-----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, QwgDRZkk0YYWfOXcJxB4N6DYLx/M6EOeh1EvdhC6wijylGkPgd974Y3cPUqmaClu ITwhDUQUqsIinc53gbWWuw== 0000926274-01-000132.txt : 20010308 0000926274-01-000132.hdr.sgml : 20010308 ACCESSION NUMBER: 0000926274-01-000132 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20010306 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-4 SEC ACT: SEC FILE NUMBER: 333-56600 FILM NUMBER: 1562147 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-4 1 0001.txt As filed with the Securities and Exchange Commission on March 6, 2001 Registration No. 333-____________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- FIDELITY FEDERAL BANCORP (Exact name of registrant as specified in its charter) Indiana 6035 (State or other jurisdiction (Primary Standard Industrial of incorporation or organization) Classification Code Number) 35-1894432 (I.R.S. Employer Identification No.) 18 N.W. Fourth Street, Evansville, Indiana 47708 (812) 424-0921 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------------- Donald R. Neel Executive Vice President, Chief Financial Officer and Treasurer Fidelity Federal Bancorp 18 N.W. Fourth Street Evansville, Indiana 47708 (812) 424-0921 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Timothy M. Harden, Esq. John W. Tanselle, Esq. Krieg DeVault Alexander & Capehart, LLP One Indiana Square, Suite 2800 Indianapolis, Indiana 46204-2079 (317) 636-4341 ------------------- Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following the effectiveness of this registration statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, 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, 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(d) 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. [ ] ------------------- 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 - ---------------------------------------------------------------------------------------------- 12% Junior $1,500,000(1) 100%(2) $1,500,000 $375.00 Subordinated Notes due 2004 - ----------------------------------------------------------------------------------------------
(1) Represents the maximum principal amount at maturity of 12% Junior Subordinated Notes due 2004 that may be issued pursuant to the exchange offer described in this registration statement. (2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f)(2) under the Securities Act of 1933, as amended. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. The information in this prospectus is not complete and may be changed. We may not sell or offer these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion, Dated March 6, 2001 PROSPECTUS $1,476,000 FIDELITY FEDERAL BANCORP OFFER TO EXCHANGE ALL OUTSTANDING 9-1/8% JUNIOR SUBORDINATED NOTES DUE 2001 FOR 12% JUNIOR SUBORDINATED NOTES DUE 2004 MATERIAL TERMS OF THE EXCHANGE OFFER o We are offering to exchange all old notes that are validly tendered and not validly withdrawn for an equal principal amount of the new notes which have substantially similar terms to the old notes, except that the new notes have an extended maturity, increased interest rate and different redemption terms. o The exchange offer will expire at 5:00 p.m., Evansville time, _____________________, 2001, unless extended. o The exchange of the old notes for the new notes in the exchange offer will be a taxable event for U.S. federal income tax purposes, but you will not realize any gain if your purchase price for your old notes was equivalent to their principal balance. THE NEW NOTES o Interest on the new notes accrues at the rate of 12% per year, payable in cash or by check every May 1 and November 1, with the first payment on November 1, 2001. o The new notes will mature on April 30, 2004. o We have the option to redeem the new notes in whole or in part at any time after May 1, 2001 and prior to maturity, at face value plus accrued but unpaid interest. If we redeem the new notes between May 1, 2001 and April 30, 2002, we also will pay a redemption premium equal to 1% of the principal amount of the new notes that have been redeemed. ----------------------- Investing in the new notes to be issued in the exchange offer involves risks. Please consider carefully the "Risk Factors" beginning on page 11 of this prospectus. ----------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the notes to be distributed in the exchange offer, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is ___________________, 2001. 1 TABLE OF CONTENTS ABOUT THIS PROSPECTUS......................................................3 WHERE YOU CAN FIND MORE INFORMATION........................................3 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION.................4 SUMMARY ..................................................................6 RISK FACTORS .............................................................11 Risk Factors Related to the Exchange Offer.......................11 Risk Factors Related to Fidelity Federal.........................13 THE EXCHANGE OFFER........................................................18 DESCRIPTION OF THE NEW NOTES..............................................24 FEDERAL INCOME TAX CONSEQUENCES...........................................27 LEGAL MATTERS.............................................................27 EXPERTS .................................................................27 2 ABOUT THIS PROSPECTUS This prospectus is part of a registration statement we have filed with the SEC. We are submitting this prospectus to holders of the old notes so that they can consider exchanging the old notes for the new notes. You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with additional or different information. If anyone provides you with additional or different information, you should not rely on it. We are not making an offer to exchange and issue the new notes in any jurisdiction where the offer or exchange is not permitted. You should assume that the information contained in this prospectus is accurate only as of the date on the front cover of this prospectus and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference. WHERE YOU CAN FIND MORE INFORMATION We file reports and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048. You may obtain further information regarding the operation of the SEC's Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings are also available to the public on the SEC's Internet site located at http://www.sec.gov. This prospectus is accompanied by a copy of our latest annual report on Form 10-K for the fiscal year ended December 31, 1999, as amended by Form 10-K/A, and our quarterly report on Form 10-Q for the quarterly period ended September 30, 2000, as amended by Form 10-Q/A, which contain additional information about us. The SEC allows us to "incorporate by reference" into this prospectus information we file with the SEC. This means we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference is considered to be part of this prospectus, unless we update or supersede that information by the information contained in this prospectus or information we file subsequently that is incorporated by reference into this prospectus. We are incorporating by reference into this prospectus the following documents that we have filed with the SEC, and our future filings with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the offering of the new notes is completed: o our annual report on Form 10-K for the fiscal year ended December 31, 1999, as amended by Form 10-K/A, o our definitive proxy statement filed April 20, 2000 in connection with our 2000 annual shareholder meeting, o our quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2000, June 30, 2000 and September 30, 2000, as amended by Form 10-Q/A for those periods, and o our current reports on Form 8-K dated January 15, 2000, May 24, 2000 and October 5, 2000. This prospectus is part of a registration statement we have filed with the SEC relating to the new notes. As permitted by SEC rules, this prospectus does not contain all of the information included in the registration statement and the accompanying exhibits and schedules we file with the SEC. You should read the registration statement and the exhibits and schedules for more information about us and the new notes. The registration 3 statement, exhibits and schedules are also available at the SEC's Public Reference Room or through its Internet site. This document incorporates by reference important business, financial and other information about us that is not included in or delivered with this document. Documents incorporated by reference and any other copies of our filings with the SEC are available from us without charge, excluding all exhibits unless specifically incorporated by reference as exhibits in this document. Written and telephone requests for any of these documents should be directed to us as indicated below: Fidelity Federal Bancorp 18 N.W. Fourth Street Evansville, Indiana 47708 Attn.: Mark A. Isaac, Vice President Telephone: (812) 424-0921 If you would like to request copies of these documents, please do so by ____________, 2001 in order to receive them before the expiration of the exchange offer. In the event that the exchange offer period is extended by us, you must submit your request no later than five business days before the expiration date, as extended by us. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This prospectus contains certain forward-looking statements that are subject to risks and uncertainties and includes information about possible or assumed future results of operations. Many possible events or factors could affect our future financial results and performance. This could cause results or performance to differ materially from those expressed in our forward-looking statements. Words such as "expects", "anticipates","believes", "estimates", variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers of this prospectus should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed throughout this prospectus. These statements are representative only on the date hereof. The possible events or factors include the following: our loan growth is dependent on economic conditions, as well as various discretionary factors, such as decisions to securitize, sell or purchase certain loans or loan portfolios; syndications or participations of loans; retention of residential mortgage loans; and the management of borrower, industry, product and geographic concentrations and the mix of the loan portfolio. The rate of charge-offs and provision expense can be affected by local, regional and international economic and market conditions, concentrations of borrowers, industries, products and geographic locations, the mix of the loan portfolio and management's judgments regarding the collectibility of loans. Liquidity requirements may change as a result of fluctuations in assets and liabilities and off-balance sheet exposures, which will impact our capital and debt financing needs and the mix of funding sources. Decisions to purchase, hold or sell securities are also dependent on liquidity requirements and market volatility, as well as on- and off-balance sheet positions. Factors that may impact interest rate risk include local, regional and international economic conditions, levels, mix, maturities, yields or rates of assets and liabilities, utilization and effectiveness of interest rate contracts and the wholesale and retail funding sources of Fidelity Federal and United Fidelity Bank. We are also exposed to the potential of losses arising from adverse changes in market rates and prices which can adversely impact the value of financial products, 4 including securities, loans, deposits, debt and derivative financial instruments, such as futures, forwards, swaps, options and other financial instruments with similar characteristics. In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal Reserve Board, the OCC, the FDIC, state regulators and the Office of Thrift Supervision, whose policies and regulations could affect our results. Other factors that may cause actual results to differ from the forward-looking statements include the following: competition with other local, regional and international banks, thrifts, credit unions and other nonbank financial institutions, such as investment banking firms, investment advisory firms, brokerage firms, investment companies and insurance companies, as well as other entities which offer financial services, located both within and outside the United States and through alternative delivery channels such as the World Wide Web; interest rate, market and monetary fluctuations; inflation; market volatility; general economic conditions and economic conditions in the geographic regions and industries in which we operate; introduction and acceptance of new banking-related products, services and enhancements; fee pricing strategies, mergers and acquisitions and our ability to manage these and other risks. 5 SUMMARY This summary highlights selected information from this prospectus to help you understand the terms of this exchange offer and the new notes. It likely does not contain all the information that is important to you or that you should consider in making a decision to exchange the old notes for the new notes. To understand all of the terms of this exchange offer and the new notes and to attain a more complete understanding of our business and financial situation, you should carefully read this entire prospectus and the information we have incorporated by reference herein. In this prospectus, we refer to our 9-1/8% Junior Subordinated Notes due 2001 as the "old notes," and to our 12% Junior Subordinated Notes due 2004 offered hereby as the "new notes." We collectively refer to the old notes and the new notes as the "notes." FIDELITY FEDERAL BANCORP We are a savings and loan holding company which owns all of the issued and outstanding stock of United Fidelity Bank, its federally-chartered savings bank subsidiary. United Fidelity Bank maintains four locations in Evansville, Indiana, and plans to open a fifth location in nearby Warrick County in March, 2001. United Fidelity Bank also participates in certain real estate activities, including owning housing developments through its wholly-owned subsidiaries. Our principal executive offices are located at 18 N.W. Fourth Street, Evansville, Indiana 47708, and our telephone number at that address is (812) 424-0921. SUMMARY OF THE EXCHANGE OFFER In the exchange offer, you are entitled to exchange your old notes for the new notes, with substantially similar terms, except the new notes have an extended maturity, increased interest rate and different redemption terms. You should read the discussion under the heading "Description of the New Notes" beginning on page 24 for further information about the new notes. After the exchange offer is complete, you will no longer be entitled to any exchange rights for your old notes. We have summarized the terms of the exchange offer below. You should read the discussion under the heading "The Exchange Offer" beginning on page 17 for further information about the exchange offer. The Exchange Offer................... We are offering to exchange up to $1,476,000 principal amount of the new notes for up to $1,476,000 principal amount of the old notes. The old notes may only be exchanged in $1,000 increments. The terms of the new notes are substantially similar in all material respects to those of the old notes, except the new notes have an extended maturity, an increased interest rate and different redemption terms. The old notes that are not tendered for exchange will continue to have the same maturity, interest rate and redemption terms. Terms of the New Notes............... The new notes have an increased interest rate of 12% per annum and mature on April 30, 2004. In addition, we have the option to redeem the new notes in whole or in part at any time after May 1, 6 2001 and prior to maturity, at face value plus accrued but unpaid interest. If we redeem the new notes between May 1, 2001 and April 30, 2002, we also will pay a redemption premium equal to 1% of the principal amount of the new notes that have been redeemed. If we redeem the new notes in part, we will select the new notes for redemption on a pro rata basis, by lot or by such other method as we in our sole discretion deem fair and appropriate. Expiration Date...................... The exchange offer will expire at 5:00 p.m., Evansville time, on ___________, 2001, or such later date and time to which we may extend it. Please read "The Exchange Offer--Extensions, Delay in Acceptance, Termination or Amendment" on page 17 for more information about an extension of the expiration date. Conditions to the Exchange Offer....................... We will not be required to accept the old notes for exchange: o if the exchange offer would be unlawful or would violate any interpretation of the staff of the SEC, or o if any legal action has been instituted or threatened that would impair our ability to proceed with the exchange offer. The exchange offer is not conditioned upon any minimum aggregate principal amount of the old notes being tendered. Please read "The Exchange Offer--Conditions to the Exchange Offer" on page 18 for more information about the conditions to the exchange offer. Procedures for Tendering Your Old Notes....................... If you want to tender your old notes in the exchange offer, you should do one of the following: o If you hold physical certificates evidencing your old notes, complete, sign and date the letter of transmittal in accordance with the instructions in that document, have your signature guaranteed if required by the letter of transmittal, and mail or deliver your manually signed letter of transmittal, together with the certificates evidencing the old notes being tendered and any other required documents, to the exchange agent prior to the expiration date; or o If you own a beneficial interest in the old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the old notes in the exchange offer, please contact the registered holder as soon as possible and instruct the registered holder to 7 tender on your behalf and to comply with our instructions described in this prospectus. Withdrawal of Tenders................ You may withdraw your tender of the old notes at any time prior to the expiration date. We will return to you, without charge, promptly after the expiration or termination of the exchange offer any old notes that you tendered but that were not accepted for exchange. U.S. Federal Income Tax Considerations....................... Provided that you paid a purchase price equivalent to the principal balance of the old notes, the exchange of the old notes for new notes should not result in any gain or loss for federal income tax purposes. Please read "Federal Income Tax Consequences" on page 26. Use of Proceeds...................... We will not receive any cash proceeds from the issuance of the new notes in the exchange offer. Appraisal or Dissenters' Rights............................... You will have no appraisal or dissenters' rights in connection with the exchange offer. Exchange Agent....................... The exchange agent for the exchange offer is Fidelity Federal Bancorp. The address, telephone number and facsimile number of the exchange agent are set forth in "The Exchange Offer--The Exchange Agent" and in the letter of transmittal. 8 SELECTED FINANCIAL DATA The information in the following table is based on historical financial information included in our prior filings with the SEC, including our annual report on Form 10-K for the fiscal year ended December 31, 1999, as amended by Form 10-K/A. The following summary financial information should be read in connection with this historical financial information, including the notes that accompany such financial information. This historical financial information is considered a part of this document. See "Where You Can Find More Information." Our audited historical financial statements as of December 31, 1999 and June 30, 1999, and for the six months ended December 31, 1999 and each of the two years ended June 30, 1999 and 1998 were audited by Olive LLP, independent public accountants. You should not assume that the results of operations below are indicative of the financial results we can achieve in the future. Selected Statistical Information (Dollars in Thousands, Except Share and Per Share Data)
As of and for the six months ended As of and for the years ended - ------------------------------------------------------------------------------------------------------------------ December 31, June 30, June 30, June 30, June 30, 1999 1999 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------------ Selected Financial Data Total assets $ 171,457 $ 172,253 $ 197,046 $ 240,819 $ 262,216 Interest-bearing deposits 22,911 14,668 6,266 1,765 4,107 Investment securities available for sale 24,305 27,325 9,854 13,790 17,459 Loans, net 96,919 110,436 156,683 203,183 216,162 Deposits 135,016 128,596 148,939 181,787 181,702 Short-term borrowings 89 128 2,531 5,191 5,693 Long-term debt 23,504 29,149 29,488 38,089 57,292 Stockholders' equity 5,427 7,814 7,515 12,936 14,295 Interest income $ 6,019 $ 14,094 $ 17,192 $ 20,282 $ 21,529 Interest expense 4,268 9,730 11,586 13,831 15,525 ----------------------------------------------------------------------- Net interest income 1,751 4,364 5,606 6,451 6,004 Provision for loan losses 1,345 (138) 4,543 975 455 ----------------------------------------------------------------------- Net interest income after provision for loan losses 406 4,502 1,063 5,476 5,549 Non-interest income 1,001 2,663 3,025 3,856 8,180 Non-interest expense 5,148 6,878 16,076 9,474 8,608 ----------------------------------------------------------------------- Income (loss) before income tax (3,741) 287 (11,988) (142) 5,121 Income tax expense (benefit) (1,671) (338) (5,194) (255) 1,886 ----------------------------------------------------------------------- Net income (loss) $ (2,070) $ 625 $ (6,794) $ 113 $ 3,235 ======================================================================= Selected Financial Ratios Return on average assets (2.41)% .33% (3.12)% .04% 1.18% Return on stockholders' equity (51.37) 7.58 (50.68) .83 23.75 Net interest margin 2.24 2.48 2.79 2.72 2.29 Net interest spread 2.05 2.24 2.62 2.57 2.11 Tangible equity to assets at year end 6.78 8.49 6.31 6.93 7.08 Allowance for loan losses to loans 2.04 3.09 1.91 .87 .49 Allowance for loan losses to non- performing loans 179.96 69.57 532.11 624.91 275.06 Dividend payout ratio N/A N/A N/A 1,500.00 67.52 Per Share Data Diluted net income (loss) $ (0.66) $ .20 $ (2.30) $ .04 $ 1.17 Basic net income (loss) (0.66) .20 (2.30) .05 1.32 Cash dividends declared .35 .60 .79 Book value at period end 1.72 2.48 2.40 5.20 5.73 Closing market price (bid) at period end 1.25 2.88 6.50 8.75 11.25 Number of average common and common equivalent shares outstanding 3,147,662 3,143,179 2,956,157 2,655,181 2,776,147
9 RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, "earnings" include pretax income from continuing operations plus fixed charges. "Fixed charges" include interest, whether expensed or capitalized, amortization of debt expense and the portion of rental expense that represents the interest factor in these rentals. The following table presents the ratio of earnings to fixed charges of Fidelity Federal for each of the fiscal years 1995 through 1999, the six months ended December 31, 1999 and for the first nine months of fiscal year 2000.
Nine Six Months Months Ended Ended Year Ended -------------- ------------ ------------------------------------------------------ September 30, December 31, June 30, June 30, June 30, June 30, June 30, 2000 1999 1999 1998 1997 1996 1995 -------------- ------------ ------------------------------------------------------ Ratio of Earnings to Fixed Charges 0.60x 0.12x 1.03x (0.03)x 0.99x 1.33x 1.45x
10 RISK FACTORS You should carefully consider the risks and uncertainties described below and the other information in this prospectus before deciding whether to participate in the exchange offer. 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. Risk Factors Related to the Exchange Offer We may not be able to pay interest on or repay the notes. a. We are a holding company and our operating company has no obligations to the holders of the notes. We conduct substantially all of our business through our operating company, United Fidelity Bank. Our cash flow and, consequently, our ability to pay interest in cash to service our debt, including the notes, are dependent upon the cash flow of United Fidelity Bank and the payment of funds by United Fidelity Bank to us. United Fidelity Bank is separate and a distinct legal entity and has no obligation, contingent or otherwise, to pay any amounts due on the notes or to make cash available for that purpose. b. Our operating company is restricted in making dividends to us. The Office of Thrift Supervision has not permitted United Fidelity Bank to pay us dividends under the terms of a Supervisory Agreement entered into in February, 1999. The OTS may agree to allow the payment of dividends from United Fidelity Bank to us to assist in debt service, although it has no obligation to do so and we cannot and do not offer any assurances that the OTS will do so. Also, the OTS could, if it considers necessary for the safety and soundness of United Fidelity Bank, continue to prohibit the payment of dividends to us in the future. If we do not receive any dividends from United Federal Bank, we may not be able to make payments on the notes. c. Our substantial amount of indebtedness could adversely affect our ability to repay the notes. We currently have a substantial amount of debt in relation to our shareholders' equity. At September 30, 2000, Fidelity Federal, on a non-consolidated basis, had total unsecured debt outstanding of $9.97 million, representing 107.2% of our total capitalization, and total shareholders' equity of $9.30 million. Our high level of debt could affect our future prospects adversely by: o impairing our ability to borrow additional money, o requiring us to use a substantial portion of our cash flows from operations to pay interest or repay debt which will reduce the funds available to us for our operations, capital expenditures and any acquisition opportunities, and o making us more vulnerable in the event of a downturn in general economic conditions. 11 We cannot assure you that we will be able to meet our debt obligations. If we are unable to generate sufficient cash to meet our obligations or if we fail to satisfy the requirements of our debt agreements, we will be in default. A default would permit certain debt holders to require payment before the scheduled due date of the debt, resulting in further financial strain on us and causing additional defaults under our other indebtedness. Our ability to meet our debt and other obligations and to reduce our total debt depends on our future operating performance and on economic, financial, competitive, regulatory and other factors. In addition, we may need to incur additional indebtedness in the future. Many of these factors are beyond our control. Although we believe that our existing current assets combined with working capital from our operations and proceeds of future equity or debt financings will be adequate to meet our existing financial obligations, we cannot assure you that our business will generate sufficient cash flow or that future financings will be available to provide sufficient proceeds to meet these obligations. d. If we are unable to refinance our existing indebtedness, we may not be able to pay interest and to make principal repayments on the new notes. We currently have substantial debt obligations that will mature before the maturity of the new notes, which may affect our ability to make required payments on the new notes. We may not be able to generate sufficient funds from operations to meet our debt service requirements or to repay all of those obligations as they are currently scheduled to become due. Accordingly, it may be necessary to refinance some of those obligations at or before their respective maturities. Our ability to refinance these obligations will depend on, among other factors, our financial condition at the time of the refinancing, any restrictions contained in financing agreements and market conditions. We may not be able to refinance those obligations. If we are unable to refinance those obligations, or are unable to obtain satisfactory terms, there could be an adverse effect on us, including on our ability to pay interest, and to make scheduled principal repayments on our indebtedness, including the new notes. The exchange offer is a taxable event for U.S. federal income tax purposes. If you participate in the exchange offer, this will be a taxable event for U.S. federal income tax purposes. You will not, however, realize any gain if you paid a purchase price equivalent to the principal balance of the old notes. Please read "Federal Income Tax Considerations." Our secured and other unsecured debt and the liabilities of our operating company are effectively senior to the notes. Our secured and other unsecured debt and all of the debt of United Fidelity Bank are effectively senior to the notes. United Fidelity Bank has no obligation to pay amounts due on the notes. At September 30, 2000, we had about $9.97 million of long-term, unsecured indebtedness. We and United Fidelity Bank may incur additional debt, subject to limitations, and that additional debt will rank senior to the notes. United Fidelity Bank may use the earnings it generates, as well as its existing assets, to fulfill its own direct debt service requirements, particularly because certain agreements may restrict its ability to pay dividends to us or because the debt of United Fidelity Bank may be secured by its assets. Holders of the old notes must ensure compliance with exchange offer procedures. You are responsible for complying with all exchange offer procedures. You will receive the new notes in exchange for your old notes only if, before the expiration date, you deliver to the exchange agent: 12 o the letter of transmittal, preferably completed and duly executed by you, together with any required signature guarantees, and o any other documents required by the letter of transmittal. You should allow sufficient time to ensure that the exchange agent receives all required documents before the exchange offer expires. Neither we nor the exchange agent has any duty to inform you of defects or irregularities with respect to the tender of your old notes for exchange. There is no public market for the notes. There is no existing market for the old notes. We cannot be sure that any trading market for the new notes will develop. If such a market were to develop, the new notes could trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar securities and other factors, including general economic conditions and our financial condition, performance and prospects. Risk Factors Related to Fidelity Federal We must achieve sufficient earnings in order to realize our $7.1 million deferred income tax receivable. We currently have a deferred income tax receivable of approximately $7.1 million. In order to utilize this asset within the federal and state carryforward periods, we must execute our current business plan and achieve sufficient annual earnings. If we are unable to achieve a sufficient level of net income, we may need to establish a valuation allowance for this deferred tax asset. This allowance would be the estimate of future expirations of existing federal and state tax carryforwards. Such an allowance would reduce the receivable and increase our expenses, thus reducing our earnings. 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, including its ability to pay dividends. 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 our ability to repay the notes. Our accomplishments are largely dependent upon the skill and experience of our senior management team. The success of our business will depend upon the services of our senior management team. Our business may suffer if we lose the services of any of these individuals, including Bruce A. Cordingley and Donald R. Neel. We have entered into a three year contract employment agreement with Mr. Neel. Mr. Cordingley's role with Fidelity Federal is not full time. He receives board fees, but he has no employment agreement with us, does not receive a salary, and has substantial business interests other than Fidelity Federal. Our future success also depends on our ability to identify, attract and retain qualified senior officers and other employees in our identified market. On September 29, 2000 we announced that M. Brian Davis would cease to serve as our president and CEO. The Executive Committee of the Board is currently functioning as interim CEO until a permanent replacement is appointed, which we anticipate will occur by the fourth quarter of 2001. Because the main activity of Fidelity 13 Federal is to own the stock of United Fidelity Bank, we do not believe that the timing of this should adversely impact us. 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 Small Cap 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 $1.25 for fiscal year 2000 and thus far in fiscal year 2001 it is $1.31. 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. Anti-takeover provisions in our charter documents may delay or prevent a takeover of Fidelity Federal. 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 and could discourage potential acquisitions of our business by third parties. As of September 30, 2000, Bruce A. Cordingley , who is a director of Fidelity Federal, beneficially owned or controlled approximately 37.6% of our issued and outstanding shares of common stock, excluding options and warrants for the purchase of common stock. As of September 30, 2000, our remaining directors, together with their respective affiliates, owned approximately 23% 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 Federal, 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 Federal, 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 Federal, even on terms that a stockholder might consider favorable. This in turn could harm the market price of our 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 14 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 248,736 shares. The existence of these options 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 Federal, even on terms that a stockholder might consider favorable. This in turn could harm the market price of our common stock. 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. 15 FIDELITY FEDERAL BANCORP Fidelity Federal, incorporated in 1993 under the laws of the State of Indiana, is a registered savings and loan holding company with its principal office in Evansville, Indiana. Our savings bank subsidiary, United Fidelity Bank, was organized in 1914 and is a federally-chartered stock savings bank located in Evansville, Indiana. We, through our savings bank subsidiary, are engaged in the business of obtaining funds in the form of savings deposits and other borrowings and investing such funds in consumer, commercial and mortgage loans and in investment and money market securities. Subsidiaries United Fidelity Bank, Village Affordable Housing Corporation and Village Securities Corporation are three of our subsidiaries. Village Affordable Housing Corporation was formed during 1998 for the purpose of owning interests in real estate housing and is currently inactive. Village Securities Corporation is also currently inactive, and is in the process of being dissolved. United Fidelity Bank's subsidiaries, Village Housing Corporation, Village Management and Village Capital Corporation have been involved in various aspects of financing, owning, developing and managing affordable housing projects. Currently, they are involved only in the business of owning affordable housing properties. As of May 19, 2000, a subsidiary of Pedcor Holdings, LLC, starting providing management and certain accounting services for the properties previously managed by Village Management Corporation. Village Management completed this transition by the end of June 2000 and is currently inactive. Village Capital has not provided any new banking services for the past two years, but records fee income on transactions previously completed. Another subsidiary of United Fidelity Bank, Village Insurance Corporation, receives fee income for credit life and accident health insurance sales. Fidelity Federal had consolidated total assets of $168.3 million and total shareholders' equity of $8.5 million as of September 30, 2000. Competition We face strong direct competition for deposits, loans and other financial-related services. United Fidelity Bank competes in Indiana, Kentucky and Illinois with other thrifts, commercial banks, credit unions, stockbrokers, finance companies and insurance companies. Some of these competitors are local, while others are statewide or national. United Fidelity Bank competes for deposits principally by offering depositors a variety of deposit programs, convenient office locations, hours and other services, and for loan originations primarily through competitive interest rates and fees, the efficiency and quality of service provided and the variety of loan products offered. Some of the non-bank financial institutions and financial services organizations with which United Fidelity Bank competes are not subject to the same degree of regulation as that imposed on federal savings banks, thrifts or thrift-holding companies. As a result, such competitors may have advantages over United Fidelity Bank in providing certain services. Many competitors are substantially larger or have significantly greater capital resources than United Fidelity Bank. Due to recently enacted legislation to allow unlimited interstate branching, we may experience heightened competition from existing competitors and other major financial institutions seeking to expand their regional banking presence in Indiana. We have discontinued development activities pertaining to the affordable housing industry and multifamily development in part because of increased levels of competition, and significant losses taken in recent years. 16 THE EXCHANGE OFFER Terms of the Exchange Offer Upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any old notes properly tendered and not withdrawn prior to the expiration date of the exchange offer. We will issue $1,000 principal amount of the new notes in exchange for each $1,000 principal amount of the old notes surrendered under the exchange offer. The old notes may be tendered only in integral multiples of $1,000. The exchange offer is not conditioned upon any minimum aggregate principal amount of the old notes being tendered for exchange. As of the date of this prospectus, $1,476,000 principal amount of the old notes are outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of the old notes. There will be no fixed record date for determining registered holders of the old notes entitled to participate in the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Act and the Securities Exchange Act and the rules and regulations of the SEC. The old notes that are not tendered for exchange in the exchange offer: o will remain outstanding, and o will continue to accrue interest at 9-1/8% per annum. We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the new notes from us. If you tender the old notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of the old notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read "--Fees and Expenses" for more details about the fees and expenses incurred in the exchange offer. We will return any old notes that we do not accept for exchange for any reason without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer. Expiration Date The exchange offer will expire at 5:00 p.m., Evansville time, on __________________, 2001, unless in our sole discretion we extend it. Extensions, Delay in Acceptance, Termination or Amendment We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. We may delay acceptance for exchange of any old notes by giving oral or written notice of the extension to their holders. During any such extensions, all old notes you have previously tendered will remain subject to the exchange offer, and we may accept them for exchange. To extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We also will make a public announcement of the extension no later than 9:00 a.m., Evansville time, on the next business day after the previously scheduled expiration date. 17 If any of the conditions described below under "--Conditions to the Exchange Offer" have not been satisfied with respect to the exchange offer, we reserve the right, in our sole discretion: o to delay accepting for exchange any old notes, o to extend the exchange offer, or o to terminate the exchange offer. We will give oral or written notice of such delay, extension or termination to the exchange agent. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of the old notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose that amendment by means of a prospectus supplement. We will distribute the supplement to the registered holders of the old notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer if the exchange offer would otherwise expire during such period. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency. Conditions to the Exchange Offer Despite any other term of the exchange offer, we will not be required to accept for exchange, or exchange any new notes for any old notes, and we may terminate the exchange offer as provided in this prospectus before accepting any old notes for exchange, if in our reasonable judgment: o the exchange offer, or the making of any exchange by a holder of old notes, would violate applicable law or any applicable interpretation of the staff of the SEC, or o any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with that exchange offer. In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made to us: o the representations contained in the letter of transmittal, and o such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations. We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any old notes not previously accepted for exchange in the exchange offer, upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the old notes as promptly as practicable. These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. Our failure at any time to exercise any of these rights will not mean that we have waived our rights. Each right will be deemed an ongoing right that we may assert at any time or at various times. Procedures for Tendering Only a holder of the old notes may tender such old notes in the exchange offer. To tender in the exchange offer, a holder must comply with the procedures for physical tender. To complete a physical tender, a holder must: 18 o complete, sign and date the letter of transmittal, o have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires, o mail or deliver the letter of transmittal to the exchange agent prior to the expiration date, and o deliver the old notes to the exchange agent prior to the expiration date. To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at its address provided below under "--The Exchange Agent" prior to the expiration date. The method of delivery of the old notes, the letter of transmittal and all other required documents to the exchange agent is at your election and risk. Rather than mail these items, we recommend that you use an overnight or hand delivery service. In all cases, you should allow sufficient time to assure delivery to the exchange agent before the expiration date You may request your broker, dealer, commercial bank, trust company or other nominee to effect the above transactions for you. How to Tender if you are a Beneficial Owner If you beneficially own the old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender those notes, you should contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf. If you are a beneficial owner and wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either: o make appropriate arrangements to register ownership of the old notes in your name, or o obtain a properly completed bond power from the registered holder of your old notes. The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date. Signatures and Signature Guarantees We require that you must have signatures on a letter of transmittal or a notice of withdrawal described below under "--Withdrawal of Tenders" guaranteed by an eligible institution unless the old notes are tendered: o by a registered holder who has not completed the annexes entitled "Special Issuance Instructions" or "Special Delivery Instructions" attached to the letter of transmittal, or o for the account of an eligible institution. An eligible institution is a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act. When Endorsements or Bond Powers are Needed If a person other than the registered holder of any old notes signs the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power. The registered holder must sign the bond power as the registered holder's name appears on the old notes. An eligible institution must guarantee that signature. If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, 19 administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless we waive this requirement, they also must submit evidence satisfactory to us of their authority to deliver the letter of transmittal. Determinations Under the Exchange Offer We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered old notes and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes our acceptance of which, in the opinion of our counsel, might be unlawful. We also reserve the right to waive any defects, irregularities or conditions of the exchange offer as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of the old notes must be cured within such time as we determine. Neither we, the exchange agent nor any other person will be under any duty to give notification of defects or irregularities with respect to tenders of the old notes, nor will we or those persons incur any liability for failure to give such notification. Tenders of the old notes will not be deemed made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date. When we will Issue New Notes In all cases, we will issue the new notes for the old notes that we have accepted for exchange in the exchange offer only after the exchange agent timely receives: o the old notes, and o a properly completed and duly executed letter of transmittal and all other required documents. Return of the Old Notes Not Accepted or Exchanged If we do not accept any tendered old notes for exchange for any reason described in the terms and conditions of the exchange offer or if the old notes are submitted for a greater principal amount than the holder desires to exchange, we will return the unaccepted or non-exchanged old notes without expense to their tendering holder. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer. Withdrawal of Tenders Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., Evansville time, on the expiration date. For a withdrawal to be effective, the exchange agent must receive a written notice of withdrawal at the address listed below under "-- The Exchange Agent". Any notice of withdrawal must: o specify the name of the person who tendered the old notes to be withdrawn, o identify the old notes to be withdrawn, including the registration number or numbers and the principal amount of such old notes, 20 o be signed by the person who tendered the old notes in the same manner as the original signature on the letter of transmittal used to deposit those old notes or be accompanied by documents of transfer sufficient to permit the exchange agent to register the transfer in the name of the person withdrawing the tender, and o specify the name in which such old notes are to be registered, if different from that of the person who tendered the old notes. We will deem any old notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn old notes by following one of the procedures described under "--Procedures for Tendering" above at any time on or prior to 5:00 p.m., Evansville time, on the expiration date. Fees and Expenses We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by facsimile, e-mail, telephone or in person by our officers and regular employees and those of our affiliates. In addition, we have retained City Securities, Inc. in connection with the exchange offer and will make payments to City Securities, Inc. in connection with soliciting the beneficial owners of the old notes for which it is the record holder. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the old notes and in handling or forwarding tenders for exchange. We will pay the cash expenses to be incurred in connection with the exchange offer. They include: o SEC registration fees for the new notes, o fees and expenses of City Securities, Inc., o accounting and legal fees, o printing costs, and o related fees and expenses. Transfer Taxes If you tender your old notes for exchange, you will not be required to pay any transfer taxes. We will pay all transfer taxes, if any, applicable to the exchange of the old notes in the exchange offer. The tendering holder will, however, be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if: o certificates representing the new notes or the old notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the old notes tendered, o tendered old notes are registered in the name of any person other than the person signing the letter of transmittal, or o a transfer tax is imposed for any reason other than the exchange of the old notes for the new notes in the exchange offer. If satisfactory evidence of payment of any transfer taxes payable by a tendering holder is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to that tendering holder. The exchange agent will retain possession of the 21 new notes with a face amount equal to the amount of the transfer taxes due until it receives payment of the taxes. The Exchange Agent We will serve as the exchange agent for the exchange offer. Please direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal to the exchange agent at the phone number listed below. You should send the letter of transmittal and any other required documents to the exchange agent as follows: By Hand, Courier or Mail (Registered or Certified): Fidelity Federal Bancorp Attn.: Deb Fritz 18 N.W. Fourth Street Evansville, Indiana 47708 By Facsimile Transmission (Only Eligible Institutions as defined in Instruction 4 of the letter of transmittal): (812) 429-0574 Deb Fritz Confirm by Telephone: (812) 424-0921 Deb Fritz Use of Proceeds We will not receive any cash proceeds from the issuance of the new notes. In consideration for issuing the new notes, we will receive in exchange a like principal amount of the old notes. The old notes surrendered in exchange for the new notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the new notes will not result in any change in our capitalization. Accounting Treatment We will amortize our expenses of the exchange offer over the term of the new notes under generally accepted accounting principles. Other Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your decision on what action to take. In the future, we may seek to acquire untendered old notes in privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to acquire any old notes that are not tendered in the exchange offer. 22 DESCRIPTION OF THE NEW NOTES The following description is a summary of the material provisions of the new notes. This summary is not complete and is qualified in its entirety by reference to the new notes, a form of which we have filed with this registration statement. Distinction Between the Old Notes and the New Notes The general terms of the new notes are substantially similar to those of the old notes, except for: o an extension of the maturity from April 30, 2001 to April 30, 2004, o an increase in the interest rate from 9-1/8% to 12%, and o different redemption terms, as described below. Principal, Interest Rate and Maturity The new notes will mature on April 30, 2004. The new notes are initially limited to $1,000,000 aggregate principal amount, subject to an increase of up to $1,500,000 aggregate principal amount. However, we may issue additional notes from time to time, without the consent of the holders of the new notes. Interest on the new notes will: o accrue at the rate of 12% per year, o be payable semiannually, in arrears, on each May 1 and November 1, with the initial interest payment payable on November 1, 2001, and o be payable to the person in whose name the new notes are registered at the close of business on April 15 and October 15 preceding the applicable interest payment date, which we refer to as "regular record dates." Optional Redemption We may redeem the new notes, in whole or in part, at our option at any time upon not less than 15 and not more than 30 days' notice, on any date after May 1, 2001 and prior to maturity, at face value plus accrued and unpaid interest. If we redeem the new notes, in whole or in part, between May 1, 2001 and April 30, 2002, we also will pay a redemption premium equal to 1% of the principal amount of the new notes that have been redeemed. If we redeem the new notes in part, we will select the new notes for redemption on a pro rata basis, by lot or by such other method as we in our sole discretion deem fair and appropriate. We will only redeem the new notes in multiples of $1,000 in original principal amount. A new note in principal amount equal to the unredeemed portion of the original note will be issued upon the cancellation of the original note. Ranking of the New Notes The new notes rank pari passu with the old notes and are unsecured obligations of Fidelity Federal and fully subordinated to all other indebtedness of Fidelity Federal, including any future issues of subordinated notes or 23 debentures of Fidelity Federal but not to common stock or preferred stock of Fidelity Federal. We presently have the following unsecured debt as of September 30, 2000: Junior subordinated notes, 9.125%, interest paid $1,476,000 semi-annually, due April 2001, unsecured Junior subordinated notes, 9.25%, interest paid 1,494,000 semi-annually, due January 2002, unsecured Senior subordinated notes, 10.00%, interest paid 7,000,000 --------- semi-annually, due January 2005, unsecured Total unsecured debt $9,970,000 ========== The new notes are not directly subordinated to indebtedness of United Fidelity Bank or its subsidiaries. However, there are no contractual limitations on the amount of indebtedness which may be incurred by United Fidelity Bank or its subsidiaries which could impact the ability of United Fidelity Bank to pay dividends to us, from which we would make payments on the new notes. Sinking Fund We are not obligated to make mandatory redemption or sinking fund payments with respect to the new notes. Payment We will pay interest on the new notes to the persons in whose names the new notes are registered at the close of business on the regular record date for each interest payment. However, we will pay the interest payable on the new notes at their stated maturity to the persons to whom we pay the principal amount of the new notes. The initial payment of interest on the new notes will be payable on November 1, 2001. We will pay principal, premium, if any, and interest on the new notes at the offices of Fidelity Federal or at any other office maintained by us for such purposes. We may pay interest by cash or by check mailed to the address of the person entitled to the payment as it appears in the security register. Non-Payment If we fail to pay the interest on, or principal of the new notes when due, the principal and interest of the new notes may be declared due and payable by the holder and payment may be enforced in accordance with Indiana law. Waiver No holder of any new note and no director, officer, employee, agent, manager, partner or other interest holder of Fidelity Federal shall have any liability for any obligation of Fidelity Federal under the new notes or for any claim based on, in respect of or by reason of such obligations. Each holder, by accepting a new note, waives and releases all such liability. Such waiver and release shall be part of the consideration for the issuance of the new notes. Notwithstanding the foregoing, this shall not be construed as a waiver or release of any claim under the federal securities laws. 24 Payment for Warrant Exercise The holders of the new notes, like the holders of the old notes, will be able to surrender the new notes at the face amount of their new notes surrendered, plus accrued interest, in payment of the exercise price of the warrants issued in connection with the 1994 rights offering. Form, Exchange and Transfer of the New Notes We will issue the new notes in registered form, without coupons. We will only issue the new notes in denominations of integral multiples of $1,000. Holders may present the new notes for exchange or for registration of transfer at our principal executive offices or at any other office or agency maintained by Fidelity Federal for such purpose. We will exchange or transfer the new notes if the new notes are duly endorsed by, or accompanied by a written instrument of transfer in a form satisfactory to us. We will not charge a service charge for any exchange or registration of transfer of the new notes. However, we may require payment of a sum sufficient to cover any tax or other governmental charge payable for the registration of transfer or exchange. Title We may treat the person in whose name a new note is registered on the applicable record date as the owner of the new note for all purposes, whether or not it is overdue. 25 FEDERAL INCOME TAX CONSEQUENCES This summary discusses the material United States federal income tax consequences to the noteholders of the exchange offer. It is not intended to be a complete analysis or description of all potential federal income tax consequences or any other tax consequences to the noteholders or any particular noteholder. This summary is not intended as a substitute for careful tax planning or for an individual analysis of the tax consequences of the exchange offer to each noteholder. Each noteholder should consult his or her own tax advisor as to the specific tax consequences of the exchange offer, such as the effects of federal, state, local and foreign income tax laws, to him or her. The following conclusions assume that each noteholder is a citizen or resident of the United States for federal income tax purposes and holds the notes as capital assets. It also assumes that the holder of the note paid a purchase price equivalent to the original principal amount of the note. This discussion does not address the federal income tax consequences relevant to particular categories of noteholders subject to special treatment under the federal income tax laws, such as broker/dealers, financial institutions, life insurance companies, tax exempt entities and foreign individuals and entities. In addition, it does not describe any tax consequences arising out of the laws of any state, locality or foreign jurisdiction. This discussion is based upon the Internal Revenue Code of 1986, as amended, temporary and final Treasury Regulations promulgated under the Code, proposed Treasury Regulations, published rulings, notices and other administrative pronouncements from the Internal Revenue Service and judicial decisions now in effect. All of these authorities are subject to change at any time by legislative, judicial or administrative action so as to result in federal income tax consequences different from those discussed below. Any such changes may be retroactively applied in a manner that could adversely affect a noteholder. Therefore, no assurance can be given with respect to any particular federal income tax consequences. No ruling has been requested from the Internal Revenue Service concerning any aspect of the exchange offer. Because the new notes to be received in exchange for the old notes likely will not qualify as "securities" for federal income tax purposes, the exchange will likely be a taxable event for United States federal income tax purposes. However, since the principal amount of the new notes to be received in exchange is the same as the principal amount of the old notes given up, there will be no income tax gain or loss as a result of the exchange. As noted above, this assumes that the holder of the old note paid a purchase price equivalent to the original principal amount of the old note. The holding period for determining capital gains or losses for the new notes received in the exchange will begin on the day after the exchange. LEGAL MATTERS The validity of the new notes and the federal income tax consequences of the exchange will be passed upon for us by Krieg DeVault Alexander & Capehart, LLP, Indianapolis, Indiana. EXPERTS Olive LLP, independent auditors, have audited our financial statements included in our annual report on Form 10-K for the six months ended December 31, 1999, as amended by Form 10-K/A, 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. 26 $1,476,000 FIDELITY FEDERAL BANCORP OFFER TO EXCHANGE ALL OUTSTANDING 9-1/8% JUNIOR SUBORDINATED NOTES DUE 2001 FOR 12% JUNIOR SUBORDINATED NOTES DUE 2004 ------------------- PROSPECTUS _______________, 2001 ------------------- Until ____________, 2001, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. 27 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS Item 20. Indemnification of Directors and Officers Chapter 23-1-37 of the Indiana Business Corporation Law (the "IBCL") gives corporations the power to indemnify officers and directors under certain circumstances. The Articles of Incorporation of Fidelity Federal Bancorp (the "Registrant") provide that the Registrant will indemnify any person who is or was a director or officer of the Registrant or of any other corporation for which such director or officer is or was serving in any capacity at the request of the Registrant 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 Registrant 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 Registrant 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 Registrant, 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 Registrant which are incorporated by reference into this Registration Statement as Exhibit 3.1. The Registrant also has policies insuring its officers and directors against certain liabilities for action taken in such capacities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). See "Item 22. Undertakings" for a description of the SEC's position regarding the indemnification of directors and officers for liabilities arising under the Securities Act. Item 21. Exhibits and Financial Statement Schedules (a) Exhibits The following instruments and documents are included as exhibits to this registration statement. Exhibits incorporated by reference are indicated below. II-1 INDEX TO EXHIBITS
Report or SEC File or Exhibit Registration Registration Exhibit Number Document Description Statement Statement Reference ------ -------------------- --------- --------- --------- *3.1 Articles of Incorporation Annual Report on 0-22880 3(a) Form 10-K for the fiscal year ended June 30, 1995 * 3.2 Articles of Amendment of the Registration 333-53668 4.1 Articles of Incorporation Statement on Form S-3 * 3.3 By-Laws of the Registrant Registration 333-53668 4.2 Statement on Form S-3 ** 4.1 Form of the Registrant's 9-1/8% Note due 2001 ** 4.2 Form of the Registrant's 12% Junior Subordinated Note due 2004 ** 5.1 Opinion of Krieg DeVault Alexander & Capehart, LLP ** 5.2 Tax Opinion of Krieg DeVault Alexander & Capehart, LLP * 10.1 1993 Director's Stock Option Plan Annual Report on 0-22880 10(d) Form 10-K for the fiscal year ended June 30, 1995 * 10.2 1995 Key Employee's Stock Annual Report on 0-22880 10(c) Option Plan Form 10-K for the fiscal year ended June 30, 1996 * 10.3 Severance Agreement between the Annual Report on 0-22880 10(c) Registrant and M. Brian Davis Form 10-K for the fiscal year ended June 30, 1998 * 10.4 Severance Agreement between the Annual Report on 0-22880 10(d) Registrant and Donald R. Neel Form 10-K for the fiscal year ended June 30, 1998 ** 12.1 Statement Regarding Computation of Ratios II-2 Report or SEC File or * 21.1 Subsidiaries of the Registrant Annual Report on 0-22880 21 Form 10-K for the fiscal year ended December 31, 1999 ** 23.1 Consent of Olive LLP ** 23.2 Consent of Krieg DeVault Alexander & Capehart, LLP (contained in Exhibit 5.1) ** 24.1 Power of Attorney (included on the signature page of the registration statement) ** 99.1 Form of Letter of Transmittal ** 99.2 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees ** 99.3 Form of Letter to Clients - ----------------------------
* Incorporated herein by reference as indicated. ** Filed herewith. II-3 (b) Financial Statement Schedules Not applicable. Item 22. Undertakings (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment 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. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) 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. II-4 (c) Insofar as indemnification for liabilities arising under the Securities Act 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 Securities 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 Securities Act and will be governed by the final adjudication of such issue. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, the State of Indiana, on March 5, 2001. FIDELITY FEDERAL BANCORP By: /s/ Donald R. Neel --------------------------------------- Donald R. Neel Executive Vice President, Treasurer 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-4 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 March 5, 2001. Name Title ---- ----- /s/ Bruce A. Cordingley Director, Chair of the Executive - ----------------------------------- Committee (Principal Executive Officer) Bruce A. Cordingley /s/ Donald R. Neel Director, Executive Vice President, - ----------------------------------- Treasurer and Chief Financial Officer Donald R. Neel (Principal Financial and Accounting Officer) /s/ Curt J. Angermeier * Director - ----------------------------------- Curt J. Angermeier /s/ William R. Baugh * Director - ----------------------------------- William R. Baugh /s/ Jack Cunningham * Director and Chairman of the Board - ----------------------------------- Jack Cunningham /s/ M. Brian Davis * Director - ----------------------------------- M. Brian Davis Name Title ---- ----- /s/ Gerald K. Pedigo * Director - ----------------------------------- Gerald K. Pedigo /s/ Barry A. Schnakenburg * Director - ----------------------------------- Barry A. Schnakenburg /s/ Phillip J. Stoffregen * Director - ----------------------------------- Phillip J. Stoffregen * By: /s/ Donald R. Neel ------------------------------ Donald R. Neel Attorney-in-Fact INDEX TO EXHIBITS
Report or SEC File or Exhibit Registration Registration Exhibit Number Document Description Statement Statement Reference - ------ -------------------- --------- --------- --------- *3.1 Articles of Incorporation Annual Report on 0-22880 3(a) Form 10-K for the fiscal year ended June 30, 1995 * 3.2 Articles of Amendment of the Registration 333-53668 4.1 Articles of Incorporation Statement on Form S-3 * 3.3 By-Laws of the Registrant Registration 333-53668 4.2 Statement on Form S-3 ** 4.1 Form of the Registrant's 9-1/8% Note due 2001 ** 4.2 Form of the Registrant's 12% Junior Subordinated Note due 2004 ** 5.1 Opinion of Krieg DeVault Alexander & Capehart, LLP ** 5.2 Tax Opinion of Krieg DeVault Alexander & Capehart, LLP * 10.1 1993 Director's Stock Option Plan Annual Report on 0-22880 10(d) Form 10-K for the fiscal year ended June 30, 1995 * 10.2 1995 Key Employee's Stock Annual Report on 0-22880 10(c) Option Plan Form 10-K for the fiscal year ended June 30, 1996 * 10.3 Severance Agreement between the Annual Report on 0-22880 10(c) Registrant and M. Brian Davis Form 10-K for the fiscal year ended June 30, 1998 Report or SEC File or * 10.4 Severance Agreement between the Annual Report on 0-22880 10(d) Registrant and Donald R. Neel Form 10-K for the fiscal year ended June 30, 1998 ** 12.1 Statement Regarding Computation of Ratios * 21.1 Subsidiaries of the Registrant Annual Report on 0-22880 21 Form 10-K for the fiscal year ended December 31, 1999 ** 23.1 Consent of Olive LLP ** 23.2 Consent of Krieg DeVault Alexander & Capehart, LLP (contained in Exhibit 5.1) ** 24.1 Power of Attorney (included on the signature page of the registration statement) ** 99.1 Form of Letter of Transmittal ** 99.2 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees ** 99.3 Form of Letter to Clients - ----------------------------
* Incorporated herein by reference as indicated. ** Filed herewith. EX-4.1 2 0002.txt Exhibit 4.1 Registered Number CUSIP: 315921AA4 R-_____________ Registered Amount $_______________ Fidelity Federal Bancorp 9 1/8% Junior Subordinated Note Due 2001 Fidelity Federal Bancorp, an Indiana corporation (herein called the "Company", which term includes any successor corporation), for value received, hereby promises to pay to ____________________________________ or registered assigns, the principal sum of $____________________ Dollars on April 30, 2001, and to pay interest thereon from May __________, 1994 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on May 1 and November 1 in each year, commencing November 1, 1994, at the rate of 9 1/8% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be on April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Payment of the principal of (and premium, if any) and interest on this Security will be made at the offices of Fidelity Federal Bancorp, 18 N.W. Fourth St., Evansville, Indiana 47708-1347 (the "Registrar and Paying Agent"), and at any other office or agency maintained by the Company for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. REGISTRAR'S CERTIFICATE FIDELITY FEDERAL BANCORP OF AUTHENTICATION This is one of those Notes authorized By:_____________________________ by the Company as its 9 1/8% Junior Subordinated Notes due 2001 And:____________________________ FIDELITY FEDERAL BANCORP By:_____________________________________ Authorized Representative This Note is one of a duly authorized issuance by the Company designated as its 9 1/8% Junior Subordinated Notes due 2001 (herein called the "Notes"), limited in aggregate principal amount to $1,000,000 (subject to an increase of up to $1,500,000 aggregate principal amount). The Notes are not redeemable at the option of the Company, in whole or in part, prior to May 1, 1994. The Notes are redeemable, at the Company's option, as a whole or from time to time in part, upon not less than 15 nor more than 30 days' notice mailed to each Holder of Notes to be redeemed at his address appearing in the Note Register, on any date on or after May 1, 1994 and prior to maturity, at the following Redemption Prices (expressed as percentages of the principal amount), together in the case of any such redemption, with accrued but unpaid interest to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the Interest Payment Date that is on or prior to the Redemption Date): Prepayment Date Premium --------------- ------- On and after May 1, 1994 103% On and after May 1, 1995 102% On and after May 1, 1997 101% On and after May 1, 1999 100% In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. The indebtedness evidenced by this Note is an unsecured obligation of the Company and is fully subordinated to all other indebtedness and obligations of the Company, including any indebtedness or obligations issued or incurred by the Company in the future. If the Company shall fail to pay the interest on, or principal of this Note when due, the principal of and interest on this Note may be declared due and payable by the Holder thereof and payment may be enforced in accordance with applicable Indiana law. No Holder of any Note and no director, officer, employee, agent, manager, partner or other interest holder of the Company shall have any liability for any obligation of the Company under the Notes or for any claim based on, in respect of or by reason of such obligations. Each Holder, by accepting a Note, waives and releases all such liability. Such waiver and release shall be part of the consideration for the issuance of the Notes. Notwithstanding the foregoing, nothing in this provision shall be construed as a waiver or release of any claims under the Federal securities laws. The transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the offices of Fidelity Federal Bancorp, 18 N.W. Fourth St., Evansville, Indiana 47708-1347, or at any other office or agency maintained by the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one of more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only in registered form without coupons in denomination of $1,000 and any integral multiple thereof and are exchangeable for a like aggregate principal amount of Notes of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. In the event any Note is mutilated, lost, stolen or destroyed, the Company may cause a new Note to be authenticated of like date, maturity and denomination as that mutilated, lost, stolen, or destroyed, provided that, in the case of any mutilated Note, such mutilated Note shall first be surrendered to the Company, and in the case of any lost, stolen or destroyed Note, there shall be first furnished to the Company evidence of such loss, theft or destruction satisfactory to the Company, together with indemnity satisfactory to it. In the event any such lost, stolen, or destroyed Note shall have matured, instead of issuing a duplicate Note the Company may, upon receiving indemnity satisfactory to it, pay the same without surrender thereof. The Company may charge the Holder of such Note with its reasonable fees and expenses in connection with the above. Prior to due presentment of this Note for registration of transfer, the Company and any agent of the Company may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM- as tenants in common TENANT- as tenants by the entireties JTTEN- as joint tenants with rights of survivorship and not as tenants in common UNIF TRANF MIN ACT- ____________________ Custodian ___________________ (Cust) (Minor) under Uniform Transfers to Minors Act _________________________________ (State) Additional abbreviations may also be used though not in the above list ---------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------ / / - -------------------------------------------------------------------------------- Please print or typewrite name and address including postal zip code of assignee - -------------------------------------------------------------------------------- the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney ---------------------------------------------------------- to transfer said Note on the books of the Company, with full power of substitution in the premises. Date: ------------------- - ---------------------------------- ------------------------------------ THE SIGNATURE(S) SHOULD BE GUARANTEED NOTICE: The signature to this BY AN ELIGIBLE GUARANTOR INSTITUTION, assignment must correspond with the (BANKS, STOCKBROKERS, SAVINGS AND LOAN name(s) as written upon the face of ASSOCIATIONS AND CREDIT UNIONS WITH the within instrument in every MEMBERSHIP IN AN APPROVED SIGNATURE particular, without alteration or GUARANTEE MEDALLION PROGRAM), PURSUANT enlargement or any damage whatever. TO S.E.C. RULE 17Ad-15. EX-4.2 3 0003.txt Exhibit 4.2 Registered Number CUSIP:__________ R- Registered Amount -------------- $ --------------- Fidelity Federal Bancorp 12% Junior Subordinated Note Due 2004 Fidelity Federal Bancorp, an Indiana corporation (herein called the "Company", which term includes any successor corporation), for value received, hereby promises to pay to ____________________________________ or registered assigns, the principal sum of $____________________ Dollars on April 30, 2004, and to pay interest thereon from May 1, 2001 or from the most recent date to which interest has been paid or duly provided for, semi-annually, in arrears, on May 1 and November 1 in each year, commencing November 1, 2001, at the rate of 12% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any interest payment date will be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the April 15 immediately preceding the May 1 interest payment dates or the October 15 immediately preceding the November 1 interest payment dates. Payment of the principal of, and premium, if any, and interest on this Note will be made at the offices of Fidelity Federal Bancorp, 18 N.W. Fourth St., Evansville, Indiana 47708, and at any other office or agency maintained by the Company for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. CERTIFICATE FIDELITY FEDERAL BANCORP OF AUTHENTICATION This is one of those Notes authorized By:______________________________ by the Company as its 12% Junior Subordinated Notes due 2004 And:_____________________________ FIDELITY FEDERAL BANCORP By:_____________________________________ Authorized Representative This Note is one of a duly authorized issuance by the Company designated as its 12% Junior Subordinated Notes due 2004 (herein called the "Notes"), limited in aggregate principal amount to $1,000,000 (subject to an increase of up to $1,500,000 aggregate principal amount). The Notes are redeemable at the option of the Company, in whole or in part, at any time upon not less than 15 and not more than 30 days' notice mailed to each Holder of Notes to be redeemed at his address appearing in the Note Register, on any date after May 1, 2001 and prior to maturity, at face value plus accrued and unpaid interest to the date of redemption. If Notes are redeemed, in whole or in part, between May 1, 2001 and April 30, 2002, the Company also will pay to the Holder thereof a redemption premium equal to one percent (1%) of the principal amount of the Note that has been redeemed. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. The indebtedness evidenced by this Note will rank pari passu with the Company's 9-1/8% Junior Subordinated Notes due 2001 and is an unsecured obligation of the Company and is fully subordinated to all other indebtedness and obligations of the Company, including any indebtedness or obligations issued or incurred by the Company in the future. If the Company shall fail to pay the interest on, or principal of this Note when due, the principal of and interest on this Note may be declared due and payable by the Holder thereof and payment may be enforced in accordance with applicable Indiana law. No Holder of any Note and no director, officer, employee, agent, manager, partner or other interest holder of the Company shall have any liability for any obligation of the Company under the Notes or for any claim based on, in respect of or by reason of such obligations. Each Holder, by accepting a Note, waives and releases all such liability. Such waiver and release shall be part of the consideration for the issuance of the Notes. Notwithstanding the foregoing, nothing in this provision shall be construed as a waiver or release of any claims under the Federal securities laws. The transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the offices of Fidelity Federal Bancorp, 18 NW Fourth St., Evansville, Indiana 47708, or at any other office or agency maintained by the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one of more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only in registered form without coupons in denomination of $1,000 and any integral multiple thereof and are exchangeable for a like aggregate principal amount of Notes of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. In the event any Note is mutilated, lost, stolen or destroyed, the Company may cause a new Note to be authenticated of like date, maturity and denomination as that mutilated, lost, stolen, or destroyed, provided that, in the case of any mutilated Note, such mutilated Note shall first be surrendered to the Company, and in the case of any lost, stolen or destroyed Note, there shall be first furnished to the Company evidence of such loss, theft or destruction satisfactory to the Company, together with indemnity satisfactory to it. In the event any such lost, stolen, or destroyed Note shall have matured, instead of issuing a duplicate Note the Company may, upon receiving indemnity satisfactory to it, pay the same without surrender thereof. The Company may charge the Holder of such Note with its reasonable fees and expenses in connection with the above. Prior to due presentment of this Note for registration of transfer, the Company and any agent of the Company may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM- as tenants in common TENANT- as tenants by the entireties JTTEN- as joint tenants with rights of survivorship and not as tenants in common UNIF TRANF MIN ACT- ____________________ Custodian ___________________ (Cust) (Minor) under Uniform Transfers to Minors Act_________________________________ (State) Additional abbreviations may also be used though not in the above list ---------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------------- / / - -------------------------------------------------------------------------------- Please print or typewrite name and address including postal zip code of assignee - -------------------------------------------------------------------------------- the within Note and all rights thereunder, hereby irrevocably constituting and appointing ___________________________________________________________ attorney to transfer said Note on the books of the Company, with full power of substitution in the premises. Date: ------------------- - ---------------------------------- -------------------------------- THE SIGNATURE(S) SHOULD BE NOTICE: The signature to this GUARANTEED BY AN ELIGIBLE assignment must correspond with GUARANTOR INSTITUTION, (BANKS, the name(s) as written upon the STOCKBROKERS, SAVINGS AND LOAN face of the within instrument in ASSOCIATIONS AND CREDIT UNIONS WITH face of the within instrument in MEMBERSHIP IN AN APPROVED SIGNATURE every particular, without GUARANTEE MEDALLION PROGRAM), alteration or enlargement or any PURSUANT TO S.E.C. RULE 17Ad-15. damage whatever. EX-5.1 4 0004.txt Exhibit 5.1 March 5, 2001 Fidelity Federal Bancorp 18 N.W. Fourth Street Evansville, Indiana 47708 Re: Offer to Exchange all Outstanding 9 1/8% Junior Subordinated Notes due 2001 for 12% Junior Subordinated Notes due 2004 (the "Exchange Offer") Ladies and Gentlemen: We have acted as counsel for Fidelity Federal Bancorp (the "Company"), in connection with the preparation and filing of a Registration Statement on Form S-4 (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), relating to the registration under the Act of $1,500,000 aggregate principal amount of the Company's 12% Junior Subordinated Notes due 2004 (the "New Notes") to be offered by the Company in exchange for a like principal amount of its issued and outstanding 9-1/8% Junior Subordinated Notes due 2001 (the "Old Notes"). The New Notes are to be offered to holders of the Old Notes pursuant to the Exchange Offer described in the Registration Statement and the Prospectus forming a part thereof. In rendering this opinion, we have reviewed and are familiar with the Company's Articles of Incorporation, as amended, and By-Laws and such other records, documents and information as we have in our judgment deemed relevant. We have also relied upon certificates of officers of the Company with respect to the accuracy of the material factual matters contained in such certificates. In making our examination, we have assumed that all signatures on documents examined by us are genuine, that all documents submitted to as originals are authentic and that all documents submitted to us as certified or photostatic copies conform with the originals of such documents. Based upon the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, it is our opinion that when (i) the Registration Statement has become effective under the Act and (ii) the New Notes have been duly authorized, issued and delivered in exchange for the Old Notes pursuant to, and in accordance with the terms of the Exchange Offer as contemplated in the Registration Statement, the New Notes will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as limited by applicable bankruptcy, insolvency, Fidelity Federal Bancorp March 5, 2001 Page 2 reorganization, moratorium, liquidation, readjustment of debt or similar laws relating to or affecting creditors' rights generally and subject to general principles of public policy and equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 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 limited to the federal laws of the United States of America and the laws of the State of Indiana and is addressed to you and is solely for your use in connection with the Registration Statement and the Exchange Offer contemplated therein. 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 Matters". In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the Commission promulgated thereunder. Very truly yours, /s/ Krieg DeVault Alexander & Capehart, LLP KRIEG DEVAULT ALEXANDER & CAPEHART, LLP EX-5.2 5 0005.txt EXHIBIT 5.2 March 5, 2001 Fidelity Federal Bancorp 18 N.W. Fourth Street Evansville, Indiana 47708 Re: Offer to Exchange all Outstanding 9 1/8% Junior Subordinated Notes due 2001for 12% Junior Subordinated Notes due 2004 (the "Exchange Offer") We have acted as tax counsel to Fidelity Federal Bancorp, an Indiana corporation (the "Company"), in connection with the Exchange Offer to holders of all outstanding 9-1/8% Junior Subordinated Notes due 2001. We have advised the Company with respect to certain federal income tax consequences of the proposed Exchange Offer. This advice relating to the Exchange Offer is summarized under the heading "FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus, which is a part of the Registration Statement on Form S-4 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), for the registration of the Exchange Offer under the Act. Such description does not purport to discuss all possible federal, state, local or foreign tax consequences of the proposed Exchange Offer, but with respect to those tax consequences that are discussed, in our opinion, the description is accurate in all material respects. We hereby consent to the use of our name under the caption "LEGAL MATTERS" in the Prospectus and the Registration Statement. In giving this consent, we do not admit that we are "experts" within the meaning of Section 11 of the Act or that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Krieg DeVault Alexander & Capehart, LLP KRIEG DEVAULT ALEXANDER & CAPEHART, LLP EX-12.1 6 0006.txt Exhibit 12.1 RATIO OF EARNINGS TO FIXED CHARGES
September 30, December 31, June 30, June 30, June 30, June 30, June 30, 2000 1999 1999 1998 1997 1996 1995 Earnings to Fixed 0.60 0.12 1.03 (0.03) 0.99 1.33 1.45 Charges Income before $(2,051) $(3,741) $287 $(11,988) $(142) $5,121 $4,576 taxes Fixed Charges: Other Interest 1,499 1,117 2,263 2,801 3,831 4,975 3,837 Deposit Interest 4,726 3,151 7,467 8,785 10,000 10,550 6,426 ------------- ------------- ------------ ------------ ------------ ------------- ------------- $6,225 $4,268 $9,730 $11,586 $13,831 $15,525 $10,263 ============= ============= ============ ============ ============ ============= =============
EX-23.1 7 0007.txt Exhibit 23.1 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference in the Registration Statement of Fidelity Federal Bancorp on Form S-4 of our report dated March 27, 2000, on the financial statements of Fidelity Federal Bancorp appearing in Fidelity Federal Bancorp's Form 10-K/A for the six months ended December 31, 1999 and to the reference to us under the heading "Experts" in such Registration Statement. /s/ Olive LLP Evansville, Indiana March 1, 2001 EX-99.1 8 0008.txt EXHIBIT 99.1 FIDELITY FEDERAL BANCORP LETTER OF TRANSMITTAL FOR OFFER TO EXCHANGE ALL OUTSTANDING 9-1/8% JUNIOR SUBORDINATED NOTES 2001 FOR 12% JUNIOR SUBORDINATED NOTES DUE 2004 The Exchange Offer will expire at 5:00 p.m., Evansville time, on _________ __, 2001, unless extended (the "Expiration Date"). Notes tendered in such Exchange Offer may be withdrawn at any time prior to 5:00 p.m., Evansville time, on the Expiration Date. DELIVER TO THE EXCHANGE AGENT: FIDELITY FEDERAL BANCORP By Hand, Courier or Mail By Facsimile Transmission (Only (Registered or Certified Mail Eligible Institutions as defined in Recommended): Instruction 4 herein): Fidelity Federal Bancorp (812) 429-0574 18 N.W. Fourth Street Attn.: Deb Fritz Evansville, Indiana 47708 Confirm by Telephone: (812) 424-0921 Deb Fritz DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED. 1 SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE LETTER OF TRANSMITTAL, ACCOMPANYING ANNEXES AND INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby acknowledges receipt and review of the prospectus dated _________ __, 2001 of Fidelity Federal Bancorp (the "Company") and this letter of transmittal, including the instructions and annexes attached hereto. These two documents together constitute the Company's offer to exchange its 12% Junior Subordinated Notes due 2004 ( the "New Notes") for a like principal amount of its issued and outstanding 9-1/8% Junior Subordinated Notes due 2001 ( the "Old Notes") (the "Exchange Offer"). The Company reserves the right, at any time or from time to time, to extend the period of time during which the Exchange Offer for the Old Notes is open, at its discretion, in which event the term "Expiration Date" shall mean the latest date to which such Exchange Offer is extended. The Company is acting as its own exchange agent (the "Exchange Agent") for the Exchange and shall make a public announcement of any extension thereof no later than 9:00 a.m., Evansville time, on the next business day after the previously scheduled Expiration Date. This letter of transmittal is to be used by a holder of the Old Notes if certificates of the Old Notes are to be forwarded herewith. Holders of the Old Notes whose Old Notes are not immediately available, or who are unable to deliver their Old Notes, this letter of transmittal and all other documents required hereby to the Exchange Agent on or prior to the Expiration Date for the Exchange Offer, should contact the Exchange Agent. The term "holder" with respect to the Exchange Offer for the Old Notes means any person in whose name such Old Notes are registered on the books of the Company or any person who holds such Old Notes and has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this letter of transmittal to indicate the action the undersigned desires to take with respect to such Exchange Offer. Holders who wish to tender their Old Notes must complete this letter of transmittal in its entirety, including the applicable annexes. Questions and requests for assistance or for additional copies of the prospectus and this letter of transmittal may be directed to the Exchange Agent. 2 Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company for exchange the principal amount of the Old Notes indicated below. Subject to and effective upon the acceptance for exchange of the principal amount of the Old Notes tendered in accordance with this letter of transmittal, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes tendered for exchange hereby.
Name(s) and Address(es) of Registered Holder(s) Exactly as Name(s) Aggregate Principal Principal Appear(s) on the Old Notes Registered Amount Represented by Amount (Please fill in, if blank) Number(s) Note(s) Tendered*
* Unless otherwise indicated, any tendering holder of the Old Notes will be deemed to have tendered the entire aggregate principal amount represented by such Old Notes. All tenders must be in integral multiples of $1,000. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent, the true and lawful agent and attorney-in-fact for the undersigned with respect to the tendered Old Notes with full power of substitution to (i) deliver such Old Notes to the Company and deliver all accompanying evidences of transfer authenticity, and (ii) present such Old Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Old Notes tendered hereby and to acquire the New Notes issuable upon the exchange of such tendered Old Notes, and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are accepted for exchange by the Company. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of the New Notes. If the undersigned is a broker-dealer that will receive the New Notes for its own account in exchange for the Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it 3 is an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). The undersigned acknowledges that if the undersigned is tendering the Old Notes in the Exchange Offer with the intention of participating in any manner in a distribution of the New Notes (i) in the absence of an exemption therefrom, the undersigned must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes, in which case the registration statement must contain the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the SEC, and (ii) failure to comply with such requirements in such instance could result in the undersigned incurring liability under the Securities Act for which the undersigned is not indemnified by the Company. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes tendered hereby. For purposes of the Exchange Offer, the Company shall be deemed to have accepted for exchange validly tendered Old Notes when, as and if the Company gives oral or written notice thereof to the Exchange Agent. Any tendered Old Notes that are not accepted for exchange pursuant to such Exchange Offer for any reason will be returned, without expense, to the undersigned as promptly as practicable after the Expiration Date for such Exchange Offer. All authority conferred or agreed to be conferred by this letter of transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this letter of transmittal shall be binding upon the undersigned's successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives. The undersigned acknowledges that the Company's acceptance of properly tendered Old Notes pursuant to the procedures described under the caption "The Exchange Offer--Procedures for Tendering" in the prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The Exchange Offer is subject to certain conditions set forth in the prospectus under the caption "The Exchange Offer--Conditions to the Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), the Company may not be required to exchange any of the Old Notes tendered hereby. Unless otherwise indicated under "Annex A/Special Issuance Instructions," please issue the New Notes issued in exchange for the Old Notes accepted for exchange, and return any Old Notes not tendered or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Annex B/Special Delivery Instructions," please mail or deliver the New Notes issued in exchange for the Old Notes accepted for exchange and any Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Annex A/Special Issuance Instructions" and "Annex B/Special Delivery Instructions" are completed, please issue the New 4 Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any Old Notes not tendered or not exchanged to, the person(s) (or account(s)) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered for exchange. * * * * * * 5 SIGNATURES - ------------------------------ ----------------------------------- Signature Signature - ------------------------------ ----------------------------------- Printed Name Printed Name - ----------------------------- ----------------------------------- Date Date MEDALLION SIGNATURE GUARANTEE (If Required by Instruction 4) Certain signatures must be guaranteed by an Eligible Institution. Signature(s) Guaranteed by an Eligible Institution: - ------------------------------------------------------------------------------ (Authorized Signature) - ------------------------------------------------------------------------------ (Title) - ------------------------------------------------------------------------------ (Name of Firm) - ------------------------------------------------------------------------------ (Address, Include Zip Code) - ------------------------------------------------------------------------------ (Area Code and Telephone Number) Dated ________________, 2001 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. Delivery of this Letter of Transmittal and the Old Notes, as well as a properly completed and duly executed copy of this letter of transmittal or facsimile hereof, and any other documents required by this letter of transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., Evansville time, on the Expiration Date for the Exchange Offer. THE METHOD OF DELIVERY OF THE TENDERED OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR THE OLD NOTES SHOULD BE SENT TO THE COMPANY. 2. Tender by Holder. Only a holder of the Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial holder of the Old Notes who is not the registered holder and who wishes to tender should arrange with the registered holder to execute and deliver this letter of transmittal on his behalf or must, prior to completing and executing this letter of transmittal and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such holder's name or obtain a properly completed bond power from the registered holder. 3. Partial Tenders. Tenders of the Old Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Old Notes is tendered, the tendering holder should fill in the principal amount tendered in the fourth column of the box entitled "Description of the Old Notes Tendered" above. The entire principal amount of the Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all of the Old Notes is not tendered, then the Old Notes for the principal amount of the Old Notes not tendered and the New Notes issued in exchange for any of the Old Notes accepted will be returned to the holder as promptly as practicable after the Old Notes are accepted for exchange. 4. Signatures on this Letter of Transmittal; Bond Powers and Endorsements; Medallion Guarantee of Signatures. If this letter of transmittal (or facsimile hereof) is signed by the record holder(s) of the Old Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change 7 whatsoever. If this letter of transmittal (or facsimile hereof) is signed by the registered holder(s) of the Old Notes listed and tendered hereby and the New Notes issued in exchange therefor are to be issued (or any untendered principal amount of the Old Notes is to be reissued) to the registered holder(s), the said holder(s) need not and should not endorse any tendered Old Notes, nor provide a separate bond power. In any other case, such holder(s) must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this letter of transmittal, with the signatures on the endorsement or bond power guaranteed by or through a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or a trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an "Eligible Institution"). If this letter of transmittal (or facsimile hereof) or any of the Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of their authority to act must be submitted with this letter of transmittal. No signature guarantee is required if (i) this letter of transmittal (or facsimile hereof) is signed by the registered holder(s) of the Old Notes tendered herein and the New Notes are to be issued directly to such registered holder(s) and neither the Annex entitled "Special Delivery Instructions" nor the Annex entitled "Special Registration Instructions" has been completed, or (ii) such Old Notes are tendered for the account of an Eligible Institution. In all other cases, all signatures on this letter of transmittal (or facsimile hereof) must be guaranteed by an Eligible Institution. 5. Special Issuance And Delivery Instructions. Tendering holders should indicate, on the applicable Annex or Annexes, the name and address to which the New Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this letter of transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address (or account number) of the person signing this letter of transmittal. 6. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the exchange of the Old Notes pursuant to the Exchange Offer. If, however, the New Notes or the Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of the Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this letter of transmittal, the amount of such transfer taxes will be billed directly to such 8 tendering holder and the Exchange Agent will retain possession of an amount of the New Notes with a face amount at least equal to the amount of such transfer taxes due by such tendering holder pending receipt by the Exchange Agent of the amount of such taxes. 7. Tax Identification Number. Federal income tax law requires that a holder of any Old Notes or the New Notes must provide the Company (as payor) with its correct taxpayer identification number ("TIN"), which, in the case of a holder who is an individual is his or her social security number. If the Company is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue Service and backup withholding of 31% on interest payments on the New Notes. To prevent backup withholding, each tendering holder must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), and that (i) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the New Notes will be registered in more than one name or will not be in the name of the actual owner, consult the instructions on Internal Revenue Service Form W-9, which may be obtained from the Exchange Agent, for information on which TIN to report. Certain foreign individuals and entities will not be subject to backup withholding or information reporting if they submit a Form W-8, signed under penalties of perjury, attesting to their foreign status. A Form W-8 can be obtained from the Exchange Agent. If such holder does not have a TIN, such holder should consult the instructions on Form W-9 concerning applying for a TIN, check the box in Part 3 of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and date the form and the Certificate of Awaiting Taxpayer Identification Number. Checking this box, writing "applied for" on the form and signing such certificate means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. If such holder does not provide its TIN to the Company within 60 days, backup withholding will begin and continue until such holder furnishes its TIN to the Company. The Company reserves the right in its sole discretion to take whatever steps are necessary to comply with the Company's obligations regarding backup withholding. 8. Validity of Tenders. All questions as to the validity, form, eligibility, time of receipt, acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which might, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any conditions of the Exchange Offer or defects or irregularities of tenders as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including this letter of transmittal and the instructions hereto) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of the Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of the Old Notes nor shall any of them incur any liability for failure to give such notification. 9 9. Waiver of Conditions. The Company reserves the absolute right to waive, in whole or part, any of the conditions to the Exchange Offer set forth in the prospectus. 10. No Conditional Tender. No alternative, conditional, irregular or contingent tender of the Old Notes will be accepted. 11. Mutilated, Lost, Stolen or Destroyed Old Notes. Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. This letter of transmittal and related documents cannot be processed until the procedures for replacing lost, stolen or destroyed Old Notes have been followed. 12. Requests For Assistance or Additional Copies. Requests for assistance or for additional copies of the prospectus or this letter of transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover page of this letter of transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. 13. Withdrawal. Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the prospectus under the caption "The Exchange Offer - Withdrawal of Tenders." IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF (TOGETHER WITH THE OLD NOTES DELIVERED IN ORIGINAL CERTIFICATED FORM) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. FAILURE TO COMPLETE AND RETURN ANNEX C MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE NEW NOTES. 10 ANNEX A SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 4 and 5) To be completed ONLY if the Old Notes in a principal amount not tendered, or the New Notes issued in exchange for the Old Notes accepted for exchange, are to be issued in the name of someone other than the undersigned, issue the New Notes and/or the Old Notes to: Name: ------------------------------------------------------------------------- Address: ---------------------------------------------------------------------- - ------------------------------------------------------------------------------ (Include Zip Code) - ------------------------------------------------------------------------------ (Tax Identification or Social Security Number) IMPORTANT PLEASE SIGN HERE WHETHER OR NOT THE OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY (Complete Accompanying Substitute Form W-9 Attached as Annex C) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ (Signature(s) of Registered Holder(s) of the Old Notes) Dated ________________, 2001 (The above lines must be signed by the registered holder(s) of the Old Notes as your name(s) appear(s) on the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed bond power from the registered holder(s), a copy of which must be transmitted with this letter of transmittal. If the Old Notes to which this letter of transmittal relate are held of record by two or more joint holders, then all such holders must sign this letter of transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) unless waived by the Company, submit 11 evidence satisfactory to the Company of such person's authority so to act. See Instructions 4 and 5 regarding the completion of this annex.) Name(s): ---------------------------------------------------------------------- (Please Type or Print) Capacity: --------------------------------------------------------------------- Address: ---------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone Number: ----------------------------------------------- Taxpayer Identification or Social Security Number: ---------------------------- 12 ANNEX B SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4 and 5) To be completed ONLY if the Old Notes in a principal amount not tendered, or the New Notes issued in exchange for the Old Notes accepted for exchange, are to be mailed or delivered to someone other than the undersigned, or to the undersigned at an address other than that shown below the undersigned's signature. Mail or deliver the New Notes and/or the Old Notes to: Name: ------------------------------------------------------------------------- Address: ---------------------------------------------------------------------- - ------------------------------------------------------------------------------ (Include Zip Code) - ------------------------------------------------------------------------------ (Tax Identification or Social Security Number) IMPORTANT PLEASE SIGN HERE WHETHER OR NOT THE OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY (Complete Accompanying Substitute Form W-9 Attached as Annex C) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ (Signature(s) of Registered Holder(s) of the Old Notes) Dated ________________, 2001 (The above lines must be signed by the registered holder(s) of the Old Notes as your name(s) appear(s) on the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed bond power from the registered holder(s), a copy of which must be transmitted with this letter of transmittal. If the Old Notes to which this letter of transmittal relate are held of record by two or more joint holders, then all such holders must sign this letter of transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) unless waived by the Company, submit 13 evidence satisfactory to the Company of such person's authority so to act. See Instructions 4 and 5 regarding the completion of this annex.) Name(s): ---------------------------------------------------------------------- (Please Type or Print) Capacity: --------------------------------------------------------------------- Address: ---------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone Number: ----------------------------------------------- Taxpayer Identification or Social Security Number: ---------------------------- 14 ANNEX C SUBSTITUTE FORMW-9
PART 1 -- PLEASE PROVIDE _____________________ SUBSTITUTE YOUR TIN IN THE BOX AT SOCIAL SECURITY NUMBER FORM W-9 RIGHT AND CERTIFY BY OR SIGNING AND DATING _____________________ BELOW EMPLOYER IDENTIFICATION NUMBER __________________________ PART 2 -- CERTIFICATION -- PART 3 NAME UNDER PENALTIES OF __________________________ PERJURY, I CERTIFY THAT: ADDRESS (NUMBER AND AWAITING TIN [ ] STREET) (1)THE NUMBER SHOWN __________________________ ON THIS FORM IS MY CITY, STATE AND ZIP CODE CORRECT TAXPAYER IDENTIFICATION NUMBER (OR I HAVE CHECKED THE BOX IN PART 3 AND EXECUTED THE CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER PLEASE COMPLETE THE BELOW) CERTIFICATE OF AWAITING AND TAXPAYER IDENTIFICATION (2) I AM NOT SUBJECT TO NUMBER BELOW. BACKUP WITHHOLDING EITHER BECAUSE 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 BECAUSE THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO CITY, STATE AND ZIP CODE BACKUP WITHHOLDING. 15 DEPARTMENT OF THE CERTIFICATE INSTRUCTIONS -- YOU MUST CROSS OUT TREASURY ITEM (2) IN PART 2 ABOVE IF YOU HAVE BEEN NOTIFIED BY INTERNAL REVENUE SERVICE THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDER-REPORTING INTEREST PAYOR'S REQUEST FOR OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF TAXPAYER AFTER BEING NOTIFIED BY THE IRS THAT YOU ARE IDENTIFICATION NUMBER SUBJECT TO BACKUP WITHHOLDING YOU RECEIVED (TIN) ANOTHER NOTIFICATION FROM THE IRS STATING THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT ITEM (2). SIGNATURE_________________________________________ DATE _______________________________________, 2001
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE NEW NOTES. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification number has not been issued to me, and either (i) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration office or (ii) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number to the payor within 60 days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. ________________________________ _________________________, 2001 Signature Date 16 EX-99.2 9 0009.txt Exhibit 99.2 FIDELITY FEDERAL BANCORP EXCHANGE OFFER FOR ALL OUTSTANDING 9-1/8% JUNIOR SUBORDINATED NOTES DUE 2001 FOR 12% JUNIOR SUBORDINATED NOTES DUE 2004 LETTER TO NOTEHOLDERS WHO ARE BENEFICIAL OWNERS To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We are sending you this letter in connection with our offer to holders of our 9-1/8% Junior Subordinated Notes due 2001 (the "Old Notes") to exchange such Old Notes for our 12% Junior Subordinated Notes due 2004 (the "New Notes") (the "Exchange Offer"). We have described the New Notes and the Exchange Offer in the enclosed prospectus. We are asking you to contact your clients for whom you hold our Old Notes registered in your name or in the name of your nominee to obtain instructions with respect to the Exchange Offer. We have enclosed several copies of the following documents for you to use: 1. Prospectus dated __________________, 2001; 2. A Letter of Transmittal for your use and for the information of your clients, together with a Substitute Form W-9; 3. A printed form of letter that may be sent to your clients for whose accounts you hold the Old Notes registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; and 4. A return envelope addressed to the Company. We request that you act promptly. The Exchange Offer will expire at 5:00 p.m., Evansville time, on _____________________, 2001 unless extended by us. You may obtain additional copies of the enclosed materials and may request assistance or information from Deb Fritz, Fidelity Federal Bancorp, 18 N.W. Fourth Street, Evansville, Indiana 47708, Telephone: (812) 424-0921. Very truly yours, FIDELITY FEDERAL BANCORP You are not an agent of Fidelity Federal Bancorp, nor of any other person (including the Fidelity Federal Bancorp) who is deemed to be making or who is making offers of our New Notes in the Exchange Offer, and you are not authorized to make any statements on their or our behalf, except for statements made in the Prospectus. EX-99.3 10 0010.txt Exhibit 99.3 FIDELITY FEDERAL BANCORP LETTER TO CLIENTS FOR TENDER OF ALL OUTSTANDING 9-1/8% JUNIOR SUBORDINATED NOTES DUE 2001 IN EXCHANGE FOR 12% JUNIOR SUBORDINATED NOTES DUE 2004 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EVANSVILLE TIME, ON __________, 2001, UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN SUCH EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., EVANSVILLE TIME, ON THE EXPIRATION DATE. To Our Clients: We are enclosing with this letter a prospectus dated __________, 2001 of Fidelity Federal Bancorp (the "Company") and the related letter of transmittal. These two documents together constitute the Company's offer to exchange its 12% Junior Subordinated Notes due 2004 (the "New Notes"), the issuance of which has been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9-1/8% Junior Subordinated Notes due 2001(the "Old Notes") (the "Exchange Offer"). The Exchange Offer for the Old Notes is not conditioned upon any minimum aggregate principal amount of the Old Notes being tendered for exchange. We are the holder of record of the Old Notes held by us for your own account. A tender of such Old Notes can be made only by us as the record holder and pursuant to your instructions. The accompanying letter of transmittal is furnished to you for your information only and cannot be used by you to tender the Old Notes held by us for your account. We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account pursuant to the terms and conditions of the Exchange Offer. We also request that you confirm that we may on your behalf make the representations contained in the letter of transmittal. Pursuant to the letter of transmittal, each holder of the Old Notes will represent to the Company that (i) if such person is not a broker-dealer, it is not engaged in, and does not intend to engage in, a distribution of the New Notes, and (ii) if such person is a broker-dealer that will receive the New Notes for its own account in exchange for the Old Notes that were acquired as a result of market-making activities or other trading activities, it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, it will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Very truly yours, PLEASE RETURN YOUR BENEFICIAL OWNER ELECTION FORM TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE APPLICABLE EXPIRATION DATE. BENEFICIAL OWNER ELECTION FORM To Registered Holder: The undersigned hereby acknowledges receipt and review of the prospectus dated __________, 2001 of Fidelity Federal Bancorp (the "Company") and the related letter of transmittal. These two documents together constitute the Company's offer to exchange its 12% Junior Subordinated Notes due 2004 (the "New Notes"), the issuance of which has been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9-1/8% Junior Subordinated Notes due 2001 (the "Old Notes") (the "Exchange Offer"). This will instruct you, the registered holder, as to the action to be taken by you relating to the Exchange Offer for the Old Notes held by you for the account of the undersigned. The aggregate principal amount of the Old Notes held by you for the account of the undersigned is (FILL IN AMOUNT): AGGREGATE PRINCIPAL AMOUNT -------------------------- -------------------------- WITH RESPECT TO THE EXCHANGE OFFER, THE UNDERSIGNED HEREBY INSTRUCTS YOU (CHECK APPROPRIATE BOX): [ ] TO TENDER ALL OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED. [ ] TO TENDER THE FOLLOWING AMOUNT OF OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED:________________________________________ [ ] NOT TO TENDER ANY OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED. IF NO BOX IS CHECKED, A SIGNED AND RETURNED ELECTION FORM TO THE REGISTERED HOLDER WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED. If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations contained in the letter of transmittal that are to be made with respect to the undersigned as a beneficial owner, including, but not limited to, the representations that (i) if the undersigned is not a broker-dealer, it is not 2 engaged in, and does not intend to engage in, a distribution of the New Notes, and (ii) if the undersigned is a broker-dealer that will receive the New Notes for its own account in exchange for the Old Notes that were acquired as a result of market-making activities or other trading activities, it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. SIGN HERE Name of beneficial owner(s): __________________________________________________ Signature(s): _________________________________________________________________ Name(s) (please print): _______________________________________________________ Address: ______________________________________________________________________ Telephone Number:_____________________________________________________________ Taxpayer Identification or Social Security Number: ____________________________ Date: _________________________________________________________________________ 3 -----END PRIVACY-ENHANCED MESSAGE-----