Exhibit 10(d)

SEVERANCE AGREEMENT


         THIS SEVERANCE AGREEMENT is made as of the 1st day of December 1997,
between FIDELITY FEDERAL BANCORP (the "Company"), an Indiana corporation and
registered savings and loan holding company under Section 10(b)(1) of the Home
Owners' Loan Act, as amended, and the owner of 100% of the issued and
outstanding stock of United Fidelity Bank (the "Savings Bank"), and DONALD R.
NEEL, Executive Vice President, CFO & Treasurer of the Company and the Executive
Vice President and Chief Operating Officer of the Savings Bank (the
"Executive").

                              W I T N E S S E T H:


         WHEREAS, the Company desires to assure continuity of its and the
Savings Bank's management; to enable its and the Savings Bank's executives to
devote their full attention to management responsibilities and, when faced with
a possible Change in Control (as defined herein), to help the Board of Directors
assess options and advise as to the best interest of the Company and its
shareholders without being influenced by the uncertainties of their own
situations; and to demonstrate to executives the interests of the Company in
their well-being and fair treatment in the event of a Change in Control; and

         WHEREAS, to that end, the Company desires to assure Executive that he
will receive certain benefits following a Change in Control (as defined below)
of the Company, subject to the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the premises and of the mutual
promises and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Executive agree as follows:

         1.   Term. The term of this Agreement shall begin on December 1, 1997
(the "Effective Date") and shall end on December 1, 1999, unless terminated as
provided herein; provided, however, that such term shall be extended for an
additional year on each anniversary of the Effective Date if Company's Board of
Directors determines by resolution to extend this Agreement prior to such
anniversary and such extension is not objected to by Executive pursuant to
written notice to Company at least 90 days prior to such anniversary. If the
Term (as defined below) is not extended as provided herein, the term of this
Agreement shall end two years subsequent to the anniversary of the Effective
Date for which no extension was made (such term including any extension thereof
shall herein be referred to as the "Term"). Notwithstanding the foregoing, this
Agreement shall automatically terminate without notice at 11:59 p.m. on the day
immediately preceding the day the Executive attains seventy (70) years of age.


<PAGE>

         2.   Benefits Upon a Change in Control.
              ---------------------------------

              (a)    The Company shall provide Executive with the benefits set
forth in Section 2(c) hereof upon any termination of Executive's employment by
the Company and the Savings Bank during that two (2) year period following a
Change in Control (as defined below) which occurs during the term of this
Agreement for any reason except the following:

              (i)    Termination for cause. "Cause" shall be defined as (A)
              action by Executive involving personal dishonesty; incompetence;
              willful misconduct; breach of fiduciary duty involving personal
              profit; intentional failure to perform stated duties; willful
              violation of any law, rule or regulation (other than traffic
              violations or similar offenses) or final cease-and-desist order;
              or gross negligence which has or may reasonably be expected to
              have a material adverse effect on the financial condition or
              reputation of the Company or the Savings Bank, (B) termination of
              Executive pursuant to the requirement or direction of a federal or
              state regulatory agency having jurisdiction over the Company or
              the Savings Bank, (C) conviction of Executive of the commission of
              any criminal offense involving dishonesty or breach of trust, or
              (D) any material breach by Executive of a material term, condition
              or covenant of this Agreement. Notwithstanding the foregoing,
              Executive shall not be deemed to have been terminated for cause
              unless there shall have been delivered to Executive a copy of a
              notice of termination from the Company accompanied by a resolution
              duly adopted by a majority of the directors then in office,
              finding that in the good faith opinion of the directors, the
              termination of Executive's employment is for cause, specifying the
              particulars thereof in detail, and granting an opportunity,
              following a reasonable period of time, for Executive, together
              with his counsel, to be heard before the Board of Directors;

              (ii)   Disability of the Executive, as determined under the
              policies and procedures of the Company as in effect immediately
              prior to such Change in Control. Termination pursuant to this
              Section 2(a)(ii) shall not affect any rights which Executive may
              have under any disability policy or program of the Company;

              (iii)  Voluntary retirement of the Executive in accordance with
              policies and procedures of the Company in effect immediately prior
              to the Change in Control; or

              (iv)   Death of the Executive.


              (b)    The Company shall also provide Executive with the benefits
set forth in Section 2(c) if a Change in Control occurs during the term of this
Agreement and Executive terminates his employment during the two (2) year period
following the Change in Control after the happening of one or more of the
following events:

              (i)    Without the express written consent of Executive, the
              assignment of Executive to any duties materially inconsistent with
              his positions, duties, responsibilities or status with the Company
              immediately prior to the Change in Control or a substantial
              reduction of his duties or responsibilities;

              (ii)   A reduction by the Company in the compensation or benefits
              of Executive in effect immediately prior to the Change in Control,
              or any failure to include Executive in any bonus or benefit plans
              as may be offered by the Company from time to time;

              (iii)  A requirement that Executive be based anywhere other than
              Evansville, Indiana, except for required travel pertaining to the
              Company's business in accordance with the Company's management
              practices in effect prior to a Change in Control;

              (iv)   Any purported termination of Executive's employment for
              cause as defined in Section 2(a)(i) above or for disability
              without grounds;

                                       2
<PAGE>

              (v)    Any failure of the Company to obtain the assumption of the
              obligation to perform this Agreement by any successor as
              contemplated in Section 9(b) hereof; or

              (vi)   Any material breach by the Company of any of the provisions
              of this Agreement or any failure by the Company to carry out any
              of its obligations hereunder.

              (c)    Subject to the terms and conditions of this Agreement,
including Sections 2(a) and 2(b) above, the Company shall pay to Executive the
amounts provided in (i) and (ii) below at the time and in the manner provided,
less any withholding therefrom under applicable federal, state or local income
tax, other tax, or social security laws or similar statutes, and shall provide
to Executive the benefits provided in (iii) below upon termination of his
employment with the Company.

              (i)    Within thirty (30) days of his date of termination
              following a Change in Control (as defined below), the Company
              shall pay to Executive a lump sum single payment in readily
              available funds, equal to the aggregate of the following:


                     (A) Executive's base salary, at his then-effective annual
                     rate, through the date of termination of his employment;
                     plus

                     (B) An amount computed by the actuary for Financial
                     Institutions Retirement Fund (or any other retirement plan
                     in which the Company participates in the future instead of
                     the Financial Institutions Retirement Fund) (the "Plan")
                     based on the actuarial assumptions for the Plan and the
                     Plan's actuarial equivalency determination procedures as in
                     effect on the date of the Executive's termination of
                     employment with the COMPANY AND THE SAVINGS BANK, equal to
                     the present value of the Executive's Accrued Benefit as
                     defined in the Plan computed as if the Executive had
                     remained in the employ of the Company and the Savings Bank
                     for 2 years after his termination of employment and had
                     received the same compensation from the Company or the
                     Savings Bank for determining benefits under the Plan, as
                     defined in the Plan, being paid to him at the time of his
                     termination of employment for that 2 year period, and
                     assuming Credited Service as defined in the Plan continues
                     for that 2 year period, minus the present value of the
                     Executive's Accrued Benefit under the Plan as computed on
                     the date of termination.

              (ii)   The Company shall further pay to Executive an aggregate
              amount equal to 2.99 times the annualized base salary for the
              current year and 2.99 times the bonus paid to the Executive by the
              Company and/or the Savings Bank in the previous fiscal year prior
              to the date of termination. Payment of such amount shall be made
              in semi-monthly installments each equal to 1/48th of such amount
              payable in the same sequence of semi-monthly payments as followed
              by the Company or the Savings Bank for the payment of salary,
              beginning on the first salary payment date following the date of
              termination and continuing until paid in full, or at the option of
              Executive, in a lump sum no later than thirty (30) calendar days
              following the date of termination.

              (iii)  In addition, in lieu of the COBRA coverage otherwise
              available to the Executive, the Company shall maintain in full
              force and effect for the continued benefit of the Executive for
              three (3) years following the date of termination, all employee
              welfare plans and programs in which the Executive was entitled to
              participate immediately prior to the date of termination provided
              that the Executive's continued participation is possible under the
              general terms and provisions of such plans and programs. The
              Executive shall pay all costs associated with obtaining such
              benefits for the first 24 months following the date of
              termination, but will be promptly reimbursed for such costs by the
              Company.


              The Executive shall not be entitled to reimbursement for the costs
              of such coverage for the next 12 months. In the event that the
              Executive's participation in any such plan or program is or
              becomes barred or unavailable, the Company shall pay to the
              Executive the difference between

                                       3
<PAGE>

              the costs to the Executive pursuant to the terms of this Agreement
              had (he)(she) been able to continue participation in such plans
              and programs and the cost to the Executive of obtaining benefits
              substantially similar to those which the Executive would otherwise
              have been entitled to receive under such plans and programs from
              which his continued participation is or becomes barred or rendered
              unavailable. Executive's rights to such benefits shall be reduced
              to the extent that Executive is eligible for comparable benefits
              supplied by a subsequent employer.

              (iv)   The Company will permit Executive or his personal
              representative(s) or heirs, during a period of twelve months
              following Executive's termination of employment which results in
              the obligation of the Company to make payments pursuant to Section
              2(c) of this Agreement (but in no event later than the date upon
              which the subject stock option expires pursuant to its terms), to
              require Company, upon written request, to purchase all outstanding
              stock options previously granted to Executive under any stock
              option plan of Company then in effect whether or not such options
              are then exercisable or have terminated at a cash purchase price
              equal to the amount by which the aggregate "fair market value" of
              the shares subject to such options exceeds the aggregate option
              price for such shares. For purposes of this Agreement, the term
              "fair market value" shall mean the higher of (1) the average of
              the highest asked prices for Company shares in the over-the-
              counter market as reported on the NASDAQ system if the shares are
              traded on such system for the 30 business days preceding such
              termination, or (2) the average per share price actually paid for
              the most highly priced 1% of the Company shares acquired in
              connection with the Change of Control by any person or group
              acquiring such control.

Provided, however, if the aggregate present value of the above payments which
may be considered a "parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended ("Code") shall equal or exceed
three (3) times the Executive's base amount ("Base Amount"), as such term is
defined in Section 280G of the Code, then such aggregate payment shall be
reduced to the highest payment which is not three (3) times such Base Amount.
The sole purpose of the limitation imposed by this provision is to preclude the
amount payable pursuant to this Section 2(c) from being characterized as an
"excess parachute payment" under section 280G of the Code. It is the intention
of the parties that this subsection be interpreted and construed in a manner so
as to allow the greatest dollar payment to Executive without such payment being
classified as an "excess parachute payment," as such term is defined by section
280G of the Code.

The Company and Executive agree that any dispute under this Section 2(c) of the
application of the limitation of section 280G of the Code shall be resolved by
an opinion of competent counsel selected by and acceptable to the Company and
Executive. Counsel's fee for the opinion required herein shall be paid by the
Company.

              (d)    For the purposes of this Agreement, a "Change in Control"
shall mean (i) any merger, consolidation, share exchange, or other combination
or reorganization involving the Company (collectively referred herein as a
"Transaction"), irrespective of which party is the surviving entity, excluding
any Transaction (A) involving the Company solely in connection with the
acquisition by the Company of any subsidiary, (B) any Transaction involving the
Company in which the shareholders of the Company immediately prior to such
Transaction own at least a majority of the issued and outstanding voting
securities of the surviving entity immediately subsequent to such Transaction
and individuals who were directors of the Company immediately prior to such
Transaction constitute at least a majority of the Board of Directors of the
surviving entity immediately subsequent to such Transaction, or (C) any
Transaction involving any employee benefit plan sponsored by the Company or the
Savings Bank or any subsidiary thereof; (ii) any sale, lease, exchange,
transfer, or other disposition of all or any substantial part of the assets of
the Company; (iii) any acquisition by any person or entity, directly or
indirectly, of the beneficial ownership of 25% or more of the outstanding voting
stock of the Company, excluding acquisitions by individuals or entities who at
the date of this Agreement were either a Director of the Company or the
beneficial owner (either directly or indirectly) of 10% or more of the voting
securities of the Company; (iv) during any period of 2 consecutive years during
the term hereof, individuals who at the date of the Agreement constitute the
Board of Directors of the Company cease for any reason to constitute at least a
majority thereof, unless the election of each Director (who was not a Director
of the Company at the date of this Agreement) at the beginning of such
Director's term has been approved by Directors representing at least two-thirds
of the Directors then in office who were Directors on the date of this
Agreement.

                                       4
<PAGE>

              (e)    Any termination of Executive's employment for the reasons
set forth in Section 2(a) (except for reason of Executive's death) or by
Executive for the reasons set forth in Section 2(b) shall be communicated by
written "Notice of Termination" to the other party, delivered in a manner
provided in Section 14 hereof. Any "Notice of Termination" given by Executive
pursuant to Section 2(b), or given by the Company in connection with a
termination as to which the Company believes it is not obligated to provide
Executive with the benefits set forth in Section 2(c), shall indicate the
specific provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
such termination. "Date of termination" for the purposes of this Agreement shall
mean the date on which such "Notice of Termination" is given.

              (f)    Notwithstanding anything to the contrary in this Agreement,
the Executive shall not be entitled to any payments or benefits pursuant to the
terms of this Agreement after he attains seventy (70) years of age.

         3.   Payment of Certain Costs of Executive. If a dispute arises
regarding a termination of Executive's employment subsequent to a Change in
Control or the interpretation or enforcement of this Agreement and Executive
obtains a final judgment in his favor from a court of competent jurisdiction or
his claim is settled by the Company prior to the rendering of a judgment by such
a court, all legal fees and expenses incurred by Executive in contesting or
disputing any such termination or seeking to obtain or enforce any right or
benefit provided for in this Agreement or in otherwise pursuing his claim will
be paid by the Company, to the extent permitted by law.

         4.   Moving Expenses. In the event of termination of Executive's
employment subsequent to a Change in Control, Executive shall be reimbursed by
the Company for any moving expenses incurred by him in relocating to the place
of subsequent employment in the event such cost is not paid by the subsequent
employer. Such expenses shall include reasonable selling expenses of his
residence. Such expenses shall be reimbursed within thirty (30) days of
Executive's submission of an itemized listing of the same to the Company.

         5.   Surrender of Company Records. Upon termination of Executive's
employment for any reason, he shall immediately surrender to the Company all
Company and Savings Bank records, notes, documents, forms, manuals or other
written or printed material, and all copies thereof, in his possession or
control, which pertains to the business of the Company and/or Savings Bank and
which would not be available publicly. Executive agrees that all of the
foregoing shall be and remain the sole and exclusive property of the Company
and/or Savings Bank.

         6.   Covenant of Confidentiality. Executive shall keep confidential and
not improperly divulge for the benefit of another party or use for his own
benefit, the Company's and Savings Bank's confidential information including,
but not limited to, business secrets relating to the Company's and Savings
Bank's finances, operations and customer lists. All of the Company's and Savings
Bank's confidential information shall be the sole and exclusive property of the
Company and/or Savings Bank.

         7.   Termination. This Agreement shall automatically terminate without
notice prior to any Change in Control if the Executive shall resign, retire,
become permanently and totally disabled, voluntarily take another position
requiring a substantial portion of his time or die. This Agreement shall also
automatically terminate without notice if Executive's employment as an officer
of the Company or the Savings Bank shall have been terminated for any reason by
the Board of Directors of the Company or the Savings Bank prior to the Company
or the Savings Bank entering into any definitive, binding agreement which
contemplates a Change in Control of the Company or the Savings Bank.

         8.   Severability. In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never been
contained herein.

         9.   Parties Bound.
              -------------

                                       5
<PAGE>

              (a)    All provisions of this Agreement shall inure to the benefit
of and be binding upon the parties hereto, their heirs, personal
representatives, successors and assigns.

              (b)    The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company pursuant to a Change
in Control, by agreement in form and substance satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be deemed a material
breach of this Agreement.

              (c)    If Executive should die while any amounts are payable to
him hereunder, this Agreement shall inure to the administrators, heirs,
distributees, devisees and legatees and all amounts payable hereunder shall then
be paid in accordance with the terms of this Agreement to Executive's devisee,
legatee or other designee or, if there be no such designee, to his estate.

         10.  Effect and Modification.
              -----------------------

              (a)    This Agreement comprises the entire agreement between the
parties with respect to the subject matter hereof and supersedes all earlier
agreements relating to the subject matter hereof. No statement or promise,
except as herein set forth, has been made with respect to the subject matter of
this Agreement. The headings of the individual sections herein are for
convenience only and shall not be deemed to be a substantive part of this
Agreement. No modification or amendment hereof shall be effective unless in
writing and signed by Executive and the Company.

              (b)    This Agreement does not provide a guarantee of continued
employment nor does it create an express or implied contract of employment and
the Executive acknowledges that no employment relationship is created in any
manner by this Agreement and that he may be terminated at any time.


              This Agreement is not intended to and shall not be deemed to be in
              lieu of any rights, benefits and privileges to which Executive may
              be entitled as an executive of the Company under any retirement,
              pension, profit sharing, stock ownership, stock option, insurance
              or hospital plan or other plans, benefits, programs and policies
              which may now be in effect or which may hereafter be adopted. It
              is understood that Executive shall have the same rights and
              privileges to participate in such plans, benefits, programs and
              policies as any other Executive during his period of employment.

              (c)    No payment shall be made pursuant to this Agreement if such
payment would be in violation of any federal or state law or regulation of any
federal or state regulatory authority having jurisdiction over the Company or
the Savings Bank or be considered an unsafe or unsound practice by any federal
or state regulatory authority having jurisdiction over the Company or the
Savings Bank.

         11.   Non-Waiver. The failure or refusal of either party to enforce all
or any part of, or the waiver by either party of any breach of this Agreement,
shall not be a waiver of that party's continuing or subsequent rights under this
Agreement, nor shall such failure or refusal or waiver have any effect upon the
subsequent enforceability of this Agreement.

         12.  Governing Law. This Agreement is being delivered in and shall be
governed by the laws of the State of Indiana.

         13.  Notice. Any notice, request, instruction or other document to be
given hereunder to any party shall be in writing and delivered by hand,
telegram, facsimile transmission, registered or certified United States mail
return receipt requested, or other form of receipted delivery, with all expenses
of delivery prepaid, as follows:

                                       6
<PAGE>

IF TO EXECUTIVE:
Donald R. Neel
2914 Elmridge Drive
Evansville, Indiana  47711

IF TO COMPANY:
Fidelity Federal Bancorp
700 South Green River Road
Suite 2000
Evansville, Indiana  47715

ATTENTION:  BOARD OF DIRECTORS


         14.  Additional Matters.
              ------------------

              (a)    If Executive is suspended and/or temporarily prohibited
from participating in the conduct of Company's or Savings Bank's affairs by a
notice served under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
Act (12 U.S.C. ss. 1818(e)(3) and (g)(1)), Company's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, Company
shall (i) pay Executive all or part of the compensation withheld while its
obligations under this Agreement were suspended and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.

              (b)    If Executive is removed and/or permanently prohibited from
participating in the conduct of Company's or Savings Bank's affairs by an order
issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. ss. 1818(e)(4) or (g)(1)), all obligations of Company under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the parties to the Agreement shall not be affected. If Company or
Savings Bank is in default (as defined in section 3(x)(1) of the Federal Deposit
Insurance Act), all obligations under this Agreement shall terminate as of the
date of default, but this provision shall not affect any vested rights of
Company or Executive.

              (c)    All obligations under this Agreement may be terminated
except to the extent determined that the continuation of the Agreement is
necessary for the continued operation of Company or Savings Bank: (i) by the
Director of the Office of Thrift Supervision, or his or her designee (the
"Director"), at the time the Federal Deposit Insurance Corporation or Resolution
Trust Corporation enters into an agreement to provide assistance to or on behalf
of Company or Savings Bank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act; or (ii) by the Director at the time the Director
approves a supervisory merger to resolve problems related to operation of
Company or Savings Bank or when Company or Savings Bank is determined by the
Director to be in an unsafe and unsound condition. Any rights of the parties
that have already vested, however, shall not be affected by such action.

                                       7
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.


                                       EXECUTIVE


                                       /s/ DONALD R. NEEL
                                       --------------------------------------
                                       Donald R. Neel



                                       FIDELITY FEDERAL BANCORP

                                       By:  /s/ M. BRIAN DAVIS
                                            ---------------------------------
                                            M. Brian Davis, President and CEO

ATTEST:

By: /s/ JACK CUNNINGHAM
    -------------------------
    Jack Cunningham, Chairman



                                       8