator of which is the
number of completed years of participation on the date of determination and the
denominator of which is the number of his or her expected completed years of
participation projected to his or her normal retirement date. A participant
shall, at all times, be 100 percent vested in his or her accrued benefit.
If a participant dies prior to the time benefits under the SERP commence, the
amount of his preretirement death benefit shall be equal to the value of the
<PAGE>
supplemental benefit calculated as if the participant had terminated his
employment on his or her normal retirement date. If a participant becomes
disabled prior to the normal retirement date he or she shall be entitled to a
benefit equal to the actuarial equivalent of the participant's accrued benefit
calculated as if such participant had terminated employment on that date.
Incentive Stock Option Plan. The Company maintains the Incentive Stock Option
Plan, which provides discretionary awards to certain officers and key employees
as determined by the Human Resource Policy Committee, which administers the
plan. There were no grants under the Incentive Stock Option Plan in the fiscal
year ended September 30, 1996.
The following table provides certain information with respect to the number of
shares of Common Stock represented by outstanding stock options held by the
executive officers as of September 30, 1996. Also reported are the values for
"in-the-money" options, which amounts represent the positive spread between the
exercise price of any such existing stock options and the fiscal year-end price
of Common Stock. No options were exercised by the executive officers in fiscal
year 1996.
<TABLE>
<CAPTION>
FISCAL YEAR END OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised In-The-Money
Name Options at Fiscal Year End (#)(1) Options at Fiscal Year End ($)(2)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Raymond S. Stolarczyk 37,241 55,863 $242,066 $363,110
Thomas E. Bentel 28,804 43,206 187,226 280,839
Grant M. Berntson 10,618 15,931 69,017 103,552
Jim Kinney 10,618 15,931 69,017 103,552
</TABLE>
(1) Options become exercisable in five equal annual portions commencing
December 15, 1994. All options will expire ten (10) years from the date of
grant, or December 15, 2003.
(2) Represents the per share market value of the Common Stock at fiscal
year end ($16.50) minus the exercise or base price, ($10.00) per share.
Transaction With Certain Related Persons. The Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA") requires that all loans or
extensions of credit to executive officers and directors must be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the general public and
must not involve more than the normal risk of repayment or present other
unfavorable features. In addition, loans made to a director or executive
officer in excess of the greater of $25,000 or 5% of the Bank's capital and
surplus (up to a maximum of $500,000) must be approved in advance by a majority
of the disinterested members of the Board of Directors.
The Bank's current policy provides that no credit will be extended to a
<PAGE>
director or executive officer, or to any immediate family member of a director
or executive officer, for the purpose of a first mortgage residential loan.
All other loans made by the Bank to its directors and officers are made in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk of
collectibility or present other unfavorable features. As of September 30,
1996, there were no loans outstanding to directors or executive officers.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended September 30, 1996
were KPMG Peat Marwick LLP. The Company's Board of Directors has reappointed
KPMG Peat Marwick LLP to continue as independent auditors for the Company for
the fiscal year ending September 30, 1997. If the appointment is not ratified
by the Company's stockholders, the Board of Directors will reevaluate the
appointment.
Representatives of KPMG Peat Marwick LLP will be present at the Annual Meeting,
will be given an opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions from stockholders present
at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
THE INDEPENDENT AUDITORS
ADDITIONAL INFORMATION
Other Matters Which May Properly Come before the Annual Meeting
The Board of Directors knows of no business that will be presented for
consideration at the Annual Meeting other than as stated in the Notice of
Annual Meeting of Stockholders. If, however, other matters are properly
brought before the Annual Meeting, it is the intention of the proxy holders to
vote the shares represented thereby on such matters in accordance with their
best judgment.
Stockholder Proposals
To be considered for inclusion in the Proxy Statement and proxy relating to the
Annual Meeting to be held in 1998, stockholder proposals must be received by
the Secretary of the Company at the address set forth on the first page of this
Proxy Statement, not later than August 28, 1997. Any such proposal will be
subject to Company's bylaws and 17 C.F.R. section 240.14a-8 of the Rules and
Regulations under the Exchange Act.
Whether or not you intend to be present at the Annual Meeting, you are urged to
return your proxy promptly. If you are present at the Annual Meeting and wish
to vote your shares in person, your proxy will be revoked by voting in person
at the Annual Meeting.
<PAGE>
<PAGE>
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
Section 6 of the bylaws of the Company provide an advance notice procedure for
a stockholder to properly nominate directors or bring other business before an
annual meeting. The stockholder must give written advance notice to the
Secretary of the Company not less than 90 days before the date originally fixed
for such meeting; provided, however, that in the event that less than 100 days
notice or prior public disclosure of the date of the meeting is given or made
to stockholders, notice by the stockholder to be timely must be received not
later than the close of business on the tenth day following the date on which
the Company's notice to stockholders of the annual meeting date was mailed or
such public disclosure was made. The advance notice by stockholders must
include the stockholder's name and address, as they appear on the Company's
record of stockholders, a brief description of the proposed business, the
reason for conducting such business at the Annual Meeting, the class and number
of shares of the Company's capital stock that are beneficially owned by such
stockholder and any material interest of such stockholder in the proposed
business. In the case of nominations to the Board, certain additional
information regarding the nominee must also be provided, as set forth in
Section 6 of the bylaws. Nothing in this paragraph shall be deemed to require
the Company to include in its Proxy Statement and proxy relating to an annual
meeting any stockholder proposal which does not meet all of the requirements
for inclusion established by the SEC and in effect at the time such proposal is
received.
By Order of the Board of Directors
Grant M. Berntson
Secretary
Chicago, Illinois
December 26, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING
IN PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
