-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ta+qPh6g3cmi7n+x5cJnrCRUjghAY2W5MKyHjCtlDahB9acGHuRLhTVw+qX1PQ4L Q1SrS9Y7R4lakyuATA67fA== 0000926274-01-000027.txt : 20010123 0000926274-01-000027.hdr.sgml : 20010123 ACCESSION NUMBER: 0000926274-01-000027 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 20010112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY FEDERAL BANCORP CENTRAL INDEX KEY: 0000910492 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351894432 STATE OF INCORPORATION: IN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-53668 FILM NUMBER: 1508204 BUSINESS ADDRESS: STREET 1: 700 S GREEN RIVER ROAD STREET 2: SUITE 2000 CITY: EVANSVILLE STATE: IN ZIP: 47715 BUSINESS PHONE: 8124692100 MAIL ADDRESS: STREET 1: 18 NW FOURTH ST STREET 2: PO BOX 1347 CITY: EVANSVILLE STATE: IN ZIP: 47706-1347 S-3 1 0001.txt As filed with the Securities and Exchange Commission on January 12, 2001 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 - -------------------------------------------------------------------------------- FIDELITY FEDERAL BANCORP - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) INDIANA 35-1894432 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 700 South Green River Road, Evansville, Indiana 47715 ------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Donald R. Neel, Timothy M. Harden, Esq. Executive Vice President, John W. Tanselle, Esq. CFO and Treasurer Krieg DeVault Alexander & Capehart, LLP Fidelity Federal Bancorp One Indiana Square, Suite 2800 18 NW Fourth Street Indianapolis, Indiana 46204-2017 PO Box 1347 (317) 636-4341 Evansville, Indiana 47706-1347 (Copy to) (812) 429-0921 (Name, address, including zip code, of agent for service) Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE ========================================================================================================= Title of each class of Amount Proposed maximum Proposed maximum Amount of securities to be offering price aggregate offering registration to be registered registered per unit price fee - --------------------------------------------------------------------------------------------------------- Common Stock, no par value 1,000,000 shares $1.375 $1,375,000 $383 =========================================================================================================
The proposed maximum offering price per share and in the aggregate is estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) and is based on $1.375, which was the average of the high and low price of the Company's Common Stock as reported by the NASDAQ SmallCap Market System on January 10, 2001. ----------------------------------------------------- The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Subject to Completion, dated _________, 2001 PROSPECTUS FIDELITY FEDERAL BANCORP 1,000,000 shares of common stock $_____ per share -------------------------------------------- We are distributing, together with this prospectus, subscription rights to purchase shares of our common stock to persons who own our common stock as of the close of business on ___________, 2001, the record date. You will receive __________ (_____) subscription right for each share of our common stock that you own on the record date. Each subscription right will entitle you to purchase one share of our common stock at the subscription price of $_____ per share. The subscription rights are exercisable beginning on the date of this prospectus and will expire at 5:00 p.m., Evansville, Indiana time, on ____________, 2001. If you timely exercise all of your subscription rights, you may be entitled to exercise over-subscription privileges to purchase additional shares of our common stock at the same subscription price, subject to the limitations set forth in this prospectus. We are undertaking this rights offering to raise additional capital without diluting your ownership interests (if you exercise your subscription rights), and without paying underwriting commissions and expenses. If you exercise your subscription rights, you will be able to purchase shares of our common stock without incurring broker's commissions. Directors, executive officers and their affiliates have committed ___________________________________. Accordingly, we expect to receive proceeds from the offering of at least $_____ million and up to $__ million, before deducting expenses payable by us. We expect to issue at least ____________ and up to ____________ shares of common stock in the offering. We are not required to sell any minimum number of shares in order to complete the rights offering. Shareholders who do not participate in the rights offering will continue to own the same number of shares, but will own a smaller percentage of the total shares outstanding. The subscription rights may not be sold, transferred or assigned, and will not be listed for trading on any stock exchange. Shares of our common stock are currently listed for quotation on the Nasdaq SmallCap Market under the symbol "FFED." On ____________, 2001, the closing price of a share of our common stock on Nasdaq was $_____. See "Risk Factors" beginning on page _____ to read about factors you should consider before buying additional shares of our common stock. -------------------------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is ____________, 2001 TABLE OF CONTENTS Summary ...................................................................i Questions and Answers About Fidelity Federal Bancorp...............i Questions and Answers About the Rights Offering....................i Risk Factors................................................................1 Risk Factors Relating to Our Common Stock..........................1 Risks Related to the Rights Offering...............................5 Special Note Regarding Forward-Looking Statements...........................7 Use of Proceeds.............................................................7 Dividend Policy.............................................................8 Price Range of Common Stock.................................................8 Capitalization..............................................................9 The Rights Offering........................................................10 Federal Income Tax Considerations..........................................17 Description of Capital Stock...............................................18 Determination of Offering Price............................................19 Plan of Distribution.......................................................20 Legal Matters..............................................................20 Experts ..................................................................20 Where You Can Find More Information........................................20 -------------------------------------------- Fidelity has not authorized any person to give you information that differs from the information in this prospectus. You should rely solely on the information contained in this prospectus. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities, in any state where the offer or sale of these securities is not permitted. The information in this prospectus is accurate only as of the date of this prospectus, even if the prospectus is delivered to you after the prospectus date, or you buy our common stock after the prospectus date. Until ________, 2001, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. PROSPECTUS SUMMARY This section answers in summary form some questions you may have about Fidelity Federal Bancorp and this rights offering. The information in this section is not complete and does not contain all of the information that you should consider before exercising your subscription rights. You should read the entire prospectus carefully, including the "Risk Factors" section and the documents listed under "Where You Can Find More Information." For convenience, references in this prospectus to "we," "us," or "Fidelity" mean Fidelity Federal Bancorp. QUESTIONS AND ANSWERS ABOUT FIDELITY FEDERAL BANCORP Q: What is Fidelity Federal Bancorp? A: Fidelity is a unitary savings and loan holding company which owns all of the issued and outstanding stock of United Fidelity Bank, fsb, its federally-chartered savings bank subsidiary. United Fidelity Bank maintains four locations in Evansville, Indiana and also participates in various real estate activities, including owning housing developments through its wholly-owned subsidiaries. Q: Where are we located? A: Our principal executive offices are located at 18 NW Fourth Street, Evansville, Indiana 47708. Our telephone number is (812) 424-0921. Q: When were we formed? A: We were incorporated under the laws of the State of Indiana in 1993. United Fidelity Bank was formed in 1914. QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING Q: What is a rights offering? A: A rights offering is an opportunity for you to purchase additional shares of our common stock at a fixed price of $_____ per share and in an amount proportional to your existing interest, which enables you to maintain your current percentage ownership in Fidelity. Q: What is a subscription right? A: We are distributing to you, at no charge, one (1) subscription right for every _____ shares of common stock that you owned on ____________, 2001, the record date. Each subscription right entitles you to purchase one share of our common stock for $_____. When you "exercise" a subscription right, that means that you choose to purchase the common stock that the subscription right entitles you to purchase. You may exercise any number of your subscription rights, or you may choose not to exercise any subscription rights. Each right carries with it a basic subscription privilege and an over-subscription privilege. You cannot give or sell your subscription rights to anybody else; only you can exercise them. i Q: What is the basic subscription privilege? A: The basic subscription privilege of each subscription right entitles you to purchase one (1) share of our common stock at a subscription price of $_____. Q: What is the over-subscription privilege? A: We do not expect that all of our shareholders will exercise all of their basic subscription privileges. By extending over-subscription privileges to our shareholders, we are providing for the purchase of those shares which are not purchased through exercise of basic subscription privileges. The over-subscription privilege entitles you, if you fully exercise your basic subscription privilege, to subscribe for additional shares of common stock not acquired by other holders of rights at the same subscription price of $_____ per share. As described below, there are limitations on your over-subscription privilege. Q: What are the limitations on the over-subscription privilege? A: We will issue up to 1,000,000 shares of common stock in the rights offering. The number of shares available for over-subscription privileges will be 1,000,000 minus the number of shares purchased upon exercise of all basic subscription privileges. If the number of shares available for sale pursuant to the exercise of all over-subscription privileges is not sufficient to satisfy in full all over-subscription privileges, the number of additional shares of our common stock that you will be entitled to purchase if you exercise your over-subscription privilege will be limited. In this situation, you will be entitled to purchase upon the exercise of your over-subscription privileges a number of shares equal to the product of (i) the number of shares of our common stock owned by you on the close of business on _____, 2001, divided by the total number of shares of our common stock owned by all shareholders exercising their over-subscription privileges on the close of business on __________ __, 2001, and (ii) the number of shares available for sale pursuant to the exercise of all over-subscription privileges, rounded down to the nearest whole number. However, in certain circumstances, in order to comply with applicable state securities laws, we may not be able to honor all over-subscription privileges even if we have shares available. Q: Why are we engaging in a rights offering? A: We are undertaking this rights offering to raise additional capital without diluting your ownership interests (if you exercise your subscription privileges), and without paying underwriting commissions and expenses. If you exercise your subscription privileges, you will be able to purchase shares of our common stock without incurring broker's commissions. Q: What will we do with the proceeds of the rights offering? A: We expect to use a portion of the proceeds to: o redeem at maturity a portion of the $1.5 million in principal amount of our 9.125% junior subordinated notes which come due in April, 2001; ii o refinance certain letters of credit which we issued in connection with the financing of affordable housing developments; o to make interest payments on outstanding debt; and o to increase the capital of United Fidelity Bank. We may also use a portion of the proceeds to refinance other affordable housing developments or for general corporate purposes. Although we expect to use the proceeds in the manner discussed above, we reserve the right to use the proceeds in any manner which we consider appropriate. Q: How many shares may I purchase? A: You will receive one (1) subscription right for every _____ shares of common stock that you owned on ____________, 2001, the record date. We will not issue any fractional shares of common stock for the exercise of any rights. Each subscription right entitles you to purchase one share of common stock for $_____. If you exercise all of the subscription rights that you receive, you may have the opportunity to purchase additional shares of common stock. On the enclosed subscription certificate, you may exercise your over-subscription privilege by indicating the number of additional shares that you wish to purchase for $_____ per share. However, we may not be able to honor your over-subscription privilege for as many additional shares as you request on your subscription certificate if the number of shares available for sale pursuant to the exercise of all over-subscription privileges is not sufficient to satisfy in full all over-subscription privileges. Subject to state securities laws and regulations, we have the discretion to issue less than the total number of shares that may be available for over-subscription requests in order to comply with state securities laws. Q: Must all holders of rights pay the subscription price in cash? A: All shareholders granted rights who wish to participate in the rights offering must timely pay the subscription price by wire transfer, certified or cashier's check drawn on a U.S. bank, or personal check that clears before expiration of the rights. Q: How did Fidelity arrive at the $_____ per share price? A: We believe that this meets our objective of raising the maximum amount of net proceeds while providing you with an opportunity to make an additional investment in our common stock. In determining this price, our board of directors considered several factors, including the historic and current market price of the common stock, general conditions in the securities market, our need for capital, alternatives available to us for raising capital, the amount of proceeds desired, and the need to offer shares at a price that would be attractive to our investors relative to the then current trading price of our common stock. We did not seek or obtain any opinion of financial advisors or investment bankers in establishing the subscription price. Q: How and by what date must I exercise my subscription price? iii A: You must properly complete the attached subscription certificate and deliver it to us before 5:00 p.m., Evansville, Indiana time, on ____________, 2001. Our address, for delivery purposes, is on page _____. Your subscription certificate must be accompanied by proper payment for each share that you wish to purchase. Q: What should I do if I want to participate in the rights offering but my shares are held in the name of my broker or a custodian bank? A: If you hold shares of Fidelity common stock through a broker, dealer or other nominee, we will ask your broker, dealer or nominee to notify you of the rights offering. If you wish to exercise your rights, you will need to have your broker, dealer or nominee act for you. To indicate your decision with respect to your rights, you should complete and return to your broker, dealer or nominee the form entitled "Beneficial Owner Election Form." You should receive this form from your broker, dealer or nominee with the other rights offering materials. Q: Has the Board of Directors made a recommendation regarding this rights offering? A: Our Board of Directors does not make any recommendation to you about whether you should exercise any rights. Q: How long will the rights offering last? A: You will be able to exercise your subscription rights only during a limited period. If you do not exercise your subscription rights before 5:00 p.m., Evansville, Indiana time, on ____________, 2001, your subscription rights will expire. We may, in our discretion, decide to extend the rights offering. In addition, if the commencement of the rights offering is delayed, the expiration date will similarly be extended. Q: After I exercise my subscription rights, can I change my mind? A: No. Once you send in your subscription certificate and payment, you cannot revoke the exercise of your subscription rights, even if you later learn information about us that you consider to be unfavorable. You should not exercise your subscription rights unless you are certain that you wish to purchase additional shares of our common stock at a price of $_____ per share. Q: Is exercising my subscription right risky? A: The exercise or your subscription rights involves certain risks. Exercising your subscription rights means buying additional shares of our common stock, and should be carefully considered as you would view other equity investments. Among other things, you should carefully consider the risks described under the heading "Risk Factors," beginning on page 1. Q: What happens if I choose not to exercise my subscription rights? A: You will retain your current number of shares of common stock in Fidelity even if you do not exercise your subscription rights. However, if other shareholders exercise their subscription rights and you do not, your relative percentage ownership of Fidelity will decrease, and your iv relative voting rights and economic interests will be diluted. Because our directors, executive officers, and their respective affiliates, which own in the aggregate approximately 60.6% of our common stock without giving effect to the shares that may be issued upon the exercise of outstanding warrants and stock options, have agreed to exercise their respective basic subscription privileges and over-subscription privileges in the amount of $_____, your percentage ownership in Fidelity will be reduced and your economic interest will be diluted if you do not exercise your basic subscription privileges. Q: Can I sell or give away my subscription rights? A: No. Subscription rights are not transferable. Q: Must I exercise any subscription rights? A: No. Q: What are the federal income tax consequences of exercising my subscription rights? A: The receipt and exercise of your subscription rights are intended to be nontaxable. You should seek specific tax advice from your personal tax advisor. Q: When will I receive my new shares? A: If you purchase shares of common stock through the rights offering, you will receive shares as soon as practicable after ____________, 2001. Subject to state securities laws and regulations, we have the discretion to delay allocation and distribution of any shares you may elect to purchase by exercise of your basic or over-subscription privilege in order to comply with state securities laws. Q: Can Fidelity cancel the rights offering? A: Yes. Our board of directors may cancel the rights offering at any time on or before ____________, 2001, for any reason. If we cancel the rights offering, any money received from shareholders will be refunded promptly, without interest. Q: How much money will Fidelity receive from the rights offering? A: Our gross proceeds from the rights offering will depend on the number of shares that are purchased. If we sell all 1,000,000 shares which may be purchased upon exercise of the rights offered by this prospectus, then we will receive proceeds of $__ million, before deducting expenses payable by us, estimated to be $__________. Since our directors, executive officers, and their respective affiliates, who currently own approximately 60.6% of our outstanding common stock, without giving effect to the shares that may be issued upon the exercise of outstanding warrants and stock options, have agreed to exercise their basic subscription privileges and over-subscription privileges in the amount of $_______, we expect to issue at least _____ shares and to receive proceeds of at least $__________ from the rights offering, before deducting expenses. v Q: How many shares of common stock will be outstanding after the rights offering? A: The number of shares of common stock that will be outstanding after the rights offering depends on the number of shares that are purchased. We expect to issue at least __________ shares to Directors during this rights offering, and if we sell all of the shares offered by this prospectus, then we will issue 1,000,000 new shares of common stock. As a result, we expect to have between approximately __________ and 5,607,659 shares of common stock outstanding immediately after the rights offering. Q: What if I have more questions? A: If you have more questions about the rights offering, please contact Mark A. Isaac, Vice President and Controller, at (812) 424-0921. vi RISK FACTORS You should carefully consider the risks and uncertainties described below and the other information in this prospectus before deciding whether to invest in shares of our common stock. Additional risks and uncertainties not presently known to us or that we currently deemed immaterial may also impair our business operations. If any of the following risks identified actually occur, our business, financial condition and operating results could be materially adversely affected. In such case, the trading price of our common stock could decline and you may lose part or all of your investment. RISK FACTORS RELATING TO OUR COMMON STOCK The success of our company, in part, is dependent upon United Fidelity Bank. Our financial condition and results of operations are dependent upon the successful operation of our savings bank subsidiary, United Fidelity Bank. We do not generate sufficient income to service our indebtedness and are dependent upon dividends, interest income and other fees and income paid to us by United Fidelity Bank. At the present time, United Fidelity Bank is subject to certain operating restrictions and cannot pay a dividend to us without approval of the Office of Thrift Supervision. United Fidelity Bank is subject to the restrictions and conditions of a Supervisory Agreement with Office of Thrift Supervision. United Fidelity Bank entered into a Supervisory Agreement with the OTS on February 3, 1999, which requires it to take certain actions and restricts certain of its operations. If United Fidelity is unable to comply with the terms and conditions of the Supervisory Agreement, the OTS could take additional regulatory action, including the issuance of a cease and desist order requiring further corrective action. Such corrective action could include, among other things, increasing the allowance for loan and lease losses, obtaining additional or new management, and further restrictions on dividends. Because we are dependent upon United Fidelity Bank for our income, this could negatively impact the price of our stock and prohibit the payment of future dividends. We do not expect to pay cash dividends on our common stock. We have not paid any cash dividends on our common stock since July 6, 1998 and do not anticipate paying cash dividends in the foreseeable future, since we are dependent upon United Fidelity Bank for funds for dividends and, under the terms of the Supervisory Agreement, United Fidelity cannot pay a dividend to us without approval of the OTS. For the foreseeable future, we anticipate that United Fidelity Bank will retain any earnings which it generates or, subject to OTS approval, pay a portion of these earnings to us in order for us to service our existing debt. If we generate any earnings, we expect that these earnings will also be used to service our existing debt. We may need additional funds for debt service. We may need additional funds for servicing our debt because United Fidelity Bank is restricted from paying dividends without prior approval of the OTS. As of September 30, 2000 we had $2.1 million in available cash for debt service and other needs. Debt service for calendar year 2001, net of subordinated debt interest payments due to us from United Fidelity Bank, is expected to be -1- approximately $1.3 million. The OTS has not permitted United Fidelity Bank to pay us dividends under the terms of the Supervisory Agreement. The OTS may agree to allow the payment of dividends from United Fidelity Bank to us to assist in debt service, although it has no obligation to do so and we can not and do not offer any assurances that the OTS will do so. Also, the OTS could, if it considers necessary for the safety and soundness of United Fidelity Bank, prohibit the payment of dividends to us in the future. Our accomplishments are largely dependent upon the skill and experience of our senior management team. The success of our business will depend upon the services of our senior management team. Our business may suffer if we lose the services of any of these individuals, including Bruce A. Cordingley and Donald R. Neel. We have entered into a 3 year contract employment agreement with Mr. Neel. Mr. Cordingley's role with Fidelity is not full time. He has no employment agreement with us, does not receive a salary (other than board fees), and has substantial business interests other than Fidelity. Our future success also depends on our ability to identify, attract and retain qualified senior officers and other employees in our identified market. We may not continue to satisfy the requirements for continued listing of our common stock on Nasdaq. Our shares of common stock are traded on the Nasdaq SmallCap Market, which has adopted rules that establish criteria for initial and continued listing of securities. Under the Nasdaq rules for continued listing, a company must satisfy certain requirements for continued listing on Nasdaq, including among others a minimum bid price for the stock of $1.00. Our minimum bid was ___ in the calendar year 2001as of ____, 2001. If we suffer substantial future losses from operations, our minimum bid could decline below the Nasdaq listing criteria. If our common stock is delisted by Nasdaq, trading in the common stock could thereafter be conducted on the over-the-counter market or on an electronic bulletin board established for securities that do not meet the Nasdaq listing requirements, which could materially affect your ability to sell your shares in the secondary market. Anti-takeover provisions in our charter documents may delay or prevent a takeover of Fidelity. Certain provisions of our charter documents may make it more difficult for a third party to acquire control of us, even on terms that a stockholder might consider favorable. Our amended and restated certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. The issuance of preferred stock could make it more difficult for a third party to acquire us because the preferred stock could have dividend, redemption, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of holders of our common stock. Our board of directors does not currently have any intent to issue shares of preferred stock. The existence of controlling shareholders may limit your ability to influence the outcome of matters requiring stockholder approval, could discourage potential acquisitions of our business by third parties, and could impact the price of our shares. -2- Bruce A. Cordingley (one of our directors) and entities and individuals affiliated with him own or control 37.6% of our issued and outstanding shares of common stock, excluding options and warrants for the purchase of common stock. He and his affiliates have agreed to purchase at least $__________ worth of our common stock in the rights offering (if such shares are available pursuant to the exercise of his subscription privilege and over-subscription privilege). Our remaining directors, together with their respective affiliates, have agreed to purchase at least $______ worth of our common stock in the rights offering (if such shares are available pursuant to the exercise of their subscription privileges and over-subscription privileges). As a result, unless all shareholders exercise their basic subscription privileges, which we believe is highly unlikely, Mr. Cordingley and his affiliates, and the remaining directors, will increase their respective ownership interests in Fidelity as a result of this rights offering. If no other shareholders exercise their subscription rights, Mr. Cordingley and his affiliates and the remaining directors will in aggregate own approximately ___% of our outstanding common stock. Although we are not aware of any arrangement or understanding, contractual or otherwise, that obligates our directors to act in concert with respect to Fidelity, the level of stock ownership held by the directors may allow them to elect all of their designees to the board of directors and to control the outcome of virtually all matters submitted for a vote of our shareholders. Either the equity interests of Mr. Cordingley and his affiliates, or the combined equity interests of all of the directors in Fidelity, could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of Fidelity, even on terms that a stockholder might consider favorable. This in turn could harm the market price of our common stock or prevent our shareholders from realizing a premium over the market price for their shares of common stock. In addition, sales of a substantial amount of our common stock in the public market, by our principal shareholders or otherwise, or the perception that these sales may occur, could materially adversely affect the market price of our common stock and impair our ability to raise funds in additional stock offerings. The existence of outstanding options could discourage potential acquisitions of our business by third parties and could impact the price of our shares. In May 2000 our shareholders approved a stock purchase agreement between us and affiliates of Mr. Cordingley. Under the terms of the stock purchase agreement, Mr. Cordingley and his affiliates have an option to purchase from us up to $5 million worth of additional shares of common stock through May 19, 2003. For shares purchased on or prior to May 19, 2001 Mr. Cordingley and his affiliates must pay $3.00 per share, and for shares purchased under the terms of this option after May 19, 2001 Mr. Cordingley and his affiliates will pay the "fair market value" of the shares, as defined in the Stock Purchase Agreement. In addition, there currently are options outstanding to directors and employees for 291,456 shares. The existence of these option could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of Fidelity, even on terms that a stockholder might consider favorable. This in turn could harm the market price of our common stock or prevent our shareholders from realizing a premium over the market price for their shares of common stock. Because our common stock has no pre-emptive rights, this would also dilute your ownership position. -3- The exercise price of the Company's outstanding options is greater than the price of the shares in the rights offering. The price of shares in the rights offering is less than the exercise price per share for the Company's outstanding options; as such, the Company will receive less for shares purchased in the rights offering by shareholders with options than it would have received if these shareholders had purchased shares from the Company by exercising their outstanding options at the higher exercise price. If this rights offering is completed, our book value per share will be reduced, which can affect the market price of your shares. Because the shares will be sold in the rights offering at less than the book value of the Company, our book value per share will be reduced, which could affect the market price of your shares. We compete with many larger financial institutions that have far greater financial resources than we have. We encounter strong competition from other financial institutions operating in our market and elsewhere. We compete with other competitors which are larger than us and have greater financial and personnel resources than we have. Because of this competition, we may have to pay higher rates of interest to attract deposits. In addition, because of our smaller size, the amount we can loan to one borrower is less than that for most of our competitors. This may impact our ability to seek relationships with larger businesses in our market area. Trends toward the consolidation of the banking industry and the lifting of interstate banking and branching restrictions may make it more difficult for us to compete effectively with large national and super-regional banking institutions. United Fidelity Bank's consumer loan concentration increases the risk of defaults by our borrowers. United Fidelity Bank makes various types of loans. Currently, approximately 24% of our assets are comprised of consumer loans. These types of loans are more risky than residential mortgage lending because of the impact on these types of loans of unemployment rates and the general economy. For example, delinquencies are typically low on these types of loans when unemployment rates are low, and increase when unemployment rates increase. Because of this, the OTS may require United Fidelity Bank to maintain a higher level of capital than a similarly sized institution with a smaller exposure to this type of loan. -4- RISKS RELATED TO THE RIGHTS OFFERING If you do not participate in this rights offering or do not exercise all of your subscription rights, you may suffer significant dilution of your percentage ownership of our common stock. This rights offering is designed to enable Fidelity to raise capital while allowing all shareholders on the record date to maintain their relative proportionate voting and economic interests. Mr. Cordingley and his affiliates, and our remaining directors and their respective affiliates, have agreed to purchase, if available at least $___ worth of stock in the rights offering pursuant to the exercise their respective basic subscription privileges and over-subscription privileges. To the extent that you do not exercise your subscription rights and shares are purchased by other shareholders in the rights offering, your proportionate voting interest will be reduced, and the percentage that your original shares represent of our expanded equity after exercise of the subscription rights will be disproportionately diluted. If no shareholders other than Mr. Cordingley and his affiliates and the remaining directors and their affiliates exercise their basic subscription privileges, Mr. Cordingley and his affiliates' ownership interest in Fidelity will increase to approximately ____% from approximately 37.6% and the ownership interest of the remaining directors and their respective affiliates in Fidelity will increase to approximately ___% from approximately 23.0%, and the ownership interest of the remaining shareholders, who currently own in the aggregate approximately 39.4% of our common stock, will decrease to approximately ___%, without giving effect to the shares that may be issued upon the exercise of outstanding warrants and stock options. The price of our common stock may decline before or after the subscription rights expire. We cannot assure you that the public trading market price of our common stock will not decline after you elect to exercise your subscription rights. If that occurs, you will have committed to buy shares of common stock at a price above the prevailing market price and you will have an immediate unrealized loss. Moreover, we cannot assure you that following the exercise of subscription rights you will be able to sell your shares of common stock at a price equal to or greater than the subscription price. Until shares are delivered upon expiration of the rights offering, you may not be able to sell the shares of our common stock that you purchase in the rights offering. Certificates representing shares of our common stock purchased will be delivered as soon as practicable after expiration of the rights offering. We will not pay you interest on funds delivered pursuant to the exercise of rights. Once you exercise your subscription rights, you may not revoke the exercise. Once you exercise your subscription rights, you may not revoke the exercise, even if less than all of the shares that we are offering are actually purchased. If we elect to withdraw or terminate the rights offering, we will have no obligation with respect to the subscription rights except to return, without interest, any subscription payments. The subscription price is not an indication of the value of Fidelity. The subscription price was set by our board of directors after considering a variety of factors. We have neither sought nor obtained a valuation opinion from an outside financial consultant or investment banker. The subscription price does not necessarily bear any relationship to the book value of our assets, past operations, cash flows, earnings, financial condition or any other established criteria for value. You should not consider the subscription price as an indication of the present or future value of -5- Fidelity. Our board of directors has established the subscription price at _______ to encourage all shareholders to exercise their subscription rights and thereby raise capital without diluting the interests of current shareholders. -6- SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Some of the information in this prospectus, including the above risk factors section, contains or incorporates by reference certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about our financial condition, results of operations and business that are based on our current and future expectations. You can find many of these statements by looking for wards such as "may," "will," "should," "expects," "plans," "anticipates,""believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms and other comparable terminology. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties, including those discussed under "Risk Factors"and elsewhere in this prospectus that could cause actual results to differ materially from those contemplated in such forward-looking statements. We believe it is important to communicate our expectations to our investors. However, you are cautioned that no forward-looking statement is a guarantee of future performance and you should not place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. There may be events in the future that we are not able to predict accurately or over which we have no control. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this prospectus. The risk factors listed above, as well as any cautionary language in this prospectus, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Before you invest in our common stock, you should be aware that the occurrence of the events described in these risk factors and elsewhere in this prospectus could have a material adverse effect on our business, operating results and financial condition. USE OF PROCEEDS Our net proceeds from the rights offering will depend upon the number of shares that are purchased. If we sell all 1,000,000 shares which may be purchased upon exercise of the rights offered by this prospectus, then we will receive net proceeds of $___ million, before deducting expenses payable by us, estimated to be $_____. Since our directors, executive officers, and their affiliates, who currently own approximately 60.6% of our outstanding shares of common stock, without giving effect to the shares that may be issued upon the exercise of outstanding warrants and stock options, have agreed to exercise their basic subscription privileges and over-subscription privileges in the aggregate amount of $_____, we expect to issue at least ____ shares and to receive proceeds of at least $______ from the rights offering, before deducting expenses. We expect to use a portion of the proceeds to: o redeem at maturity a portion of the $1.5 million in principal amount of our 9.125% junior subordinated notes which come due in April, 2001; o refinance certain letters of credit which we issued in connection with the financing of affordable housing developments; o to make interest payments on outstanding debt; and o to increase the capital of United Fidelity Bank. -7- We may also use a portion of the net proceeds to refinance affordable housing developments or for general corporate purposes. Although we expect to use the net proceeds in the manner discussed above, we reserve the right to use the net proceeds in any manner which we consider appropriate. DIVIDEND POLICY We have not paid any cash dividends on our common stock since July 6, 1998 and do not anticipate paying cash dividends in the foreseeable future, since we are dependent upon United Fidelity Bank for funds for dividends and, under the terms of the Supervisory Agreement, United Fidelity cannot pay a dividend to us without approval of the OTS. For the foreseeable future, we anticipate that United Fidelity Bank will retain any earnings which it generates or, subject to OTS approval, pay a portion of these earnings to us in order for us to service our existing debt. If we generate any earnings, we expect that these earnings will also be used to service our existing debt. The declaration and payment in the future of any cash dividends will be at the discretion of our board of directors and will depend upon the earnings, capital requirements and financial position of Fidelity, general economic conditions and other pertinent factors. PRICE RANGE OF COMMON STOCK Our common stock is traded on the Nasdaq SmallCap Market under the symbol "FFED". The following table sets forth the reported high and low bid prices of our common stock for the periods indicated: 1998 High Low ---- --------- --------- First Quarter $ 10 3/8 $ 8 3/4 Second Quarter 9 3/8 6 1/16 Third Quarter 61/2 31/2 Fourth Quarter 5 3 1/4 1999 ---- First Quarter $ 4 $ 21/2 Second Quarter 3 7/8 2 3/4 Third Quarter 3 1/16 2 5/8 Fourth Quarter 2 7/8 1 1/4 2000 ---- First Quarter $ 3 5/16 $ 1 1/4 Second Quarter 2 7/8 1 3/4 Third Quarter 2 5/8 2 Fourth Quarter 2 1/8 1 1/4 -8- The closing price of our common stock was $______ on ______, 2001, the last full trading day before we publicly announced the rights offering. The closing price of our common stock was $__________ on ____________, 2001, the last full trading day before the date of this prospectus. We urge you to obtain a current stock quote for our common stock. CAPITALIZATION The following table shows our capitalization as of September 30, 2000. The table also shows our capitalization as adjusted for the completion of the rights offering (including application of net proceeds from that transaction as described on page __ under the heading "Use of Proceeds") at the subscription price of $____ per share and assuming that all subscription rights are exercised.
September 30, 2000 ----------------------------------- Actual As Adjusted --------------- --------------- (dollars in thousands) Borrowings Notes payable, secured by specified multifamily mortgages $ 2,474 $ Note Payable, secured by United stock 2,000 --------------- Junior subordinated notes, unsecured 2,970 --------------- Senior subordinated notes, unsecured 7,000 Federal Home Loan Bank advances 10,297 and other borrowings Total Borrowings $ 24,741 Shareholders' Equity Common Stock 4,608 Stock Warrants 11 Additional paid-in capital 13,673 Retained earnings (9,051) Valuation Allowance for Securities (700) --------------- --------------- Total shareholders' equity 8,541 --------------- --------------- Total capitalization $ $ =============== ===============
-9- THE RIGHTS OFFERING Before exercising any subscription rights, you should read carefully the information set forth under "Risk Factors. The Subscription Rights We are distributing non-transferable subscription rights to shareholders who owned shares of our common stock on ____________, 2001, the record date, at no cost to the shareholders. We will give you one (1) subscription right for each share of common stock that you owned on the record date. Each subscription right will entitle you to purchase one share of common stock for $____. If you wish to exercise your subscription rights, you must do so before 5:00 p.m., ________ time, on ____________, 2001. After that date, the subscription rights will expire and will no longer be exercisable. Basic Subscription Privilege Each subscription right will entitle you to receive, upon payment of $____, one (1) share of common stock. You will receive the shares that you purchase pursuant to your basic subscription privilege as soon as practicable after ____________, 2001, whether you exercise your subscription rights immediately prior to that date or earlier. You are not required to exercise any or all of your rights unless you wish to purchase shares under your over-subscription privilege described below, in which case you must exercise all of your rights. Over-Subscription Privilege Subject to the limitations described below, each subscription right also grants you an over-subscription privilege to purchase additional shares of common stock that are not purchased by other shareholders. You are entitled to exercise your over-subscription privilege only if you exercise your basic subscription privilege in full. If you wish to exercise your over-subscription privilege, you should indicate the number of additional shares that you would like to purchase in the space provided on your subscription certificate. You may not be able to purchase as many additional shares as you requested on your subscription certificate if the number of shares available for sale pursuant to the exercise of all over-subscription privileges is not sufficient to satisfy in full all over-subscription privileges. If this occurs, we will reallocate the number of additional shares of our common stock that you will be entitled to purchase if you exercise your over-subscription privilege on a pro rata basis with other shareholders exercising their over-subscription privileges. You will be entitled to purchase a number of shares upon exercise of your over-subscription privilege equal to the product of (i) the number of shares of our common stock owned by you on the close of business on _____, 2001, divided by the total number of shares of our common stock owned by all shareholders exercising their over-subscription privileges on the close of business on __________ __, 2001, and (ii) the number of shares available for sale pursuant to the exercise of all over-subscription privileges, rounded down to the nearest whole number. If this results in a number of shares greater than the number of shares you requested, you will receive only the number of shares that you requested, and the excess will be reallocated (one or more times as necessary) among those shareholders whose subscriptions are not fully satisfied on the same principle, until all available shares have been allocated or all exercises of over-subscription privileges are satisfied. -10- When you send in your subscription certificate, you must also send the full purchase price for the number of additional shares that you have requested to purchase (in addition to the payment due for shares purchased through your basic subscription privilege). If the number of additional shares you are eligible to purchase exceeds the number of shares you requested, you will receive only the number of shares that you requested, and the remaining shares will be divided among other shareholders exercising their over-subscription privileges. In certain circumstances, however, in order to comply with applicable state securities laws, we may not be able to honor all over-subscription privileges even if we have shares available. To determine if you have fully exercised your basic subscription privilege, we will consider only the basic subscription privileges held by you in the same capacity. For example, suppose you were granted rights to purchase shares of Fidelity common stock you own individually and for shares of Fidelity common stock you own jointly with your spouse. You only need to fully exercise your basic subscription privilege with respect to your individually owned rights in order to exercise your over-subscription privilege with respect to your individually owned rights. You do not have to subscribe for any shares under the basic subscription privilege owned jointly with your spouse to exercise your individual over-subscription privilege. When you complete the portion of the subscription certificate to exercise the over-subscription privilege, you will be representing and certifying that you have fully exercised your basic subscription privilege received in respect of shares of Fidelity common stock you hold in that capacity. You must exercise your over-subscription privilege at the same time you exercise your basic subscription privilege in full. If you own your shares of Fidelity common stock through your broker, dealer or other nominee holder who will exercise your over-subscription privilege on your behalf, the nominee holder will be required to certify to us: o the number of shares held on ____________, 2001, the record date, on your behalf; o the number of rights you exercised under your basic subscription privilege; o that your entire basic subscription privilege held in the same capacity has been exercised in full; and o the number of shares of Fidelity common stock you subscribed for pursuant to the over-subscription privilege. Your nominee holder must also disclose to us certain other information received from you. If you exercised your over-subscription privilege and are allocated less than all of the shares of Fidelity common stock for which you wished to subscribe, the excess funds you paid for shares of Fidelity common stock that are not allocated to you will be returned in full by mail, without interest or deduction, as soon as practicable after the expiration date of the rights. -11- Intended Purchases Mr. Cordingley and his affiliates, and the other directors of Fidelity and their respective affiliates, who currently own approximately 37.6% and 23.0%, respectively, of our outstanding shares of common stock, without giving effect to the shares that may be issued upon the exercise of outstanding warrants and stock options, have agreed to exercise their basic subscription privileges and over-subscription privileges in the amount of at least $______. As a result, we expect that at least ______ of the _____ shares offered in this rights offering will be subscribed for. No Recommendation to Rights Holders Neither Fidelity nor its Board of Directors is making any recommendations to you as to whether or not you should exercise your subscription rights. You should make your decision based on your own assessment of your best interests after reading this prospectus. Expiration Date The rights will expire at 5:00 p.m., _______ time, on ____________, 2001, unless we decide to extend the rights offering. If you do not exercise your subscription rights prior to that time, your subscription rights will expire and will no longer be exercisable. We will not be required to issue shares of common stock to you if we receive your subscription certificate or your payment after that time, regardless of when you sent the subscription certificate and payment, unless you send the documents in compliance with the guaranteed delivery procedures described below. Withdrawal Right Our board of directors may withdraw the rights offering in its sole discretion at any time prior to or on ____________, 2001, for any reason (including, without limitation, a change in the market price of our common stock). If we withdraw the rights offering, any funds you paid will be promptly refunded, without interest or penalty. Determination of Subscription Price We computed the price at which a share of stock could be purchased in the rights offering by _________________________________________. Our board of directors chose the $____ per share subscription price after considering a variety of factors, including the following: - the historic and current market price of the common stock; - our need for capital; - alternatives available to us for raising capital; - the amount of proceeds desired; and - the book value of our stock. The $____ per share subscription price should not be considered an indication of the actual value of Fidelity or of our common stock. We cannot assure you that the market price of the common stock will not decline during or after the rights offering. We also cannot assure you that you will be able to sell shares of common stock purchased during the rights offering at a price equal to or greater than $___ per share. We urge you to obtain a current quote for our common stock before exercising your rights. -12- Transferability of Subscription Rights Both the basic subscription privileges and over-subscription privileges are non-transferable and non-assignable. Only you may exercise these subscription rights. Exercise of Subscription Privileges You may exercise your subscription privileges by delivering to us on or prior to ____________, 2001: - A properly completed and duly executed subscription certificate; - Any required signature guarantees; and - Payment in full of $_____ per share for the shares of common stock subscribed for by exercising your basic subscription privileges and, if desired, your over-subscription privileges. You should deliver your subscription certificate and payment to us at the address shown on page ___. We will not pay you interest on funds delivered to us pursuant to the exercise of rights. Method of Payment Payment for the shares must be made in United States dollars and may be made by bank certified check or cashier's check drawn upon a United States bank or a postal, telegraphic or express money order payable to the order of Fidelity Federal Bancorp. Payment for basic subscription privileges and over-subscription privileges may also be effected through wire transfer as follows: Bank Name: Address: ABA#: Account #: Account Name: We will consider payment to have been received only upon: o actual receipt of any certified check or cashier's check drawn upon a U.S. bank or of any postal, telegraphic or express money order; o actual receipt of any funds transferred by wire transfer; or o actual receipt of any funds through an alternative payment method which we may approve. Guaranteed Delivery Procedures If you want to exercise your subscription rights, but time will not permit your subscription certificate to reach us on or prior to ____________, 2001, you may exercise your subscription rights if you satisfy the following guaranteed delivery procedures: -13- (1) You send, and we receive, payment in full for each share of common stock being subscribed for through the basic subscription privilege and the over-subscription privilege, on or prior to ____________, 2001; (2) You send, and we receive, on or prior to ____________, 2001, a notice of guaranteed delivery, substantially in the form provided to you with your subscription certificate, from a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. The notice of guaranteed delivery must state your name, the number of subscription rights that you hold, the number of shares of common stock that you wish to purchase pursuant to the basic subscription privilege and the number of shares, if any, you wish to purchase pursuant to the over-subscription privilege. The notice of guaranteed delivery must guarantee the delivery of your subscription certificate to us within three Nasdaq National Market trading days following the date of the notice of guaranteed delivery; and (3) You send, and we receive, your properly completed and duly executed subscription certificate, including any required signature guarantees, within three Nasdaq National Market trading days following the date of your notice of guaranteed delivery. The notice of guaranteed delivery may be delivered to us in the same manner as your subscription certificate at the addresses set forth on page ____, or may be transmitted to us by facsimile transmission, to facsimile number (812) 421 - 2931, Attention: Mark A. Isaac, Vice President. You can obtain additional copies of the form of notice of guaranteed delivery by requesting them from us at the address set forth on page ______. Signature Guarantee Signatures on the subscription certificate do not need to be guaranteed if either the subscription certificate provides that the shares of common stock to be purchased are to be delivered directly to the record owner of such subscription rights, or the subscription certificate is submitted for the account of a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. If a signature guarantee is required, signatures on the subscription certificate must be guaranteed by an Eligible Guarantor Institution, as defined in Rule l7Ad-15 of the Securities Exchange Act of 1934, as amended, subject to the standards and procedures adopted by us. Eligible Guarantor Institutions include banks, brokers, dealers, credit unions, national securities exchanges and savings associations. Notice to Beneficial Holders If you are a broker, a trustee or a depositary for securities who holds shares of Fidelity common stock for the account of others as a nominee holder, you should notify the respective beneficial owners of such shares of the issuance of the rights as soon as possible to find out such beneficial owners' intentions. You should obtain instructions from the beneficial owner with respect to the rights, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner so instructs, you should complete the appropriate subscription certificates and, in the -14- case of the over-subscription privilege, the related nominee holder certification, and submit them to the Subscription Agent with the proper payment. A nominee holder that holds shares for the account(s) of more than one beneficial owner may exercise the number of rights to which all such beneficial owners in the aggregate otherwise would have been entitled if they had been direct record holders of Fidelity common stock on the record date, so long as the nominee submits the appropriate subscription certificates and certifications and proper payment to the Subscription Agent. Beneficial Owners If you are a beneficial owner of shares of Fidelity common stock or rights that you hold through a nominee holder, we will ask your broker, dealer or other nominee to notify you of this rights offering. If you wish to exercise your rights, you will need to have your broker, dealer or other nominee act for you. To indicate your decision with respect to your rights, you should complete and return to your broker, dealer or other nominee the form entitled "Beneficial Owner Election Form." You should receive this form from your broker, custodian bank or other nominee with the other rights offering materials. Ambiguities in Exercise of Subscription Rights If you do not specify the number of subscription rights being exercised on your subscription certificate, or if your payment is not sufficient to pay the total purchase price for all of the shares that you indicated you wished to purchase, you will be deemed to have exercised the maximum number of subscription rights that could be exercised for the amount of the payment that the Subscription Agent receives from you. If your payment exceeds the total purchase price for all of the subscription rights shown on your subscription certificate, your payment will be applied, until depleted, to subscribe for shares of common stock in the following order: (1) to subscribe for the number of shares, if any, that you indicated on the subscription certificate that you wished to purchase through your basic subscription privilege, until your basic subscription privilege has been fully exercised; and (2) to subscribe for additional shares of common stock pursuant to the over-subscription privilege (subject to any applicable limitation). Any excess payment remaining after the foregoing allocation will be returned to you as soon as practicable by mail, without interest or deduction. Regulatory Limitation We will not be required to issue you shares of common stock pursuant to the rights offering if, in our opinion, you would be required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control such shares if, at the time the subscription rights expire, you have not obtained such clearance or approval. State and Foreign Securities Laws The rights offering is not being made in any state or other jurisdiction in which it is unlawful to do so, nor are we selling or accepting any offers to purchase any shares of common stock to you if you -15- are a resident of any such state or other jurisdiction. We may delay the commencement of the rights offering in certain states or other jurisdictions in order to comply with the securities law requirements of such states or other jurisdictions. It is not anticipated that there will be any changes in the terms of the rights offering. In our sole discretion, we may decline to make modifications to the terms of the rights offering requested by certain states or other jurisdictions, in which case shareholders who live in those states or jurisdictions will not be eligible to participate in the rights offering. Our Decision Binding on You All questions concerning the timeliness, validity, form and eligibility of any exercise of subscription rights will be determined by us, and our determinations will be final and binding. In our sole discretion, we may waive any defect or irregularity, or permit a defect or irregularity to be corrected within such time as we may determine, or reject the purported exercise of any subscription right by reason of any defect or irregularity in such exercise. Subscriptions will not be deemed to have been received or accepted until all irregularities have been waived or cured within such time as we determine in our sole discretion. We will be under no duty to notify you of any defect or irregularity in connection with the submission of a subscription certificate or incur any liability for failure to give such notification. No Revocation of Exercise of Subscription Right After you have exercised your basic subscription privilege or over-subscription privilege, you may not revoke that exercise. You should not exercise your subscription rights unless you are certain that you wish to purchase additional shares of our common stock. Shares of Common Stock Outstanding after the Rights Offering Assuming we issue all of the shares of common stock offered in the rights offering, approximately 5,607,659 shares of common stock will be issued and outstanding. This would represent a 21.7% increase in the number of outstanding shares of common stock. If you do not exercise your basic subscription rights, the percentage of common stock that you hold will decrease if shares are purchased by other shareholders in the rights offering. Fees and Expenses You are responsible for paying any commissions, fees, taxes or other expenses incurred in connection with the exercise of the subscription rights. We will not pay such expenses. If You Have Questions If you have questions or need assistance concerning the procedure for exercising subscription rights or if you would like additional copies of this prospectus, the instructions, or forms for use in connection with the rights offering, you should contact Deb Fritz, Assistant Vice President, Shareholder Relations, of Fidelity, at: Fidelity Federal Bancorp 18 NW Fourth Street, PO Box 1347 Evansville, Indiana 47706-1347 -16- Telephone: (812) 429-0550 (extension 2226) (800) 280-8280 (extension 2226) IMPORTANT: Please carefully read the instructions accompanying the subscription certificate and follow those instructions in detail. You are responsible for choosing the payment and delivery method for your subscription certificate, and you bear the risks associated with such delivery. If you choose to deliver your subscription certificate and payment by mail, we recommend that you use registered mail, properly insured, with return receipt requested. We also recommend that you allow a sufficient number of days to ensure delivery to us prior to ____________, 2001. FEDERAL INCOME TAX CONSIDERATIONS The following summarizes the material federal income tax considerations of the rights offering to you and Fidelity. This summary is based on the Internal Revenue Code of 1986, as amended, the Treasury regulations thereunder, judicial authority and administrative rulings and practice, all of which are subject to change at any time, possibly with retroactive effect. This summary may not address federal income tax consequences applicable to shareholders subject to special treatment under federal income tax law, such as financial institutions, broker-dealers, life insurance companies or traders in securities that elect to mark to market. Also, this discussion does not address applicable tax consequences if you hold our common stock as part of a hedging, straddle, constructive sale, conversion or other risk reduction transaction. In addition, this summary does not address the tax consequences of the rights offering under applicable state, local or foreign tax laws. This discussion assumes that your shares of common stock and the subscription rights and shares issued to you during the rights offering constitute capital assets (generally, property held for investment) for federal income tax purposes. Receipt and exercise of the subscription rights distributed pursuant to the rights offering is intended to be nontaxable to shareholders, and the following summary assumes you will qualify for such nontaxable treatment. If, however, the rights offering does not qualify as nontaxable, you would be treated as receiving a taxable distribution equal to the fair market value of the subscription rights on their distribution date. The distribution would be taxed as a dividend to the extent made out of Fidelity's current or accumulated earnings and profits; any excess would be treated first as a return of your basis (investment) in your Fidelity stock and then as a capital gain. Expiration of the subscription rights would result in a capital loss. You should consult your tax advisor to determine the tax consequences to you of the rights offering in light of your particular circumstances, including any state, local and foreign tax consequences. Taxation of Shareholders Receipt of a Subscription Right. You will not recognize any gain or other income upon receipt of a subscription right. Tax Basis and Holding Period of Subscription Rights. Your tax basis in each subscription right will effectively depend on whether you exercise the subscription right or allow the subscription right to expire. If you exercise a subscription right, your tax basis in the subscription right will be determined by allocating the tax basis of your common stock on which the subscription right is distributed between the -17- common stock and the subscription right, in proportion to their relative fair market values on the date of distribution of the subscription right. However, if the fair market value of your subscription rights is less than 15% of the fair market value of your existing shares of common stock, then the tax basis of each subscription right will be deemed to be zero, unless you elect, by attaching an election statement to your federal income tax return for the taxable year in which you receive the subscription rights, to allocate tax basis to your subscription rights. If you allow a subscription right to expire, it will be treated as having no tax basis. Your holding period for a subscription right will include your holding period for the shares of common stock upon which the subscription right is issued. Expiration of Subscription Rights. You will not recognize any loss upon the expiration of a subscription right. Exercise of Subscription Rights. You generally will not recognize a gain or loss on the exercise of a subscription right. The tax basis of any share of common stock that you purchase through the rights offering will be equal to the sum of your tax basis (if any) in the subscription right exercised and the price paid for the share. The holding period of the shares of common stock purchased through the rights offering will begin on the date that you exercise your subscription rights. Sale or Exchange of Shares Acquired Upon Exercise of Subscription Rights If you sell or exchange shares of Fidelity common stock, you will generally recognize gain or loss on the transaction. The gain or loss you recognize is equal to the difference between the amount you realize on the transaction and your basis in the shares you sold. Such gain or loss generally will be capital gain or loss so long as you held the shares as a capital asset at the time of the sale or exchange. Gain or loss from an asset held for more than one year will generally be taxable as long-term capital gain or loss. If you are an individual, any long-term capital gain is generally taxed at a maximum federal income tax rate of 20%. Taxation of Fidelity We will not recognize any gain, other income or loss upon the issuance of the subscription rights, the lapse of the subscription rights, or the receipt of payment for shares of common stock upon exercise of the subscription rights. DESCRIPTION OF CAPITAL STOCK The following is a summary of the terms of our capital stock and highlights some of the provisions of our amended and restated certificate of incorporation and bylaws. Since we are only providing a general summary of certain terms of our amended and restated certificate of incorporation and bylaws, you should only rely on the actual provisions of the amended and restated certificate of incorporation or the bylaws. If you would like to read the certificate of incorporation or bylaws, they are on file with the Securities and Exchange Commission. -18- Authorized and Outstanding Capital Stock Our authorized capital stock consists of 15,000,000 shares of common stock, no par value, and 5,000,000 shares of preferred stock. As of September 30, 2000, there were 4,607,659shares of common stock outstanding and approximately 492 beneficial holders of common stock of record. All outstanding shares of common stock are fully paid and non-assessable. We have two issues of outstanding warrants to purchase 18,282 and 9,471 shares of our common stock at a price of $6.22 and $8.93 per share, respectively. The warrants expire on April 30, 2004 and January 31, 2005, respectively. The warrants may be exercised in whole or in part at any time prior to expiration. Fidelity has reserved 27,753 shares of common stock for the possible exercise of these warrants. None of the warrants have been exercised as of September 30, 2000. As of September 30, 2000, we also had outstanding, under our stock option plans, options to purchase 291,456 shares of our common stock. All of the options have an exercise price in excess of $2.88 per share. We have reserved 291,456 shares of common stock for the possible exercise of options under these option plans. Common Stock The holders of common stock are entitled to dividends in such amounts and at such times as may be declared by the board of directors out of funds legally available therefor. Holders of common stock are entitled to one vote per share for the election of directors and other corporate matters. Such holders are not entitled to vote cumulatively for the election of directors. In the event of liquidation, dissolution or winding up of Fidelity, holders of common stock would be entitled to share ratably in all of our assets available for distribution to the holders of common stock. The common stock carries no preemptive rights. All outstanding shares of common stock are, and the shares of common stock to be sold by Fidelity in the rights offering when issued will be, duly authorized, validly issued, fully paid and non-assessable. Preferred Stock Our board of directors is authorized to issue from time to time, without stockholder authorization, in one or more designated series, shares of preferred stock with such dividend, redemption, conversion and exchange provisions as are provided in the particular series. The issuance of preferred stock could have the effect of delaying or preventing a change in control of Fidelity. Your rights as a holder of our common stock may be affected by any preferred stock that we may issue. Our board of directors has no present plans to issue any preferred stock. Transfer Agent We act as our own transfer agent for the common stock. DETERMINATION OF OFFERING PRICE Our board of directors decided to set a $____ per share subscription price after considering a variety of factors described elsewhere in this prospectus. The $____ per share price should not be considered an indication of the actual value of Fidelity or of our common stock. We cannot assure you that the market price of the common stock will not decline during or after the rights offering. We also cannot assure you that you will be able to sell shares of common stock purchased during the rights offering at a price equal to or greater than $_____ per share. We have neither sought, nor obtained, any valuation opinion from outside financial advisors or investment bankers. -19- PLAN OF DISTRIBUTION On or about ____________, 2001, we will distribute the subscription rights, subscription certificates and copies of this prospectus to individuals who owned shares of common stock on ____________, 2001. We have not employed any brokers, dealers or underwriters in connection with the rights offering and will not pay any underwriting commissions, fees or discounts in connection with the rights offering. Certain of our directors or officers may assist in the rights offering. These individuals will not receive any commissions or compensation other than their normal directors' fees or employment compensation and will not register with the Securities and Exchange Commission as brokers in reliance on certain safe harbor provisions contained in Rule 3a4-1 under the Exchange Act. If you wish to exercise your subscription rights and purchase shares of common stock, you should complete the subscription certificate and return it with payment for the shares, to us, at the address on page ___. If you have any questions, you should contact Deb Fritz, Assistant Vice President, Shareholder Relations, of Fidelity at: Fidelity Federal Bancorp 18 NW Fourth Street, PO Box 1347 Evansville, Indiana 47706-1347 Telephone: (812) 429-0550 (extension 2226) (800) 280-8280 (extension 2226). LEGAL MATTERS The validity of the shares of common stock offered by this prospectus will be passed upon for us by Krieg DeVault Alexander & Capehart, LLP, Indianapolis, Indiana. EXPERTS Olive LLP, independent auditors, have audited our financial statements and schedule included in our Annual Report on Form 10-K for the year ended December 31, 1999, as set forth in their report, which is incorporated by reference into this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Olive LLP's report, given on their authority as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We have filed with the SEC a registration statement on Form S-3, which registers the securities that we are offering under this prospectus. The registration statement, including the attached exhibits and schedules, contains additional relevant information about us and the securities offered. The rules and regulations of the SEC allow us to omit certain information included in the registration statement from this prospectus. We file annual, quarterly and special reports, proxy statements and other information with the SEC under the Securities Exchange Act of 1934. You may read and copy this information at the following locations of the SEC: -20- Judiciary Plaza Public Referral Room 450 Fifth Street, NW Washington, D.C. 20549 Seven World Trade Center 13th Floor New York, New York 10048 Citicorp Center 500 West Madison Street Suite 1400 Chicago, Illinois 60661 You may also obtain copies of this information by mail from the Public Reference Room of the SEC, 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. The SEC also maintains an Internet world wide web site that contains reports, proxy statements and other information about issuers, like us, who file electronically with the SEC. The address of that site is http://www.sec.gov. The SEC allows us to incorporate by reference information into this prospectus. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus, except for any information that is superseded by subsequent incorporated documents or by information that is included directly in this prospectus. Our descriptions in this prospectus concerning the contents of any contract, agreement or document are not necessarily complete. For those contracts, agreements or documents that we filed as exhibits to the registration statement, you should read the exhibit for a more complete understanding of the document or subject matter involved. This prospectus includes by reference the documents listed below that we previously have filed with the SEC and that are not delivered with this document. They contain important information about Fidelity and its financial condition. Filing Date Filed - ------ ---------- Current Report on Form 8-K January 5, 2000 Annual Report on Form 10-K for the year March 30, 2000 ended December 31, 1999 Amended Annual Report on Form 10-K for April 4, 2000 the year ended December 31, 1999 Proxy Statement on Schedule 14A April 20, 2000 Quarterly Report on Form 10-Q for the May 15, 2000 quarter ended March 31, 2000 -21- Filing Date Filed - ------ ---------- Current Report on Form 8-K May 24, 2000 Quarterly Report on Form 10-Q for the August 14, 2000 quarter ended June 30, 2000 Current Report on Form 8-K October 5, 2000 Quarterly Report on Form 10-Q for the November 14, 2000 quarter ended September 30, 2000 Our SEC file number is 0-22880. We incorporate by reference additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, between the date of this prospectus and the termination of the offering of securities under this prospectus. These documents include our periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as our proxy statements. You may obtain any of these incorporated documents from us without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference in such document. You may obtain documents incorporated by reference in this prospectus by requesting them from us in writing or by telephone at the following address: Fidelity Federal Bancorp 18 NW Fourth Street PO Box 1347 Evansville, Indiana 47706-1347 Attention: Mark A. Isaac, Vice President Telephone: (812) 429 - 0921. -22- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. - -------- ------------------------------------------- The following are actual or estimated expenses incurred or to be incurred by the Company in connection with this offering: Fees Amount - ---- ------ Filing Fee $ 383 Printing Expenses 2,000* Legal Fees, Blue Sky Fees and Expenses 20,000* Accounting Fees and Expenses 3,000* Miscellaneous Expenses 500* -------- Total $25,883 *Estimated. Item 15. Indemnification of Directors and Officers. - ------- ----------------------------------------- The Company's Articles of Incorporation provide that the Company will indemnify any person who is or was a director or officer of the Company or of any other corporation for which such director or officer is or was serving in any capacity at the request of the Company against all liability and expense that may be incurred in connection with any claim, action, suit or proceeding with respect to which such director or officer is wholly successful or acted in good faith in a manner such director or officer reasonably believed to be in, or not opposed to, the best interests of the Company or such other corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such conduct was unlawful. A director or officer of the Company is entitled to be indemnified as a matter of right with respect to those claims, actions, suits or proceedings in which such director or officer has been wholly successful. In all other cases, such director or officer, shall be entitled to indemnification as a matter of right unless (i) the director or officer has breached or failed to perform the person's duties in compliance with the standard of conduct set forth above and (ii) such breach of failure to perform constituted willful misconduct or recklessness as determined by the Board of Directors of the Company, a committee of the Board of Directors, independent legal counsel, or a committee of disinterested persons selected by the Board of Directors. The foregoing is a summary of detailed provisions for indemnification found at Article VI, Section 2 of the Articles of Incorporation of the Company which are incorporated by reference into this Registration Statement as Exhibit 4(a). Item 16. Exhibits. The following exhibits are filed as part of this - -------- -------- Registration Statement: Exhibit Number Exhibit - -------------- ------- 4.1 Articles of Incorporation of the Company (incorporated by reference to Exhibit 3(a) of the Company's Annual Report on Form 10-K [Commission File No. 0-22880] for the year ended June 30, 1995) and Articles of Amendment. 4.2 By-Laws of the Company 5 Opinion of Krieg DeVault Alexander & Capehart, LLP re: legality 23.1 Consent of Krieg DeVault Alexander & Capehart, LLP (included in Exhibit 5) 23.2 Consent of Olive LLP 24 Powers of Attorney (included in Signature Page) 99.1(a) Shareholder Rights Agreement 99.1(b) Instructions for Use of Shareholders Rights Agreement 99.2 Notice of Guaranteed Delivery 99.3 Letter to Record Holders 99.4 Letter to Beneficial Holders 99.5 Letter to Clients of Beneficial Holders 99.6 Beneficial Owner Election Form 99.7 Nominee Holder Certification 99.8 Substitute Form W-9 Item 17. Undertakings. - -------- ------------ (a) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURE PAGE -------------- Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, State of Indiana, on November 15, 2000. FIDELITY FEDERAL BANCORP By: /S/ DONALD R. NEEL ------------------------- Donald R. Neel, Executive Vice President and Chief Financial Officer POWER OF ATTORNEY ----------------- Each person signing below hereby makes, constitutes and appoints Bruce A. Cordingley and Donald R. Neel, and each of them, his true and lawful attorneys-in-fact to execute and file any and all amendments (including post-effective amendments) to this Registration Statement on Form S-3 as such attorney in-fact may deem appropriate. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated below as of November 15, 2000. By /S/ BRUCE A. CORDINGLEY ---------------------------------------- Bruce A. Cordingley Director, Chair of the Executive Committee and Acting Principal Executive Officer By /S/ DONALD R. NEEL ---------------------------------------- Donald R. Neel Director, Executive Vice President, Treasurer and Chief Financial Officer (Principal Accounting Officer) By /S/ CURT J. ANGERMEIER ---------------------------------------- Curt J. Angermeier Director By /S/ WILLIAM R. BAUGH ---------------------------------------- William R. Baugh Director By /S/ JACK CUNNINGHAM ---------------------------------------- Jack Cunningham Director and Chairman of the Board By ---------------------------------------- M. Brian Davis Director By /S/ GERALD K. PEDIGO ---------------------------------------- Gerald K. Pedigo Director By /S/ BARRY A. SCHNAKENBURG ---------------------------------------- Barry A. Schnakenburg Director By /S/ PHILLIP J. STOFFREGEN ---------------------------------------- Phillip J. Stoffregen Director EX-4.1 2 0002.txt Exhibit 4.1 ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF FIDELITY FEDERAL BANCORP Fidelity Federal Bancorp (hereinafter referred to as the "Corporation"), a corporation existing pursuant to the provisions of the Indiana Business Corporation Law, as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating the amendment of its Articles of Incorporation, hereby certifies, by its duly authorized officer, the following facts: ARTICLE I AMENDMENT Section 1. The date of incorporation of the Corporation is July 30, 1993. Section 2. The name of the Corporation following this amendment to the Corporation's Articles of Incorporation is Fidelity Federal Bancorp. Section 3. The exact text of Section 1 of Article III of the Corporation's Articles of Incorporation is, as now amended, as follows: Section 1. Number of Shares. The total number of shares of capital stock which the Corporation has authority to issue is 20,000,000 shares, all of which shall be divided into two classes of shares to be designated "Common Stock" and "Preferred Stock", respectively, as follows: 15,000,000 shares of Common Stock; and 5,000,000 shares of Preferred Stock. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof issued and outstanding) by the affirmative vote of the holders of a majority of shares of Common Stock then issued and outstanding, without a vote of holders of the shares of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms and conditions establishing the series of Preferred Stock. Section 4. The exact text of Section 4 of Article III of the Corporation's Articles of Incorporation is, as now amended, as follows: Section 4. Voting for Directors. At each election of directors, every shareholder entitled to vote at an election shall have the right to vote, in person or by proxy, the number of shares owned by the shareholder for as many persons as there are directors to be elected and for whose election the shareholder has a right to vote; however, there shall not be any cumulative voting either by giving one candidate a number of votes equal to the number of directors to be elected multiplied by the number of shares owned by the shareholder, or by distributing such votes accumulated by the same method among any number of candidates. Section 5. The exact text of Section 3 of Article IV of the Corporation's Articles of Incorporation is, as now amended, as follows: Section 3. Terms of Directors and Removal. With respect to any directors whose terms are scheduled to expire when their successors are elected and qualified at the Annual Meeting of Shareholders (or any special meeting in lieu thereof) in 2000, the terms of office of each such successor shall thenceforth be for one year commencing at such annual meeting. With respect to any directors whose terms of office are scheduled to expire when their successors are elected and qualified at the Annual Meeting of Shareholders in 2001, the terms of office of each such successor shall thenceforth be for one year commencing at such annual meeting. With respect to any directors whose terms of office are scheduled to expire when their successors are elected and qualified at the Annual Meeting of Shareholders in 2002, the terms of office of each such successor shall thenceforth be for one year commencing at such annual meeting and thereafter each such successor may be removed at a meeting. Any additional directorships resulting from an increase in the number of directors shall be for a term of one year. Section 6. The exact text of Section 4 of Article IV of the Corporation's Articles of Incorporation is, as now amended, as follows: Section 4. Removal of Directors with or Without Cause. Each director who is elected and qualified at the Annual Meeting of Shareholders (or any special meeting held in lieu thereof) in 2000 or thereafter may be removed (i) with or without cause, at a meeting of shareholders called expressly for that purpose, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors, or (ii) with cause, by a vote of a majority of directors then in office. Any additional directors resulting from an increase in 2 the number of directors or who are elected to fill any vacancy may also be removed as provided in this Article IV, Section 4. "Cause" for removal of a director shall be limited to the grounds specifically enumerated in 12 C.F.R. Section 563.39 (or any successor provision) with respect to termination for cause. ARTICLE II DATE OF ADOPTION OF AMENDMENTS The date of the adoption of the amendments set forth above in Article I, Sections 3, 4, 5, and 6 above is May 19, 2000. ARTICLE III MANNER OF ADOPTION AND VOTE Section 1. The Board of Directors of the Corporation duly adopted resolutions approving the foregoing amendments to the Corporation's Articles of Incorporation and recommending such amendments to the shareholders of the Corporation. Section 2. The shareholders of the Corporation entitled to vote with respect to the foregoing amendments to the Articles of Incorporation duly approved and adopted such amendments on May 19, 2000 at the annual meeting of the shareholders of the Corporation. The result of the vote of the shareholders with respect to the amendment to Article III, Section 1, is as follows: Designation of Shares Entitled to Vote: Common Stock Number of Votes Entitled to be Cast: 3,147,662 Number of Votes Represented at the Meeting: 2,967,532 Number of Votes Cast in Favor of the Amendment: 2,723,676 Number of Votes Cast Against the Amendment: 228,152 The result of the vote of the shareholders with respect to the amendment to Article III, Section 4, is as follows: Designation of Shares Entitled to Vote: Common Stock Number of Votes Entitled to be Cast: 3,147,662 Number of Votes Represented at the Meeting: 2,967,532 Number of Votes Cast in Favor of the Amendment: 2,037,308 Number of Votes Cast Against the Amendment: 213,078 3 The result of the vote of the shareholders with respect to the amendment to Article IV, Section 3, is as follows: Designation of Shares Entitled to Vote: Common Stock Number of Votes Entitled to be Cast: 3,147,662 Number of Votes Represented at the Meeting: 2,967,532 Number of Votes Cast in Favor of the Amendment: 2,070,460 Number of Votes Cast Against the Amendment: 175,282 The result of the vote of the shareholders with respect to the amendment to Article IV, Section 4, is as follows: Designation of Shares Entitled to Vote: Common Stock Number of Votes Entitled to be Cast: 3,147,662 Number of Votes Represented at the Meeting: 2,967,532 Number of Votes Cast in Favor of the Amendment: 2,207,943 Number of Votes Cast Against the Amendment: 48,295 ARTICLE IV COMPLIANCE WITH LEGAL REQUIREMENTS The manner of adoption of the foregoing amendment to the Articles of Incorporation and the vote by which it was adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation and the By-Laws of the Corporation. * * * The undersigned officer of the Corporation verifies, subject to the penalties of perjury, that the statements contained herein are true this 19th day of May, 2000. By: /S/ DONALD R. NEEL ------------------ Donald R. Neel, Executive Vice President 4 EX-4.2 3 0003.txt Exhibit 4.2 AMENDED BY-LAWS OF FIDELITY FEDERAL BANCORP ARTICLE I Section 1. Name. The name of the corporation is Fidelity Federal Bancorp ("Corporation"). Section 2. Registered Office and Registered Agent. The street address of the Registered Office of the Corporation is One Indiana Square, Suite 2800, Indianapolis, Indiana 46204, and the name of its Registered Agent at that office is John W. Tanselle. Section 3. Seal. Unless otherwise required by law, the Corporation shall not be required to use a seal. If the Board of Directors of the Corporation determines that the Corporation shall use a seal, the seal shall be circular in form and mounted upon a metal die, suitable for impressing the same upon paper. About the upper periphery of the seal shall appear the words "Fidelity Federal Bancorp" and about the lower periphery thereof the word "Indiana". In the center of the seal shall appear the word "Seal". ARTICLE II The fiscal year of the Corporation shall begin each year on the first day of January and end on the last day of December. ARTICLE III Capital Stock Section 1. Number of Shares and Classes of Capital Stock. The total number of shares of capital stock which the Corporation shall have authority to issue shall be as set forth in the Corporation's Articles of Incorporation from time to time. Subject to the provisions in the Articles of Incorporation regarding cumulative voting for directors, the capital stock shall have unlimited voting rights and shall be entitled to receive the net assets of the Corporation upon dissolution. Consideration for Shares. The shares of stock of the Corporation shall be issued or sold in such manner and for such amount of consideration, received or to be received, as may be fixed 1 from time to time by the Board of Directors. Upon payment of the consideration fixed by the Board of Directors, such shares of stock shall be fully paid and nonassessable. Section 3. Payment for Shares. The consideration determined by the Board of Directors to be required for the issuance of shares of capital stock of the Corporation may consist of any tangible or intangible property or benefit to the Corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the Corporation. If the Board of Directors authorizes the issuance of shares for promissory notes or for promises to render services in the future, the Corporation shall report in writing to the shareholders the number of shares authorized to be so issued with or before the notice of the next shareholders' meeting. The Corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be cancelled in whole or in part. When payment of the consideration for which a share was authorized to be issued shall have been received by the Corporation, such share shall be declared and taken to be fully paid and not liable to any further call or assessment, and the holder thereof shall not be liable for any further payments thereon. In the absence of actual fraud in the transaction, the judgment of the Board of Directors as to the value of such property, labor or services received as consideration, or the value placed by the Board of Directors upon the corporate assets in the event of a share dividend, shall be conclusive. Section 4. Certificate for Shares. Each holder of capital stock of the Corporation shall be entitled to a stock certificate, signed by the President or a Vice President and the Secretary or any Assistant Secretary of the Corporation, stating the name of the registered holder, the number of shares represented by such certificate, and that such shares are fully paid and nonassessable, provided, that if such shares are not fully paid, the certificates shall be legibly stamped to indicate the percent which has been paid, and as further payments are made, the certificate shall be stamped accordingly. If the Corporation is authorized to issue shares of more than one class, every certificate shall state the kind and class of shares represented thereby, and the relative rights, interests, preferences and restrictions of such class, or a summary thereof; provided, that such statement may be omitted from the certificate if it shall be conspicuously set forth upon the face or back of the certificate that such statement, in full, will be furnished by the Corporation to any shareholder upon written request and without charge. Section 5. Facsimile Signatures. If a certificate is countersigned by the written signature of a transfer agent other than the Corporation or its employee, the signatures of the 2 officers of the Corporation may be facsimiles. If a certificate is countersigned by the written signature of a registrar other than the Corporation or its employee, the signatures of the transfer agent and the officers of the Corporation may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of its issue. Section 6. Transfer of Shares. The shares of capital stock of the Corporation shall be transferable only on the books of the Corporation upon surrender of the certificate or certificates representing the same, properly endorsed by the registered holder or by his duly authorized attorney or accompanied by proper evidence of succession, assignment or authority to transfer. The Corporation may impose restrictions on the transfer or registration of transfer of capital stock of the Corporation by means of these By-laws, the Articles of Incorporation, or by an agreement with shareholders. Shareholders may agree between themselves to impose a restriction on the transfer or registration of transfer of shares. A restriction which is authorized by the Indiana Business Corporation Law and which has its existence noted conspicuously on the front or back of the Corporation's stock certificate is valid and enforceable against the holder or a transferee of the holder of the Corporation's stock certificate. If noted on the certificate the restriction is enforceable against a person without knowledge of the restriction. Section 7. Cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 9 of this Article III. Section 8. Transfer Agent and Registrar. The Board of Directors may appoint a transfer agent and a registrar for each class of capital stock of the Corporation and may require all certificates representing such shares to bear the signature of such transfer agent and registrar. Shareholders shall be responsible for notifying the transfer agent and registrar for the class of stock held by such shareholder in writing of any changes in their addresses from time to time, and failure so to do shall relieve the Corporation, its shareholders, directors, officers, transfer agent and registrar of liability for failure to direct notices, dividends, or other documents or property to an address other than the one appearing upon the records of the transfer agent and registrar of the Corporation. Section 9. Lost, Stolen or Destroyed Certificates. The Corporation may cause a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or 3 destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum and in such form as it may direct to indemnify against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of such new certificate. The Corporation, in its discretion, may authorize the issuance of such new certificates without any bond when, in its judgment, it is proper to do so. Section 10. Registered Shareholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of such shares to receive dividends, to vote as such owner, to hold liable for calls and assessments, and to treat as owner in all other respects, and shall not be bound to recognize any equitable or other claims to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Indiana. ARTICLE IV Meetings of Shareholders Section 1. Place of Meeting; Conference Telephone Meetings. Meetings of shareholders of the Corporation shall be held at such place, within or without the State of Indiana, as may from time to time be designated by the Board of Directors, or as may be specified in the notices or waivers of notice of such meetings. A shareholder may participate in a shareholders' meeting by means of a conference telephone or similar communications equipment by which all persons participating in the meeting can communicate with each other, and participating by these means constitutes presence in person at the meeting. Section 2. Annual Meeting. The annual meeting of shareholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held on such day and at such time within six (6) months following the close of the Corporation's fiscal year as the Board of Directors may set by resolution. Failure to hold the annual meeting within such time period shall not work any forfeiture or a dissolution of the Corporation, and shall not affect otherwise valid corporate acts. Section 3. Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the Board of Directors or the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request of shareholders holding of record not less than one-fourth of all the shares outstanding and entitled by the Articles of Incorporation to vote on the business for which the meeting is being called. Such request by the shareholders shall be in writing, signed by all of such shareholders (or their duly authorized proxies), dated and delivered to the Corporation's secretary. 4 Section 4. Notice of Meetings. A written or printed notice, stating the place, day and hour of the meeting, and in case of a special meeting, or when required by any other provision of the Indiana Business Corporation Law, or of the Articles of Incorporation, as now or hereafter amended, or these By-Laws, the purpose or purposes for which the meeting is called, shall be delivered or mailed by the Secretary, or by the officers or persons calling the meeting, to each shareholder of record entitled by the Articles of Incorporation, as now or hereafter amended, and by the Indiana Business Corporation Law to vote at such meeting, at such address as appears upon the records of the Corporation, at least ten (10) days and no more than sixty (60) days before the date of the meeting. Notice of any such meeting may be waived in writing by any shareholder, if the waiver sets forth in reasonable detail the purpose or purposes for which the meeting is called, and the time and place thereof. Attendance at any such meeting in person, or by proxy, shall constitute a waiver of notice of such meeting. Each shareholder, who has in the manner above provided waived notice of the shareholders' meeting, or who personally attends a shareholders' meeting, or is represented thereat by a proxy authorized to appear by an instrument of proxy, shall be conclusively presumed to have been given due notice of such meeting. Notice of any adjourned meeting of shareholders shall not be required to be given if the time and place thereof are announced at the meeting at which the adjournment is taken, except as may be expressly required by law. Section 5. Addresses of Shareholders. The address of any shareholder appearing on the records of the Corporation or appearing on the records maintained by the Transfer Agent if the Corporation has appointed a Transfer Agent shall be deemed to be the latest address of such shareholder for the class of stock held by such shareholder. Section 6. Voting at Meetings. (a) Quorum. The holders of record of a majority of the issued and outstanding stock of the Corporation entitled to vote at such meeting, present in person or by proxy, shall constitute a quorum at all meetings of stockholders for the transaction of business, except where otherwise provided by law, the Articles of Incorporation or these By-Laws. In the absence of a quorum, any officer entitled to preside at, or act as secretary of, such meeting shall have the power to adjourn the meeting from time to time until a quorum shall be constituted. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting, but only those stockholders entitled to vote at the original meeting shall be entitled to vote at any adjournment or adjournments thereof unless a new record date is fixed by the Board of Directors for the adjourned meeting. (b) Voting Rights. Except as otherwise provided by law or by the provisions of the Articles of Incorporation, every shareholder shall have the right at every shareholders' meeting to one vote for each share of stock having voting power, registered in his name on the books of the Corporation on the date for the determination of shareholders entitled to vote, on all matters coming before the meeting including the election of directors. At any meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote in person, or by 5 proxy executed in writing by the shareholder or a duly authorized attorney-in-fact and bearing a date not more than eleven months prior to its execution, unless a longer time is expressly provided therein. (c) Required Vote. When a quorum is present at any meeting, action on a matter (other than the election of directors) is approved if the votes cast favoring the action exceed the votes cast opposing the action unless the Indiana Business Corporation Law or the Articles of Incorporation require a greater number of affirmative votes. Unless otherwise provided in the Articles of Incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. (d) Validity of a Vote, Consent, Waiver or Proxy Appointment. If the name on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the Corporation if acting in good faith may accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder. The Corporation may reject a vote, consent, waiver, or proxy appointment if the authorized tabulation officer, acting in good faith, has a reasonable basis for doubt about the validity of the signature, or the signatory's authority. If so accepted or rejected, the Corporation and its officer are not liable in damages to the shareholder for any consequences of the rejection. Any of the Corporation's actions based on an acceptance or rejection of a vote, consent, waiver or proxy appointment under this Section is valid unless a court of competent jurisdiction determines otherwise. Section 7. Voting List. The transfer agent (or, if the Corporation has no transfer agent, the Secretary) of the Corporation shall make before each meeting of shareholders, a complete list of the shareholders entitled by the Articles of Incorporation, as now or hereafter amended, to vote at such meeting, arranged in alphabetical order, with the address and number of shares so entitled to vote held by each shareholder. Such list shall be produced and kept open at the time and place of the meeting of shareholders and subject to the inspection of any shareholder during the holding of such meeting. Section 8. Fixing of Record Date to Determine Shareholders Entitled to Vote. The Board of Directors may prescribe a period not exceeding seventy (70) days prior to meetings of the shareholders, during which no transfer of stock on the books of the Corporation may be made; or, in lieu of prohibiting the transfer of stock may fix a day and hour not more than seventy (70) days prior to the holding of any meeting of shareholders as the time as of which shareholders entitled to notice of, and to vote at, such meeting shall be determined, and all persons who are holders of record of voting stock at such time, and no others, shall be entitled to notice of, and to vote at, such meeting. In the absence of such a determination, such date and time shall be the close of business on the tenth (10th) day prior to the date of such meeting. Any determination of shareholders entitled to notice of or to vote at a shareholders meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which is only required if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. 6 Section 9. Shareholder Nominations for Election of Directors or Proposals For New Business. Any shareholder desiring to make a nomination for the election of directors at the annual meeting of the shareholders must submit written notice thereof to the Secretary of the Corporation not less than sixty (60) days prior to the date of such meeting; provided, however, that in the event that less than seventy (70) days notice or prior public disclosure of the date of such meeting is given or made to shareholders, notice by the shareholder to the Corporation, to be timely, must be so received not later than the close of business on the 10th day following the day on which notice by the Corporation of the date of such meeting was mailed to shareholders or such public disclosure was made. Section 10. Consent Action by Shareholders. Any action required or permitted to be taken at a shareholders' meeting may be taken without a meeting, if one (1) or more written consents describing the action taken are signed by all the shareholders entitled to vote on the action, and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Action taken under this section is effective when the last shareholder entitled to vote on the action signs the consent, unless the consent specifies a different, prior or subsequent effective date. ARTICLE V Board of Directors Section 1. Election, Number and Term of Office. Directors shall be elected at the annual meeting of shareholders, or, if not so elected, at a special meeting of shareholders called for that purpose, by the holders of the shares of stock entitled by the Articles of Incorporation to elect directors. The number of directors of the Corporation to be elected by the holders of the shares of stock entitled by the Articles of Incorporation to elect directors shall be nine (9) unless changed by amendment of this section. All directors elected by the holders of such shares, except in the case of earlier resignation, removal or death, shall hold office until their respective successors are chosen and qualified. Directors need not be shareholders of the Corporation. Section 2. Vacancies. Any vacancy occurring on the Board of Directors caused by resignation, death or other incapacity shall be filled by a majority vote of the remaining members of the Board of Directors, until the annual meeting of the shareholders at which the term of the class of the director whose vacancy the new director is filling expires. If the vote of the remaining members of the Board shall result in a tie, such vacancy, at the discretion of the Board of Directors, may be filled by vote of the shareholders at a special meeting called for that 7 purpose. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director. Any vacancy on the Board of Directors caused by an increase in the number of directors shall be filled by a majority vote of the members of the Board of Directors, and such new director's term may expire at the annual meeting of any of the three classes of directors as may be determined by the directors who elect such new director, the intent being to elect as nearly as possible one-third (1/3) of the members of the Board of Directors each year. Section 3. Annual Meeting of Directors. The Board of Directors shall meet each year immediately after the annual meeting of the shareholders, at the place where such meeting of the shareholders has been held either within or without the State of Indiana, for the purpose of organization, election of officers, and consideration of any other business that may properly come before the meeting. No notice of any kind to either old or new members of the Board of Directors for such annual meeting shall be necessary. Section 4. Regular Meetings. Regular meetings of the Board of Directors, if any, shall be held at such times and places, either within or without the State of Indiana, as may be fixed by the directors. Such regular meetings of the Board of Directors may be held without notice or upon such notice as may be fixed by the directors. Section 5. Special Meetings. Special meetings of the Board of Directors may be called by the President or by not less than a majority of the members of the Board of Directors. Notice of the time and place, either within or without the State of Indiana, of a special meeting shall be served upon or telephoned to each director at least twenty-four hours, or sent by mail, telegraph, cable, telecopy or over-night courier to each director at his usual place of business or residence at least forty-eight hours prior to the time of the meeting. Directors, in lieu of such notice, may sign a written waiver of notice either before the time of the meeting, at the meeting or after the meeting. Attendance by a director in person at any such special meeting shall constitute a waiver of notice. Section 6. Conference Telephone Meetings. A member of the Board of Directors may participate in a meeting of the Board by means of a conference telephone or similar communications equipment by which all persons participating in the meeting can communicate with each other, and participation by these means constitutes presence in person at the meeting. Section 7. Quorum. A majority of the actual number of directors elected and qualified, from time to time, shall be necessary to constitute a quorum for the transaction of any business except the filling of vacancies, and the act of a majority of the directors present at the meeting, at which a quorum is present, shall be the act of the Board of Directors, unless the act of a greater number is required by the Indiana Business Corporation Law, by the Articles of Incorporation, or by these By-Laws. A director, who is present at a meeting of the Board of Directors or a committee of the Board of Directors, at which action on any corporate matter is 8 taken, shall be conclusively presumed to have assented to the action taken, unless (a) he objects at the beginning of the meeting (or promptly upon his arrival) to holding the meeting or transacting business at the meeting, (b) his dissent or abstention from the action taken is entered in the minutes of the meeting, or (c) he delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the Secretary of the Corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. Section 8. Consent Action by Directors. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if one (1) or more written consents describing the action taken are signed by all members of the Board of Directors or such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or committee, or filed with the corporate records reflecting the action taken. Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different, prior or subsequent effective date. Section 9. Removal of Directors. Unless otherwise provided in Articles of Incorporation, any or all members of the Board of Directors may be removed, with or without cause, only by the affirmative vote of a majority of the total number of shares entitled to vote for the election of directors at a meeting called for that purpose. Section 10. Resignations. Any director may resign at any time by giving written notice to the Board of Directors, to the President or to the Secretary. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 11. Distributions. The Board of Directors shall have power, subject to any restrictions and limitations contained in the Indiana Business Corporation Law or in the Articles of Incorporation, to declare and pay distributions upon the outstanding capital stock of the Corporation to its shareholders as and when they deem expedient. Section 12. Fixing of Record Date to Determine Shareholders Entitled to Receive Corporate Benefits. The Board of Directors may fix a record date, declaration date and payment date with respect to any share dividend or distribution to the Corporation's shareholders. If no record date is fixed for the determination of shareholders entitled to receive payment of a distribution, the end of the day on which the resolution of the Board of Directors declaring such dividend is adopted shall be the record date for such determination. Section 13. Interest of Directors in Contracts. Any contract or other transaction between the Corporation and any corporation in which this Corporation owns a majority of the capital stock or between the Corporation and any corporation which owns a majority of the capital stock of the Corporation shall be valid and binding, notwithstanding that the directors or 9 officers of this Corporation are identical or that some or all of the directors or officers, or both, are also directors or officers of such other corporation. Any contract or other transaction with the Corporation in which a director of the Corporation has a direct or indirect interest is not voidable by the Corporation solely because of the director's interest in the transaction, if any one (1) of the following is true: (a) The material facts of the transaction and the director's interest were disclosed or known to the Board of Directors or a committee of the Board of Directors and the Board of Directors or committee authorized, approved, or ratified the transaction; or (b) The material facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote and they authorized, approved, or ratified the transaction; or (c) The transaction was fair to the Corporation. A transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the Board of Directors or on the committee who have no direct or indirect interest in the transaction, but it cannot be authorized, approved or ratified by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purposes of this Section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any transaction if it is otherwise authorized, approved, or ratified as provided in this Section. Shares owned by or voted under the control of a director who has a direct or indirect interest in the transaction, and shares owned by or voted under the control of an entity in which the director has a direct or indirect interest, may be counted in a vote of shareholders to determine whether to authorize, approve, or ratify a conflict of interest transaction under Subsection (b). For purposes of this Section, a director of the Corporation has an indirect interest in a transaction if: (i) Another entity in which the director has a material financial interest or in which the director is a general partner is a party to the transaction; or (ii) Another entity of which the director is a director, officer or trustee is a party to the transaction and the transaction is, or is required to be, considered by the Board of Directors of the Corporation. 10 This Section shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common and statutory law applicable thereto. Section 14. Committees. The Board of Directors may, by resolution adopted by a majority of the actual number of directors elected and qualified, from time to time, designate from among its members an executive committee and one or more other committees, each of which, to the extent provided in the resolution, the Articles of Incorporation, or these By-Laws, may exercise all of the authority of the Board of Directors of the Corporation. The executive committee shall act as the nominating committee for selecting the nominees for election as directors of the Corporation. However, no such committee has the authority to (a) authorize distributions (except a committee may authorize or approve a reacquisition of shares if done according to a formula or method, or within a range, prescribed by the Board of Directors), (b) approve or propose to shareholders action that the Indiana Business Corporation Law requires to be approved by shareholders, (c) fill vacancies on the Board of Directors or any of its committees, (d) amend the Articles of Incorporation, (e) adopt, amend or repeal the By-laws, (f) approve a plan of merger not requiring shareholder approval, or (g) authorize or approve the issuance or sale or a contract for sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except the Board of Directors may authorize a committee to take the action described in this subsection within limits prescribed by the Board of Directors. No member of any such committee shall continue to be a member thereof after he ceases to be a director of the Corporation. ARTICLE VI Officers Section 1. Principal Officers. The principal officers of the Corporation shall be a Chairman of the Board, a Vice Chairman, a President, a Treasurer, a Secretary, and such Vice Presidents as may be determined from time to time by the Board of Directors. The Corporation may also have, at the discretion of the Board of Directors, such other subordinate officers as may be appointed in accordance with the provisions of these By-Laws. The same individual may hold more than one office at any time, and a single individual may hold all of the offices at any time. Section 2. Election and Term of Office. The principal officers of the Corporation shall be chosen annually by the Board of Directors at the annual meeting thereof. Each such officer shall hold office until his successor shall have been duly chosen and qualified, or until his death, or until he shall resign, or shall have been removed in the manner hereinafter provided. Section 3. Removal. Any principal officer may be removed, either with or without cause, at any time, by resolution adopted at any meeting of the Board of Directors by a majority of the actual number of directors elected and qualified from time to time. 11 Section 4. Subordinate Officers. In addition to the principal officers enumerated in Section 1 of this Article VI, the Corporation may have one or more Assistant Treasurers, one or more Assistant Secretaries and such other officers, agents and employees as the Board of Directors may deem necessary, each of whom shall hold office for such period, may be removed with or without cause, have such authority, and perform such duties as the President, or the Board of Directors, may from time to time determine. The Board of Directors may delegate to any principal officer the power to appoint and to remove any such subordinate officers, agents or employees. Section 5. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors, to the President or to the Secretary. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 6. Vacancies. Any vacancy in any office for any cause may be filled for the unexpired portion of the term in the manner prescribed in these By-Laws for election or appointment to such office for such term. Section 7. Chairman of the Board. The Chairman of the Board, who shall be chosen from among the directors, shall preside at all meetings of shareholders and at all meetings of the Board of Directors. He shall perform such other duties and have such other powers as, from time to time, may be assigned to him by the Board of Directors. Section 8. Vice Chairman. The Vice Chairman, who shall be chosen from among the directors, shall, in the absence of the Chairman of the Board preside at all meetings of shareholders and at all meetings of the Board of Directors. He shall perform such other duties and have such other powers as, from time to time, may be assigned to him by the Board of Directors. Section 9. President. The President shall be the chief executive officer of the Corporation and as such shall have general supervision of the affairs of the Corporation, subject to the control of the Board of Directors. He shall be an ex officio member of all standing committees. Subject to the control and direction of the Board of Directors, the President may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. In general, he shall perform all duties and have all the powers incident to the office of President, as herein defined, and all such other duties and powers as, from time to time, may be assigned to him by the Board of Directors. In performing all the duties incident to the office of President, the President shall report directly to the executive committee and chairman of the executive committee. Section 10. Vice Presidents. The Executive Vice Presidents, if one or more has been appointed, and then the Vice Presidents in the order of their seniority, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the President and 12 Executive Vice President, perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time assign. Section 11. Treasurer. The Treasurer shall have charge and custody of, and be responsible for, all funds and securities of the Corporation and shall deposit all such funds in the name of the Corporation in such banks or other depositories as shall be selected by the Board of Directors. He shall upon request exhibit at all reasonable times his books of account and records to any of the directors of the Corporation during business hours at the office of the Corporation where such books and records shall be kept; shall render upon request by the Board of Directors a statement of the condition of the finances of the Corporation at any meeting of the Board of Directors or at the annual meeting of the shareholders; shall receive, and give receipt for, moneys due and payable to the Corporation from any source whatsoever; and in general, shall perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or the Board of Directors. The Treasurer shall give such bond, if any, for the faithful discharge of his duties as the Board of Directors may require. Section 12. Secretary. The Secretary shall keep or cause to be kept in the books provided for that purpose the minutes of the meetings of the shareholders and of the Board of Directors; shall duly give and serve all notices required to be given in accordance with the provisions of these By-Laws and by the Indiana Business Corporation Law; shall be custodian of the records and of the seal of the Corporation and see that the seal is affixed to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-Laws; and, in general, shall perform all duties incident to the office of Secretary and such other duties as may, from time to time, be assigned to him by the President or the Board of Directors. Section 13. Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors, and the salaries of any subordinate officers may be fixed by the President. Section 14. Voting Corporation's Securities. Unless otherwise ordered by the Board of Directors, the President and Secretary, and each of them, are appointed attorneys and agents of the Corporation, and shall have full power and authority in the name and on behalf of the Corporation, to attend, to act, and to vote all stock or other securities entitled to be voted at any meetings of security holders of corporations, or associations in which the Corporation may hold securities, in person or by proxy, as a stockholder or otherwise, and at such meetings shall possess and may exercise any and all rights and powers incident to the ownership of such securities, and which as the owner thereof the Corporation might have possessed and exercised, if present, or to consent in writing to any action by any such other corporation or association. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. 13 ARTICLE VII Amendments The power to make, alter, amend, or repeal these By-Laws is vested in the Board of Directors, but the affirmative vote of a majority of the actual number of directors elected and qualified, from time to time, shall be necessary to effect any alteration, amendment or repeal of these By-Laws. 14 EX-5 4 0004.txt Exhibit 5 January 12, 2001 Board of Directors Fidelity Federal Bancorp 18 NW Fourth Street Evansville, Indiana 47708 Re: Issuance of Shares of Common Stock of Fidelity Federal Bancorp in connection with Rights Offering Gentlemen: We have represented Fidelity Federal Bancorp ("Company"), Evansville, Indiana, as special counsel in connection with the preparation and filing with the Securities and Exchange Commission of a Registration Statement on Form S-3 ("Registration Statement") dated as of the date of this letter for the purpose of registering shares of the Company's common stock under the Securities Act of 1933, as amended ("Shares"). The Shares are to be issued pursuant to the terms and conditions of the rights offering ("Rights Offering") of the Company, as set forth and described in the Registration Statement. In connection with this opinion, we have reviewed and are familiar with Company's Articles of Incorporation and By-Laws and such other records, documents and information as we have in our judgment deemed relevant. Based upon the foregoing, it is our opinion that if and when sold pursuant to the terms and conditions of the Rights Offering as set forth in the Registration Statement, the Shares will, when issued in accordance with and pursuant to the terms of the Rights Offering, be legally issued, fully paid and non-assessable. This opinion is limited to the matters stated herein, and no opinion is to be implied or may be inferred beyond the matters expressly stated. This opinion is addressed to you and is solely for your use in connection with the Registration Statement, and we assume no professional responsibility to any other person whatsoever. Accordingly, the opinion expressed herein is not to be relied upon, utilized or quoted by or delivered or disclosed to, in whole or in part, any other person, corporation, entity or governmental authority without, in each instance, the prior written consent of this firm. We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the reference made to us in the Registration Statement and the Prospectus forming a part thereof under the caption "Legal Opinions". In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the Rules and Regulations of the Securities and Exchange Commission promulgated thereunder. Very truly yours, KRIEG DEVAULT ALEXANDER & CAPEHART, LLP EX-23.2 5 0005.txt Exhibit 23.2 Independent Auditor's Consent We consent to the incorporation by reference in the Registration Statement of Fidelity Federal Bancorp on Form S-3 of our report dated March 27, 2000, on the financial statements of Fidelity Federal Bancorp appearing in Fidelity Federal Bancorp's Form 10-K for the year ended December 31, 1999 and to the reference to us under the heading "Experts" in such Registration Statement. /s/ Olive, LLP Evansville, Indiana January 12, 2001 EX-99.1(A) 6 0006.txt Exhibit 99.1(a) FIDELITY FEDERAL BANCORP EVANSVILLE, INDIANA SHAREHOLDER RIGHTS AGREEMENT Fidelity Federal Bancorp, an Indiana corporation (the "Company"), is conducting a rights offering (the "Rights Offering") which entitles the holders of the Company's common stock (the "Common Stock"), as of the close of business on __________, 2001 (the "Record Date"), to receive ___ (__) subscription right (each, a "Right") for each share of Common Stock held of record on the Record Date. Each Right entitles the holder thereof to subscribe for and purchase ___ (__) share of Common Stock (the "Basic Subscription Privilege") at a subscription price of $____ per share (the "Subscription Price"). The Company will issue up to 1,000,000 shares of Common Stock pursuant to the Rights Offering. If any shares of Common Stock are not purchased by the Rights holders pursuant to such Rights holders' Basic Subscription Privileges (the "Excess Shares"), any Rights holder fully exercising such Rights holder's Basic Subscription Privilege may purchase an additional number of the Excess Shares (the "Over-Subscription Privilege"), subject to the limit on the number of Excess Shares that may be purchased described under the heading "The Rights Offering--Over-Subscription Privilege" in the prospectus (the "Prospectus") dated __________, 2001. The Company will not permit the exercise of a Rights holder's Over-Subscription Privilege unless o the Rights holder specifies below the intent to exercise the Over-Subscription Privilege, subject to the terms and conditions of the Rights Offering, or o the aggregate Subscription Price delivered or transmitted by such Rights holder exceeds the aggregate Subscription Price for all shares for which such Rights holder would be entitled to subscribe pursuant to such Rights holder's Basic Subscription Privilege. Set forth above is the number of Rights evidenced by this Shareholders Rights Agreement that the Rights holder is entitled to exercise pursuant to such Rights holder's Basic Subscription Privilege. For a more complete description of the terms and conditions of the Rights Offering, please refer to the Prospectus, which is incorporated herein by reference. Copies of the Prospectus are available upon request from Deb Fritz, Assistant Vice President, Shareholder Relations, at (812) 429-0550, extension 2226, or at (800) 280-8280 (extension 2226). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Prospectus. 1 This Shareholders Rights Agreement must be received by the Company, or the guaranteed delivery requirements described under the heading "The Rights Offering--Guaranteed Delivery Procedures" must be complied with, with payment in full by 5:00 p.m., Evansville, Indiana time, on __________, 2001, unless extended in the sole discretion of the Company (as it may be extended, the "Expiration Date"). Any Rights not exercised prior to the Expiration Date will expire and no longer be exercisable. Any subscription for shares of Common Stock in the Rights Offering made hereby is irrevocable, except as described in the Prospectus. The Company will issue certificates representing shares of Common Stock purchased pursuant to the Rights Offering as soon as practicable following the Expiration Date. Some or all of the Rights represented by this Shareholders Rights Agreement may be exercised by duly completing and returning this Shareholders Rights Agreement to the Company prior to the Expiration Date. Rights holders are advised to review the Prospectus and instructions before exercising their Rights. The registered owner whose name is inscribed hereon is entitled to subscribe for shares of Common Stock upon the terms and subject to the conditions set forth in the Prospectus and instructions relating to the use hereof. The Rights are not assignable or transferable. RIGHTS HOLDER REPRESENTATIONS AND ACKNOWLEDGMENTS As an inducement to the Company to accept this Shareholders Rights Agreement, the undersigned hereby acknowledges, understands and agrees as follows: (a) The undersigned was a shareholder of record or the beneficial owner of shares of the Company on the Record Date. (b) Shareholders Rights Agreement and the exercise of rights contemplated hereby may be rejected, in whole or in part, at the sole discretion of the Company. In the event that this Shareholders Rights Agreement, and the exercise of rights contemplated hereby, is rejected by the Company for whatever reason, all funds that the undersigned has paid pursuant to this Shareholders Rights Agreement will be promptly returned, without interest thereon, as soon as practicable after such rejection. (c) The representations, warranties, agreements and information provided by the undersigned herein shall be relied upon by the Company when issuing shares of its Common Stock pursuant to the exercise of the Basic Subscription Privilege and Over-Subscription Privilege by the undersigned. (d) This Shareholders Rights Agreement shall be binding upon and inure to the benefit of the undersigned's heirs, successors and representatives. The undersigned shall not transfer or assign his interest under this Agreement. 2 (e) This Shareholders Rights Agreement shall be construed in accordance with and governed by the laws of the State of Indiana, without regard to choice of law principles thereof. (f) All information contained herein with respect to the undersigned shall be true, accurate and complete on the date hereof and on the date that this Shareholders Rights Agreement is accepted by the Company. The undersigned shall indemnify and hold harmless the Company and its directors, officers, employees and agents from and against all claims, losses, damages and liabilities, including without limitation reasonable attorneys' fees and costs, resulting from or arising out of any misrepresentation or any inaccuracy in or breach of any statement or provision contained in this Shareholders Rights Agreement. 3 EXERCISE OF RIGHTS The undersigned hereby irrevocably exercises one or more Rights to subscribe for shares of Common Stock as indicated below, on the terms and subject to the conditions specified in the Prospectus, receipt of which is hereby acknowledged.* (a) Number of shares subscribed for pursuant to the Basic Subscription Privilege: ____ x $___ = $_____ payment. (___ Right needed to subscribe for one share.) (b) Number of shares subscribed for pursuant to the Over-Subscription Privilege: ____ x $___ = $_____ payment. By exercising this Over-Subscription Privilege, the undersigned Rights holder hereby represents and certifies that the undersigned has fully exercised its Basic Subscription Privilege. (c) Total Subscription: (total number of shares on lines (a) and (b) multiplied by $___) = $_________ payment. If the aggregate Subscription Price enclosed or transmitted is insufficient to purchase the total number of shares of Common Stock included in lines (a) and (b), or if the number of shares being subscribed for is not specified, the Rights holder exercising this Shareholders Rights Agreement shall be deemed to have subscribed for the maximum number of shares of Common Stock that could be subscribed for with the aggregate Subscription Price received. If the number of shares of Common Stock to be subscribed for pursuant to the Over-Subscription Privilege is not specified and the amount enclosed or transmitted exceeds the aggregate Subscription Price for all shares which may be purchased pursuant to the Basic Subscription Privilege represented by this Shareholders Rights Agreement (the "Subscription Excess"), the Rights holder executing this Shareholders Rights Agreement shall be deemed to have exercised the Over-Subscription Privilege to purchase, to the extent available, that number of shares of Common Stock equal to the quotient obtained by dividing the Subscription Excess by the Subscription Price (rounded down to the nearest whole number), subject to the limit on the number of shares a Rights holder may purchase pursuant to the Over- Subscription Privilege. To the extent any portion of the aggregate Subscription Price enclosed or transmitted remains after the foregoing procedures, such funds shall be mailed to the Rights holder without interest or deduction as soon as practicable after the Expiration Date. 4 METHOD OF PAYMENT (Check And Complete Appropriate Box(es)): - ---------------------------------------------------------- [ ] Check, bank draft, or money order payable to "Fidelity Federal Bancorp"; or [ ] Wire transfer of immediately available funds directed to: Bank Name: Address: ABA#: Account #: Account Name: United Fidelity Bank Final Credit: Fidelity Federal Bancorp Rights Offering Account If Notice of Guaranteed Delivery procedures are being utilized: [ ] Check here if Rights are being exercised pursuant to the Notice of Guaranteed Delivery delivered to the Company prior to the date hereof and complete the following: Name(s) of Registered Holder(s) ______________________________________________ Window Ticket Number (if any) ________________________________________________ Date of Execution of Notice of Guaranteed Delivery ___________________________ Name of Institution which Guaranteed Delivery_______________________________ * IN WITNESS WHEREOF, the undersigned (has/have) executed this Shareholders Rights Agreement this _______ day of _________________________, 2001. Rights holder's Signature(s) ____________________________ Rights holder's Signature(s) ____________________________ (If held jointly) Telephone No. (___) ___-____ 5 DELIVERY INSTRUCTIONS Address for mailing of Common Stock certificate in accordance with the Prospectus if other than shown on the first page hereof: Name: __________________________________________________________________________ Address: _______________________________________________________________________ Rights holder's Signature(s): __________________________________________________ Rights holder's Signature(s): ________________________________ (If held jointly) Signatures Guaranteed by: ______________________________________________________ Eligible Institution If the addressee above is not an Eligible Institution (as defined in the "Instructions For Use of Midway Airlines Corporation Shareholders Rights Agreements") or the Rights holder named on this Shareholders Rights Agreement, then the Rights holder completing this Shareholders Rights Agreement must have an Eligible Institution guarantee such Rights holder's signature. 6 EX-99.1(B) 7 0007.txt Exhibit 99.1(b) INSTRUCTIONS FOR USE OF FIDELITY FEDERAL BANCORP SHAREHOLDERS RIGHTS AGREEMENT CONSULT THE COMPANY OR YOUR BANK OR BROKER AS TO ANY QUESTIONS The following instructions relate to a rights offering (the "Rights Offering") by Fidelity Federal Bancorp (the "Company"), to the holders of its common stock (the "Common Stock"), as described in the Company's prospectus dated __________, 2001 (the "Prospectus"). Holders of record of shares of the Common Stock at the close of business on __________, 2001 (the "Record Date") are receiving ___ (__) subscription right (collectively, the "Rights") for each share of the Common Stock held by them on the Record Date. Each Right is exercisable, upon payment of $___ in cash (the "Subscription Price"), to purchase one share of the Common Stock (the "Basic Subscription Privilege"). In addition, subject to the limitations described below, each Rights holder who fully exercises the Basic Subscription Privilege also has the right to subscribe at the Subscription Price for additional shares of Common Stock (the "Over-Subscription Privilege"). Only the shares of Common Stock not subscribed for through the exercise of the Basic Subscription Privilege by the Expiration Date, as defined below, will be available for purchase pursuant to the Over-Subscription Privilege (the "Excess Shares"). A Rights holder may only exercise the Over-Subscription Privilege to purchase up to that number of shares of Common Stock equal to such Right holder's percentage ownership of the Company's issued and outstanding Common Stock on the Record Date multiplied by the number of Excess Shares, rounded down to the nearest whole number. Nominee holders of Common Stock that hold, on the Record Date, shares for the account(s) of more than one beneficial owner may exercise the number of Rights to which all such beneficial owners in the aggregate would otherwise have been entitled if they had been direct record holders of Common Stock on the Record Date; provided such nominee holder makes a proper showing to the Company, as determined in the Company's sole and absolute discretion. The Rights will expire at 5:00 p.m., Evansville, Indiana time, on __________, 2001, unless such time or date is extended as described in the Prospectus (the "Expiration Date"). The number of Rights to which you are entitled is printed on the face of your Shareholders Rights Agreement. You should indicate your elections with regard to the exercise of your Rights by completing the appropriate form or forms on your Shareholders Rights Agreement and returning it to the Company in the envelope provided. Your Shareholders Rights 1 Agreement must be received by the Company, or guaranteed delivery requirements with respect to your Shareholders Rights Agreement must be complied with, and payment of the Subscription Price, including final clearance of any checks, must be received by the Company, on or before 5:00 p.m., Evansville, Indiana time, on the Expiration Date. You may not revoke any exercise of your Rights. 1. Subscription Privilege. ---------------------- To exercise Rights, complete the Shareholders Rights Agreement and deliver your properly completed and executed Shareholders Rights Agreement, together with payments in full of the Subscription Price for each share of Common Stock subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege, to the Company If you want to exercise your Rights, but time will not permit your Shareholders Rights Agreement to reach the Company prior to the Expiration Date, you may cause a written guarantee substantially in the form enclosed herewith (the "Notice of Guaranteed Delivery") from a commercial bank, trust company, securities broker or dealer, credit union, savings association or other eligible guarantor institution which is a member of or a participant in a signature guarantee program acceptable to the Company (each of the foregoing being an "Eligible Institution"), to be received by the Company at or prior to the Expiration Date, together with payment in full of the applicable Subscription Price. Such Notice of Guaranteed Delivery must state your name, the number of Rights represented by your Shareholders Rights Agreement, the number of Rights being exercised pursuant to the Basic Subscription Privilege and the number of shares of Common Stock, if any, being subscribed for pursuant to the Over-Subscription Privilege, and will guarantee the delivery to the Company of your properly completed and executed Shareholders Rights Agreement within three Nasdaq National Market trading days following the date of the Notice of Guaranteed Delivery. If this procedure is followed, your Shareholders Rights Agreement must be received by the Company within three Nasdaq National Market trading days of the Notice of Guaranteed Delivery. Additional copies of the Notice of Guaranteed Delivery may be obtained upon request from the Company, at the address, or by calling the telephone number, indicated below. Payment of the Subscription Price must be made in U.S. dollars for the full number of shares of Common Stock being subscribed for by (a) check or bank draft (cashier's check) drawn upon a United States bank or a postal, telegraphic or express money order payable to the order of Fidelity Federal Bancorp, or (b) wire transfer of same day funds to the account maintained by the Company for such purpose at __________, ABA No. __________, Account No. __________ (marked: Fidelity Federal Bancorp Rights Offering Account). The Subscription Price will be deemed to have been received by the Compapny only upon (i) the clearance of any uncertified check, (ii) the receipt by the Company of any certified check or bank draft drawn upon a U.S. bank or of any postal, telegraphic or express money order, (iii) receipt by the Company of any funds transferred by wire transfer, or (iv) receipt of funds by the Company through an alternative payment method approved by the Company. 2 If paying by uncertified personal check, please note that the funds paid thereby may take five business days or more to clear. Accordingly, Rights holders who wish to pay the Subscription Price by means of an uncertified personal check are urged to make payment 3 sufficiently in advance of the Expiration Date to ensure that such payment is received and clears by such date and are urged to consider payment by means of certified or cashier's check, money order or wire transfer of funds. Banks, brokers, trusts, depositories or other nominee holders of the Rights who exercise the Basic Subscription Privilege and the Over-Subscription Privilege on behalf of beneficial owners of Rights will be required to certify to the Company on a Nominee Holder Certification Form, in connection with the exercise of the Over-Subscription Privilege, as to the aggregate number of Rights that have been exercised, and the number of shares of Common Stock that are being subscribed for pursuant to the Over-Subscription Privilege, by each beneficial owner of Rights on whose behalf such nominee holder is acting. The address and facsimile numbers of the Company are as follows: Fidelity Federal Bancorp 18 NW Fourth Street PO Box 1347 Evansville, Indiana 47706-1347 Attention: Mark A. Isaac, Vice President Telephone: (812) 429 - 0921 Facsimile: _____________ Delivery of the Shareholders Rights Agreement to an address other than as set forth above or transmission via a facsimile machine other than as set forth above does not constitute a valid delivery. The telephone numbers of the Company, for inquiries, information or requests for additional documentation are as follows: Deb Fritz, Assistant Vice President, Shareholder Relations, of Fidelity at: Fidelity Federal Bancorp 18 NW Fourth Street, PO Box 1347 Evansville, Indiana 47706-1347 Telephone: (812) 429-0550 (extension 2226) (800) 280-8280 (extension 2226). If you have not indicated the number of Rights being exercised, or if you have not forwarded full payment of the Subscription Price for the number of Rights that you have indicated are being exercised, you will be deemed to have exercised the Basic Subscription Privilege with respect to the maximum number of whole Rights which may be exercised for the Subscription Price payment transmitted or delivered by you, and to the extent that the Subscription Price payment transmitted or delivered by you exceeds the product of the Subscription Price multiplied by the number of Rights evidenced by the Shareholders Rights Agreement(s) transmitted or delivered by you (such excess being the "Subscription Excess"), you will be deemed to have exercised your Over-Subscription Privilege to purchase, to the extent available, that number of whole shares of the Common Stock equal to the quotient obtained by dividing the Subscription Excess by the Subscription Price, subject to the limit on the number of shares a Rights holder may purchase pursuant to the Over- Subscription Privilege. 4 2. Conditions to Completion of the Rights Offering. ------------------------------------------------ There are no conditions to the completion of the Rights Offering. However, the board of directors of the Company may withdraw the Rights Offering in its sole discretion at any time prior to or on __________, 2001 for any reason (including, without limitation, a change in the market price of the Company's common stock). If the board of directors of the Company withdraws the Rights Offering, any funds you paid will be promptly refunded, without interest or penalty. 3. Delivery of Common Stock. ------------------------- The following deliveries and payments will be made to the address shown on the face of your Shareholders Rights Agreement unless you provide instructions to the contrary on the Shareholders Rights Agreement. (a) Basic Subscription Privilege. As soon as practicable after the valid exercise of the Rights, the Company will mail to each exercising Rights holder certificates representing shares of Common Stock purchased pursuant to the Basic Subscription Privilege. (b) Over-Subscription Privilege. As soon as practicable after the Expiration Date, the Company will mail to each Rights holder who validly exercises the Over-Subscription Privilege the number of shares of Common Stock allocated to such Rights holder pursuant to the Over-Subscription Privilege. See "The Rights Offering--Over-Subscription Privilege" in the Prospectus. (c) Cash Payments. As soon as practicable after the Expiration Date, the Company will mail to each Rights holder who exercises the Over-Subscription Privilege any excess funds, without interest or deduction, received in payment of the Subscription Price for each share of the Common Stock that is subscribed for by, but not allocated to, such Rights holder pursuant to the Over-Subscription Privilege. 4. Execution. ---------- (a) Execution by Registered Holder(s). The signature on the Shareholders Rights Agreement must correspond with the name of the registered holder exactly as it appears on the Shareholders Rights Agreement without any alteration or change whatsoever. If the Shareholders Rights Agreement is registered in the names of two or more joint owners, all of such owners must sign. Persons who sign the Shareholders Rights Agreement in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Company in its sole and absolute discretion, must present to the Company satisfactory evidence of their authority to so act. (b) Execution by Person Other than Registered Holder. If the Shareholders Rights Agreement is executed by a person other than the holder named on the face of the Shareholders Rights Agreement, proper evidence of authority of the person executing the Shareholders Rights 5 Agreement must accompany the same unless, for good cause, the Company dispenses with proof of authority. (c) Signature Guarantees. Your signature must be guaranteed by an Eligible Institution if you wish to specify special delivery instructions pursuant to the Shareholders Rights Agreement. 5. Method of Delivery. ------------------- The method of delivery of Shareholders Rights Agreements and payment of the Subscription Price to the Company will be at the election and risk of the Rights holder, but, if sent by mail, it is recommended that they be sent by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the Company and the clearance of any checks sent in payment of the Subscription Price prior to the Expiration Date. 6. Substitute Form W-9. -------------------- Each Rights holder who elects to exercise Rights through the Company should provide the Company with a correct Taxpayer Identification Number ("TIN") and, where applicable, certification of such Rights holder's exemption from backup withholding on Substitute Form W-9. Each foreign Rights holder who elects to exercise the Rights through the Company should provide the Company with certification of foreign status on Form W-8. Copies of Form W-8 and additional copies of Substitute Form W-9 may be obtained upon request from the Company at the address, or by calling the telephone number indicated above. Failure to provide the information on the form may subject such holder to 31% federal income tax withholding with respect to dividends that may be paid by the Company on shares of Common Stock purchased upon the exercise of Rights (for those holders exercising Rights). 6 EX-99.2 8 0008.txt EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR SHAREHOLDERS RIGHTS AGREEMENTS ISSUED BY FIDELITY FEDERAL BANCORP This form, or one substantially equivalent hereto, must be used to exercise Rights pursuant to the Rights Offering described in the prospectus dated __________, 2001 (the "Prospectus") of Fidelity Federal Bancorp (the "Company"), if a holder of Rights cannot deliver the Shareholders Rights Agreements evidencing the Rights (the "Shareholders Rights Agreement(s)") to the Company at or prior to 5:00 p.m., Evansville, Indiana time, on __________, 2001, unless extended by the Company (the "Expiration Date"). Such form must be delivered by hand or sent by facsimile transmission or mail or overnight delivery to the Company, and must be received by the Company on or prior to the Expiration Date. See the discussion set forth under "The Rights Offering--Guaranteed Delivery Procedures" in the Prospectus. Even if the Shareholders Rights Agreement evidencing the Rights is being delivered pursuant to the procedure for guaranteed delivery thereof, payment of the Subscription Price of $____ per share for each share of common stock (the "Common Stock") of the Company subscribed for upon exercise of such Rights must be received by the Company in the manner specified in the Prospectus at or prior to the Expiration Date. See the discussion set forth under "The Rights Offering--Guaranteed Delivery Procedures" in the Prospectus. All undefined capitalized terms used herein have the definitions ascribed to them in the Prospectus. The address and facsimile numbers of the Company are as follows: Fidelity Federal Bancorp 18 NW Fourth Street PO Box 1347 Evansville, Indiana 47706-1347 Attention: Mark A. Isaac, Vice President Telephone: (812) 429 - 0921 Facsimile: _____________ Delivery of this instrument to an address other than as set forth above or transmission via a facsimile machine other than as set forth above does not constitute a valid delivery. The address and telephone numbers of the Company, for inquiries, information or requests for additional documentation are as follows: Deb Fritz, Assistant Vice President, Shareholder Relations, Fidelity Federal Bancorp, 18 NW Fourth Street, PO Box 1347, Evansville, Indiana 47706-1347, Telephone: (812) 429-0550 (extension 2226) or (800) 280-8280 (extension 2226). 1 Ladies and Gentlemen: The undersigned hereby represents that he or she is the holder of Shareholders Rights Agreement(s) representing ___________ Rights and that such Shareholders Rights Agreement(s) cannot be delivered to the Company at or before the Expiration Date. Upon the terms and subject to the conditions set forth in the Prospectus, receipt of which is hereby acknowledged, the undersigned hereby elects to exercise: (i) the Basic Subscription Privilege to subscribe for one share of Common Stock per Right with respect to _______ of the Rights represented by such Shareholders Rights Agreement, and (ii) the Over-Subscription Privilege to subscribe, to the extent that shares ("Excess Shares") are not subscribed for pursuant to exercises under the Basic Subscription Privilege, for an aggregate of up to _______ Excess Shares. The undersigned understands that payment of the Subscription Price of $___ per share for each share of the Common Stock subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege must be received by the Company at or before the Expiration Date and represents that such payment, in the aggregate amount of $_________, either (check appropriate box): [ ] is being delivered to the Company herewith; or [ ] has been delivered separately to the Company; and is or was delivered in the manner set forth below (check appropriate box and complete information relating thereto): [ ] wire transfer of funds . name of transferor institution________________________________ . date of transfer______________________________________________ . confirmation number (if available)____________________________ [ ] uncertified check (Payment by uncertified check will not be deemed to have been received by the Company until such check has cleared. Holders paying by such means are urged to make payment sufficiently in advance of the Expiration Date to ensure that such payment clears by such date). [ ] certified check [ ] bank draft (cashier's check) [ ] money order . name of maker_________________________________________________ . date of check, draft or money order number____________________ . bank on which check is drawn or issuer of money order_________________________ 2 Signature(s)____________________________________________________________________ Name(s)_________________________________________________________________________ ________________________________________________________________________________ (Please type or Print) Area Code and Tel. No(s)._______________________________________________________ GUARANTEE OF DELIVERY (NOT TO BE USED FOR SHAREHOLDERS RIGHTS AGREEMENT SIGNATURE GUARANTEE) The undersigned, a member firm of a registered national securities exchange or member of the National Association of Securities Dealers, Inc., commercial bank or trust company having an office or correspondent in the United States, or another "Eligible Guarantor Institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees that within three Nasdaq National Market trading days after the date hereof, the undersigned will deliver to the Company the Shareholders Rights Agreements representing the Rights being exercised hereby, with any required signature guarantees and any other required documents. Name of Firm:___________________________________________________________________ Address: ________________________________________________________________________________ Zip Code:_______________________________________________________________________ Area Code and Telephone Number:_________________________________________________ Authorized Signature:___________________________________________________________ Title:__________________________________________________________________________ Name:___________________________________________________________________________ (Please Type or Print) The institution which completes this form must communicate the guarantee to the Company and must deliver the Shareholders Rights Agreements to the Company within the time period shown herein. Failure to do so could result in a financial loss to such institution. DO NOT SEND SHAREHOLDERS RIGHTS AGREEMENTS WITH THIS FORM. 3 EX-99.3 9 0009.txt EXHIBIT 99.3 Form of Letter to Stockholders Who Are Record Holders Dear Stockholders: We are sending you this letter as a holder of our common stock in connection with our offering of subscription rights to acquire our common stock (the "Rights Offering") as described in the enclosed Prospectus. We have described the subscription rights and the Rights Offering in the enclosed Prospectus and evidenced the subscription rights by a Shareholders Rights Agreement registered in your name. Enclosed are copies of the following documents: 1. The Prospectus; 2. The Shareholders Rights Agreement; 3. The "Instructions for Use of Fidelity Federal Bancorp Shareholders Rights Agreements" (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9); 4. A Notice of Guaranteed Delivery for Shareholders Rights Agreements; and 5. A return envelope addressed to Fidelity Federal Bancorp. To participate in the Rights Offering, we suggest that you act promptly. Neither the Company nor its board of directors is making any recommendation as to whether or not you should exercise your subscription rights. You should make your decision based on your own assessment of your best interests after reading the Prospectus. If you have any questions about the Rights Offering, please contact Mark A. Isaac, Vice President at (812) 429-0550 or (800) 280-8280. Very truly yours, FIDELITY FEDERAL BANCORP EX-99.4 10 0010.txt Exhibit 99.4 Letter to Stockholders Who Are Beneficial Owners To Securities Dealers, Commercial Banks, Trust Companies and Other Nominees: We are sending you this letter in connection with our offering to our stockholders of subscription rights to purchase our common stock (the "Rights Offering"). We have described the subscription rights and the Rights Offering in the enclosed Prospectus and evidenced the subscription rights by a Shareholders Rights Agreement registered in your name or the name of your nominee. We are asking you to contact your clients for whom you hold our common stock registered in your name or in the name of your nominee to obtain instructions with respect to the subscription rights. We have enclosed several copies of the following documents for you to use: 1. The Prospectus; 2. The "Instructions for Use of Fidelity Federal Bancorp Shareholders Rights Agreements" (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9); 3. A form letter which may be sent to your clients for whose accounts you hold our common stock registered in your name or the name of your nominee; 4. A Beneficial Owner Election Form, on which you may obtain your clients' instructions with regard to the subscription rights; 5. A Nominee Holder Certification Form; 6. A Notice of Guaranteed Delivery for Shareholders Rights Agreements issued by the Company; and 7. A return envelope addressed to the Company. We request that you act promptly. You may obtain additional copies of the enclosed materials and may request assistance or information from Deb Fritz, Assistant Vice President, Shareholder Relations, Fidelity Federal Bancorp, 18 NW Fourth Street, PO Box 1347, Evansville, Indiana 47706-1347, Telephone: (812) 429-0550 (extension 2226) or (800) 280-8280 (extension 2226). Very truly yours, FIDELITY FEDERAL BANCORP You are not an agent of the Company, nor of any other person (including the Company) who is deemed to be making or who is making offers of our common stock in the Rights Offering, and you are not authorized to make any statements on their or our behalf, except for statements made in the Prospectus. EX-99.5 11 0011.txt EXHIBIT 99.5 Letter to Clients of Beneficial Owners To Our Clients: We are sending this letter because we hold shares of Fidelity Federal Bancorp common stock for you. Fidelity Federal Bancorp has commenced an offering of subscription rights to purchase its common stock, as described in the enclosed Prospectus. We have enclosed your copy of the following documents: 1. The Prospectus; and 2. The Beneficial Owner Election Form. We urge you to read these documents carefully before instructing us to exercise your subscription rights. We will act on your behalf according to your instructions. We will not exercise your subscription rights unless you instruct us to do so. EX-99.6 12 0012.txt EXHIBIT 99.6 BENEFICIAL OWNER ELECTION FORM I (we) acknowledge receipt of your letter and the enclosed materials relating to the offering of subscription rights ("Rights") to purchase shares of common stock (the "Common Stock") of Fidelity Federal Bancorp (the "Company"). In this form, I (we) instruct you whether to exercise Rights distributed with respect to the Common Stock held by you for my (our) account, pursuant to the terms and subject to the conditions set forth in the prospectus dated __________, 2001 (the "Prospectus"). BOX 1. [ ] Please do not exercise Rights for shares of the Common Stock. BOX 2. [ ] Please exercise Rights for shares of the Common Stock as set forth below:
Number of Rights Subscription Price Payment Basic Subscription ___________ X $______ = $______ (Line 1) Privilege: Over-Subscription ___________ X $______ = $______ (Line 2) Privilege
By exercising the Over-Subscription Privilege, I (we) hereby represent and certify that I (we) have fully exercised my (our) Basic Subscription Privilege received in respect of shares of Common Stock held in the below-described capacity. Total Payment Required = $__________ (Sum of Lines 1 and 2; must equal total of amounts in Boxes 3 and 4). BOX 3. [ ] Payment in the following amount is enclosed: __________ BOX 4. [ ] Please deduct payment from the following account maintained by you as follows: ------------------ ------------------- Type of Account Account No. Amount to be deducted: $__________ Date: _______________, 2001 _______________________ Signature EX-99.7 13 0013.txt EXHIBIT 99.7 Form of Nominee Holder Certificate Form FIDELITY FEDERAL BANCORP NOMINEE HOLDER CERTIFICATION The undersigned, a bank, broker, trustee, depositary or other nominee holder of subscription rights ("Rights") to purchase shares of common stock ("Common Stock") of Fidelity Federal Bancorp (the "Company") pursuant to the Rights Offering described and provided for in the Company's prospectus dated __________, 2001 (the "Prospectus"), hereby certifies to the Company that: (1) the undersigned has exercised the number of Rights specified below pursuant to the Basic Subscription Privilege (as described in the Prospectus) on behalf of beneficial owners of Rights who have subscribed for the purchase of additional shares of Common Stock pursuant to the Over-Subscription Privilege (as described in the Prospectus), listing separately below each such exercised Basic Subscription Privilege and the corresponding Over-Subscription Privilege (without identifying any such beneficial owner); and (2) each such beneficial owner's Basic Subscription Privilege has been exercised in full if it is exercising its Over-Subscription Privilege.
Number of Shares Owned on Rights Exercised Pursuant to Number of Shares Subscribed The Record Date Basic Subscription Privilege to Pursuant to Over- Subscription Privilege 1. 2. 3. 4. 5.
[Name of Bank, Broker, Trustee, Depositary or Other Nominee] By: ____________________ Name: Title: EX-99.8 14 0014.txt EXHIBIT 99.8 IMPORTANT TAX INFORMATION Under United States federal income tax law, dividend payments and other distributions that may be made by the Company on shares of Common Stock issued upon the exercise of Rights may be subject to backup withholding and each Rights holder who either exercises or sells Rights should provide the Company (as the Company's agent) with such Rights holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9 below. If such Rights holder is an individual, the TIN is his or her Social Security Number ("SSN"). If the Company is not provided with the correct TIN in connection with such payments, the Rights holder may be subject to a $50.00 penalty imposed by the Internal Revenue Service (the "IRS"). Exempt Rights holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In general, in order for a foreign individual to qualify as an exempt recipient, such Rights holder must submit a statement, signed under the penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Company. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Company will be required to withhold 31% of any such payments made to the Rights holder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. Purpose of Substitute Form W-9 A person who is required to file an information return with the IRS must get your TIN to report, for example, income paid to you. Use Form W-9 to give your correct TIN to the payer (the person requesting your TIN) and, when applicable, (1) to certify that the TIN you are using is correct (or that you are waiting for a number to be issued), (2) to certify that you are not subject to backup withholding or (3) to claim exemption from backup withholding if you are an exempt payee. To prevent backup withholding, a Rights holder is required to notify the Company of such Rights holder's correct TIN by completing the form below certifying that the TIN provided on Substitute Form W- 9 is correct (or that such Rights holder is awaiting a TIN). NOTE: If a payer gives you a form other than a Form W-9 to request your TIN, you must use the payer's form if it is substantially similar to Form W-9. What Is Backup Withholding? Persons making certain payments to you must withhold and pay to the IRS 31% of such payments under certain conditions. This is called "backup withholding." Payments that may be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, non-employee pay, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding. If you give the payer your correct TIN, make proper certifications, and report all your taxable interest and dividends on your tax return, payments you receive will not be subject to backup withholding. Payments you receive WILL be subject to backup withholding if: 1. You do not furnish your TIN to the payer, or 1 2. The IRS tells the payer that you furnished an incorrect TIN, or 3. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or 4. You did not certify to the payer that you are not subject to backup withholding under 3 above (for reportable interest and dividend accounts opened after 1983 only), or 5. You did not certify your TIN when required. See the chart below for details. Certain payees and payments are exempt from backup withholding and information reporting. See below. What Number to Give the Company? Each Rights holder is required to give the Company the SSN or Employer Identification Number ("EIN") of the record owner of the Rights. If the Rights are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidelines on which number to report. NOTE: All references herein to sections are to the indicated sections of the Internal Revenue Code of 1986, as amended. 2 PAYER'S NAME: _______________ SUBSTITUTE FORM W-9 REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION Name: ___________________________________________________________ Business name, if different from above: _________________________ Address (number, street and apt. or suite no.): _________________ City, state and ZIP code: _______________________________________ Check appropriate box: [_] Individual/Sole Proprietor [_] Corporation [_] Partnership [_] Other (Specify) _______________ Requester's name and address (optional): ____________________________________ PART I: TAXPAYER IDENTIFICATION NUMBER (TIN) Social security number: ____________________ OR Employer identification number: ____________________OR If awaiting TIN write "Applied For" and complete Parts III and IV: __________ List Account Number(s) (Optional):__________________________________________________________________ PART II: FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING For payees exempt from backup withholding, see the enclosed Guidelines and complete as instructed therein. PART III: CERTIFICATION Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because you have failed to report all interest or dividends on your tax return. For real estate transactions, item (2) does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. ________________________________ ________________, 2001 Signature Date 3 NOTE: Failure to complete and return this form may result in backup withholding of 31% of any payments made to you in respect of our common stock issued in the Rights Offering. Please review the enclosed guidelines for certification of taxpayer identification number on Substitute Form W-9 for additional information. YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR" IN THE APPROPRIATE LINE IN PART I OF SUBSTITUTE FORM W-9 PART IV: CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within 60 days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. ________________________________ ________________, 2001 Signature Date GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER Social Security numbers have nine digits separated by two hyphens: i.e., 000- 00-0000. Employer Identification numbers have nine digits separated by only one hyphen: i.e., 00- 0000000. The table below will help determine the number to give the Payer. 4 FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF: 1. Individual The individual 2. Two or more individuals (joint account) The actual owner of the account, or, if combined funds, any one of the individuals (1) 3. Custodian account of a minor (Uniform The minor (2) Gift to Minors Act) 4. (a) The usual revocable savings trust The grantor-trustee (1) (grantor is also trustee) (b) So-called trust account that is not a legal or valid trust under state law The actual owner (1) 5. Sole proprietorship The owner (3) 4 6. A valid trust, estate, or pension trust The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title) (4) 7. Corporation The corporation 8. Association, club, religious, charitable, educational or other tax-exempt organization The organization 9. Partnership The partnership 10. A broker or registered nominee The broker or nominee 11. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the name of the owner. (4) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. Section references are to the Internal Revenue Code. Obtaining a Number. - ------------------ If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the "IRS") and apply for a number. Payees Exempt from Backup Withholding. - ------------------------------------- The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments 5 subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except that the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding or information reporting: medical and health care payments, attorneys' fees and payment for services paid by a federal executive agency. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions and patronage dividends. (1) A corporation. (2) An organization exempt from tax under section 501(a), or an individual retirement plan ("IRA"), or a custodial account under 403(b)(7) if the account satisfies the requirements of Section (F)(2). (3) The United States or any of its agencies or instrumentalities. (4) A State, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the United States or a possession of the United States. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947. Payments of dividends and patronage dividends generally not subject to backup withholding also include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident partner. . Payments of patronage dividends not paid in money. . Payments made by certain foreign organizations. 6 . Section 401(k) distributions made by ESOP. Payments of interest generally not subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt interest dividends under section 852). . Payments described in section 6049(b)(5) to nonresident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Mortgage interest paid to you. Payments that are not subject to information reporting are also not subject to backup withholding. For details see sections 6041, 6041(A)(a), 6042, 6044, 6045, 6049, 6050A and 6050N, and the regulations under such sections. Privacy Act Notice. - ------------------ Section 6109 requires you to give your correct taxpayer identification number to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your taxpayer identification number whether or not you are qualified to file a tax return. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties. - --------- (1) Penalty for Failure to Furnish Taxpayer Identification Number. If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Civil Penalty for False Information with Respect to Withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. (3) Criminal Penalty for Falsifying Information. Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. IM-326091-1 7 -----END PRIVACY-ENHANCED MESSAGE-----