EXHIBIT 10.2
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, l997, by
and between HopFed Bancorp, Inc. (the "Company") and ________________ (the
"Employee").
WHEREAS, the Employee has heretofore been employed by Hopkinsville
Federal Savings Bank (the "Bank") as its __________________________, is
experienced in all phases of the business of the Bank, and has become the ______
of the Company; and
WHEREAS, the parties desire by this writing to establish and to set
forth the continuing employment relationship between the Company and the
Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is hereby employed as the _________________
----------
__________of the Company. The Employee shall render such administrative and
management services for the Company as are currently rendered and as are
customarily performed by persons situated in a similar executive capacity. The
Employee shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Company. The Employee's other duties shall
be such as the Board of Directors of the Company (the "Board") may from time to
time reasonably direct, including normal duties as an officer of the Company.
2. Consideration from Company: Joint and Several Liability. In lieu of
-------------------------------------------------------
paying the Employee a base salary during the term of this Agreement, the Company
hereby agrees that to the extent permitted by law, it shall be jointly and
severally liable with its subsidiary, the Bank, for the payment of all amounts
due under the employment agreement of even date herewith between the Bank and
the Employee. Nevertheless, the Board may in its discretion at any time during
the term of this Agreement agree to pay the Employee a base salary for the
remaining term of this Agreement. If the Board agrees to pay such salary, the
Board shall thereafter review, not less often than annually, the rate of the
Employee's salary, and in its sole discretion may decide to increase his salary.
3. Discretionary Bonuses. The Employee shall participate in an
---------------------
equitable manner with all other senior management employees of the Company in
discretionary bonuses that the Board may award from time to time to the
Company's senior management employees. No other compensation provided for in
this Agreement shall be deemed a substitute for the Employee's right to
participate in such discretionary bonuses.
4. (a) Participation in Retirement, Medical and Other Plans. The
----------------------------------------------------
Employee shall be entitled to participate in any plan that the Company maintains
for the benefit of its employees if the plan relates to (i) pension, profit-
sharing, or other retirement benefits, (ii) medical insurance or the
reimbursement of medical or dependent care expenses, or (iii) other group
benefits, including disability and life insurance plans.
(b) Employee Benefits; Expenses. The Employee shall participate in
---------------------------
any fringe benefits that are or may become available to the Company's senior
management employees, including, for example: any stock option or incentive
compensation plans, club memberships, and any other benefits that are
commensurate with the responsibilities and functions to be performed by the
Employee under this Agreement. The Employee shall be reimbursed for all
reasonable out-of-pocket business expenses that shall incur in connection with
his services under this Agreement upon substantiation of such expenses in
accordance with the policies of the Company.
5. Term. The Company hereby employs the Employee, and the
----
Employee hereby accepts such employment under this Agreement, for the period
commencing on the effective date of the Federal Stock Charter of the Bank (the
"Effective Date") and ending twelve (12) months thereafter (or such earlier date
as is determined in accordance with Section 9 hereof). Additionally, on each
annual anniversary date from the Effective Date, this Agreement and the
Employee's term of employment shall be extended for an additional one-year
period beyond the then effective expiration date, provided that the Board
determines in a duly adopted resolution that the performance of the Employee has
met the Board's requirements and standards, and that this Agreement shall be
extended.
6. Loyalty; Full Time and Attention
--------------------------------
(a) During the period of his employment hereunder and except for
illness, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all his full business time, attention, skill, and efforts
to the faithful performance of his duties hereunder to the Company and its
subsidiaries; provided that, from time to time, the Employee may serve on the
board of directors of, and hold any other offices or positions in, companies or
organizations, that will not present any conflict of interest with the Company
or any of its subsidiaries or affiliates, or unfavorably affect the performance
of Employee's duties pursuant to this Agreement, or will not violate any
applicable statute or regulation. "Full business time" is hereby defined as
that amount of time usually devoted to like companies by similarly situated
executive officers. During the term of his employment under this Agreement, the
Employee shall not engage in any business or activity contrary to the business
affairs or interests of the Company, or be gainfully employed in any other
position or job other than as provided above.
(b) Nothing contained in this Section 6 shall be deemed to prevent
or limit the Employee's right to invest in the capital stock or other securities
of any business dissimilar from that of the Company, or, solely as a passive or
minority investor, in any business.
7. Standards. The Employee shall perform his duties under this Agreement
---------
in accordance with such reasonable standards as the Board may establish from
time to time. The Company will provide the Employee with the working facilities
and staff customary for similar executive officers and necessary for him to
perform his duties.
8. Vacation and Sick Leave. The Employee shall be entitled,
-----------------------
without loss of pay, to absent himself voluntarily from the performance of his
duties under this Agreement in accordance
2
with the terms set forth below, all such voluntary absences to count as
vacation time; provided that:
(a) The Employee shall be entitled to an annual vacation in
accordance with the policies periodically established by the Board for senior
management employees of the Company.
(b) The Employee shall not receive any additional compensation from
the Company on account of his failure to take a vacation, and the Employee shall
not accumulate unused vacation from one fiscal year to the next, except in
either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall
be entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment obligations with the Company for such additional
periods of time and for such valid and legitimate reasons as the Board may in
its discretion approve. Further, the Board may grant to the Employee a leave or
leaves of absence, with or without pay, at such time or times and upon such
terms and conditions as the Board in its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick
leave benefit as established by the Board.
9. Termination and Termination Pay. Subject to Section 11 hereof,
-------------------------------
the Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall
-----
terminate upon his death during the term of this Agreement, in which event the
Employee's estate shall be entitled to receive the compensation due the
Employee through the last day of the calendar month in which his death occurred.
(b) Disability. The Company may terminate the Employee's
----------
employment after having established, through a determination by the Board, the
Employee's Disability. For purposes of this Agreement, "Disability" means a
physical or mental infirmity that impairs the Employee's ability to
substantially perform his duties under this Agreement and that results in the
Employee becoming eligible for long-term disability benefits under the Company's
long-term disability plan (or, if the Company has no such plan in effect, that
impairs the Employee's ability to substantially perform his duties under this
Agreement for a period of one hundred eighty (180) consecutive days). The
Employee shall be entitled to the compensation and benefits provided for under
this Agreement for (i) any period during the term of this Agreement and prior to
the establishment of the Employee's Disability during which the Employee is
unable to work due to the physical or mental infirmity, or (ii) any period of
Disability that is prior to the Employee's termination of employment pursuant to
this Section 9(b); provided that any benefits paid pursuant to the Company's
long-term disability plan will continue as provided in such plan.
3
(c) For Just Cause. The Board may, by written notice to the
--------------
Employee, immediately terminate his employment at any time, for Just Cause. The
Employee shall have no right to receive compensation or other benefits for any
period after termination for Just Cause. Termination for "Just Cause" shall
mean termination because of, in the good faith determination of the Board, the
Employee's 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 material
breach of any provision of this Agreement. Notwithstanding the foregoing, the
Employee shall not be deemed to have been terminated for Just Cause unless there
shall have been delivered to the Employee a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the entire membership of the
Board (excluding the Employee if a member of the Board) at a meeting of the
Board called and held for the purpose (after reasonable notice to the Employee
and an opportunity for the Employee to be heard before the Board), finding that
in the good faith opinion of the Board the Employee was guilty of conduct set
forth above in the second sentence of this Subsection (c) and specifying the
particulars thereof in detail.
(d) Without Just Cause. Subject to the provisions of Section 11
------------------
hereof, the Board may, by written notice to the Employee, immediately terminate
his employment at any time for any reason; provided that, if such termination is
for any reason other than pursuant to Sections 9(a), (b) or (c) above, the
Employee shall be entitled to receive the following compensation and benefits:
(i) the salary provided pursuant to Section 2 hereof, up to the date of
expiration of the term (including any renewal term then in effect) of this
Agreement (the "Termination Date") and (ii) the cost to the Employee of
obtaining all health, life, disability and other benefits (excluding any bonus,
stock option or other compensation benefits) in which the Employee would have
been eligible to participate through the Termination Date based upon the benefit
levels substantially equal to those that the Company provided for the Employee
at the date of termination of employment. Said sum shall be paid, at the option
of the Employee, either (I) in periodic payments over the remaining term of this
Agreement, as if the Employee's employment had not terminated, or (II) in one
lump sum within ten (10) days of such termination.
(e) Voluntary Termination by Employee. Subject to the provisions of
---------------------------------
Section 11 hereof, the Employee may voluntarily terminate employment with the
Company during the term of this Agreement, upon at least sixty (60) days' prior
written notice to the Board, in which case the Employee shall receive only his
compensation, vested rights and employee benefits accrued up to the date of his
termination.
(f) Limitation by Section 18 (k)of the FDIA. Notwithstanding
---------------------------------------
anything herein to the contrary, any payments madee to the employee pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with section 18(K) of the FDIA (12 U.S.C. (S) 1828(K)) and any
regulations promulgated thereunder.
4
10. No Mitigation. The Employee shall not be required to mitigate the
-------------
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, and no such payment shall be offset or reduced by the amount of
any compensation or benefits provided to the Employee in any subsequent
employment.
11. Change in Control.
-----------------
(a) Notwithstanding any provision herein to the contrary, if the
Employee's employment under this Agreement is terminated by the Company, without
the Employee's prior written consent and for a reason other than for Just Cause,
death or disability in connection with or within twelve (12) months after any
change in control of the Bank or the Company, which has not been approved in
advance by a two-thirds vote of the full Board of Directors of each of the Bank
and the Company, the Employee shall be paid an amount equal to the difference
between (i) the product of 2.99 times his "base amount" as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") and
regulations promulgated thereunder, and (ii) the sum of any other "parachute
payments" (as defined under Section 280G(b)(2) of the Code) that the Employee
receives on account of the change in control. Said sum shall be paid in one
lump sum within ten (10) days of such termination. The term "change in control"
shall mean (1) a change in the ownership, holding or power to vote more than 25%
of the Bank's or the Company's voting stock, (2) a change in the ownership or
possession of the ability to control the election of a majority of the Bank's or
the Company's directors, or (3) a change in the ownership or possession of the
ability to exercise a controlling influence over the management or policies of
the Bank or the Company by any person or by persons acting as a "group" (within
the meaning of Section 13(d) of the Securities and Exchange Act of 1934) (except
that, in the case of (1), (2) and (3) hereof, ownership or control of the Bank
or its directors by the Company itself shall not constitute a change in control.
The term "person" means an individual other than the Employee, or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein.
(b) In the event that any dispute arises between the Employee and
the Company as to the terms or interpretation of this Agreement, including this
Section 11, whether instituted by formal legal proceedings or otherwise,
including an action that Employee takes to enforce the terms of this Section 11
or to defend against any action taken by the Company, the Employee shall be
reimbursed for all costs and expenses, including reasonable attorneys' fees,
arising from such disputes or proceedings, provided that the Employee shall have
obtained a final judgment by a court of competent jurisdiction in his or her
favor. Such reimbursement shall be paid within ten (10) days of Employee's
providing the Company with written evidence, which may be in the form, among
others, of a canceled check or receipt, of any costs or expenses incurred by the
Employee.
12. Successors and Assigns.
----------------------
(a) This Agreement shall inure to the benefit of and be binding
upon any corporate or other successor of the Company that shall acquire,
directly or indirectly, by merger,
5
consolidation, purchase or otherwise, all or substantially all of the assets or
stock of the corporation.
(b) Since the Company is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Company.
13. Amendments. No amendments or additions to this Agreement shall
----------
be binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
14. Applicable Law. This Agreement shall be governed in all
--------------
respects, whether as to its validity, construction, capacity, performance or
otherwise, by the laws of the Commonwealth of Kentucky, except to the extent
that Federal law shall be deemed to apply.
15. Severability. The provisions of this Agreement shall be deemed
------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Entire Agreement. This Agreement, together with any understanding or
----------------
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
ATTEST: HOPFED BANCORP, INC.
_____________________________ By: _______________________________
Secretary Its:
WITNESS:
_____________________________ ___________________________________
__________________("Employee")
6
