FIDELITY FEDERAL BANK & TRUST

                              EMPLOYMENT AGREEMENT
                                       FOR
                                VINCE A. ELHILOW

     This Agreement  (this  "Agreement")  is made effective as of the ___ day of
December,  2005 by and between  Fidelity  Federal Bank & Trust (the  "Bank"),  a
federally chartered stock savings bank, with its principal administrative office
at 205 Datura  Street,  West Palm Beach,  Florida  33401,  and Vince A.  Elhilow
("Executive").  Any  references  to the  "Company"  herein  shall mean  Fidelity
Bankshares,  Inc., a Delaware  corporation which is the stock holding company of
the Bank.

     WHEREAS,  Executive  is  currently  employed  as the  President  and  Chief
Executive Officer of the Bank; and

     WHEREAS,  the Bank and  Executive  are parties to an  employment  agreement
dated  January 1, 2004,  which was  entered  into when the Bank  converted  from
mutual to stock form as the subsidiary of Fidelity Bankshares,  MHC, a federally
chartered mutual holding company; and

     WHEREAS,  new Section 409A of the Internal Revenue Code ("Code"),  which is
initially  effective in 2005,  has deemed  certain  employment  agreements to be
deferred compensation, subject to its provisions; and

     WHEREAS,  the  Bank  and  Executive  desire  at  this  time to  update  the
employment agreement to, among other things, comply with Code Section 409A.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
President and Chief Executive Officer of the Bank and the Company, respectively.
During said period, Executive also agrees to serve as a director of the Bank and
the Company  and, if elected,  as an officer and director of any  subsidiary  or
affiliate  of the Bank.  Failure to reelect  Executive  as  President  and Chief
Executive  Officer of the Bank and the Company  without the consent of Executive
during the term of this Agreement shall constitute a breach of this Agreement.

2.   TERMS AND DUTIES

     (a) The period of Executive's  employment  under this Agreement shall begin
as of the date first above written and shall continue for  thirty-six  (36) full
calendar months  thereafter.  Commencing on the first  anniversary  date of this
Agreement   ("Anniversary   Date")  and  continuing  on  each  Anniversary  Date
thereafter,  this  Agreement  shall renew for an  additional  year such that the
remaining  term shall be three (3) years unless  written  notice of  non-renewal
("Non-Renewal  Notice") is provided to  Executive  at least thirty (30) days and
not more than sixty (60) days prior to any such Anniversary  Date, in which case


<PAGE>

his employment  shall cease at the end of thirty-six (36) months  following such
Anniversary Date. Prior to each notice period for non-renewal, the disinterested
members of the Board of  Directors  of the Bank and the Company  ("Board")  will
conduct a  comprehensive  performance  evaluation  and review of  Executive  for
purposes of determining whether to extend the Agreement, and the results thereof
shall be included in the minutes of the Board's meeting.

     (b) During the period of his  employment  hereunder,  except for periods of
absence  occasioned by illness,  reasonable  vacation  periods,  and  reasonable
leaves of absence,  Executive  shall  faithfully  perform  his duties  hereunder
including  activities and services  related to the  organization,  operation and
management of the Bank and the Company.

     (c) Notwithstanding anything herein to the contrary, Executive's employment
with the Bank may be terminated by the Bank or Executive during the term of this
Agreement,  subject  to the terms and  conditions  of this  Agreement.  However,
Executive shall not perform, in any respect, directly or indirectly,  during the
pendency of his temporary or permanent  suspension or termination from the Bank,
duties and  responsibilities  as President  and Chief  Executive  Officer of the
Company.

3.   COMPENSATION AND REIMBURSEMENT

     (a) The  compensation  specified under this Agreement shall  constitute the
salary and benefits  paid for the duties  described in Section 2. The Bank shall
pay Executive as compensation a salary of not less than $465,000 per year ("Base
Salary").  Such Base Salary shall be payable monthly,  or in accordance with the
normal  payroll  practices  of the Bank.  During the  period of this  Agreement,
Executive's  Base Salary  shall be reviewed  at least  annually;  the first such
review  will be made no later than  January  31 of each year  during the term of
this  Agreement and shall be effective  from the first day of said month through
the end of the  calendar  year.  Such review  shall be  conducted by a Committee
designated  by the  Board,  and  the  Board  may  increase,  but  not  decrease,
Executive's  Base Salary (any  increase  in Base Salary  shall  become the "Base
Salary" for purposes of this Agreement). In addition to the Base Salary provided
in this Section 3(a),  the Bank shall provide  Executive at no cost to Executive
with all such other  benefits as are provided  uniformly to permanent  full-time
employees of the Bank.

     (b)  The  Bank  will  provide   Executive  with  employee   benefit  plans,
arrangements  and  perquisites   substantially  equivalent  to  those  in  which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement,  and the Bank will not,  without
Executive's prior written consent, make any changes in such plans,  arrangements
or  perquisites  which would  adversely  affect  Executive's  rights or benefits
thereunder.  Without limiting the generality of the foregoing provisions of this
Section 3(b),  Executive will be entitled to participate in or receive  benefits
under any employee benefit plans of the Bank or the Company  including,  but not
limited to, retirement  plans,  supplemental  retirement  plans,  pension plans,
profit-sharing    plans,    stock   option   and    restricted    stock   plans,
health-and-accident  plans, medical coverage and any other employee benefit plan
or arrangement made available by the Bank in the future to its senior executives
and key  management  employees,  subject to and on a basis  consistent  with the
terms,  conditions and overall  administration  of such plans and  arrangements.
Executive will be entitled to incentive  compensation and bonuses as provided in
any plan of the Bank in which Executive is eligible to participate. Nothing paid
to Executive under any such plan or arrangement  will be deemed to be in lieu of
other compensation to which Executive is entitled under this Agreement.


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<PAGE>

     (c) In  addition  to the  benefits  provided  under  paragraph  (b) of this
Section,  Executive and his spouse shall be entitled to  continuing  health care
coverage upon Executive's retirement or other termination of employment with the
Bank,  other than  termination for Cause,  which coverage shall be fully paid by
the Bank  and  shall be  substantially  similar  to the  coverage  provided  for
Executive and his spouse prior to Executive's  termination  of employment.  Such
health care coverage  shall survive the  termination  of, or expiration of, this
Agreement,  and shall  continue for the  lifetime of each of  Executive  and his
spouse,  provided however, that upon each such person's eligibility for Medicare
coverage,  the Bank shall  provide  health  care  coverage to such person at the
highest level of coverage provided or made available by the American Association
of Retired Persons (AARP) to its members  residing in the locale where Executive
resides,  which coverage shall be supplemental his or her Medicare  coverage for
his or her lifetime.

     (d) The Bank shall pay or reimburse Executive for all reasonable travel and
other  reasonable  expenses  incurred by Executive in performing his obligations
under this Agreement and may provide such  additional  compensation in such form
and such amounts as the Board may from time to time determine.

4.   OUTSIDE ACTIVITIES

     Executive  may  serve as a member of the board of  directors  of  business,
community  and  charitable  organizations  subject to the approval of the Board,
provided that in each case such service shall not materially  interfere with the
performance  of his duties  under this  Agreement  or present  any  conflict  of
interest.  Such service to and participation in outside  organizations  shall be
presumed  for these  purposes  to be for the  benefit of the Bank,  and the Bank
shall reimburse Executive his reasonable expenses associated therewith.

5.   WORKING FACILITIES AND EXPENSES

     Executive's  principal place of employment shall be at the Bank's principal
executive offices.  The Bank shall provide Executive,  at his principal place of
employment, with a private office and other support services and facilities that
are  suitable to his position  with the Bank and  necessary  or  appropriate  in
connection  with the  performance of his duties under this  Agreement.  The Bank
shall provide Executive with an automobile suitable to the position of President
and Chief  Executive  Officer of the Bank,  and such  automobile  may be used by
Executive  in carrying  out his duties  under this  Agreement as well as for his
personal use. The Bank shall  reimburse  Executive for the cost of  maintenance,
use and servicing of such  automobile.  The Bank shall also reimburse  Executive
for his ordinary and necessary business expenses incurred in connection with the
performance of his duties under this Agreement,  including,  without limitation,
travel and reasonable  entertainment  expenses and fees for  memberships in such
clubs  and  organizations  that  Executive  and the  Board  mutually  agree  are
necessary and appropriate to further the business of the Bank.  Reimbursement of
such expenses shall be made upon presentation to the Bank of an itemized account
of the expenses in such form as the Bank may reasonably require.


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<PAGE>

6.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION OR CHANGE IN CONTROL

     The  provisions  of this  Section  shall in all  respects be subject to the
terms and conditions stated in Sections 9 and 16.

     (a) The  provisions of this Section 6(a) shall apply upon the occurrence of
an  Event  of  Termination  (as  herein  defined)  during  Executive's  term  of
employment  under  this  Agreement.  As used in this  Agreement,  an  "Event  of
Termination" shall mean and include any one or more of the following:

     (i) the  termination  by the Bank or the Company of  Executive's  full-time
employment hereunder for any reason other than (A) Disability or Retirement,  as
defined in Section 7 below, or (B) Termination for Cause as defined in Section 8
hereof; or

     (ii) Executive's resignation from the Bank's employ, upon any

          (A)     failure to elect or reelect or to appoint or reappoint
                  Executive as President and Chief Executive Officer of the Bank
                  and/or the Company,

          (B)     material change in Executive's function, duties, or
                  responsibilities, which change would cause Executive's
                  position to become one of lesser responsibility, importance,
                  or scope from the position and attributes thereof described in
                  Section 1 above,

          (C)     relocation of Executive's principal place of employment by
                  more than 30 miles from its location at the effective date of
                  this Agreement,

          (D)     liquidation or dissolution of the Bank or Company other
                  than liquidations or dissolutions that are caused by
                  reorganizations that do not affect the status of Executive, or

          (E)     breach of this Agreement by the Bank.

Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D) or
(E) above,  Executive  shall have the right to elect to terminate his employment
under this  Agreement by  resignation  upon sixty (60) days prior written notice
given within a reasonable  period of time not to exceed four (4) calendar months
after the initial event giving rise to said right to elect.  Notwithstanding the
preceding sentence, in the event of a continuing breach of this Agreement by the
Bank, Executive,  after giving due notice within the prescribed time frame of an
initial event  specified  above,  shall not waive any of his rights solely under
this  Agreement  and this  Section  by  virtue of the fact  that  Executive  has
submitted his  resignation but has remained in the employment of the Bank and is
engaged  in good  faith  discussions  to  resolve  any  occurrence  of an  event
described in clauses (A), (B), (C), (D) or (E) above.

     (b) The  provisions  of this  Section  6(b) and 6(d)  shall  apply upon the
occurrence of a Change in Control during the term of this  Agreement,  including
extensions  hereof.  In the event of a Change in Control  of the  Company or the
Bank,  Executive  shall be entitled to the  payments  set forth in Section  6(d)


                                       4
<PAGE>

hereof.  For purposes of this  Agreement,  a Change in Control of the Company or
the Bank shall mean (i) a change in  ownership  of the Company or the Bank under
paragraph (1) below, or (ii) a change in effective control of the Company or the
Bank  under  paragraph  (2)  below,  or (iii) a  change  in the  ownership  of a
substantial portion of the assets of the Company or the Bank under paragraph (3)
below:

     (1) Change in the  ownership  of the  Company or the Bank.  A change in the
ownership  of the  Company  or the Bank  shall  occur  on the date  that any one
person,  or more  than one  person  acting as a group (as  defined  in  Proposed
Treasury  Regulation  Section   1.409A-3(g)(5)(v)(B)  or  subsequent  guidance),
acquires ownership of stock of the corporation that, together with stock held by
such person or group,  constitutes more than 50 percent of the total fair market
value or total voting power of the stock of such corporation.

     (2) Change in the effective control of the Company or the Bank. A change in
the  effective  control of the  Company or the Bank shall occur on the date that
either (i) any one person, or more than one person acting as a group (as defined
in Proposed  Treasury  Regulation  Section  1.409A-3(g)(5)(v)(B)  or  subsequent
guidance),  acquires (or has acquired  during the 12-month  period ending on the
date of the most recent  acquisition  by such person or  persons)  ownership  of
stock of the corporation possessing 35 percent or more of the total voting power
of the  stock  of  such  corporation;  or  (ii) a  majority  of  members  of the
corporation's  board of  Directors  is replaced  during any  12-month  period by
Directors  whose  appointment  or election is not  endorsed by a majority of the
members  of the  corporation's  board  of  Directors  prior  to the  date of the
appointment or election,  provided that this  sub-section  (ii) is  inapplicable
where a majority shareholder of the Company or the Bank is another corporation.

     (3) Change in the  ownership of a  substantial  portion of the Company's or
the Bank's  assets.  A change in the ownership of a  substantial  portion of the
Company or the Bank's  assets  shall occur on the date that any one  person,  or
more  than one  person  acting  as a group  (as  defined  in  Proposed  Treasury
Regulation Section  1.409A-3(g)(5)(v)(B)  or subsequent guidance),  acquires (or
has acquired  during the 12-month  period  ending on the date of the most recent
acquisition by such person or persons) assets from the  corporation  that have a
total  gross  fair  market  value  equal to or more than 40 percent of the total
gross fair market value of (i) all of the assets of the Company or the Bank,  or
(ii) the value of the assets being  disposed of,  either of which is  determined
without regard to any liabilities associated with such assets.

     (4) For all purposes  hereunder,  the definition of Change in Control shall
be  construed  to be  consistent  with the  requirements  of  Proposed  Treasury
Regulation Section 1.409A-3(g) or subsequent guidance.

     (c) Upon the occurrence of an Event of  Termination,  as defined in Section
6(a)(i) or (ii), on the Date of  Termination,  as defined in Section 9(b) or, if
different,  within the time frame set forth in any sub-paragraph below, the Bank
shall pay,  provide or credit to Executive  (or, in the event of his  subsequent
death, his beneficiary or beneficiaries, or his estate, as the case may be):

     (i)  his  earned  but  unpaid  salary  as of the  date  of  termination  of
employment  with the Bank and the  benefits  to which he would be entitled as of
the date of termination as a former employee under the Bank's  employee  benefit
plans and programs and compensation plans and programs;


                                       5
<PAGE>

     (ii) as severance pay or liquidated  damages, or both, a sum equal to three
(3) times the sum of (A) the  highest  annual  rate of Base  Salary  and (B) the
highest annual bonus awarded to Executive during the prior three years.  Payment
of the amount  required  hereunder  shall be made no later than the first day of
the seventh month following Executive's  Separation from Service if Executive is
a Specified  Employee and such delay is required by Code Section 409A. For these
purposes,  the terms  "Specified  Employee" and "Separation  from Service" shall
have the meaning  required by Code  Section  409A.  Such  payments  shall not be
reduced in the event Executive obtains other employment following termination of
employment;

     (iii) at the Bank's expense,  continued medical,  dental and life insurance
coverage  substantially  identical  to the coverage  maintained  by the Bank for
Executive  prior to his  termination  of  employment.  Such  medical  and dental
coverage  shall continue for the lifetime of each of Executive and his spouse as
provided in Section 3(c) hereof,  and such life insurance shall cease thirty-six
(36) months following the Event of Termination;

     (iv) any outstanding  unvested stock options or shares of restricted  stock
of the Company that have been awarded to him, which shall become fully vested as
of his termination of employment;

     (v) within  sixty (60) days (or within  such  shorter  period to the extent
that  information  can be  reasonably  obtained)  following his  termination  of
employment  with the Bank,  a lump sum payment in an amount equal to the present
value of the  Bank's  contributions  that  would  have been made on  Executive's
behalf under the Bank's 401(k) Plan and employee  stock  ownership plan (and any
other  defined  contribution  plan  maintained  by the Bank) if he had continued
working  for  the  Bank  for  a  thirty-six  (36)  month  period  following  his
termination,  earning the Base Salary that would have been  achieved  during the
remaining unexpired term of this Agreement (assuming, if a Change in Control has
occurred,  that the annual Base Salary increases at the rate of six percent (6%)
per year on each  Anniversary  Date  over the  remaining  unexpired  term of the
Agreement) and making the maximum amount of employee contributions permitted, if
any,  under such plan or plans,  where such present  values are to be determined
using a discount rate of six percent (6%) per year;

     (vi) within  sixty (60) days (or within such  shorter  period to the extent
that  information  can  reasonably  be obtained)  following his  termination  of
employment  with the Bank,  a lump sum payment in an amount equal to the excess,
if any, of (A) the present  value of the  benefits to which he would be entitled
under  the  Supplemental  Executive  Retirement  Plan  (and any  other  deferred
compensation  plan for  management  or  highly  compensated  employees  that are
maintained  by the  Bank)  if he had  continued  working  for the  Bank  for the
thirty-six  (36) month period  following his  termination at the Base Salary and
bonus that would have been achieved during the remaining  unexpired term of this
Agreement  (assuming,  if a Change in Control  has  occurred,  that  annual Base
Salary and bonus each  increase at the rate of six percent (6%) per year on each
Anniversary Date for the remaining unexpired term of the Agreement) over (B) the
present  value of the benefits to which he is actually  entitled  under any such
plan, as of the date of his termination  with the Bank, where the present values
are to be determined using a discount rate of six percent (6%) and the mortality
tables prescribed under Section 72 of the Code.


                                       6
<PAGE>

     (d) Upon the occurrence of a Change in Control,  as defined in Section 6(b)
the Bank  shall  pay,  provide  or credit to  Executive  (or in the event of his
death, to his Beneficiary):

     (i) as severance pay or liquidated  damages,  or both, a sum equal to three
(3) times the sum of (A) the  highest  annual  rate of Base  Salary  and (B) the
highest annual bonus awarded to Executive during the prior three years.  Payment
of the amount  required  hereunder  shall be made in a lump sum on the effective
date of the Change in Control;

     (ii) at the Bank's expense,  continued  medical,  dental and life insurance
coverage  substantially  identical  to the coverage  maintained  by the Bank for
Executive prior to the Change in Control. Such medical and dental coverage shall
continue  for the  lifetime of each of  Executive  and his spouse as provided in
Section 3(c) hereof,  and such life insurance shall cease thirty-six (36) months
following the Executive's termination of employment;

     (iii) any outstanding  unvested stock options or shares of restricted stock
of the Company that have been awarded to him, which shall become fully vested as
of the effective date of the Change in Control;

     (iv) at the time of or within  sixty  (60)  days (or  within  such  shorter
period to the extent that information can be reasonably  obtained) following the
Change in Control, a lump sum payment in an amount equal to the present value of
the Bank's  contributions  that would have been made on Executive's behalf under
the Bank's 401(k) Plan and employee stock  ownership plan (and any other defined
contribution  plan  maintained by the Bank) if he had continued  working for the
Bank for a thirty-six (36) month period following his  termination,  earning the
Base Salary that would have been achieved during the remaining unexpired term of
this Agreement (assuming,  if a Change in Control has occurred,  that the annual
Base  Salary  increases  at the  rate  of six  percent  (6%)  per  year  on each
Anniversary Date over the remaining  unexpired term of the Agreement) and making
the maximum amount of employee contributions  permitted, if any, under such plan
or plans,  where such present values are to be determined  using a discount rate
of six percent (6%) per year;

     (v) at the time of or within sixty (60) days (or within such shorter period
to the extent that information can reasonably be obtained)  following the Change
in Control,  a lump sum payment in an amount equal to the excess, if any, of (A)
the  present  value of the  benefits  to which he would be  entitled  under  the
Fidelity Federal Savings Bank of Florida Supplemental  Executive Retirement Plan
(and any other deferred  compensation plan for management or highly  compensated
employees that are  maintained by the Bank) if he had continued  working for the
Bank for the thirty-six (36) month period  following his termination at the Base
Salary and bonus that would have been achieved  during the  remaining  unexpired
term of this  Agreement  (assuming,  if a Change in Control has  occurred,  that
annual Base Salary and bonus each  increase at the rate of six percent  (6%) per
year on each Anniversary Date for the remaining unexpired term of the Agreement)
over (B) the present  value of the  benefits  to which he is  actually  entitled
under any such plan, as of the date of his termination  with the Bank, where the
present  values are to be  determined  using a discount rate of six percent (6%)
and the mortality tables prescribed under Section 72 of the Code.


                                       7
<PAGE>

     (e) Notwithstanding the preceding  paragraphs of this Section, in the event
that:

     (i) the aggregate  payments or benefits to be made or afforded to Executive
under said paragraphs (the "Parachute  Benefits")  would be deemed to include an
"excess  parachute  payment"  under  Section  280G of the Code or any  successor
thereto, and

     (ii)  if  such   Parachute   Benefits   were  reduced  to  an  amount  (the
"Non-Triggering  Amount"), the value of which is one dollar ($1.00) less than an
amount equal to the total amount of payments  permissible  under Section 280G of
the Code or any successor  thereto,  then the  Parachute  Benefits to be paid to
Executive shall be so reduced so as to be a Non-Triggering Amount.

     (f) Payments  under Section 6(d) and 6(e) above shall be made  irrespective
of whether  termination  of employment  has occurred.  Notwithstanding  anything
herein to the contrary,  Executive shall only be entitled to a payment under the
first to occur of an Event of  Termination  under  Section  6(c) or a Change  in
Control under  Section  6(d).  Payments  under one of these  alternatives  shall
preclude any payments under the other.

7.   TERMINATION UPON RETIREMENT, DISABILITY OR DEATH

     For  purposes of this  Agreement,  termination  by the Bank of  Executive's
employment  based on "Retirement"  shall mean termination in accordance with the
Bank's  retirement  policy  or in  accordance  with any  retirement  arrangement
established  with  Executive's  consent with respect to him. Upon termination of
Executive upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank and other plans to which Executive is a party.

     In the event Executive is unable to perform his duties under this Agreement
on a  full-time  basis for a period of six (6)  consecutive  months by reason of
illness or other  physical  or mental  disability  ("Disability"),  the Bank may
terminate this Agreement,  provided that the Bank shall continue to be obligated
to pay Executive his Base Salary for the remaining term of the Agreement, or one
year,  whichever is the longer  period of time,  and  provided  further that any
amounts actually paid to Executive pursuant to any disability insurance or other
similar such program which the Bank has provided or may provide on behalf of its
employees  generally or its senior  executives  or pursuant to any  workman's or
social security  disability  program shall reduce the compensation to be paid to
Executive pursuant to this paragraph.

     In the event of  Executive's  death during the term of the  Agreement,  his
estate,  legal  representatives or named beneficiaries (as directed by Executive
in writing) shall be paid  Executive's  Base Salary as defined in Paragraph 3(a)
at the rate in effect at the time Executive's death for a period of one (1) year
from the date of Executive's death.


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<PAGE>

8.   TERMINATION FOR CAUSE

     The  term  "Termination  for  Cause"  shall  mean  termination  because  of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law,  rule, or  regulation  (other than minor
traffic  violations or similar  offenses) or final  cease-and-desist  order,  or
material breach of any provision of this Agreement. In determining incompetence,
the acts or omissions shall be measured against standards  generally  prevailing
in the savings institution industry.  For purposes of this paragraph,  no act or
failure to act on the part of Executive  shall be  considered  "willful"  unless
done,  or  omitted  to be done,  by  Executive  not in good  faith  and  without
reasonable  belief that Executive's  action or omission was in the best interest
of the Bank.  Notwithstanding  the foregoing,  Executive  shall not be deemed to
have been  Terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the  affirmative  vote of not less
than  three-fourths of the members of the Board at a meeting of the Board called
and  held  for  that  purpose  (after  reasonable  notice  to  Executive  and an
opportunity  for him,  together  with  counsel,  to be heard  before the Board),
finding  that in the good faith  opinion of the Board,  Executive  was guilty of
conduct justifying  Termination for Cause and specifying the particulars thereof
in detail.  Executive shall not have the right to receive  compensation or other
benefits for any period after  Termination for Cause.  Any stock options granted
to  Executive  under  any stock  option  plan of the Bank,  the  Company  or any
subsidiary  or  affiliate  thereof,  shall become null and void  effective  upon
Executive's  receipt of Notice of  Termination  for Cause  pursuant to Section 9
hereof, and shall not be exercisable by Executive at any time subsequent to such
Termination for Cause.

9.   NOTICE

     (a)  Any  purported  termination  by the  Bank  or by  Executive  shall  be
communicated by Notice of Termination to the other party hereto. For purposes of
this  Agreement,  a "Notice of  Termination"  shall mean a written  notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances  claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

     (b) "Date of  Termination"  shall  mean (A) if  Executive's  employment  is
terminated  for  Disability,  thirty (30) days after a Notice of  Termination is
given (provided that he shall not have returned to the performance of his duties
on a  full-time  basis  during  such  thirty  (30) day  period),  and (B) if his
employment is terminated for any other reason,  the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).

     (c) If, within thirty (30) days after any Notice of  Termination  is given,
the party  receiving such Notice of Termination  notifies the other party that a
dispute exists concerning the termination, except upon the voluntary termination
by Executive,  in which case the Date of Termination shall be the date specified
in the Notice, the Date of Termination shall be the date on which the dispute is
finally  determined,  either by mutual  written  agreement of the parties,  by a
binding arbitration award, or by a final judgment, order or decree of a court of


                                       9
<PAGE>

competent  jurisdiction (the time for appeal having expired and no appeal having
been  perfected)  and  provided  further that the Date of  Termination  shall be
extended  by a notice of dispute  only if such notice is given in good faith and
the party  giving  such notice  pursues  the  resolution  of such  dispute  with
reasonable diligence. Notwithstanding the pendency of any such dispute, the Bank
will continue to pay Executive his full  compensation  in effect when the notice
giving  rise to the  dispute  was given  (including,  but not  limited  to, Base
Salary) and continue Executive as a participant in all compensation, benefit and
insurance  plans in which he was  participating  when the notice of dispute  was
given,  until the dispute is finally resolved in accordance with this Agreement,
provided  such dispute is resolved  within the term of this  Agreement.  If such
dispute is not resolved within the term of the Agreement,  the Bank shall not be
obligated,  upon final resolution of such dispute, to pay Executive compensation
and other payments accruing beyond the term of the Agreement. Amounts paid under
this Section shall be offset  against or reduce any other amounts due under this
Agreement.

10.  POST-PAYMENT OBLIGATIONS

     (a) All payments and benefits to Executive  under this  Agreement  shall be
subject to Executive's  compliance with paragraph (b) of this Section during the
term of this  Agreement  and for one (1)  full  year  after  the  expiration  or
termination hereof.

     (b) Executive shall, upon reasonable  notice,  furnish such information and
assistance  to the Bank as may  reasonably be required by the Bank in connection
with any litigation in which it or any of its  subsidiaries or affiliates is, or
may become, a party.

11.  NON-COMPETITION

     (a) Upon any termination of Executive's employment hereunder,  other than a
termination  (whether  voluntary or  involuntary) in connection with a Change in
Control,  as a result of which the Bank and/or the  Company is paying  Executive
the benefits entitled to Executive under Section 6 of this Agreement,  Executive
agrees not to compete  with the Bank  and/or the Company for a period of one (1)
year  following such  termination in any city,  town or county in which the Bank
and/or the  Company  has an office or has filed an  application  for  regulatory
approval to establish an office,  determined  as of the  effective  date of such
termination,  except as agreed to pursuant to a  resolution  duly adopted by the
Board.  Executive  agrees that during such period and within said area,  cities,
towns and counties, Executive shall not work for or advise, consult or otherwise
serve  with,  directly  or  indirectly,  any entity  whose  business  materially
competes with the depository,  lending or other business  activities of the Bank
and/or the Company.  The parties hereto,  recognizing  that  irreparable  injury
would  result to the Bank and/or the  Company,  its business and property in the
event of Executive's breach of this Subsection 11(a), agree that in the event of
any such breach by Executive,  the Bank and/or the Company would be entitled, in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain  the  violation  hereof by  Executive,  Executive's  partners,  agents,
employers,  employees  and all  persons  acting for or with  Executive.  Nothing
herein  shall be  construed  as  prohibiting  the Bank and/or the  Company  from
pursuing  any other  remedies  available to the Bank and/or the Company for such
breach or threatened breach, including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
business activities and plans for business activities of the Bank and affiliates


                                       10
<PAGE>

thereof,  as it may exist from time to time,  is a valuable,  special and unique
asset of the business of the Bank.  Executive will not, during or after the term
of his  employment,  disclose  any  knowledge of the past,  present,  planned or
considered  business activities of the Bank or affiliates thereof to any person,
firm, corporation,  or other entity for any reason or purpose whatsoever (except
for such  disclosure  as may be required  to be provided to any federal  banking
agency  with  jurisdiction  over the  Bank or  Executive).  Notwithstanding  the
foregoing,  Executive  may disclose any knowledge of banking,  financial  and/or
economic  principles,  concepts  or ideas  which are not solely and  exclusively
derived from the business  plans and  activities of the Bank,  and Executive may
disclose any  information  regarding  the Bank or the Company which is otherwise
publicly  available.  In the event of a breach or threatened breach by Executive
of the  provisions of this  Section,  the Bank will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, the knowledge of the
past,  present,  planned  or  considered  business  activities  of the  Bank  or
affiliates  thereof,  or  from  rendering  any  services  to any  person,  firm,
corporation  or other entity to whom such  knowledge,  in whole or in part,  has
been  disclosed  or is  threatened  to be  disclosed.  Nothing  herein  will  be
construed as prohibiting the Bank from pursuing any other remedies  available to
the Bank for such breach or threatened breach, including the recovery of damages
from Executive.

12.  SOURCE OF PAYMENTS

     (a) All payments provided in this Agreement shall be timely paid in cash or
check  from the  general  funds of the Bank.  Executive  and the Bank,  however,
acknowledge that pursuant to that certain Employment Agreement between Executive
and the Company dated as of the date of this Agreement (the "Company  Employment
Agreement"), the Company has guaranteed payment and provision of all amounts and
benefits due  hereunder to Executive  and, if such amounts and benefits due from
the Bank are not timely paid or provided by the Bank,  such amounts and benefits
shall be paid or provided by the Company.

     (b)  Notwithstanding  any provision  herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided in this  Agreement,  are paid to or
received by Executive under the Company Employment Agreement,  such compensation
payments and benefits will be subtracted from any amounts due  simultaneously to
Executive under similar provisions of this Agreement.

     (c) For financial  statement  purposes,  ongoing payments  pursuant to this
Agreement and the Company Employment Agreement (collectively,  the "Agreements")
shall  be  allocated  by the  Bank  and the  Company  on a  quarterly  basis  in
proportion to the services  rendered to the Bank and the Company,  respectively.
Termination payments made pursuant to the provisions of Section 6 of each of the
Agreements  shall be charged  and paid in  accordance  with the terms of Section
6(c) of this Agreement and Section 11 of the Company Employment Agreement.

13.  NO EFFECT ON EMPLOYEE BENEFITS PLANS OR PROGRAMS

     The termination of Executive's employment during the term of this Agreement
or thereafter,  whether by the Bank or by Executive, shall have no effect on the
vested  rights of  Executive  under the  Company's  or the Bank's  qualified  or
non-qualified  retirement,  pension,  savings,  thrift,  profit-sharing or stock
bonus plans,  group life, health (including  hospitalization,  medical and major
medical),  dental,  accident and long term  disability  insurance plans or other
employee benefit plans or programs,  or compensation  plans or programs in which
Executive was a participant.


                                       11
<PAGE>

14.  NO ATTACHMENT

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of,
Executive and the Bank and their respective successors and assigns.

15.  ENTIRE AGREEMENT; MODIFICATION AND WAIVER

     (a) This Agreement and the Company Employment  Agreement contain the entire
agreement  of the  Executive,  the Bank and the Company  relating to the subject
matter  hereof,  and  supercedes  in its entirety any and all prior  agreements,
understandings  or  representations  between the parties relating to the subject
matter hereof,  including but not limited to, that certain employment  agreement
between the Bank and Executive dated January 7, 1994.

     (b) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (c) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

16.  REQUIRED REGULATORY PROVISIONS

     (a) The Bank may terminate  Executive's  employment at any time.  Executive
shall not have the  right to  receive  compensation  or other  benefits  for any
period after Termination for Cause as defined in Section 8 hereinabove.

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


                                       12
<PAGE>

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section 8(e)(4) or 8g(1) of the Federal Deposit Insurance Act (12 USC ss.1818(e)
and  ss.1818(g)(1)),  all  obligations  of the Bank  under this  contract  shall
terminate  as of the  effective  date of the  order,  but  vested  rights of the
contracting parties shall not be affected.

     (d) If the Bank is in default as defined in Section  3(x)(1) of the Federal
Deposit Insurance Act (12 USC ss.1813(x)(1)),  all obligations of the Bank under
this  contract  shall  terminate as of the date of default,  but this  paragraph
shall not affect any vested rights of the contracting parties.

     (e) All  obligations  of the Bank under this contract  shall be terminated,
except to the extent  determined that  continuation of the contract is necessary
for the continued  operation of the Bank by the Director of the Office of Thrift
Supervision  ("OTS")  or his  designee  at the  time  (i)  the  Federal  Deposit
Insurance Corporation ("FDIC") enters into an agreement to provide assistance to
or on behalf of the Bank under the  authority  contained in Section 13(c) of the
Federal Deposit  Insurance Act (12 USC ss.1823(c));  or (ii) the Director of the
OTS or his designee approves a supervisory merger to resolve problems related to
the  operation of the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.

     (f) Notwithstanding anything herein contained to the contrary, any payments
to  Executive  by the  Bank  pursuant  to  this  Agreement  are  subject  to and
conditioned  upon their  compliance  with Section  18(k) of the Federal  Deposit
Insurance  Act,  12 U.S.C.  Section  1828(k),  and the  regulations  promulgated
thereunder in 12 C.F.R. Part 359.

17.  SEVERABILITY

     If, for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

18.  HEADINGS FOR REFERENCE ONLY

     The headings of sections  and  paragraphs  herein are  included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

19.  GOVERNING LAW

     This  Agreement  shall be  governed by the laws of the State of Florida but
only to the extent not superseded by federal law.

20.  ARBITRATION

     Except as otherwise expressly provided elsewhere in this Agreement,  in the
event that any dispute  should  arise  between  the  parties as to the  meaning,
effect,  performance,  enforcement,  or other  issue  in  connection  with  this


                                       13
<PAGE>

Agreement, which dispute cannot be resolved by the parties, the dispute shall be
decided  by final  and  binding  arbitration  of a panel  of three  arbitrators.
Proceedings in arbitration and its conduct shall be governed by the rules of the
American Arbitration  Association ("AAA") applicable to commercial  arbitrations
(the "Rules") except as modified by this Section. The Employee shall appoint one
arbitrator,  the Company  shall appoint one  arbitrator,  and the third shall be
appointed by the two arbitrators  appointed by the parties. The third arbitrator
shall be impartial  and shall serve as chairman of the panel.  The parties shall
appoint  their  arbitrators  within  thirty  (30)  days  after  the  demand  for
arbitration is served, failing which the AAA promptly shall appoint a defaulting
party's  arbitrator,  and the two arbitrators  shall select the third arbitrator
within  fifteen  (15) days after their  appointment,  or if they cannot agree or
fail to so appoint,  then the AAA promptly  shall appoint the third  arbitrator.
The  arbitrators  shall render their decision in writing within thirty (30) days
after the close of  evidence  or other  termination  of the  proceedings  by the
panel,  and the  decision  of a majority of the  arbitrators  shall be final and
binding upon the parties, nonappealable, except in accordance with the Rules and
enforceable in accordance  with the Florida  Arbitration  Code or any applicable
successor legislation. Any hearings in the arbitration shall be held in the Palm
Beach County, Florida unless the parties shall agree upon a different venue, and
shall be private and not open to the public.  Each party shall bear the fees and
expenses of its arbitrator, counsel, and witnesses, and the fees and expenses of
the third  arbitrator  shall be shared equally by the parties.  The costs of the
arbitration,  including  the fees of AAA,  shall be  borne  as  directed  in the
decision of the panel.

21.  PAYMENT OF LEGAL FEES

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
dispute or question of  interpretation  relating to this Agreement shall be paid
or reimbursed by the Bank,  provided that the dispute or interpretation has been
settled by Executive and the Bank or has been resolved in Executive's favor.

22.  INDEMNIFICATION

     During  the  term  of this  Agreement  and for a  period  of six (6)  years
thereafter, the Bank shall provide Executive (including his heirs, executors and
administrators)  with coverage under a standard directors and officers liability
insurance policy at its expense,  and shall indemnify  Executive (and his heirs,
executors and  administrators) to the fullest extent permitted under Federal law
against all expenses and  liabilities  reasonably  incurred by him in connection
with or  arising  out of any  action,  suit or  proceeding  in  which  he may be
involved by reason of his having been a director or officer of the Bank (whether
or not he continues  to be a director or officer at the time of  incurring  such
expenses or liabilities),  such expenses and liabilities to include,  but not be
limited to, judgments, court costs and attorneys fees and the cost of reasonable
settlements  (such settlements must be approved by the Board of Directors of the
Bank). If such action,  suit or proceeding is brought  against  Executive in his
capacity as an officer or director of the Bank,  however,  such  indemnification
shall not extend to  matters as to which  Executive  is finally  adjudged  to be
liable for willful misconduct in the performance of his duties.


                                       14
<PAGE>

23.  SUCCESSOR TO THE BANK

     The Bank  shall  require  any  successor  or  assignee,  whether  direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially  all the business or assets of the Bank or the Company,  expressly
and  unconditionally to assume and agree to perform the Bank's obligations under
this Agreement, in the same manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had taken place.

                    [Remainder of Page Intentionally Blank]











                                       15
<PAGE>


                                   SIGNATURES

     IN WITNESS  WHEREOF,  the Bank has caused this  Agreement to be executed by
its duly authorized officer, and Executive has signed this Agreement,  effective
as of the date first above written.

ATTEST:                              FIDELITY FEDERAL BANK & TRUST



____________________                 By:
Secretary                                -------------------------------------
                                         Vince A. Elhilow

WITNESS:                             EXECUTIVE:



____________________                 By:
                                         -------------------------------------
                                         Vince A. Elhilow
                                         President and Chief Executive Officer










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