Document:

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of May 19, 2000, between M. BRIAN DAVIS, an
individual residing at 7731 Newburgh Road, Evansville, Indiana 47715
("Executive"), and FIDELITY FEDERAL BANCORP, an Indiana corporation (the
"Company").

                              W I T N E S S E T H:
                               - - - - - - - - - -

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

     WHEREAS, the Company expressly acknowledges that Executive has heretofore
performed a significant role in the furtherance of the Company's business
activities; and

     WHEREAS, on January 21, 2000 the Company and Pedcor Investments, a limited
liability company, entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") pursuant to which Pedcor Investments, a limited liability company
has agreed to purchase from the Company and the Company has agreed to sell to
the Purchaser or its permitted assigns (including Pedcor Bancorp and Pedcor
Holdings, LLC) (collectively, the "Purchaser") shares of Common Stock (as
hereinafter defined) of the Company (such transaction being hereinafter referred
to as the "Acquisition"); and

     WHEREAS, the obligation of the Purchaser to consummate the Acquisition is
expressly conditioned upon the execution and delivery of this Agreement by
Executive on the date hereof and the performance of his obligations under this
Agreement by Executive from and after the Effective Date (as hereinafter
defined);

     WHEREAS, the Company desires to continue the employment of Executive as its
President and Chief Executive Officer commencing on the Effective Date and to be
assured of its right to his services, on the terms and conditions hereinafter
set forth, and Executive desires to continue to be so employed commencing on the
Effective Date on such terms and conditions; and

     WHEREAS, Executive expressly understands and agrees that his failure to
continue employment with the Company on the Effective Date upon the terms and
conditions set forth in this Agreement will cause substantial damages to the
Company and the Purchaser;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

     1. Employment; Duties. The Company hereby employs Executive and Executive
hereby accepts such employment as President and Chief Executive Officer of the
Company, on the terms and subject to the conditions hereinafter set forth. In
such capacity and subject to the authority

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of the Company's Board of Directors ("Board"), Executive shall perform such
functions with respect to the business and affairs of the Company, consistent
with his position, as the Board or the board of directors of the Subsidiaries
(as defined below) shall determine from time to time. Executive shall be based
and shall perform his duties at the Company's present principal offices;
provided, however, that Executive shall not be required to perform his duties at
the principal offices of the Company if the Company should move its principal
offices during the Employment Term to a location in excess of thirty-five (35)
miles from Evansville, Indiana. Executive shall travel at the Company's expense
to the extent necessary to perform his duties hereunder. Executive shall devote
his full business time and energies to the business and affairs of the Company
and shall not accept other employment or perform any services for any other
person, firm or corporation; provided, however, that Executive may devote
reasonable amounts of time to activities having a charitable, educational or
other public interest purpose if and to the extent such activities do not
substantially interfere with Executive's performance of his responsibilities
hereunder. Executive shall, upon reasonable notice, furnish such information and
proper assistance to the Company and its affiliates as reasonably may be
required by the Company in connection with any legal action involving the
Company or any of its affiliates. Executive agrees to use his best efforts,
skills and abilities to promote and protect the interests of the Company and all
of its subsidiaries now or hereafter organized (the "Subsidiaries"), including
United Fidelity Bank, FSB (the "Bank") and to perform his duties hereunder.
Executive agrees to serve as a director or officer of any of the Company's
subsidiaries or controlled affiliates requesting his services, and to perform
such services for such subsidiaries or controlled affiliates, consistent with
his office, as its Board of Directors or other governing body shall request.

     2. Term; Termination.

          (a) Executive's employment pursuant hereto shall become effective on
     the Effective Date (as hereinafter defined) and shall remain in effect,
     subject to renewal pursuant to subparagraph (b) of this Paragraph 2 and to
     earlier termination pursuant to subparagraph (c) of this Paragraph 2, until
     the third anniversary of the Effective Date (the "Initial Expiration
     Date"). The term of employment hereunder, commencing with the Effective
     Date and including any renewals or extensions hereof, is hereinafter
     referred to as the "Employment Term."

          (b) Subject to the provisions of subparagraph (c) of this Paragraph 2,
     this Agreement may be extended for additional periods of one year
     commencing on the Initial Expiration Date and on each anniversary of the
     Initial Expiration Date (each such anniversary date being referred to
     herein as an "Extension Date") if the Board of Directors of the Company
     determines by resolution, after reviewing the performance of the Executive,
     to extend this Agreement prior to the Initial Expiration Date and/or
     Extension Date and such extension is not objected to by Executive pursuant
     to written notice to the Company prior to such anniversary.

          (c) In addition to the expiration of the Employment Term as
     hereinabove provided, subject to the provisions of Paragraph 2(f) hereof,
     this Agreement and Executive's employment by the Company shall terminate on
     the Date of Termination (as hereinafter defined) as follows:

               (i) automatically upon Executive's death;

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               (ii) at the Company's option if, as a result of Executive's
          incapacity due to physical or mental illness, he is unable to perform
          the duties of his employment hereunder for a continuous period of
          sixty (60) days or an aggregate of ninety (90) days in any one hundred
          eighty (180) day period (each such period being hereinafter referred
          to as a "Disability Period");

               (iii) at the Company's option at any time for Cause. "Cause"
          shall mean (A) action by Executive involving personal dishonesty;
          incompetence; willful misconduct; breach of fiduciary duty involving
          personal profit; intentional failure to perform stated duties; willful
          violation of any law, rule or regulation (other than traffic
          violations or similar offenses) or final cease-and-desist order; or
          gross negligence which has or may reasonably be expected to have a
          material adverse effect on the financial condition or reputation of
          the Company or the Bank; (B) termination of Executive pursuant to the
          requirement or direction of a federal or state regulatory agency
          having jurisdiction over the Company or the Bank; (C) conviction of
          Executive of the commission of any criminal offense involving
          dishonesty or breach of trust; (D) any material breach by Executive of
          a term, condition or covenant of this Agreement; or (E) the engagement
          by Executive in any activity constituting a material breach of
          Paragraph 9, 10 or 11 of this Agreement. The Company reserves the
          right to institute litigation against Executive to recover damages in
          the event that the Company or its Subsidiaries or Affiliates suffers
          damages as a result of the Executive engaging in any of the conduct
          specified in clauses (A) through (E) of this Section 2(c)(iii);

               (iv) at the Company's option at any time without Cause; or

               (v) by Executive for Good Reason. "Good Reason" shall mean (A)
          any removal of Executive as a principal executive officer of the
          Company, except as a result of his death, his disability or for Cause,
          (B) the failure of the Company to cause any resulting or surviving
          owner of the Company's business or any transferee of the Company to
          assume all of the Company's continuing obligations hereunder, or (C) a
          material breach by the Company of any of its obligations to Executive
          arising hereunder.

          (d) Any termination pursuant to subparagraph (b) or (c) shall be
     communicated by a Notice of Termination from the terminating party to the
     other party. "Notice of Termination" shall mean a written notice indicating
     the specific provision of this Agreement upon which such termination is
     based and, in the case of a termination pursuant to subparagraph(c)(ii),
     (c)(iii) or (c)(v), setting forth in reasonable detail the facts and
     circumstances giving rise to such termination.

          (e) As appropriate under the circumstances, "Date of Termination"
     shall mean, as applicable: (A) the date of Executive's death; (B) thirty
     (30) days after a Notice of Termination is given to Executive, if
     Executive's employment is terminated pursuant to subparagraph (c)(ii)
     above; (C) the date specified in the Notice of Termination if Executive's
     employment is terminated by the Company pursuant to subparagraph (c)(iii)
     or (c)(iv) above; or (D) thirty (30) days after a Notice of Termination is
     given to the Company, if Executive's employment is terminated pursuant to
     subparagraph (c)(v) above.

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

     3. Compensation.

          (a) The Company shall pay Executive an annual base salary ("Base
     Salary") equal to $195,000 during the Employment Term and during any
     renewal year of the Employment Term (subject to any increases which the
     Board, in its sole discretion, may approve). Base Salary shall be payable
     in equal installments in accordance with the Company's regular payroll
     practices for executive level employees, as determined from time to time by
     the Board, but in no event less frequently than monthly.

          (b) On the Effective Date, the Executive shall be granted options to
     purchase 50,000 shares of Common Stock at an exercise price of $4.00 per
     share and otherwise substantially upon the terms and conditions set forth
     in the form of Option Agreement attached as Exhibit A hereto. Such options
     shall not be "incentive stock options" within the meaning of the Internal
     Revenue Code.

     4. Compensation Upon Termination and During Disability.

          (a) If Executive's employment shall be terminated by his death, the
     Company shall pay to his estate Executive's unpaid Base Salary for the
     period through the Date of Termination from the Company's regular payroll.
     In addition, Executive shall continue to participate in the employee
     benefit, retirement and compensation plans and receive other benefits as
     provided in Paragraph 6(a) hereof through the Date of Termination.

          (b) In the event of Executive's physical or mental disability, the
     Company shall continue to pay Executive his Base Salary during the
     Disability Period. If the Company terminates Executive following the
     Disability Period, the Company shall pay Executive his Base Salary for the
     period from the Company's regular payroll through the Date of Termination.
     In addition, Executive shall continue to participate in the employee
     benefit, retirement and compensation plans and receive other benefits as
     provided in Paragraph 6(a) hereof through the Date of Termination.

          (c) If Executive's employment shall be terminated for Cause by the
     Company or by the Executive without Good Reason, the Company shall continue
     to pay Executive his Base Salary through the Date of Termination. In
     addition, Executive shall continue to participate

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     in the employee benefit, retirement and compensation plans and receive
     other benefits as provided in Paragraph 6(a) hereof through the Date of
     Termination.

          (d) If Executive's employment is terminated by the Company without
     Cause or by the Executive for Good Reason and such termination does not
     occur after a Change in Control (as hereinafter defined), (i) the Company
     shall continue to pay Executive his Base Salary for a period equal to the
     remaining Employment Term payable in semi-monthly installments during such
     remaining period, and (ii) in lieu of the COBRA coverage otherwise
     available to the Executive and provided that the Executive's continued
     participation is permissible under the terms and provisions of the employee
     health plans and programs in which the Executive participated immediately
     prior to the Date of Termination, the Company shall maintain in full force
     and effect for the continued benefit of the Executive for a period equal to
     the remaining Employment Term, all such plans and programs. The Executive
     shall pay all costs associated with obtaining the benefits described in
     this subparagraph (d) for the entire period following the Date of
     Termination, but will be promptly reimbursed for such costs by the Company.
     In the event that the Executive's participation in any such plan or program
     is or becomes barred or unavailable, the Company shall pay to the Executive
     the difference between the cost the Executive would have incurred pursuant
     to the terms of this Agreement had he been able to continue participation
     in such plans and programs and the cost to the Executive of obtaining
     substantially comparable health benefits. Executive's entitlement to
     benefits pursuant to this subparagraph (d) shall be reduced to the extent
     that Executive is eligible for comparable health benefits in connection
     with employment with an employer other than the Company.

          (e) If Executive's employment is terminated by the Company without
     Cause or by the Executive for Good Reason at any time within twelve months
     after a Change of Control, then the Company shall pay Executive the amounts
     specified in subparagraphs (e)(i) and (e)(iii) below at the times and in
     the manner specified therein, less any withholding payments required under
     applicable federal, state or local income tax, other tax or social security
     laws or similar statutes and shall provide Executive with the benefits
     specified in subparagraph (e)(ii) below:

               (i) an aggregate amount payable in 48 equal semi-monthly
          installments commencing with the Company's first regularly scheduled
          payroll payment date after the Date of Termination or, at the option
          of the Executive, in a lump-sum payable no later than thirty (30) days
          after the Date of Termination equal to the lesser of (A) 2.99 times
          the average annual Base Salary plus 2.99 times the average annual
          bonus paid to the Executive by the Company and any subsidiaries of the
          Company during the five most recent taxable years (annualized if such
          year is a "short" year for tax purposes) immediately preceding the
          Date of Termination and (B) 2.99 times the annual Base Salary in
          respect of the fiscal year in which the Date of Termination occurs and
          2.99 times the annual bonus paid to the Executive by the Company
          and/or all subsidiaries during the last fiscal year immediately
          preceding the Date of Termination;

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               (ii) in lieu of the COBRA coverage otherwise available to the
          Executive and provided that the Executive's continued participation is
          permissible under the terms and provisions of the employee health
          plans and programs in which the Executive participated immediately
          prior to the Date of Termination, the Company shall maintain in full
          force and effect for the continued benefit of the Executive for three
          (3) years following the Date of Termination, all such plans and
          programs. The Executive shall pay all costs associated with obtaining
          the benefits described in this subparagraph (e)(ii) for the first
          twenty-four (24) months following the Date of Termination, but will be
          promptly reimbursed for such costs by the Company. The Executive shall
          not be entitled to reimbursement for the costs relating to such
          benefits for the final twelve (12) months of coverage. In the event
          that the Executive's participation in any such plan or program is or
          becomes barred or unavailable, the Company shall pay to the Executive
          the difference between the cost the Executive would have incurred
          pursuant to the terms of this Agreement had he been able to continue
          participation in such plans and programs and the cost to the Executive
          of obtaining substantially comparable health benefits. Executive's
          entitlement to benefits pursuant to this subparagraph (e)(ii) shall be
          reduced to the extent that Executive is eligible for comparable health
          benefits in connection with employment with an employer other than the
          Company; and

               (iii) the Company will permit Executive or his personal
          representative(s) or heir(s), during a period of thirty (30) days
          following the Date of Termination (but in no event later than the date
          of expiration or forfeiture of the subject stock options), to require
          the Company, upon written request, to purchase all outstanding stock
          options previously granted to Executive under any Company stock option
          plan at a cash purchase price equal to the amount by which the
          aggregate "fair market value" (as hereinafter defined) of the shares
          subject to such options on the Date of Termination exceeds the
          aggregate exercise price for such options; provided that the Company
          shall not be required to purchase any such stock options which have
          expired or were forfeited pursuant to the terms of such plan or any
          stock option agreement issued pursuant to the terms of such plan. For
          purposes of this subparagraph (e)(iii), "fair market value" shall mean
          the mid-point between the reported closing bid and ask prices for the
          shares of such option stock as quoted by the North American Securities
          Dealer Automated Quotation System ("NASDAQ"). If the option stock is
          not quoted on NASDAQ, the "fair market value" shall be determined by
          the Board based upon quotations of the entities which make a market in
          the Company's option stock. In the event no entity makes a market in
          the Company's option stock, "fair market value" shall mean the amount
          agreed upon by the Executive and the Company. If the Executive and the
          Company are unable to reach an agreement regarding the "fair market
          value" of the option stock within ten (10) days of the Date of
          Termination specified in the Notice of Termination, then the Executive
          and the Company shall each select an appraisal firm and the two firms
          shall determine the fair market value of the option stock. If the two
          appraisal firms cannot agree upon the "fair market value" within
          thirty (30) days of their appointment, they shall appoint a third
          appraisal firm and the decision of a majority of the three (3)
          appraisal firms shall be final and binding on the Executive and the
          Company; provided, however, the Executive may elect, by notifying the
          Company within thirty (30) days after the Date of Termination, to have
          the following definition of "fair market value" apply for purposes of
          this subparagraph (e)(iii): the per share book value of the Company's
          option stock, calculated in accordance with generally accepted
          accounting principles as of the last day of the month coinciding with
          or immediately preceding the Date of Termination. The costs of any
          appraisals required pursuant to this subparagraph (e)(iii) shall be
          paid one-half by the Company and one-half by the Executive or his
          personal representative(s) or heir(s), as applicable.

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          (f) If Executive is suspended and/or temporarily prohibited from
     participating in the conduct of the Company's or any affiliate's affairs by
     a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit
     Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Company's
     obligations under this Agreement (including, without limitation, the
     payment of Base Salary) shall be suspended as of the date of service of
     such notice, unless stayed by appropriate proceedings. If the charges in
     the notice are dismissed, the Company shall (i) pay Executive all or part
     of the compensation withheld while its obligations under this Agreement
     were suspended and (ii) reinstate (in whole or in part) any of it
     obligations which were suspended.

          (g) If Executive is removed and/or permanently prohibited from
     participating in the conduct of the Company's or any affiliate's affairs by
     an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
     Insurance Act (12 U.S.C. Section 1818(e)(4) and (g)(1)), all obligations of
     the Company under this Agreement shall terminate as of the effective date
     of such order. In connection therewith, the Company shall continue to pay
     Executive his Base Salary through the Date of Termination. In addition,
     Executive shall continue to participate in the employee benefit, retirement
     and compensation plans and receive other benefits as provided in Paragraph
     6(a) hereof through the Date of Termination. If the Company is in default
     (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act), all
     obligations under this Agreement shall terminate as of the date of default,
     but this provision shall not affect any vested rights of Executive or of
     the Company.

          (h) Any payments made to Executive pursuant to this Agreement, or
     otherwise, are subject to and conditioned upon their compliance with 12
     U.S.C. Section 1828(k) and any regulations promulgated thereunder.

               (i) Unless otherwise agreed by the Company and Executive, all
          payments made to Executive (or his estate, as applicable) pursuant to
          this Paragraph 4, whether during a Disability Period or after the Date
          of Termination, shall be made in the amounts, at the times and subject
          to the terms and conditions otherwise applicable to payments to
          Executive pursuant to Paragraph 3 hereof, as if such payments were
          made to Executive during the Employment Term.

     5. Reimbursement of Expenses. In addition to the compensation and benefits
provided to Executive pursuant to other provisions of this Agreement, the
Company will reimburse Executive in a manner consistent with established
policies of the Company for reasonable out-of-pocket expenses actually incurred
or paid by him in the performance of his services hereunder, subject to
presentation of such expense statements, receipts, vouchers or other supporting
information as the Company may reasonably require.

     6. Other Benefits. In addition to the compensation and benefits provided to
Executive pursuant to other provisions of this Agreement, during the Employment
Term, Executive shall be entitled to the following:

          (a) participation in and receipt of benefits under (i) any retirement
     plan or arrangement for the benefit of executive employees of the
     Company,(ii) any health or other welfare plan or arrangement for the
     benefit of executive employees of the Company, (iii) any bonus,
     profit-sharing or deferred compensation plan or arrangement for the benefit
     of executive employees

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     of the Company and (iv) any other employee benefit plan, program or
     arrangement, made available by Company to its executive employees; provided
     that Executive's participation in any such plan, program or arrangement
     shall be on a basis consistent with the terms, conditions and overall
     administration of such plan, program or arrangement and Executive is
     otherwise eligible to participate or receive benefits under such plan,
     program or arrangement; and

          (b) a number of paid vacation days, sick days and personal days which
     are usual and customary for senior executive officers of corporations which
     are similarly situated to the Company or provided to any other executive
     level employees of the Company, but in no event shall the number of paid
     vacation days in any year of the Employment Term exceed four (4) weeks.

     7. Other Agreements. Executive represents and warrants to the Company that
he is not a party to any agreement, written or oral, and is not bound by the
terms of any written or oral agreement to which he is not a party, which
prohibits him from performing his duties under this Agreement or of serving the
Company in any other capacity. Executive agrees to indemnify the Company and
shall hold the Company harmless from and against any liability, loss, cost or
expense, including reasonable attorneys' fees and expenses, incurred by the
Company by reason of the inaccuracy of the representations and warranties made
by Executive in this Paragraph 7.

     8. Life Insurance. Executive agrees that, if requested by the Company, he
will cooperate with the Company to obtain a policy or policies of life insurance
on his life in such amount(s) as the Company may determine, including submitting
to any appropriate medical examinations and completing and executing any
appropriate application(s) or similar form(s). Any such policy or policies shall
be for the benefit of the Company and the Company shall pay all premiums
thereunder.

     9. Inventions, Etc. Executive agrees to promptly disclose in writing to the
Company all ideas, formulae, programs, systems, devices, processes, business
concepts, discoveries and inventions (hereinafter referred to collectively as
"Discoveries"), whether or not patentable, which he, while employed hereunder,
conceives, makes, develops, acquires or reduces to practice, whether alone or
with others and whether during or after usual working hours, and which are
related to the Company's business or interests, or are used or usable by the
Company, or arise out of or in connection with the duties performed by Executive
hereunder. Executive hereby transfers and assigns to the Company all right,
title and interest in and to all Discoveries, including any and all domestic and
foreign patent rights therein and any renewals thereof. On request of the
Company, Executive shall from time to time during or after the expiration or
termination of his employment by the Company, execute such further instruments
(including, without limitation, applications for letters patent and assignments
thereof) and do all such other reasonable and legal acts and things as may be
deemed necessary or desirable by the Company to protect and/or enforce its
rights in respect of Discoveries. All expenses of filing or prosecuting any
patent application shall be borne by the Company, but Executive shall cooperate
in filing and/or prosecuting any such application. Executive shall receive no
additional compensation for the performance of his obligations hereunder, except
as may be agreed to by the Company.

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     10. Covenant Regarding Confidentiality. All information about the business
and affairs of the Company and its affiliates which is not generally available
to the public or disclosed by the Company or such affiliates, and any
information about the Company and its affiliates which becomes generally
available to the public as a result of a breach by any person of any
confidentiality obligation to the Company or any such affiliate (including,
without limitation, with respect to the Company and each such affiliate, its
secrets and information about its business, financial condition and performance,
prospects, products, technology, know-how, merchandising and advertising
programs and plans, and the names of its suppliers, customers and lenders and
the nature of its dealings with them), constitute "Company Confidential
Information." Executive acknowledges that he will have access to, and knowledge
of, Company Confidential Information, and that improper use or revelation of
same by Executive, whether during or after the termination of his employment by
the Company, could cause serious injury to the business of the Company and its
affiliates. Accordingly, Executive agrees that, except as required to perform
his duties under this Agreement, or as required by law, he will forever keep
secret and inviolate all Company Confidential Information which shall come into
his possession, and he will not disclose the same to any other person or
organization for so long as such Company Confidential Information is not
generally known by, or accessible to, the public. Executive further agrees that
he will not use any Company Confidential Information for his own benefit or
directly or indirectly for the benefit of any person or organization other than
the Company and its affiliates.

     11. Covenant Not to Compete.

          (a) During the Employment Term and for a period of three (3) years
     thereafter (whether Executive's employment shall have ended by reason of
     the expiration of this Agreement or otherwise, and which period is
     hereinafter referred to as the "Restricted Period"), Executive shall not,
     directly or indirectly, engage in any business anywhere in the Restricted
     Territory (as hereinafter defined) either as a stockholder, officer,
     manager, employee, agent, representative, consultant, partner, member,
     proprietor or principal in any other capacity, in any business engaged in
     the wholesale and/or retail sub-prime mortgage lending business or net
     branch banking or in the consumer indirect lending area (the "Restricted
     Activities"), or directly or indirectly, own any interest in, manage,
     operate, join, control, lend money or render financial or other assistance
     to or participate in or be connected with, as a partner, stockholder,
     member, proprietor, other principal, consultant or otherwise, any person
     that otherwise competes with respect to the Restricted Activities with the
     Company or such Subsidiaries, including the Bank. As a separate and
     independent covenant, the Executive further agrees with the Company that,
     during the Restricted Period, the Executive will not in any way, directly
     or indirectly, for the purpose of conducting or engaging in the Restricted
     Activities, solicit, advise or otherwise do, or attempt to do, business
     with any customers of the Company or its affiliates with whom the Company
     or its affiliates had any dealings during the one (1) year period
     immediately preceding such solicitation or take away or interfere or
     attempt to interfere with any employee (or person who was an employee
     during the six (6) month period preceding the date of attempted hiring or
     recruitment), customer, trade, business or patronage of the Company or its
     affiliates, or induce or attempt to induce any of them to leave the employ
     of the Company or its affiliates, or violate the terms of their contracts,
     or any employment arrangements, with the Company or its affiliates.
     Notwithstanding anything herein to the contrary, the ownership by Executive
     of not more than five percent (5%) of any class of outstanding securities
     of an issuer listed on a national securities exchange or regularly traded
     in the over-the-counter market

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     shall not constitute a violation of this Paragraph 11(a). The "Restricted
     Territory" shall mean any location in the United States of America, and in
     any other country, state, region, county, city or locality thereof where
     the Company or any of its Subsidiaries, including the Bank or any of its
     affiliates is transacting business during the Restricted Period or during a
     period of five (5) years prior thereto has been transacting business. The
     parties agree and intend that the covenants contained in this Paragraph
     11(a) shall be construed as a series of separate covenants, one for each
     applicable region, county, city, state or country. Except for geographic
     coverage, each such separate covenant shall be deemed identical in terms.

          (b) Executive acknowledges that the operation and conduct of the
     business of the Company is special and unique and involves the use of trade
     secrets and confidential information and that during the period of his
     employment hereunder, Executive will acquire special knowledge and/or skill
     that he could effectively utilize in competition with the Company and its
     affiliates. Executive further acknowledges that the provisions of
     Paragraphs 9, 10 and 11 hereof are essential to the goodwill and
     profitability of the Company and its affiliates, and have provided
     substantial inducement to the Company's agreement to execute and consummate
     this Agreement, and that the application or operation thereof shall not
     involve a substantial hardship upon his future business or livelihood.
     Executive agrees that remedies at law for any breach by him of the
     covenants contained in Paragraphs 9, 10 and 11 hereof will be inadequate,
     and that in the event of a violation of the covenants therein, in addition
     to any and all legal and equitable remedies which may be available to the
     Company and its affiliates, the said covenants may be enforced by an
     injunction in a suit in equity, without the necessity of proving actual
     damage, and that a temporary injunction may be granted immediately upon the
     commencement of any such suit and without notice. Should any court
     determine that any of the separate covenants of this Paragraph 11 shall be
     unenforceable in respect of geographic area, then such covenant shall be
     deemed eliminated for the purpose of those proceedings to the extent
     necessary to permit the remaining separate covenants to be enforced. If any
     other provision of Paragraphs 9, 10 and 11 shall be deemed by an
     appropriate court to be unenforceable for any reason, then such court shall
     be empowered to substitute, to the extent enforceable, provisions similar
     thereto or other provisions so as to provide the Company and its affiliates
     to the fullest extent permitted by applicable law, the benefits intended by
     Paragraphs 9, 10 and 11 hereof. Executive acknowledges that the covenants
     contained in this Paragraph 11 are intended by the parties to be in
     addition to and not in lieu of or in limitation of any other agreement or
     covenant between Executive and the Company. Each of the provisions of
     Paragraphs 9,10 and 11 hereof shall survive the termination of this
     Agreement and the termination of Executive's employment by the Company.

          (c) Notwithstanding anything in this Paragraph 11 to the contrary, in
     the event that Executive's employment is terminated by the Company without
     Cause prior to the scheduled expiration of the Employment Term, the
     provisions of this Paragraph 11 shall apply only for the period during
     which Executive is paid Base Salary (or would have been paid the Base
     Salary except for the election by the Executive to receive a lump-sum
     payment pursuant to Paragraph 4(e)(i)) after termination pursuant to the
     terms of this Agreement, plus one year.

     12. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered if delivered personally or by facsimile (followed by
first class U.S. mail), or three days

                                       10
<PAGE>

after mailing if mailed by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice, except that notice of
changes of address shall be effective upon receipt):

                           If to the Company:

                           Fidelity Federal Bancorp
                           700 S. Green River Road - Suite 2000
                           Evansville, Indiana 47715
                           Attn: Chairman of the Board of Directors
                           Telecopy No.: (812) 469-2101

                           with a copy to:

                           Krieg, DeVault, Alexander & Capehart, LLP
                           One Indiana Square - Suite 2800
                           Indianapolis, Indiana 46204
                           Attn: John W. Tanselle, Esq.
                           Telecopy No.: (317) 636-1507

     If to Executive, to him at his address set forth in the introductory
Paragraph of this Agreement.

     13. Definitions. In addition to other terms defined elsewhere in this
Agreement, the following terms shall have the meanings set forth below:

     "Change of Control" shall mean (a) consummation of any transaction in which
a person or entity was required to file an application or notice to acquire the
securities or assets of the Company or the Bank, whether by purchase, merger,
consolidation, share exchange or other combination or reorganization
(irrespective of which party is the surviving entity), or by sale, lease,
exchange, transfer, or other disposition of all or any substantial part of the
assets of the Company or the Bank (collectively referred herein as a
"Transaction"), under the federal Bank Holding Company Act of 1956 (12 U.S.C.
Section 1841 et seq), the federal Change in Bank Control Act (12 U.S.C. Section
1817(j)), the federal Savings and Loan Holding Company Act (12 U.S.C. Section
1467a) or the federal Bank Merger Act (12 U.S.C. Section 1828(c)), as such laws
may be amended from time to time or any regulations promulgated thereunder
(collectively, the "Governing Laws"). Notwithstanding anything herein to the
contrary, the following shall not be deemed to constitute a "Change of Control"
for purposes of this definition or for purposes of this Agreement: (i) the
Acquisition; (ii) the purchase by Purchaser, or any of their affiliates, or the
transfer by Purchaser to any of their affiliates, of shares of Common Stock;
(iii) consummation of any Transaction requiring approval under the Governing
Laws (1) involving the Company solely in connection with the acquisition by the
Company of any subsidiary, (2) involving a business combination or
reorganization in which the shareholders of the Company immediately prior to
such Transaction own at least a majority of the issued and outstanding voting
securities of the surviving entity immediately subsequent to such Transaction
and individuals who were directors of the Company immediately

                                       11
<PAGE>

prior to such Transaction constitute at least a majority of the Board of
Directors of the surviving entity immediately subsequent to such Transaction or
(3) involving any employee benefit plan sponsored by the Company or any
subsidiary thereof; (iv) consummation of any acquisition of shares of Common
Stock requiring approval under the Governing Laws by individuals or entities who
at the date of this Agreement were either a director or officer of the Company
or the beneficial owner (either directly or indirectly) of ten percent (10%) or
more of the combined voting power of the Company's then outstanding securities;
or (v) consummation of any acquisition of the Common Stock requiring approval
under the Governing Laws by individuals or entities which would result in such
individuals or entities owning directly and/or beneficially less than 25% of the
combined voting power of the Company's then outstanding securities, unless after
such acquisition such individuals or entities would constitute the largest
shareholder of the Common Stock (for this purpose, the shares of Common Stock
owned by the Purchaser and its affiliates shall be aggregated).

     "Common Stock" shall mean the common stock, stated value $1.00 per share,
of the Company.

     "Effective Date" shall mean the date of this Agreement.

     14. Conditions and Acknowledgment.

          (a) This Agreement shall only become effective and binding upon the
     Executive and upon the Company commencing upon and as of the Effective
     Date; and

          (b) By executing and delivering this Agreement, Executive expressly
     acknowledges and agrees (i) that his continuation of employment by the
     Company pursuant to the provisions of this Agreement constitutes a
     significant condition to consummation of the Stock Purchase Agreement, (ii)
     that Executive's failure to continue his employment with the Company from
     and after the Effective Date upon the terms and conditions set forth in
     this Agreement (unless Executive's employment by the Company is terminated
     upon the terms and conditions set forth herein) will cause substantial
     damages to the Company and to the Purchaser for which he, the Executive,
     shall be personally liable, and (iii) upon the Effective Date, the
     Severance Agreement dated December 1, 1997 by and between the Executive and
     the Company shall terminate and be void and of no effect, and that
     Executive shall have no rights and the Company shall have no obligations
     thereunder.

     15. General.

          (a) This Agreement shall be governed by and construed and enforced in
     accordance with the laws of the State of Indiana applicable to contracts
     made and to be performed entirely within such state (without regard to
     principles of conflict of laws of Indiana or of any other jurisdictions).

          (b) The Paragraph headings contained herein are for reference purposes
     only and shall not in any way affect the meaning or interpretation of this
     Agreement.

                                       12
<PAGE>

          (c) This Agreement sets forth the entire agreement and understanding
     of the parties relating to the subject matter hereof, and supersedes all
     prior agreements, arrangements and understandings, written or oral, between
     the parties.

          (d) This Agreement and the benefits hereunder are personal to the
     Company and Executive, and are not assignable or transferable, nor may the
     services to be performed hereunder be assigned by Executive, the Company to
     any person, firm or corporation; provided, however, that this Agreement and
     the benefits hereunder may be assigned by the Company and/or will be
     assigned (by operation of law) to any person, firm or corporation acquiring
     all or substantially all of the assets or stock of the Company or to any
     corporation into which the Company may be merged or consolidated, as long
     as no such assignment operates to expand the Restricted Territory without
     the consent of Executive.

          (e) The Company shall require any successor (whether direct or
     indirect, by purchase, merger, consolidation or otherwise) to all or
     substantially all of the business or assets of the Company, to expressly
     assume and agree to perform all of the provisions of this Agreement.
     Failure of the Company to obtain such agreement prior to the effectiveness
     of any such succession shall be deemed a material breach of this Agreement
     and shall entitle Executive to terminate his employment with the Company
     pursuant to subparagraph 2(c)(v) hereof.

          (f) Anything in this Agreement to the contrary notwithstanding in the
     event the Company's independent public accountants determine that any
     payment by the Company to or for the benefit of Executive, whether paid or
     payable pursuant to the terms of this Agreement, would be non-deductible by
     the Company for federal income tax purposes as a result of Section 280G of
     the Internal Revenue Code of 1986, as amended (the "Code"), then the amount
     payable to or for the benefit of Executive pursuant to the Agreement shall
     be reduced (but not below zero) to the Reduced Amount. For purposes of this
     Paragraph 15(f), the "Reduced Amount" shall be the amount which maximizes
     the amount payable to Executive without causing the payment to be
     non-deductible to the Company as a result of the provisions of Section 280G
     of the Code.

          (g) All references in this Agreement to amounts to be paid or benefits
     to be provided to or on behalf of Executive are to the gross amounts
     thereof which are due hereunder. Except as otherwise provided herein, the
     Company shall have the right to deduct therefrom or collect from Executive
     all sums which may be required to be deducted or withheld under any
     provision of law, including, but not limited to, social security payments,
     income tax withholding, any other deduction required by law and any
     interest, penalties or additions to tax imposed with respect thereto.

          (h) This Agreement may be amended, modified, superseded, canceled,
     renewed or extended, and the terms or covenants hereof may be waived, only
     by a written instrument executed by both parties hereto, or in the case of
     a waiver, by the party waiving compliance. The failure of either party at
     any time to require performance of any provision hereof shall in no manner
     affect the right of such party at a later time to enforce the same. No
     waiver by either party of the breach of any term or covenant contained in
     this Agreement, whether by

                                       13
<PAGE>

     conduct or otherwise, in any one or more instances, shall be deemed to be,
     or construed as, a further or continuing waiver of any such breach, or a
     waiver of the breach of any other term or covenant contained in this
     Agreement.

          (i) This Agreement may be executed in counterparts, each of which
     shall be an original and all of which taken together shall constitute one
     and the same instrument.

          (j) Subject to the provisions of Paragraph 11 hereof, if any term or
     other provision of this Agreement is invalid, illegal or incapable of being
     enforced by any rule of law or public policy, all other conditions and
     provisions of this Agreement shall nevertheless remain in full force and
     effect so long as the economic or legal substance of the transactions
     contemplated hereby is not affected in any manner adverse to any party.
     Upon such determination that any term or other provision is invalid,
     illegal or incapable of being enforced, the parties hereto shall negotiate
     in good faith to modify this Agreement so as to effect the original intent
     of the parties as closely as possible in an acceptable manner to the end
     that the transactions contemplated hereby are fulfilled to the extent
     possible.

                                 * * * * * * * *

                                       14
<PAGE>

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                                             FIDELITY FEDERAL BANCORP

                                             By:
                                                -----------------------------
                                                Name:  Jack Cunningham
                                                Title: Chairman of the Board

                                                -----------------------------
                                                M. BRIAN DAVIS

                                                        15EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of May 19, 2000, between DONALD R. NEEL, an
individual residing at 10414 Knollbrook Court, Evansville, Indiana 47711
("Executive"), FIDELITY FEDERAL BANCORP, an Indiana corporation (the "Company")
and UNITED FIDELITY BANK, FSB (the "Bank"), a wholly-owned subsidiary of the
Company.

                              W I T N E S S E T H:
                               - - - - - - - - - -

     WHEREAS, Executive is currently employed as the Executive Vice President,
Chief Financial Officer and Treasurer of the Company and Executive Vice
President, Chief Operating Officer and Treasurer of the Bank; and

     WHEREAS, the Company and the Bank expressly acknowledge that Executive has
heretofore performed a significant role in the furtherance of the Company's and
the Bank's business activities; and

     WHEREAS, on January 21, 2000 the Company and Pedcor Investments, a limited
liability company, entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") pursuant to which Pedcor Investments, a limited liability company
has agreed to purchase from the Company and the Company has agreed to sell to
the Purchaser or its permitted assigns (including Pedcor Bancorp and Pedcor
Holdings, LLC) (collectively, the "Purchaser") shares of Common Stock (as
hereinafter defined) of the Company (such transaction being hereinafter referred
to as the "Acquisition"); and

     WHEREAS, the obligation of the Purchaser to consummate the Acquisition is
expressly conditioned upon the execution and delivery of this Agreement by
Executive on the date hereof and the performance of his obligations under this
Agreement by Executive from and after the Effective Date (as hereinafter
defined);

     WHEREAS, the Company desires to continue the employment of Executive as its
Chief Financial Officer and the Bank desires to continue the employment of
Executive as its Executive Vice President, Chief Operating Officer and
Treasurer, and effective July 1, 2000 the Bank desires the Executive to become
its President and Chief Executive Officer, and to be assured of its right to his
services, on the terms and conditions hereinafter set forth, and Executive
desires to continue to be so employed commencing on the Effective Date on such
terms and conditions; and

     WHEREAS, Executive expressly understands and agrees that his failure to
continue employment with the Company and the Bank on the Effective Date upon the
terms and conditions set forth in this Agreement will cause substantial damages
to the Company and the Purchaser;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, and for other good and valuable
consideration, the receipt and

                                        1
<PAGE>

sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:

     1. Employment; Duties. The Company hereby employs Executive and Executive
hereby accepts such employment as Chief Financial Officer of the Company, and
the Bank hereby employs Executive and Executive hereby accepts such employment
as Executive Vice President, Chief Operating Officer and Treasurer of the Bank,
on the terms and subject to the conditions hereinafter set forth. Effective July
1, 2000, Executive shall be promoted from the offices of Executive Vice
President, Chief Operating Officer and Treasurer of the Bank and assume the role
and office of the President and Chief Executive Officer of the Bank. In such
capacities, Executive shall perform such functions with respect to the business
and affairs of the Company, the Bank, and the Subsidiaries (as defined below)
consistent with his position, as the Board of the Company or the Bank shall
determine from time to time; provided, however, that Executive shall not be
required to perform his duties at the principal offices of the Bank if the Bank
should move its principal offices during the Employment Term to a location in
excess of thirty-five (35) miles from Evansville, Indiana. Executive shall
travel at the expense of the Company or the Bank, as appropriate, to the extent
necessary to perform his duties hereunder. Executive shall devote his full
business time and energies to the business and affairs of the Company and the
Bank and shall not accept other employment or perform any services for any other
person, firm or corporation; provided, however, that Executive may devote
reasonable amounts of time to activities having a charitable, educational or
other public interest purpose if and to the extent such activities do not
substantially interfere with Executive's performance of his responsibilities
hereunder. Executive shall, upon reasonable notice, furnish such information and
proper assistance to the Company and its affiliates as reasonably may be
required by the Company or the Bank in connection with any legal action
involving the Company, the Bank, or any of their affiliates. Executive agrees to
use his best efforts, skills and abilities to promote and protect the interests
of the Company and all of its subsidiaries now or hereafter organized (the
"Subsidiaries"), including the Bank, and to perform his duties hereunder.
Executive agrees to serve as a director or officer of any of the Company's
subsidiaries or controlled affiliates requesting his services, and to perform
such services for such subsidiaries or controlled affiliates, consistent with
his office, as its Board of Directors or other governing body shall request.

     2. Term; Termination.

     (a) Executive's employment pursuant hereto shall become effective on the
Effective Date (as hereinafter defined) and shall remain in effect, subject to
renewal pursuant to subparagraph (b) of this Paragraph 2 and to earlier
termination pursuant to subparagraph (c) of this Paragraph 2, until the third
anniversary of the Effective Date (the "Initial Expiration Date"). The term of
employment hereunder, commencing with the Effective Date and including any
renewals or extensions hereof, is hereinafter referred to as the "Employment
Term."

     (b) Subject to the provisions of subparagraph (c) of this Paragraph 2, this
Agreement may be extended for additional periods of one year commencing on the
Initial Expiration Date and on each anniversary of the Initial Expiration Date
(each such anniversary date being referred to herein as an "Extension Date") if
the Board of Directors of both the Company and the Bank determines by
resolution, after reviewing the performance of the Executive, to extend this

                                        2
<PAGE>

Agreement prior to the Initial Expiration Date and/or Extension Date and such
extension is not objected to by Executive pursuant to written notice to the
Company or the Bank prior to such anniversary.

     (c) In addition to the expiration of the Employment Term as provided above,
subject to the provisions of Paragraph 2(f) hereof, this Agreement and
Executive's employment by the Company and the Bank shall terminate on the Date
of Termination (as hereinafter defined) as follows:

          (i) automatically upon Executive's death;

          (ii) at the the option of the Company or the Bank if, as a result of
     Executive's incapacity due to physical or mental illness, he is unable to
     perform the duties of his employment hereunder for a period of sixty (60)
     consecutive days or an aggregate of ninety (90) days in any one hundred
     eighty (180) day period (each such period being hereinafter referred to as
     a "Disability Period");

          (iii) at the option of the Company or the Bank at any time for Cause.
     "Cause" shall mean (A) action by Executive involving personal dishonesty;
     incompetence; willful misconduct; breach of fiduciary duty involving
     personal profit; intentional failure to perform stated duties; willful
     violation of any law, rule or regulation (other than traffic violations or
     similar offenses) or final cease-and-desist order; or gross negligence
     which has or may reasonably be expected to have a material adverse effect
     on the financial condition or reputation of the Company or the Bank; (B)
     termination of Executive pursuant to the requirement or direction of a
     federal or state regulatory agency having jurisdiction over the Company or
     the Bank; (C) conviction of Executive of the commission of any criminal
     offense involving dishonesty or breach of trust; (D) any material breach by
     Executive of a term, condition or covenant of this Agreement; or (E) the
     engagement by Executive in any activity constituting a material breach of
     Paragraph 9, 10 or 11 of this Agreement. The Company reserves the right to
     institute litigation against Executive to recover damages in the event that
     the Company or its Subsidiaries or Affiliates suffers damages as a result
     of the Executive engaging in any of the conduct specified in clauses (A)
     through (E) of this Section 2(c)(iii);

          (iv) at the option of the Company or the Bank at any time without
     Cause; or

          (v) by Executive for Good Reason. "Good Reason" shall mean (A) any
     removal of Executive as a principal executive officer of the Company or the
     Bank, except as a result of his death, his disability or for Cause, (B) the
     failure of the Company or the Bank to cause any resulting or surviving
     owner of the Company's or the Bank's business or any transferee of the
     Company or the Bank to assume all of the Company's and the Bank's
     continuing obligations hereunder, or (C) a material breach by the Company
     or the Bank of any of its obligations to Executive arising hereunder.

     (d) Any termination pursuant to subparagraph (c) shall be communicated by a
Notice of Termination from the terminating party to the other party. "Notice of
Termination"

                                        3
<PAGE>

shall mean a written notice indicating the specific provision of this Agreement
upon which such termination is based and, in the case of a termination pursuant
to subparagraph (c)(ii), (c)(iii) or (c)(v), setting forth in reasonable detail
the facts and circumstances giving rise to such termination.

     (e) As appropriate under the circumstances, "Date of Termination" shall
mean, as applicable: (A) the date of Executive's death; (B) thirty (30) days
after a Notice of Termination is given to Executive, if Executive's employment
is terminated pursuant to subparagraph (c)(ii) above; (C) the date specified in
the Notice of Termination if Executive's employment is terminated by the Company
or the Bank pursuant to subparagraph (c)(iii) or (c)(iv) above; or (D) thirty
(30) days after a Notice of Termination is given to the Company or the Bank, if
Executive's employment is terminated pursuant to subparagraph (c)(v) above.

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

     3. Compensation.

     (a) The Executive shall receive from the Company and/or the Bank an annual
base salary ("Base Salary") equal in the aggregate to $140,000 during the
Employment Term and during any renewal year of the Employment Term (subject to
any increases which the Board, in its sole discretion, may approve). Base Salary
shall be payable in equal installments in accordance with the Company's regular
payroll practices for executive level employees, as determined from time to time
by the Board, but in no event less frequently than monthly. The amount of the
Base Salary shall be allocated on an equitable basis between the Company and the
Bank, based upon the good faith determination by the Executive and the Board of
Directors of the Company and the Bank as to the amount of time spent by the
Executive with respect to the business of the Company and the business of the
Bank.

     (b) On the Effective Date, the Executive shall be granted options to
purchase 25,000 shares of Common Stock at an exercise price of $4.00 per share
and otherwise substantially upon the terms and conditions set forth in the form
of Option Agreement attached as Exhibit A hereto. Such options shall not be
"incentive stock options" within the meaning of the Internal Revenue Code.

                                        4
<PAGE>

     4. Compensation Upon Termination and During Disability.

     (a) If Executive's employment shall be terminated by his death, the Company
and/or the Bank shall pay to his estate Executive's unpaid Base Salary for the
period through the Date of Termination from the Company's and/or the Bank's
regular payroll. In addition, Executive shall continue to participate in the
employee benefit, retirement and compensation plans and receive other benefits
as provided in Paragraph 6(a) hereof through the Date of Termination.

     (b) In the event of Executive's physical or mental disability, the Company
and/or the Bank shall continue to pay Executive his Base Salary during the
Disability Period. If the Company or the Bank terminates Executive following the
Disability Period, the Company and/or the Bank shall pay Executive his Base
Salary for the period from the Company's and/or the Bank's regular payroll
through the Date of Termination. In addition, Executive shall continue to
participate in the employee benefit, retirement and compensation plans and
receive other benefits as provided in Paragraph 6(a) hereof through the Date of
Termination.

     (c) If Executive's employment shall be terminated for Cause by the Company
or the Bank or by the Executive without Good Reason, the Company and/or the Bank
shall continue to pay Executive his Base Salary through the Date of Termination.
In addition, Executive shall continue to participate in the employee benefit,
retirement and compensation plans and receive other benefits as provided in
Paragraph 6(a) hereof through the Date of Termination.

     (d) If Executive's employment is terminated by the Company or the Bank
without Cause or by the Executive for Good Reason and such termination does not
occur after a Change in Control (as hereinafter defined), (i) the Company and/or
the Bank shall continue to pay Executive his Base Salary for a period equal to
the remaining Employment Term payable in semi-monthly installments during such
remaining period, and (ii) in lieu of the COBRA coverage otherwise available to
the Executive and provided that the Executive's continued participation is
permissible under the terms and provisions of the employee health plans and
programs in which the Executive participated immediately prior to the Date of
Termination, the Company and/or the Bank shall maintain in full force and effect
for the continued benefit of the Executive for a period equal to the remaining
Employment Term, all such plans and programs. The Executive shall pay all costs
associated with obtaining the benefits described in this subparagraph (d) for
the entire period following the Date of Termination, but will be promptly
reimbursed for such costs by the Company and/or the Bank. In the event that the
Executive's participation in any such plan or program is or becomes barred or
unavailable, the Company and/or the Bank shall pay to the Executive the
difference between the cost the Executive would have incurred pursuant to the
terms of this Agreement had he been able to continue participation in such plans
and programs and the cost to the Executive of obtaining substantially comparable
health benefits. Executive's entitlement to benefits pursuant to this
subparagraph (d) shall be reduced to the extent that Executive is eligible for
comparable health benefits in connection with employment with an employer other
than the Company or the Bank.

     (e) If Executive's employment is terminated by the Company or the Bank
without Cause or by the Executive for Good Reason at any time within twelve
months after a Change of Control, then the Company and/or the Bank shall pay
Executive the amounts specified in

                                        5
<PAGE>

subparagraphs (e)(i) and (e)(iii) below at the times and in the manner specified
therein, less any withholding payments required under applicable federal, state
or local income tax, other tax or social security laws or similar statutes and
shall provide Executive with the benefits specified in subparagraph (e)(ii)
below:

          (i) an aggregate amount payable in 48 equal semi-monthly installments
     commencing with the Company's first regularly scheduled payroll payment
     date after the Date of Termination or, at the option of the Executive, in a
     lump-sum payable no later than thirty (30) days after the Date of
     Termination equal to the lesser of (A) 2.99 times the average annual Base
     Salary plus 2.99 times the average annual bonus paid to the Executive by
     the Company and any subsidiaries of the Company during the five most recent
     taxable years (annualized if such year is a "short" year for tax purposes)
     immediately preceding the Date of Termination, and (B) 2.99 times the
     annual Base Salary in respect of the fiscal year in which the Date of
     Termination occurs plus 2.99 times the annual bonus paid to the Executive
     by the Company and/or all subsidiaries during the last fiscal year
     immediately preceding the Date of Termination;

          (ii) in lieu of the COBRA coverage otherwise available to the
     Executive and provided that the Executive's continued participation is
     permissible under the terms and provisions of the employee health plans and
     programs in which the Executive participated immediately prior to the Date
     of Termination, the Company and/or the Bank shall maintain in full force
     and effect for the continued benefit of the Executive for three (3) years
     following the Date of Termination, all such plans and programs. The
     Executive shall pay all costs associated with obtaining the benefits
     described in this subparagraph (e)(ii) for the first twenty-four (24)
     months following the Date of Termination, but will be promptly reimbursed
     for such costs by the Company and/or the Bank. The Executive shall not be
     entitled to reimbursement for the costs relating to such benefits for the
     final twelve (12) months of coverage. In the event that the Executive's
     participation in any such plan or program is or becomes barred or
     unavailable, the Company and/or the Bank shall pay to the Executive the
     difference between the cost the Executive would have incurred pursuant to
     the terms of this Agreement had he been able to continue participation in
     such plans and programs and the cost to the Executive of obtaining
     substantially comparable health benefits. Executive's entitlement to
     benefits pursuant to this subparagraph (e)(ii) shall be reduced to the
     extent that Executive is eligible for comparable health benefits in
     connection with employment with an employer other than the Company or the
     Bank; and

          (iii) the Company will permit Executive or his personal
     representative(s) or heir(s), during a period of thirty (30) days following
     the Date of Termination (but in no event later than the date of expiration
     or forfeiture of the subject stock options), to require the Company, upon
     written request, to purchase all outstanding stock options previously
     granted to Executive under any Company stock option plan at a cash purchase
     price equal to the amount by which the aggregate "fair market value" (as
     hereinafter defined) of the shares subject to such options on the Date of
     Termination exceeds the aggregate exercise price for such options; provided
     that the Company shall not be required to purchase any such stock options
     which have expired or were forfeited pursuant to the terms of such plan or
     any stock option agreement issued pursuant to the terms of such plan. For
     purposes of this subparagraph (e)(iii), "fair market value" shall mean the
     mid-point between the reported closing bid and ask prices for the shares of
     such option stock as quoted by the North American Securities Dealer
     Automated Quotation System ("NASDAQ"). If the

                                        6
<PAGE>

     option stock is not quoted on NASDAQ, the "fair market value" shall be
     determined by the Board based upon quotations of the entities which make a
     market in the Company's option stock. In the event no entity makes a market
     in the Company's option stock, "fair market value" shall mean the amount
     agreed upon by the Executive and the Company. If the Executive and the
     Company are unable to reach an agreement regarding the "fair market value"
     of the option stock within ten (10) days of the Date of Termination
     specified in the Notice of Termination, then the Executive and the Company
     shall each select an appraisal firm and the two firms shall determine the
     fair market value of the option stock. If the two appraisal firms cannot
     agree upon the "fair market value" within thirty (30) days of their
     appointment, they shall appoint a third appraisal firm and the decision of
     a majority of the three (3) appraisal firms shall be final and binding on
     the Executive and the Company; provided, however, the Executive may elect,
     by notifying the Company within thirty (30) days after the Date of
     Termination, to have the following definition of "fair market value" apply
     for purposes of this subparagraph (e)(iii): the per share book value of the
     Company's option stock, calculated in accordance with generally accepted
     accounting principles as of the last day of the month coinciding with or
     immediately preceding the Date of Termination. The costs of any appraisals
     required pursuant to this subparagraph (e)(iii) shall be paid one-half by
     the Company and one-half by the Executive or his personal representative(s)
     or heir(s), as applicable.

     (f) If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Company's, Bank's, or any affiliate's
affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Company's
and the Bank's obligations under this Agreement (including, without limitation,
the payment of Base Salary) shall be suspended as of the date of service of such
notice, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Company and/or the Bank shall (i) pay Executive all or part
of the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate (in whole or in part) any of it obligations which
were suspended.

     (g) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Company's, Bank's, or any affiliate's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1818(e)(4) and (g)(1)), all obligations
of the Company and the Bank under this Agreement shall terminate as of the
effective date of such order. In connection therewith, the Company and/or shall
continue to pay Executive his Base Salary through the Date of Termination. In
addition, Executive shall continue to participate in the employee benefit,
retirement and compensation plans and receive other benefits as provided in
Paragraph 6(a) hereof through the Date of Termination. If the Company or the
Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act), all obligations under this Agreement shall terminate as of the
date of default, but this provision shall not affect any vested rights of
Executive or of the Company or of the Bank.

     (h) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.

     (i) Unless otherwise agreed by the Company or the Bank, and Executive, all
payments made to Executive (or his estate, as applicable) pursuant to this
Paragraph 4, whether

                                        7
<PAGE>

during a Disability Period or after the Date of Termination, shall be made in
the amounts, at the times and subject to the terms and conditions otherwise
applicable to payments to Executive pursuant to Paragraph 3 hereof, as if such
payments were made to Executive during the Employment Term.

     (j) The amounts to be paid to Executive pursuant to Paragraph 4 of this
Agreement shall be allocated on an equitable basis between the Company and the
Bank, based upon the good faith determination by the Board of Directors of the
Company and the Bank as to the amount of time spent by the Executive with
respect to the business of the Company and the business of the Bank.

     5. Reimbursement of Expenses. In addition to the compensation and benefits
provided to Executive pursuant to other provisions of this Agreement, the
Company and/or the Bank will reimburse Executive in a manner consistent with
established policies of the Company and the Bank for reasonable out-of-pocket
expenses actually incurred or paid by him in the performance of his services
hereunder, subject to presentation of such expense statements, receipts,
vouchers or other supporting information as the Company or the Bank may
reasonably require.

     6. Other Benefits. In addition to the compensation and benefits provided to
Executive pursuant to other provisions of this Agreement, during the Employment
Term, Executive shall be entitled to the following:

     (a) participation in and receipt of benefits under (i) any retirement plan
or arrangement for the benefit of executive employees of the Company or the
Bank,(ii) any health or other welfare plan or arrangement for the benefit of
executive employees of the Company or the Bank, (iii) any bonus, profit-sharing
or deferred compensation plan or arrangement for the benefit of executive
employees of the Company or the Bank, and (iv) any other employee benefit plan,
program or arrangement, made available by Company or the Bank to its executive
employees; provided that Executive's participation in any such plan, program or
arrangement shall be on a basis consistent with the terms, conditions and
overall administration of such plan, program or arrangement and Executive is
otherwise eligible to participate or receive benefits under such plan, program
or arrangement; and

     (b) a number of paid vacation days, sick days and personal days which are
usual and customary for senior executive officers of corporations which are
similarly situated to the Company or the Bank or provided to any other executive
level employees of the Company or the Bank, but in no event shall the number of
paid vacation days in any year of the Employment Term exceed four (4) weeks.

     7. Other Agreements. Executive represents and warrants to the Company and
the Bank that he is not a party to any agreement, written or oral, and is not
bound by the terms of any written or oral agreement to which he is not a party,
which prohibits him from performing his duties under this Agreement or of
serving the Company or the Bank in any other capacity. Executive agrees to
indemnify the Company and the Bank and shall hold each of them harmless from and
against any liability, loss, cost or expense, including reasonable attorneys'
fees and expenses, incurred by the

                                        8
<PAGE>

Company or the Bank by reason of the inaccuracy of the representations and
warranties made by Executive in this Paragraph 7.

     8. Life Insurance. Executive agrees that, if requested by the Company or
the Bank, he will cooperate with the Company and/or the Bank to obtain a policy
or policies of life insurance on his life in such amount(s) as the Company or
the Bank may determine, including submitting to any appropriate medical
examinations and completing and executing any appropriate application(s) or
similar form(s). Any such policy or policies shall be for the benefit of the
Company or the Bank and the Company and/or the Bank shall pay all premiums
thereunder.

     9. Inventions, Etc. Executive agrees to promptly disclose in writing to the
Company all ideas, formulae, programs, systems, devices, processes, business
concepts, discoveries and inventions (hereinafter referred to collectively as
"Discoveries"), whether or not patentable, which he, while employed hereunder,
conceives, makes, develops, acquires or reduces to practice, whether alone or
with others and whether during or after usual working hours, and which are
related to the Company's or the Bank's business or interests, or are used or
usable by the Company or the Bank, or arise out of or in connection with the
duties performed by Executive hereunder. Executive hereby transfers and assigns
to the Company and/or the Bank all right, title and interest in and to all
Discoveries, including any and all domestic and foreign patent rights therein
and any renewals thereof. On request of the Company, Executive shall from time
to time during or after the expiration or termination of his employment by the
Company or the Bank, execute such further instruments (including, without
limitation, applications for letters patent and assignments thereof) and do all
such other reasonable and legal acts and things as may be deemed necessary or
desirable by the Company or the Bank to protect and/or enforce their or its
rights in respect of Discoveries. All expenses of filing or prosecuting any
patent application shall be borne by the Company or the Bank, but Executive
shall cooperate in filing and/or prosecuting any such application. Executive
]shall receive no additional compensation for the performance of his obligations
hereunder, except as may be agreed to in writing by the Company or the Bank.

     10. Covenant Regarding Confidentiality. All information about the business
and affairs of the Company and its affiliates which is not generally available
to the public or disclosed by the Company or such affiliates, and any
information about the Company and its affiliates which becomes generally
available to the public as a result of a breach by any person of any
confidentiality obligation to the Company or any such affiliate (including,
without limitation, with respect to the Company and each such affiliate, its
secrets and information about its business, financial condition and performance,
prospects, products, technology, know-how, merchandising and advertising
programs and plans, and the names of its suppliers, customers and lenders and
the nature of its dealings with them), constitute "Company Confidential
Information." Executive acknowledges that he will have access to, and knowledge
of, Company Confidential Information, and that improper use or revelation of
same by Executive, whether during or after the termination of his employment by
the Company, could cause serious injury to the business of the Company and its
affiliates. Accordingly, Executive agrees that, except as required to perform
his duties under this Agreement, or as required by law, he will forever keep
secret and inviolate all Company Confidential Information which shall come into
his possession, and he will not disclose the same to any other person or
organization for so long as such Company Confidential Information is not
generally known by, or accessible to, the public. Executive further agrees that
he will not use any Company Confidential

                                        9
<PAGE>

Information for his own benefit or directly or indirectly for the benefit of any
person or organization other than the Company and its affiliates.

     11. Covenant Not to Solicit or Compete.

     (a) During the Employment Term and for a period of three (3) years
thereafter (whether Executive's employment shall have ended by reason of the
expiration of this Agreement or otherwise, and which period is hereinafter
referred to as the "Restricted Period"), Executive agrees with the Company that
he will not in any way, directly or indirectly, take away or interfere or
attempt to interfere with any employee (or person who was an employee during the
six (6) month period preceding the date of attempted hiring or recruitment) of
the Company or its affiliates, or induce or attempt to induce any of them to
leave the employ of the Company or its affiliates, or violate the terms of their
contracts, or any employment arrangements, with the Company or its affiliates.
The parties agree and intend that the covenants contained in this Paragraph
11(a) shall be construed as a series of separate covenants, one for each
applicable region, county, city, state or country. Except for geographic
coverage, each such separate covenant shall be deemed identical in terms.

     (b) Executive acknowledges that the operation and conduct of the business
of the Company is special and unique and involves the use of trade secrets and
confidential information and that during the period of his employment hereunder,
Executive will acquire special knowledge and/or skill that he could effectively
utilize in competition with the Company and its affiliates. Executive further
acknowledges that the provisions of Paragraphs 9, 10 and 11 hereof are essential
to the goodwill and profitability of the Company and its affiliates, and have
provided substantial inducement to the Company's agreement to execute and
consummate this Agreement, and that the application or operation thereof shall
not involve a substantial hardship upon his future business or livelihood.
Executive agrees that remedies at law for any breach by him of the covenants
contained in Paragraphs 9, 10 and 11 hereof will be inadequate, and that in the
event of a violation of the covenants therein, in addition to any and all legal
and equitable remedies which may be available to the Company and its affiliates,
the said covenants may be enforced by an injunction in a suit in equity, without
the necessity of proving actual damage, and that a temporary injunction may be
granted immediately upon the commencement of any such suit and without notice.
Should any court determine that any of the separate covenants of this Paragraph
11 shall be unenforceable in respect of geographic area, then such covenant
shall be deemed eliminated for the purpose of those proceedings to the extent
necessary to permit the remaining separate covenants to be enforced. If any
other provision of Paragraphs 9, 10 and 11 shall be deemed by an appropriate
court to be unenforceable for any reason, then such court shall be empowered to
substitute, to the extent enforceable, provisions similar thereto or other
provisions so as to provide the Company and its affiliates to the fullest extent
permitted by applicable law, the benefits intended by Paragraphs 9, 10 and 11
hereof. Executive acknowledges that the covenants contained in this Paragraph 11
are intended by the parties to be in addition to and not in lieu of or in
limitation of any other agreement or covenant between Executive and the Company.
Each of the provisions of Paragraphs 9,10 and 11 hereof shall survive the
termination of this Agreement and the termination of Executive's employment by
the Company.

                                       10
<PAGE>

     (c) Notwithstanding anything in this Paragraph 11 to the contrary, in the
event that Executive's employment is terminated by the Company or the Bank
without Cause prior to the scheduled expiration of the Employment Term, the
provisions of this Paragraph 11 shall apply only for the period for which
Executive is paid Base Salary (or would have been paid the Base Salary except
for the election by the Executive to receive a lump-sum payment pursuant to
Paragraph 4(e)(i)) after termination pursuant to the terms of this Agreement,
plus one year.

     12. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered if delivered personally or by facsimile (followed by
first class U.S. mail), or three days after mailing if mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice, except that notice of changes of address shall be effective upon
receipt):

                           If to the Company or the Bank:

                           Fidelity Federal Bancorp
                           700 S. Green River Road - Suite 2000
                           Evansville, Indiana 47715
                           Attn: Chairman of the Board of Directors
                           Telecopy No.: (812) 469-2101

                           with a copy to:

                           Krieg, DeVault, Alexander & Capehart, LLP
                           One Indiana Square - Suite 2800
                           Indianapolis, Indiana 46204
                           Attn: John W. Tanselle, Esq.
                           Telecopy No.: (317) 636-1507

     If to Executive, to him at his address set forth in the introductory
Paragraph of this Agreement.

     13. Definitions. In addition to other terms defined elsewhere in this
Agreement, the following terms shall have the meanings set forth below:

     "Change of Control" shall mean (a) consummation of any transaction in which
a person or entity was required to file an application or notice to acquire the
securities or assets of the Company or the Bank, whether by purchase, merger,
consolidation, share exchange or other combination or reorganization
(irrespective of which party is the surviving entity), or by sale, lease,
exchange, transfer, or other disposition of all or any substantial part of the
assets of the Company or the Bank (collectively referred herein as a
"Transaction"), under the federal Bank Holding Company Act of 1956 (12 U.S.C.
Section 1841 et seq), the federal Change in Bank Control Act (12 U.S.C. Section
817(j)), the federal Savings and Loan Holding Company Act (12 U.S.C. Section
1467a) or the federal Bank Merger Act (12 U.S.C. Section 1828(c)), as such laws
may be amended from time to

                                       11
<PAGE>

time or any regulations promulgated thereunder (collectively, the "Governing
Laws"). Notwithstanding anything herein to the contrary, the following shall not
be deemed to constitute a "Change of Control" for purposes of this definition or
for purposes of this Agreement: (i) the Acquisition; (ii) the purchase by
Purchaser, or any of their affiliates, or the transfer by Purchaser to any of
their affiliates, of shares of Common Stock; (iii) consummation of any
Transaction requiring approval under the Governing Laws (1) involving the
Company solely in connection with the acquisition by the Company of any
subsidiary, (2) involving a business combination or reorganization in which the
shareholders of the Company immediately prior to such Transaction own at least a
majority of the issued and outstanding voting securities of the surviving entity
immediately subsequent to such Transaction and individuals who were directors of
the Company immediately prior to such Transaction constitute at least a majority
of the Board of Directors of the surviving entity immediately subsequent to such
Transaction or (3) involving any employee benefit plan sponsored by the Company
or any subsidiary thereof; (iv) consummation of any acquisition of shares of
Common Stock requiring approval under the Governing Laws by individuals or
entities who at the date of this Agreement were either a director or officer of
the Company or the beneficial owner (either directly or indirectly) of ten
percent (10%) or more of the combined voting power of the Company's then
outstanding securities; or (v) consummation of any acquisition of the Common
Stock requiring approval under the Governing Laws by individuals or entities
which would result in such individuals or entities owning directly and/or
beneficially less than 25% of the combined voting power of the Company's then
outstanding securities, unless after such acquisition such individuals or
entities would constitute the largest shareholder of the Common Stock (for this
purpose, the shares of Common Stock owned by the Purchaser and its affiliates
shall be aggregated).

     "Common Stock" shall mean the common stock, stated value $1.00 per share,
of the Company.

     "Effective Date" shall mean the date of this Agreement.

     14. Conditions and Acknowledgment.

     (a) This Agreement shall only become effective and binding upon the
Executive and upon the Company and the Bank commencing upon and as of the
Effective Date; and

     (b) By executing and delivering this Agreement, Executive expressly
acknowledges and agrees (i) that his continuation of employment by the Company
and the Bank pursuant to the provisions of this Agreement constitutes a
significant condition to consummation of the Stock Purchase Agreement, (ii) that
Executive's failure to continue his employment with the Company and the Bank
from and after the Effective Date upon the terms and conditions set forth in
this Agreement (unless Executive's employment by the Company or the Bank is
terminated upon the terms and conditions set forth herein) will cause
substantial damages to the Company and the Bank and to the Purchaser for which
he, the Executive, shall be personally liable, and (iii) upon the Effective
Date, the Severance Agreement dated December 1, 1997 by and between the
Executive and the Company shall terminate and be void and of no effect, and that
Executive shall have no rights and the Company shall have no obligations
thereunder.

                                       12
<PAGE>

     15. General.

     (a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Indiana applicable to contracts made
and to be performed entirely within such state (without regard to principles of
conflict of laws of Indiana or of any other jurisdictions).

     (b) The Paragraph headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.

     (c) This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, between the
parties.

     (d) This Agreement and the benefits hereunder are personal to the Company,
the Bank and Executive, and are not assignable or transferable, nor may the
services to be performed hereunder be assigned by Executive, the Company or the
Bank to any person, firm or corporation; provided, however, that this Agreement
and the benefits hereunder may be assigned by the Company and the Bank and/or
will be assigned (by operation of law) to any person, firm or corporation
acquiring all or substantially all of the assets or stock of the Company or the
Bank or to any corporation into which the Company or the Bank may be merged or
consolidated, as long as no such assignment operates to expand the Restricted
Territory without the consent of Executive.

     (e) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company, to expressly assume and agree to perform all
of the provisions of this Agreement. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be deemed a
material breach of this Agreement and shall entitle Executive to terminate his
employment with the Company pursuant to subparagraph 2(c)(v) hereof.

     (f) Anything in this Agreement to the contrary notwithstanding in the event
the Company's independent public accountants determine that any payment by the
Company to or for the benefit of Executive, whether paid or payable pursuant to
the terms of this Agreement, would be non-deductible by the Company for federal
income tax purposes as a result of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), then the amount payable to or for the benefit of
Executive pursuant to the Agreement shall be reduced (but not below zero) to the
Reduced Amount. For purposes of this Paragraph 15(f), the "Reduced Amount" shall
be the amount which maximizes the amount payable to Executive without causing
the payment to be non-deductible to the Company as a result of the provisions of
Section 280G of the Code.

     (g) All references in this Agreement to amounts to be paid or benefits to
be provided to or on behalf of Executive are to the gross amounts thereof which
are due hereunder. Except as otherwise provided herein, the Company and/or the
Bank shall have the right to deduct therefrom or collect from Executive all sums
which may be required to be deducted or withheld

                                       13
<PAGE>

under any provision of law, including, but not limited to, social security
payments, income tax withholding, any other deduction required by law and any
interest, penalties or additions to tax imposed with respect thereto.

     (h) This Agreement may be amended, modified, superseded, canceled, renewed
or extended, and the terms or covenants hereof may be waived, only by a written
instrument executed by both parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of either party at any time to require
performance of any provision hereof shall in no manner affect the right of such
party at a later time to enforce the same. No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.

     (i) This Agreement may be executed in counterparts, each of which shall be
an original and all of which taken together shall constitute one and the same
instrument.

     (j) Subject to the provisions of Paragraph 11 hereof, if any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

                                       14
<PAGE>

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                                         FIDELITY FEDERAL BANCORP

                                         By:
                                             ----------------------------------
                                             Name:  Jack Cunningham
                                             Title: Chairman of the Board

                                         UNITED FIDELITY BANK, fsb

                                         By:
                                             ----------------------------------
                                             Name:  Jack Cunningham
                                             Title: Chairman of the Board

                                         "EXECUTIVE"

                                         --------------------------------------
                                         DONALD R. NEEL

                                       15

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