Document:

FIDELITY FEDERAL BANK & TRUST

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                            Effective October 1, 1989

                            Restated December 1, 2005
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                                TABLE OF CONTENTS

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ARTICLE I--PURPOSE; EFFECTIVE DATE.........................................1

ARTICLE II--DEFINITIONS....................................................1

  2.1    Accrued Benefit...................................................1
  2.2    Actuarial Equivalent..............................................1
  2.3    Beneficiary.......................................................1
  2.4    Board.............................................................1
  2.5    Change in Control shall mean any of the following:................2
  2.6    Committee.........................................................2
  2.7    Compensation......................................................2
  2.8    Company...........................................................3
  2.9    Deferred Retirement Date..........................................3
  2.10   Disability........................................................3
  2.11   Early Retirement Date.............................................3
  2.12   Employer..........................................................3
  2.13   Final Monthly Compensation........................................3
  2.14   Final Average Compensation........................................3
  2.15   Normal Retirement Date............................................4
  2.16   Participant.......................................................4
  2.17   Participation Agreement...........................................4
  2.18   Proposed Regulations..............................................4
  2.19   Qualified Retirement Plan.........................................4
  2.20   Retirement........................................................4
  2.21   Separation from Service...........................................5
  2.22   Specified Employee................................................5
  2.23   Spouse............................................................5
  2.24   Supplemental Retirement Benefit...................................6
  2.25   Target Retirement Percentage......................................6
  2.26   Years of Credited Service.........................................6

ARTICLE III--PARTICIPATION AND VESTING.....................................6

  3.1    Eligibility and Participation.....................................6
  3.2    Change in Employment Status.......................................6
  3.3    Vesting...........................................................6
  3.4    Suicide...........................................................7

ARTICLE IV--PRERETIREMENT SURVIVOR BENEFIT.................................7

  4.1    Preretirement Survivor Benefit....................................7
  4.2    Payment of Benefits...............................................7

ARTICLE V--SUPPLEMENTAL RETIREMENT BENEFITS................................7

  5.1    Target Retirement Percentage......................................7
  5.2    Normal Retirement Benefit.........................................8

                                                                           (i)
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  5.3    Deferred Retirement Benefit.......................................8
  5.4    Early Retirement Benefit..........................................8
  5.5    Early Termination Retirement Benefit..............................9
  5.6    Change in Control Benefit.........................................9
  5.7    Disability Retirement Benefit....................................10
  5.8    Inflation Index..................................................10
  5.9    Payment of Benefits..............................................10
  5.10   Withholding; Payroll Taxes.......................................12
  5.11   Payment to Guardian..............................................12

ARTICLE VI--BENEFICIARY DESIGNATION.......................................12

  6.1    Beneficiary Designation..........................................12
  6.2    Amendments.......................................................12
  6.3    No Participant Beneficiary Designation...........................13
  6.4    Effect of Payment................................................13

ARTICLE VII--ADMINISTRATION...............................................13

  7.1    Committee; Duties................................................13
  7.2    Agents...........................................................13
  7.3    Binding Effect of Decisions......................................13
  7.4    Indemnity of Committee...........................................13

ARTICLE VIII--CLAIMS PROCEDURE............................................14

  8.1    Claim............................................................14
  8.2    Denial of Claim..................................................14
  8.3    Review of Claim..................................................14
  8.4    Final Decision...................................................14

ARTICLE IX--TERMINATION, SUSPENSION OR AMENDMENT..........................14

  9.1    Termination, Suspension or Amendment of Plan.....................14

ARTICLE X--MISCELLANEOUS..................................................15

  10.1   Unfunded Plan....................................................15
  10.2   Unsecured General Creditor.......................................16
  10.3   Trust Fund.......................................................16
  10.4   Nonassignability.................................................16
  10.5   Not a Contract of Employment.....................................16
  10.6   Protective Provisions............................................16
  10.7   Terms............................................................17
  10.8   Captions.........................................................17
  10.9   Governing Law....................................................17
  10.10  Validity.........................................................17

                                                                           (ii)
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  10.11  Notice...........................................................17
  10.12  Successors.......................................................17
  10.13  Compliance with Section 409A of the Code.........................17

                                                                           (iii)
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                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                          FIDELITY FEDERAL BANK & TRUST

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                            EFFECTIVE OCTOBER 1, 1989

                            RESTATED DECEMBER 1, 2005

                       ARTICLE I--PURPOSE; EFFECTIVE DATE

     The purpose of this  Supplemental  Executive  Retirement Plan  (hereinafter
referred  to as the  "Plan") is to  provide  supplemental  retirement  and death
benefits for certain key employees of Fidelity Federal Bank & Trust (hereinafter
referred to as  "Fidelity  Federal").  It is intended  that the Plan will aid in
retaining and attracting employees of exceptional ability by providing them with
these  benefits.  This Plan was initially  effective as of October 1, 1989.  The
Plan was  restated  July 1,  2004  and was  most  recently  restated  into  this
document,  effective  December  1,  2005 in order to bring  the  entire  Accrued
Benefit  under the Plan into  compliance  with new Section  409A of the Internal
Revenue Code.

                             ARTICLE II--DEFINITIONS

     For the purposes of this Plan, the following  terms shall have the meanings
indicated, unless the context clearly indicates otherwise:

2.1  Accrued Benefit

     "Accrued  Benefit"  means the present value of the  Participant's  benefits
under the Plan.

2.2  Actuarial Equivalent

     "Actuarial  Equivalent"  means equivalence in value between two (2) or more
forms of  payment  based on a  determination  by an actuary  chosen by  Fidelity
Federal,  using sound actuarial  assumptions at the time of such  determination.
However, if a participant elects a lump sum under the Qualified Retirement Plan,
for  purposes of Article V of this Plan,  the lump sum shall be  converted  to a
monthly,  ten (10) year certain and life annuity using the lowest  discount rate
provided in the Qualified  Retirement  Plan for the  determination  of actuarial
equivalence.

2.3  Beneficiary

     "Beneficiary" means the person, persons or entity entitled under Article VI
to receive any Plan benefits payable after a Participant's death.

2.4  Board

     "Board" means the Board of Directors of Fidelity Federal.

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2.5  Change in Control shall mean any of the following:

               (a) "Change in Control" shall mean (i) a change in the ownership
         of the Company, (ii) a change in the effective control of the Company,
         or (iii) a change in the ownership of a substantial portion of the
         assets of the Company, as described below.

               (b) A change in the ownership of a corporation occurs on the date
         that any one person, or more than one person acting as a group (as
         defined in Proposed Treasury Regulations section 1.409A-3(g)(5)(v)(B)),
         acquires ownership of stock of the Company 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.

               (c) A change in the effective control of the Company occurs on
         the date that either (i) any one person, or more than one person acting
         as a group (as defined in Proposed Treasury Regulations section
         1.409A-3(g)(5)(vi)(B)) 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 Company possessing 35 percent or
         more of the total voting power of the stock of such Company, or (ii) a
         majority of the members of the Company'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 Company's board of
         directors prior to the date of the appointment or election, provided
         that this subsection "(ii)" is inapplicable where a majority
         shareholder of the Company is another corporation.

               (d) A change in a substantial portion of the Company's assets
         occurs on the date that any one person or more than one person acting
         as a group (as defined in Proposed Treasury Regulations section
         1.409A-3(g)(5)(vii)(C)) 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 Company 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 (ii) the value of the
         assets being disposed of, either of which is determined without regard
         to any liabilities associated with such assets. For all purposes
         hereunder, the definition of Change in Control shall be construed to be
         consistent with the requirements of Proposed Regulations section
         1.409A-3(g)(5), except to the extent that such Proposed Regulations are
         superseded by subsequent guidance.

2.6  Committee

     "Committee"  means the Committee  appointed to administer the Plan pursuant
to Article VII.

2.7  Compensation

     "Compensation"  means the salary and bonuses paid to a  Participant  before
reduction for amounts  deferred under the Fidelity  Federal  Long-Term  Deferred
Compensation  Plan, the 2005 Fidelity Federal  Long-Term  Deferred  Compensation
Plan or any salary reduction contributions under IRC Section 401(k) or any other
salary deferral program.  Compensation does not include expense  reimbursements,
any special bonuses related to disability or life insurance, any form of noncash
compensation  or benefits,  Employer  contributions  to the Retirement  Plan for
Employees of Fidelity Federal Bank & Trust, Employer discretionary contributions
to the Fidelity Federal Long-Term Deferred  Compensation Plan, the 2005 Fidelity
Federal Long-Term Deferred  Compensation Plan, group life insurance premiums, or
any other payments or benefits other than normal compensation.

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2.8. Company

     "Company" means Fidelity Bankshares, Inc.

2.9  Deferred Retirement Date

     "Deferred Retirement Date" means the first day of the month coincident with
or next  following the  Participant's  Separation  from Service (with respect to
amounts  accrued  after  December  31,  2004)  if such  date  occurs  after  the
Participant's Normal Retirement Date.

2.10 Disability

     "Disability"  means a physical or mental  condition that, in the opinion of
the Committee, permanently prevents a Participant from satisfactorily performing
the  Participant's  usual duties for Employer.  The  Committee's  decision as to
Disability will be based upon medical  reports and/or  evidence  satisfactory to
the Committee.  In no event shall a Disability be deemed to occur or to continue
after a Participant's Normal Retirement Date.

2.11 Early Retirement Date

     "Early  Retirement  Date"  means  the date on which the  Participant  has a
Separation  from  Service  if it  occurs  after  the  first  day  of  the  month
coincidental with or next following a Participant's attainment of age fifty-five
(55) and completion of fifteen (15) Years of Credited Service,  but prior to his
Normal Retirement Date.

2.12 Employer

     "Employer"  means  Fidelity  Federal  Bank & Trust,  a federally  chartered
savings bank, or any successor to the business  thereof,  and any  affiliated or
subsidiary corporations designated by the Board.

2.13 Final Monthly Compensation

     "Final Monthly  Compensation"  means the Participant's  Compensation during
the final twelve (12)  consecutive  complete  calendar months of employment with
the Employer  prior to the event that triggers  distribution,  divided by twelve
(12),  provided,  however,  that if Executive  has received 2 or more bonuses in
that 12 month period, only the higher bonus shall be taken into consideration.

2.14 Final Average Compensation

     "Final   Average   Compensation"   means  the  sum  of  the   Participant's
Compensation  during the  consecutive  sixty (60) months of employment  with the
Employer  prior  to  the  event  that  triggers  distribution,  divided  by  60.
Compensation  earned after the  Participant's  Normal  Retirement  Date shall be
included only if it increases Final Average  Compensation.  If a Participant has
not been  employed by the Employer for sixty (60) full calendar  months,  "Final
Average  Compensation"  shall mean the sum of Participant's  compensation during
the full months  employed by Employer  (annualized  to 12 months for any partial
year) and then divided by the number of years  (including the  annualized  year)
Participant was employed by Employer.

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2.15 Normal Retirement Date

     "Normal  Retirement  Date" means the first day of the month coincident with
or next following the  Participant's  attainment of age  sixty-five  (65) or age
sixty (60) with thirty (30) Years of Credited Service.  In the event of a Change
in Control,  Normal  Retirement Date means the first day of the month coincident
with or next  following  either the  Participant's  attainment of age sixty-five
(65) or age sixty (60) with  thirty  (30)  Years of  Credited  Service  from the
Participant's  original  hire  date.  If  following  a Change  in  Control,  the
Participant's employment terminates prior to the Participant's Normal Retirement
Date,  the  Years  of  Credited  Service  determination  shall be made as if the
Participant  was  never  terminated.  Notwithstanding  anything  herein  to  the
contrary,  three amendments that credit  additional Years of Credited Service to
certain  Participants or that established a different Normal Retirement Date for
certain  Participants,  preceded  the  date  of  this  restated  Plan,  and  are
incorporated herein by reference and attached hereto as Exhibits.

2.16 Participant

     "Participant" means any individual who is participating or has participated
in this Plan as provided in Article III.

2.17 Participation Agreement

     "Participation  Agreement" means the agreement filed by a Participant which
acknowledges assent to the terms of the Plan.

2.18 Proposed Regulations

     "Proposed  Regulations"  means the regulations  proposed under Code Section
409A, IRS Notice 2005-1 and any subsequent guidance.

2.19 Qualified Retirement Plan

     "Qualified  Retirement  Plan" means the  Retirement  Plan for  Employees of
Fidelity Federal Bank & Trust or any successor defined benefit retirement income
plan or plans maintained by the Employer which qualifies under Section 401(a) of
the Internal  Revenue Code. For purposes of  determining  benefits and actuarial
equivalencies under the Qualified  Retirement Plan, the actuarial principles and
assumptions which have consistently applied to such plan(s) shall continue to be
applied.

2.20 Retirement

     "Retirement"  means  a  Participant's  Separation  from  Service  with  the
Employer at the Participant's  Early Retirement Date, Normal Retirement Date, or
Deferred Retirement Date.

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2.21 Separation from Service

     "Separation  from Service"  means the  Participant's  death,  retirement or
termination of employment with the Employer. No Separation from Service shall be
deemed to occur due to  military  leave,  sick leave or other bona fide leave of
absence if the period of such leave does not exceed six months or, if longer, so
long as the Participant's  right to reemployment is provided by law or contract.
If the leave exceeds six months and the  Participant's  right to reemployment is
not  provided  by law or by  contract,  then  the  Participant  shall  be have a
Separation from Service on the first date  immediately  following such six-month
period.

     The Participant shall not be treated as having a Separation from Service if
the  Participant  provides  more than  insignificant  services  for the Employer
following the Participant's  actual or purported  termination of employment with
the  Employer.  Services  shall be  treated as not being  insignificant  if such
services  are  performed  at an annual rate that is at least equal to 20% of the
services  rendered by the Participant for the Employer,  on average,  during the
immediately  preceding  three full calendar  years of employment (or if employed
less than three years,  such shorter period of  employment)  and the annual base
compensation  for such  services is at least  equal to 20% of the  average  base
compensation earned during the final three full calendar years of employment (or
if employed less than three years, such shorter period of employment).

     Where the Participant  continues to provide services to a previous employer
in a capacity other than as an employee,  a Separation  from Service will not be
deemed to have occurred if the  Participant  is providing  services at an annual
rate  that is 50% or more of the  services  rendered,  on  average,  during  the
immediate preceding three full calendar years of employment (or if employed less
than three years,  such lesser period) and the annual base compensation for such
services is 50% or more of the annual base compensation  earned during the final
three full calendar years of employment (or if less, such lesser period).

2.22 Specified Employee

     "Specified  Employee"  means a key  employee  within  the  meaning  of Code
Section 416(i) without regard to paragraph 5 thereof. Where a new corporation or
entity  ("new  corporation")  is  established  as part of a  corporate  division
governed by Code section 335 from a  corporation  that is publicly  traded on an
established securities market or otherwise ("old corporation"),  any employee of
the new corporation  who was a key employee of the old  corporation  immediately
prior to the spin off is a key employee of the new corporation  until the end of
the 12-month period beginning on the first day of the fourth month following the
old corporation's last  identification  date preceding the spinoff  transaction.
Where two corporations  (pre-merger  corporations)  are merged or become part of
the  same  controlled  group of  corporations  so as to be  treated  as a single
service recipient under Proposed Treasury regulations section  1.409A-1(g),  any
employee  of the  merged  corporation  who  was a key  employee  of  either  the
pre-merger  corporations  immediately before the merger is a key employee of the
merged   corporation  until  the  first  day  of  the  fourth  month  after  the
identification date of the merged corporation next following the merger.

2.23 Spouse

     "Spouse" means a Participant's  wife or husband who is lawfully  married to
the Participant at the time of the Participant's death.

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2.24 Supplemental Retirement Benefit

     "Supplemental  Retirement  Benefit"  means  the  benefit  determined  under
Article V of this Plan.

2.25 Target Retirement Percentage

     "Target  Retirement  Percentage"  means  the  percentage  of Final  Average
Compensation which will be used as a target from which other forms of retirement
benefits  are  subtracted,  as provided in Article V, to arrive at the amount of
the Supplemental Retirement Benefit actually payable to a Participant.

2.26 Years of Credited Service

     "Years of Credited  Service" means the number of years of credited  vesting
service determined under the provisions of the Employer's  Qualified  Retirement
Plan.  Notwithstanding  anything herein to the contrary,  three  amendments that
credit  additional  Years of Credited  Service to certain  Participants  or that
established  a  different  Normal  Retirement  Date  for  certain  Participants,
preceded  the  date of  this  restated  Plan,  and are  incorporated  herein  by
reference and attached hereto as Exhibits.

                     ARTICLE III--PARTICIPATION AND VESTING

3.1  Eligibility and Participation

               (a) Eligibility. Eligibility to participate in the Plan shall be
         limited to those employees of the Employer who are designated by the
         Board.

               (b) Participation. An Employee's participation in the Plan shall
         be effective upon notification of the employee of eligibility to
         participate, completion of a Participation Agreement by the Participant
         and acceptance of the Participation Agreement by the Committee.
         Participation in the Plan shall continue until such time as the
         Participant terminates employment with the Employer, and as long
         thereafter as the Participant is eligible to receive benefits under
         this Plan.

3.2  Change in Employment Status

     Discontinued  Eligibility.  If the  Board,  prior to a Change  in  Control,
determines that a Participant's  employment  performance is no longer at a level
which deserves reward through participation in this Plan, but does not terminate
the  Participant's  employment  with  the  Employer,  participation  herein  and
eligibility to receive benefits  hereunder shall be limited to the Participant's
vested interest in such benefits as of the date designated by the Board.

3.3  Vesting

     Each  Participant  shall be one hundred  percent  (100%) vested in benefits
under  this Plan  after  completing  five (5)  Years of  Credited  Service.  The
preceding notwithstanding,  each Participant shall be one hundred percent (100%)
vested in benefits  under this Plan upon death,  Disability,  Normal  Retirement
Date or upon Change in Control.

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3.4  Suicide

     The provisions of Article IV notwithstanding, no benefit shall be paid to a
Beneficiary if the Participant's  death occurs as a result of suicide during the
twenty-four  (24) successive  calendar months  beginning with the calendar month
following the commencement of an employee's participation in this Plan.

                   ARTICLE IV--PRERETIREMENT SURVIVOR BENEFIT

4.1  Preretirement Survivor Benefit

     If a Participant  dies while  employed by the Employer,  the Employer shall
pay a supplemental survivor benefit to the Participant's  Beneficiary(ies).  The
amount of this benefit  shall be equal to the  actuarially  equivalent  lump sum
value of the accrued  Supplemental  Retirement  Benefit as determined under 5.2,
5.3, 5.4 or 5.5, whichever Section is applicable, at the date of death.

4.2  Payment of Benefits

               (a) Form and Commencement of Benefit Payments. The supplemental
         survivor benefits payable under this Article shall be paid in the form
         of one hundred twenty (120) equal monthly installments, with interest.
         The interest rate used in determining the monthly payments shall be the
         same interest rate used in determining the lump sum equivalent in 4.1
         above. Payments shall commence the first day of the second month
         following the death of the Participant and shall continue the first day
         of each month thereafter for the duration of the payment period.

               (b) Commutation of Benefits. In accordance with the Proposed
         Regulations under Code Section 409A, a Participant may elect no later
         than December 31, 2006, to have the supplemental survivor benefit
         payable to the Participant's Beneficiary upon the Participant's death
         paid in the form of a lump sum rather than 120 monthly installment
         payments. In such case, the lump sum payment shall be the actuarial
         equivalent of the benefit payable under Section 4.2(a) above.

                   ARTICLE V--SUPPLEMENTAL RETIREMENT BENEFITS

5.1  Target Retirement Percentage

     The  Target   Retirement   Percentage  shall  equal  eighty  percent  (80%)
multiplied by a fraction,  the numerator of which is the Participant's  Years of
Credited  Service and the denominator of which is the Years of Credited  Service
the Participant will accrue by his Normal  Retirement Date,  assuming he remains
employed by the Employer  until such date.  In the event of a Change in Control,
the  denominator  in the  preceding  factor shall be equal to the  Participant's

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actual years of service at the time of the event which triggers a  distribution.
The adjusted Target  Retirement  Percentage shall be rounded to four (4) decimal
places and may never exceed eighty percent (80%) unless the Participant  retires
on a  Deferred  Retirement  Date.  For  a  Participant  retiring  on a  Deferred
Retirement  Date,  the target shall equal eighty  percent (80%) plus two percent
(2%) for each full year by which the  Participant's  retirement is subsequent to
the Participant's Normal Retirement Date (for these purposes, "full years" shall
be  determined  by rounding up or down to the  nearest  full year).  In no event
shall the Target Retirement Percentage ever exceed one hundred percent (100%).

5.2  Normal Retirement Benefit

     If a Participant  retires on the Normal Retirement Date, the Employer shall
pay to the  Participant a  Supplemental  Retirement  Benefit equal to the Target
Retirement   Percentage   multiplied   by  the   Participant's   Final   Average
Compensation, less

               (a) Fifty percent (50%) of the Participant's primary Social
         Security benefit determined at the Participant's Normal Retirement Date
         based on the then current law, assuming no future compensation and
         using an additional five percent (5%) per year reduction (prorated for
         partial years) if retirement occurs before age sixty-two (62), and

               (b) The monthly ten (10) year certain life annuity which is the
         actuarial equivalent on the Normal Retirement Date of all benefits
         accrued under the Qualified Retirement Plan, including any benefit
         previously distributed from the Qualified Retirement Plan.

5.3  Deferred Retirement Benefit

     If a Participant  retires at a Deferred Retirement Date, the Employer shall
pay to the  Participant a  Supplemental  Retirement  Benefit equal to the Target
Retirement   Percentage   multiplied   by  the   Participant's   Final   Average
Compensation, less

               (a) Fifty percent (50%) of the Participant's primary Social
         Security benefit determined at the Deferred Retirement Date, and

               (b) The monthly ten (10) year certain life annuity that is the
         actuarial equivalent on the Deferred Retirement Date of all benefits
         accrued under the Qualified Retirement Plan, including any benefit
         previously distributed from the Qualified Retirement Plan.

5.4  Early Retirement Benefit

     If a Participant  retires at an Early  Retirement  Date, the Employer shall
pay to the  Participant a  Supplemental  Retirement  Benefit equal to the Target
Retirement   Percentage   multiplied   by  the   Participant's   Final   Average
Compensation, less

               (a) Fifty percent (50%) of the Participant's primary Social
         Security benefit determined at the Participant's Normal Retirement Date
         based on the then current law, assuming no future compensation and
         using an additional five percent (5%) per year reduction (prorated for
         partial years) if the Normal Retirement Date is before age sixty-two
         (62), and

               (b) The monthly ten (10) year certain life annuity at age
         sixty-five (65) that is the actuarial equivalent on the Normal
         Retirement Date of all benefits accrued under the Qualified Retirement
         Plan, including any benefit previously distributed from the Qualified
         Retirement Plan.

PAGE 8 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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     The above  benefit  shall be  reduced  by five  percent  (5%) for each full
calendar year by which the  commencement of payment under this section  precedes
the Participant's  Normal Retirement Date. The percentages shall be prorated for
partial years.

5.5  Early Termination Retirement Benefit

     If a vested  Participant  terminates  employment  prior to Retirement,  the
Employer shall pay to the Participant a Supplemental Retirement Benefit equal to
the Target Retirement  Percentage  multiplied by the Participant's Final Average
Compensation, less

               (a) Fifty percent (50%) of the Participant's primary Social
         Security benefit projected to be paid at age sixty-five (65) based on
         the then current law and assuming no future increases in compensation,
         and

               (b) The monthly ten (10) year certain life annuity that is the
         actuarial equivalent at age sixty-five (65) of all benefits accrued
         under the Qualified Retirement Plan, including any benefit previously
         distributed from the Qualified Retirement Plan.

5.6  Change in Control Benefit

     (a) If a a Change in Control  occurs,  the  Participant's  benefit shall be
based on Final Monthly  Compensation  instead of Final Average  Compensation and
shall be calculated as follows:

               (1) If the Participant is eligible for Normal Retirement, the
         Participant's benefit shall be calculated pursuant to Section 5.2,
         except that Final Monthly Compensation shall be used instead of Final
         Average Compensation. Such Participant's benefit shall commence within
         ninety (90) days after the Change in Control, irrespective of whether
         the Participant's employment is terminated.

               (2) If the Participant is eligible for Early Retirement at the
         time of the Change in Control, the Participant's benefit shall be
         calculated pursuant to Section 5.4, with the adjustments to the Target
         Retirement Percentage and Normal Retirement Date, as required. Such
         benefit shall commence within ninety (90) days after the Change in
         Control unless the Participant has elected prior to December 31, 2005,
         to have the Participant's benefit commence upon Retirement.

               (3) If the Participant is not eligible for Early Retirement at
         the time of the Change in Control, whether or not such Participant's
         employment is terminated following the Change in Control, such
         Participant's benefit shall be calculated pursuant to Section 5.2 at
         the Participant's Normal Retirement Date, based on the adjustments to
         the Target Retirement Percentage required as a result of a Change of
         Control. Such benefit shall commence within thirty (30) days of the
         Participant's Normal Retirement Date, unless the Participant is a
         Specified Employee at the Participant's Normal Retirement Date, and
         then such benefit shall commence on the first day of the seventh month
         following Separation form Service.

PAGE 9 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

5.7  Disability Retirement Benefit

     If a person  terminates  employment  prior  to  Retirement  as a result  of
Disability,  the Employer shall pay to the Participant a Supplemental Retirement
Benefit  commencing at age  sixty-five  (65). The benefits shall be equal to the
amount  the  Participant  would  have  received  at such time  under the  Normal
Retirement  provisions  of this Article  assuming the  Participant  would not be
eligible for Normal  Retirement  until age sixty-five (65). For purposes of this
calculation,  Years of Credited  Service  shall  continue  to accrue  during the
period of Disability and the Participant's  Final Average  Compensation shall be
based  only on the  amounts  earned  during  the  twelve  (12)  months  prior to
Disability if this provides the Participant with a greater benefit.

5.8  Inflation Index

     The  Supplemental  Executive  Retirement  Benefit  shall be  increased  for
inflation on the January 1 coinciding  with or following the  anniversary of the
commencement of benefits, and each January 1 thereafter.  This increase shall be
the lesser of:

               (a) The percentage change in the national consumer price index
         (CPI-U) for the twelve (12) month period preceding October of the prior
         year (determined by comparing the prior two (2) years' September
         indexes). This percentage change shall be calculated and rounded to
         four (4) decimal places (XX.XX%) and shall never be less than zero (0),
         or

               (b) Six percent (6%).

5.9  Payment of Benefits

               (a) Form of Benefit Payments. The Supplemental Retirement Benefit
         shall be paid in the basic form provided below, unless the Participant
         requests an alternative form at the time of initial enrollment or prior
         to December 31, 2006. Any alternative form shall be the Actuarial
         Equivalent of the basic form of benefit payments. The basic and
         alternative forms of payment are as follows:

                      (1) Basic Form of Benefit Payments. Monthly single life
               annuity with a ten (10) year certain for the Participant's life.

                      (2) Alternative Forms of Benefit Payment.

                             (i) A joint and survivor annuity with payment
                      continued to the survivor in the same amount as the amount
                      paid to the Participant.

                             (ii) A joint and survivor annuity with payment
                      continued to the survivor at one-half (1/2) of the amount
                      paid to the Participant.

                             (iii) Any other form that is the Actuarial
                      Equivalent of the basic form of benefit payments.
                      Notwithstanding anything herein to the contrary, a
                      Participant may change the form of annuity payment from
                      one type of life annuity to another type of life annuity
                      before any annuity payment has been made. Such a change is
                      not considered a change in the time and form of a payment,
                      provided that the annuities are actuarially equivalent
                      applying reasonable actuarial assumptions in accordance
                      with Section 1.409A-2(b)(2)(ii) of the Proposed
                      Regulations.

PAGE 10 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

               (b) Commencement of Benefit Payments. The Supplemental Retirement
         Benefits payable to a Participant under the Normal, Deferred, or Early
         Retirement provisions of this Article shall commence within ninety (90)
         days of the Participant's termination of employment, provided, however,
         if the Participant is a Specified Employee at the time of termination
         of employment, commencement shall occur no earlier than the first day
         of the seventh month following Separation from Service. The
         Supplemental Retirement Benefits payable to a Participant under the
         Early Termination or Disability provisions of this Article shall
         commence within thirty (30) days of the Participant attaining age
         sixty-five (65).

               (c) Transition Period Changes.

                       a.   Notwithstanding the above, Participants may change
                            their payment elections hereunder through December
                            31, 2006, in accordance with Section XI(C) of the
                            Preamble to the 2005 Proposed Regulations issued
                            under Code section 409A; provided, however, that in
                            2006 a Participant cannot change payment elections
                            with respect to payments that the Participant would
                            otherwise receive in 2006 or cause payments to be
                            made in 2006. Any transition period changes shall be
                            made on such forms as are provided by the Committee
                            and shall be filed by the Committee during the
                            applicable transition period.

                       b.   Commutation  of  Benefits.  In  accordance  with the
                            Proposed  Regulations  under Code  Section  409A, a
                            Participant  may elect no later than December 31,
                            2006, (or by December 31, 2005,  with respect to
                            benefits  to be paid  commencing in 2006) to change
                            the Participant's election with respect to the form
                            of  payment,  or to have a partial  payment in one
                            form and the  remainder  in  another form (e,g.,40%
                            in a lump sum and 60% paid in a single life
                            annuity).  In such case,  the  aggregate of the two
                            forms of payment shall be the  actuarial equivalent
                            of the  basic form of benefit payable under Section
                            5.9(a)(1) above.

               (d) Distribution of De Minimus Benefits. Notwithstanding anything
         herein to the cotrary, if the value of the Participant's Accrued
         Benefit (when added together with all of his benefits under all
         nonqualified deferred compensation plans maintained by the Employer) is
         $10,000 or less at the time of the distribution event, payment shall be
         made in a lump sum, even if the Participant had specified a different
         form of payment, and such payment shall be made before the later of (i)
         December 31 of the year in which the Participant terminates service
         with the Employer or (ii) the 15th day of the third month following the
         Participant's termination of service with the Employer.

              (e) Other Changes in Benefit Elections. In the event a Participant
         desires to modify the time or form (e.g., from annuity to lump sum
         or vice versa) of distribution of the Participant's Supplemental
         Retirement Benefit, the Participant may do so by filing a written
         election with the Committee, provided that:

PAGE 11 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

              (1) the subsequent election shall not be effective for at least 12
                  months after the date on which the subsequent election is
                  made;

              (2) except for payments upon the Executive's death, Disability or
                  upon an Unforeseeable Emergency, the first of a stream of
                  payments for which the subsequent election is made shall be
                  deferred for a period of not less than five (5) years from the
                  date on which such payment would otherwise have been made;

              (3) for payments scheduled to be made on a specified date, the
                  subsequent election must be made at least 12 months before the
                  date of the first scheduled payment.

5.10 Withholding; Payroll Taxes

     The Employer shall withhold from payments made hereunder any taxes required
to be withheld from a Participant's  wages for the federal or any state or local
government. However, a Beneficiary may elect not to have withholding for federal
income tax purposes pursuant to Section 3405(a)(2) of the Internal Revenue Code,
or any successor provision.

5.11 Payment to Guardian

     If a Plan benefit is payable to a minor or a person declared incompetent or
to a person incapable of handling the disposition of his property, the Committee
may direct payment of such Plan benefit to the guardian, legal representative or
person  having the care and custody of such minor,  incompetent  or person.  The
Committee  may  require   proof  of   incompetency,   minority,   incapacity  or
guardianship  as it may  deem  appropriate  prior  to  distribution  of the Plan
benefit.  Such  distribution  shall  completely  discharge the Committee and the
Employer from all liability with respect to such benefit.

                       ARTICLE VI--BENEFICIARY DESIGNATION

6.1  Beneficiary Designation

     Each Participant shall have the right, at any time, to designate any person
or  persons  as his  Beneficiary  or  Beneficiaries  (both  primary  as  well as
secondary)  to whom  benefits  under this Plan shall be paid in the event of his
death prior to complete  distribution  to  Participant of the benefits due under
the Plan. Each Beneficiary  designation shall be in a written form prescribed by
the Committee,  and will be effective only when filed with the Committee  during
the Participant's lifetime.

6.2  Amendments

     Any  Beneficiary  designation  may be changed by a Participant  without the
consent  of any  designated  Beneficiary  by  the  filing  of a new  Beneficiary
designation with the Committee. The filing of a new Beneficiary designation form
will cancel all Beneficiary  designations  previously  filed. If a Participant's
Compensation is community property,  any Beneficiary  Designation shall be valid
or effective only as permitted under applicable law.

PAGE 12 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

6.3  No Participant Beneficiary Designation

     In  the  absence  of  an  effective  Beneficiary  Designation,  or  if  all
designated  Beneficiaries  predecease  the  Participant or die prior to complete
distribution of the Participant's  benefits,  then the Participant's  designated
Beneficiary  shall be deemed to be the  person or persons  surviving  him in the
first of the  following  classes in which there is a  survivor,  share and share
alike;

               (a) The Particpant' surviving Spouse;

               (b) The Participant's children, except that if any of the
         children predecease the Participant but leave issue surviving, then
         such issue shall take by right of representation the share their parent
         would have taken if living;

               (c) The Participant's estate.

6.4  Effect of Payment

     The payment to the deemed Beneficiary shall completely discharge Employer's
obligations under this Plan.

                           ARTICLE VII--ADMINISTRATION

7.1  Committee; Duties

     This plan shall be administered by the Committee which shall consist of not
less than three (3) persons appointed by the Board. The Committee shall have the
authority  to make,  amend,  interpret,  and enforce all  appropriate  rules and
regulations  for the  administration  of this Plan and decide or resolve any and
all questions including interpretations of this Plan, as may arise in connection
with the Plan.  A majority  vote of the  Committee  members  shall  control  any
decision. Members of the Committee may be Participants under this Plan.

7.2  Agents

     The Committee  may, from time to time,  employ other agents and delegate to
them  such  administrative  duties  as it sees  fit,  and may from  time to time
consult with counsel who may be counsel to the Employer.

7.3  Binding Effect of Decisions

     The decision or action of the Committee in respect of any question  arising
out of or in connection with the administration,  interpretation and application
of the Plan and the rules and regulations  promulgated  hereunder shall be final
and conclusive and binding upon all persons having any interest in the Plan.

7.4  Indemnity of Committee

     The Employer shall indemnify and hold harmless the members of the Committee
against any and all claims, loss, damage,  expense or liability arising from any
action or failure to act with respect to this Plan,  except in the case of gross
negligence or willful misconduct.

PAGE 13 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

                         ARTICLE VIII--CLAIMS PROCEDURE

8.1  Claim

     Any person claiming a benefit, requesting an interpretation or ruling under
the Plan, or requesting  information under the Plan shall present the request in
writing to the Committee which shall respond in writing within thirty (30) days.

8.2  Denial of Claim

     If the claim or request  is  denied,  the  written  notice of denial  shall
state:

               (a) The reason for denial, with specific reference to the Plan
         provisions on which the denial is based.

               (b) A description of any additional material or information
         required and an explanation of why it is necessary.

               (c) An explanation of the Plan's claim review procedure. 8.3
         Review of Claim

     Any  person  whose  claim or  request  is denied or who has not  received a
response  within thirty (30) days may request  review by notice given in writing
to the  Committee.  The claim or request  shall be reviewed by the Committee who
may, but shall not be required to, grant the claimant a hearing.  On review, the
claimant may have representation, examine pertinent documents, and submit issues
and comments in writing.

8.4  Final Decision

     The decision on review shall normally be made within sixty (60) days. If an
extension of time is required for a hearing or other special circumstances,  the
claimant  shall be notified and the time limit shall be one hundred twenty (120)
days.  The  decision  shall be in  writing  and shall  state the  reason and the
relevant  plan  provisions.  All decisions on review shall be final and bind all
parties concerned.

                ARTICLE IX--TERMINATION, SUSPENSION OR AMENDMENT

9.1  Termination, Suspension or Amendment of Plan

               (a) The Board may, in its sole discretion, terminate or suspend
         this Plan at any time or from time to time, in whole or in part. The
         Board may amend this Plan at any time or from time to time. However, no
         such termination suspension or amendment shall adversely affect the
         benefits of Participants which have accrued prior to such action or the
         benefits of any Beneficiary of a Participant who has previously died.

               (b) The Board may completely terminate the Plan. Subject to the
         requirements of Code Section 409A, in the event of complete
         termination, the Plan shall cease to operate and the Employer shall pay
         out to each Participant his or her Accrued Benefit as if that
         Participant had terminated service as of the effective date of the
         complete termination. Such complete termination of the Plan shall occur
         only under the following circumstances and conditions.

PAGE 14 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

                      (1) The Board may terminate the Plan within 12 months of a
         corporate dissolution taxed under Code section 331, or with approval of
         a bankruptcy court pursuant to 11 U.S.C. ss.503(b)(1)(A), provided that
         the amounts deferred under the Plan are included in each Participant's
         gross income in the latest of (i) the calendar year in which the Plan
         terminates; (ii) the calendar year in which the amount is no longer
         subject to a substantial risk of forfeiture; or (iii) the first
         calendar year in which the payment is administratively practicable.

                      (2) The Board may terminate the Plan within the 30 days
         preceding a Change in Control (but not following a Change in Control),
         provided that the Plan shall only be treated as terminated if all
         substantially similar arrangements sponsored by the Employer are
         terminated so that the Participants and all participants under
         substantially similar arrangements are required to receive all amounts
         of compensation deferred under the terminated arrangements within 12
         months of the date of the termination of the arrangements, provided,
         however that any termination prior to a Change in Control under this
         sub-paragraph will be deemed to be a termination coincident or
         following a Change in Control for purposes of the calculation and
         payment of benefits under Section 5.6 hereof.

                      (3) The Board may terminate the Plan provided that (i) all
         arrangements sponsored by the Employer that would be aggregated with
         this Plan under Proposed Treasury regulations section 1.409A-1(c) if
         any Participant covered by this Plan was also covered by any of those
         other arrangements are also terminated; (ii) no payments other than
         payments that would be payable under the terms of the arrangement if
         the termination had not occurred are made within 12 months of the
         termination of the arrangement; (iii) all payments are made within 24
         months of the termination of the arrangements; and (iv) the Employer
         does not adopt a new arrangement that would be aggregated with any
         terminated arrangement under Proposed Treasury regulations section
         1.409A-1(c) if the same Participant participated in both arrangements,
         at any time within five years following the date of termination of the
         arrangement.

                      (4) The Board may terminate the Plan pursuant to such
         other terms and conditions as the Internal Revenue Service may permit
         from time to time.

                            ARTICLE X--MISCELLANEOUS

10.1 Unfunded Plan

     This Plan is  intended  to be an  unfunded  plan  maintained  primarily  to
provide  deferred  compensation  benefits  for a select group of  management  or
highly compensated employees.

PAGE 15 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

10.2 Unsecured General Creditor

     Participants and their Beneficiaries,  heirs,  successors and assigns shall
have no legal or equitable rights,  interest or claims in any property or assets
of Employer,  nor shall they be beneficiaries of, or have any rights,  claims or
interests  in any life  insurance  policies,  annuity  contracts or the proceeds
therefrom  owned or which may be acquired by  Employer.  Such  policies or other
assets of  Employer  shall  not be held  under  any  trust  for the  benefit  of
Participants, their Beneficiaries,  heirs, successors or assigns, or held in any
way as collateral  security for the  fulfilling of the  obligations  of Employer
under this Plan.  Any and all of  Employer's  assets  shall be, and remain,  the
general, unpledged, unrestricted assets of Employer. Employer's obligation under
the Plan shall be that of an unfunded and  unsecured  promise of Employer to pay
money in the future.

10.3 Trust Fund

     The Employer shall be responsible for the payment of all benefits  provided
under the Plan.  At its  discretion,  the Employer may establish one (1) or more
trusts,  with such  trustees  as the  Board  may  approve,  for the  purpose  of
providing  for the  payment  of such  benefits.  Such  trust  or  trusts  may be
irrevocable,  but the  assets  thereof  shall be  subject  to the  claims of the
Employer's  creditors.  To the extent any benefits  provided  under the Plan are
actually paid from any such trust, the Employer shall have no further obligation
with respect thereto,  but to the extent not so paid, such benefits shall remain
the obligation of, and shall be paid by, the Employer.

10.4 Nonassignability

     Neither a Participant nor any other person shall have any right to commute,
sell, assign,  transfer,  pledge,  anticipate,  mortgage or otherwise  encumber,
transfer,  hypothecate  or convey in advance of actual  receipt the amounts,  if
any, payable hereunder,  or any part thereof, which are, and all rights to which
are, expressly declared to be unassignable and  nontransferable.  No part of the
amounts  payable  shall,  prior to actual  payment,  be  subject  to  seizure or
sequestration  for the  payment of any  debts,  judgments,  alimony or  separate
maintenance  owed by a Participant or any other person,  nor be  transferable by
operation  of  law  in the  event  of a  Participant's  or  any  other  person's
bankruptcy or insolvency.

10.5 Not a Contract of Employment

     The terms and  conditions  of this Plan shall not be deemed to constitute a
contract  of  employment  between  the  Employer  and  the  Participant  (or his
Beneficiary)  shall have no rights against the Employer  except as may otherwise
by specifically provided herein. Moreover,  nothing in this Plan shall be deemed
to give a Participant the right to be retained in the service of the Employer or
to interfere  with the right of the Employer to  discipline  or discharge him at
any time.

10.6 Protective Provisions

     A Participant  will  cooperate  with the Employer by furnishing any and all
information  requested by the Employer,  in order to  facilitate  the payment of
benefits hereunder, and by taking such physical examinations as the Employer may
deem necessary and taking such other action as may be requested by the Employer.

PAGE 16 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

10.7 Terms

     Whenever  any  words  are  used  herein  in the  masculine,  they  shall be
construed as though they were used in the feminine in all cases where they would
so apply;  and  wherever  any words are used  herein in the  singular  or in the
plural,  they shall be  construed  as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

10.8 Captions

     The captions of the articles,  sections and paragraphs of this Plan are for
convenience  only and shall not control or affect the meaning or construction of
any of its provisions.

10.9 Governing Law

     The provisions of this Plan shall be construed and interpreted according to
the laws of the State of Florida.

10.10  Validity

     In case any provision of this Plan shall be held illegal or invalid for any
reason,  said  illegality  or invalidity  shall not affect the  remaining  parts
hereof,  but this Plan shall be  construed  and  enforced as if such illegal and
invalid provision had never been inserted herein.

10.11  Notice

     Any notice or filing  required or  permitted  to be given to the  Committee
under the Plan shall be sufficient if in writing and hand delivered,  or sent by
registered or certified  mail to any member of the Committee or the Secretary of
the  Employer.  Such notice shall be deemed given as of the date of delivery or,
if delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.

10.12  Successors

     The provisions of this Plan shall bind and inure to the benefit of Fidelity
Federal and its successors and assigns. The term successors as used herein shall
include any corporate or other business  entity which shall,  whether by merger,
consolidation,  purchase or otherwise  acquire all or  substantially  all of the
business and assets of Fidelity Federal,  and successors of any such corporation
or other business entity.

10.13  Compliance with Section 409A of the Code

     The Plan is  intended  to be a  non-qualified  deferred  compensation  plan
described in Section 409A of the Code. The Plan shall be operated,  administered
and  construed to give effect to such intent.  To the extent that a provision of
the Plan fails to comply with Code  Section 409A and a  construction  consistent
with Code Section 409A is not possible,  such provision shall be void ab initio.
In addition,  the Plan shall be subject to  amendment,  with or without  advance
notice to Participants  and other  interested  parties,  and on a prospective or
retroactive  basis,  including  but not  limited to  amendment  in a manner that
adversely  affects the rights of Participants and other interested  parties,  to
the extent necessary to effect such compliance.

PAGE 17 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>

     IN WITNESS WHEREOF, and pursuant to resolution of the Board of Directors of
Fidelity  Federal,  as adopted and approved on September 17, 1989 and as amended
and  restated on July 1, 2004 and December 1, 2005 such  corporation  has caused
this instrument to be executed by its duly authorized  officers  effective as of
December 1, 2005.

                                       FIDELITY FEDERAL BANK & TRUST

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

                                       By:
                                          -------------------------------------
                                          Elizabeth Cook, Secretary

                                       Dated:
                                             ----------------------------------

PAGE 18 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLANFIDELITY BANKSHARES, INC.

                              EMPLOYMENT AGREEMENT
                                       FOR
                                VINCE A. ELHILOW

     This Agreement  (this  "Agreement")  is made effective as of the ___ day of
December,  2005 by and between  Fidelity  Bankshares,  Inc. (the  "Company"),  a
Delaware  corporation,  with its principal  administrative  office at 205 Datura
Street, West Palm Beach, Florida 33401, and Vince A. Elhilow ("Executive").

     WHEREAS,  Executive  is  currently  employed  as the  President  and  Chief
Executive  Officer of the  Company  and of  Fidelity  Federal  Bank & Trust (the
"Bank"), and the Company is the sole stockholder of the Bank; and

     WHEREAS,  the Company and Executive are parties to an employment  agreement
dated January 1, 2004; and

     WHEREAS,  the Bank and  Executive  have entered into an updated  employment
agreement dated December __, 2005 (the "Bank  Employment  Agreement")  governing
the terms and conditions of Executive's employment by the Bank; 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  Company  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 Company.  Failure to reelect  Executive as President  and Chief
Executive  Officer of 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

<PAGE>

("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
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  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 Company may be terminated  by the Company 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  Company,  duties and  responsibilities  as  President  and Chief  Executive
Officer of the Bank.

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  Company
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  Company  shall  provide  Executive  at no cost to
Executive  with all such other  benefits as are provided  uniformly to permanent
full-time employees of the Company and/or the Bank.

     (b) The  Company  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  Company  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 and/or the Company in the future to

                                       2
<PAGE>

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  Company  and/or  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.

     (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
Company, other than termination for Cause, which coverage shall be fully paid by
the Company 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 Company 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  to his or her Medicare  coverage
for his or her lifetime.

     (d) The Company 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  Company,  and the
Company shall reimburse Executive his reasonable expenses associated therewith.

5.   WORKING FACILITIES AND EXPENSES

     Executive's  principal  place  of  employment  shall  be at  the  Company's
principal  executive  offices.  The  Company  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 Company and necessary
or  appropriate  in  connection  with the  performance  of his duties under this
Agreement.  The Company shall provide  Executive with an automobile  suitable to
the position of President and Chief Executive  Officer of the Company,  and such
automobile  may be used by  Executive  in  carrying  out his  duties  under this
Agreement as well as for his personal use. The Company shall reimburse Executive
for the cost of maintenance,  use and servicing of such automobile.  The Company
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 Company.  Reimbursement of such expenses shall be made upon  presentation to
the Company of an itemized  account of the  expenses in such form as the Company
may reasonably require.

                                       3
<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 17.

     (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 Company'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 Company.

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
Company,  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 Company and
is engaged in good faith  discussions  to  resolve  any  occurrence  of an event
described in clauses (A), (B), (C), (D) or (E) above.

                                       4
<PAGE>

     (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)
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.

                                       5
<PAGE>

     (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
Company  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 Company and the benefits to which he would be entitled as of
the date of termination  as a former  employee under the Company's or the Bank's
employee benefit plans and programs and compensation plans and programs;

     (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  Company's  expense,  continued  medical,  dental  and  life
insurance  coverage  substantially  identical to the coverage  maintained by the
Company or 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
coverage 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 be obtained)  following his  termination of
employment  with the  Company,  a lump sum  payment  in an  amount  equal to the
present  value of the Company  and/or 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
or the Company) if he had  continued  working for the Company and 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%);

     (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  Company  and/or 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

                                       6
<PAGE>

other deferred  compensation plan for management or highly compensated employees
that are maintained by the Bank and/or the Company), if he had continued working
for the Company and 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 Company and/or 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.

     (d) Upon the occurrence of a Change in Control,  as defined in Section 6(b)
the Company  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 Company's expense, continued medical, dental and life insurance
coverage  substantially  identical to the coverage maintained by the Bank and/or
the  Company 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  Company's  and/or  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 and/or the
Company)  if he had  continued  working  for  the  Bank  and the  Company  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)

                                       7
<PAGE>

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  and/or  the  Company)  if he had
continued  working for the Bank and the Company  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 Company and/or 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.

     (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 Company of Executive's
employment  based on "Retirement"  shall mean termination in accordance with the
Company's  and/or  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  Company or 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 Company may
terminate  this  Agreement,  provided  that the  Company  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 Company  and/or the Bank has

                                       8
<PAGE>

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 Section 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.

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 material 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 Company. 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  Company 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).

                                       9
<PAGE>

     (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
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
Company 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 Company 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 Company  and/or the Bank as may  reasonably be required by the
Company and/or the Bank in connection  with any litigation in which it or any of
its  subsidiaries  or  affiliates  is, or may become,  a party.

11.  ADDITIONAL PAYMENTS RELATED TO A CHANGE IN CONTROL

     (a) In the  event  of a  Change  in  Control  of the  Bank or the  Company,
Executive  shall be entitled  to receive an amount  payable by the  Company,  in
addition to any  compensation  or benefits paid by the Bank pursuant to the Bank
Employment Agreement,  which amount shall equal the difference,  if any, between
(i) the  amount  that  would  be paid by the  Bank  under  the  Bank  Employment
Agreement  without  regard to any  reduction  that may be  required by reason of
Section  6(c) of the Bank  Employment  Agreement,  and (ii) the  amount  that is
actually paid by the Bank under the terms of the Bank Employment Agreement.

     (b) In  addition,  in each  calendar  year that  Executive  is  entitled to
receive  payments  or  benefits  under  the  provisions  of the Bank  Employment
Agreement,  this Agreement  and/or a Company or Bank sponsored  employee benefit

                                       10
<PAGE>

plan, the  independent  accountants of the Company shall  determine if an excess
parachute  payment  (as  defined  in  Section  4999 of the  Code)  exists.  Such
determination  shall be made after taking any reductions  permitted  pursuant to
Section 280G of the Code and the regulations  thereunder.  Any amount determined
to be an excess  parachute  payment  after taking into  account such  reductions
shall be hereafter  referred to as the "Initial  Excess  Parachute  Payment." As
soon as  practicable  after a Change in Control,  the Initial  Excess  Parachute
Payment shall be determined. For purposes of this determination, Executive shall
be deemed to pay federal  income taxes at the highest  marginal  rate of federal
income tax  (including,  but not limited to, the  Alternative  Minimum Tax under
Code  Sections  55-59,  if  applicable)  and  state  and local  income  tax,  if
applicable,  at the highest  marginal rate of taxation in the state and locality
of Executive's residence on the date such payment is payable, net of the maximum
reduction in the federal income taxes which could be obtained from any available
deduction of such state and local taxes.  Any  determination  by the independent
accountants shall be binding on the Company and Executive.  Within five (5) days
after such determination, the Company shall pay Executive, subject to applicable
withholding  requirements  under applicable state or federal law an amount equal
to:

     (i) twenty (20) percent of the Initial  Excess  Parachute  Payment (or such
other amount equal to the tax imposed under Section 4999 of the Code), and

     (ii)  such  additional  amount  (tax  allowance)  as  may be  necessary  to
compensate  Executive  for the payment by Executive of state and federal  income
and excise  taxes on the payment  provided  under Clause (i) and on any payments
under this Clause (ii). In computing such tax allowance,  the payment to be made
under Clause (i) shall be multiplied by the "gross up percentage"  ("GUP").  The
GUP shall be determined as follows:

                                    Tax Rate
                              GUP = ----------
                                   1- Tax Rate

The Tax Rate for  purposes of  computing  the GUP shall be the highest  marginal
federal  and  state  income  and  employment-related  tax  rate,  including  any
applicable  excise tax rate,  applicable  to  Executive in the year in which the
payment under Clause (i) is made.

     (c) Notwithstanding  the foregoing,  if it shall subsequently be determined
in a final judicial determination or a final administrative  settlement to which
Executive  is a party  that the excess  parachute  payment as defined in Section
4999 of the Code,  reduced as described  above,  is  different  from the Initial
Excess Parachute  Payment (such different amount being hereafter  referred to as
the  "Determinative  Excess Parachute  Payment") then the Company's  independent
accountants shall determine the amount (the "Adjustment  Amount") Executive must
pay to the  Company  or the  Company  must  pay to  Executive  in  order  to put
Executive (or the Company, as the case may be) in the same position as Executive
(or the  Company,  as the case may be)  would  have been if the  Initial  Excess
Parachute Payment had been equal to the Determinative  Excess Parachute Payment.
In determining the Adjustment  Amount,  the independent  accountants  shall take
into account any and all taxes (including any penalties and interest) paid by or
for Executive or refunded to Executive or for  Executive's  benefit.  As soon as
practicable  after the  Adjustment  Amount has been so  determined,  the Company
shall pay the  Adjustment  Amount to  Executive  or  Executive  shall  repay the
Adjustment  Amount  to the  Company,  as the case may be.  The  purpose  of this
paragraph is to assure that (i) Executive is not reimbursed  more for the golden

                                       11
<PAGE>

parachute  excise tax than is  necessary  to make him  whole,  and (ii) if it is
subsequently  determined that additional  golden parachute excise tax is owed by
him, additional reimbursement payments will be made to him to make him whole for
the additional excise tax.

     (d) In each  calendar  year that  Executive  receives  payments or benefits
under the Bank Employment  Agreement  and/or this Agreement  and/or a Company or
Bank sponsored  employee  benefit plan,  Executive shall report on his state and
federal  income  tax  returns  such   information  as  is  consistent  with  the
determination  made by the  independent  accountants of the Company as described
above. The Company shall indemnify and hold Executive  harmless from any and all
losses, costs and expenses (including without limitation,  reasonable attorney's
fees,  interest,  fines and penalties)  that Executive  incurs as a result of so
reporting  such  information.  Executive  shall  promptly  notify the Company in
writing whenever  Executive  receives notice of the institution of a judicial or
administrative  proceeding,  formal  or  informal,  in  which  the  federal  tax
treatment  under  Section  4999 of the Code of any amount paid or payable  under
this  Section is being  reviewed or is in  dispute.  The  Company  shall  assume
control at its expense over all legal and accounting  matters pertaining to such
federal  tax  treatment  (except  to the extent  necessary  or  appropriate  for
Executive to resolve any such proceeding with respect to any matter unrelated to
amounts paid or payable  pursuant to this  contract).  Executive shall cooperate
fully with the Company in any such  proceeding.  Executive  shall not enter into
any  compromise or settlement or otherwise  prejudice any rights the Company may
have in connection therewith without prior consent of the Company.

12.  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 Company  and/or the Bank 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 12(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.

                                       12
<PAGE>

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
business  activities  and plans  for  business  activities  of the  Company  and
affiliates  thereof,  as it may exist from time to time, is a valuable,  special
and unique asset of the business of the Company.  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 Company 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  Company  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 Company,  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 Company 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
Company 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 Company from pursuing any other remedies  available
to the Company for such breach or threatened  breach,  including the recovery of
damages from Executive.

13.  SOURCE OF PAYMENTS; NO DUPLICATION OF PAYMENTS

     (a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Company.

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

     (c) For financial  statement  purposes,  ongoing payments  pursuant to this
Agreement and the Bank Employment  Agreement  (collectively,  the  "Agreements")
shall  be  allocated  by the  Company  and the  Bank  on a  quarterly  basis  in
proportion to the services  rendered to the Company and the Bank,  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 the Bank Employment Agreement and Section 11 of this Agreement.

14.  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 Company or by Executive,  shall have no effect on
the vested rights of the 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.

                                       13
<PAGE>

15.  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 Company and their respective successors and assigns.

16.  ENTIRE AGREEMENT; MODIFICATION AND WAIVER

     (a) This  Agreement and the Bank  Employment  Agreement  contain the entire
agreement  of the  Executive,  the Company and the Bank  relating to the subject
matter  hereof,  and  supercede in its  entirety  any and all prior  agreements,
understandings  or  representations  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.

17.  REGULATORY PROVISIONS

     Notwithstanding  anything herein contained to the contrary, any payments to
the  Executive  by the  Company  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.

18.  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.

19.  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.

                                       14
<PAGE>

20.  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.

21.  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
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.

22.  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 Company,  provided that the dispute or  interpretation  has
been settled by Executive  and the Company or has been  resolved in  Executive's
favor.

23.  INDEMNIFICATION

     During  the  term  of this  Agreement  and for a  period  of six (6)  years
thereafter,  the Company 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
Delaware 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,  officer or employee of the
Company  (whether or not he continues  to be a director,  officer or employee 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 Company).

                                       15
<PAGE>

24.  SUCCESSOR TO THE COMPANY

     The Company  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  Company's  obligations
under this Agreement, in the same manner and to the same extent that the Company
would be  required  to perform if no such  succession  or  assignment  had taken
place.

                     [Remainder of Page Intentionally Blank]

                                       16
<PAGE>

                                   SIGNATURES

     IN WITNESS WHEREOF, the Company 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 BANKSHARES, INC.

____________________                  By:
Secretary                                 -------------------------------------

WITNESS:                              EXECUTIVE:

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

                                       17

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