EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, l997, by and
between Hopkinsville Federal Savings Bank (the "Bank") and Xxxxx Xxxxxx (the
"Employee").
WHEREAS, the Employee has heretofore been employed by the Bank as its
President and Chief Executive Officer and is experienced in all phases of the
business of the Bank; and
WHEREAS, the parties desire by this writing to establish and to set forth
the continuing employment relationship between the Bank and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is hereby employed as the President and
----------
Chief Executive Officer of the Bank. Except to the extent that the Board of
Directors of the Bank (the "Board") shall have delegated a portion of such
authority to one or more other officers, the Employee shall have general charge
and direction of the business of the Bank, shall see that all orders and
resolutions of the Board are carried into effect, and shall perform such other
administrative and management services for the Bank 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 Bank.
2. Base Compensation. The Bank agrees to pay the Employee during the
-----------------
term of this Agreement a salary at the rate of $__________ per annum, payable in
cash not less frequently than monthly. The Board shall 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 Bank in discretionary
bonuses that the Board may award from time to time to the Bank'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 Bank 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 Bank's senior
management employees, including, for example: any stock option or incentive
compensation plans and any other benefits that are commensurate with the
responsibilities and functions to be performed by the Employee under this
Exhibit 10.1
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, l997, by and
between Hopkinsville Federal Savings Bank (the "Bank") and ________________ (the
"Employee").
WHEREAS, the Employee has heretofore been employed by the Bank as its
__________________________ and is experienced in all phases of the business of
the Bank; and
WHEREAS, the parties desire by this writing to establish and to set forth
the continuing employment relationship between the Bank and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is hereby employed as the ___________________
----------
___________ of the Bank. The Employee shall render such administrative and
management services for the Bank 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 Bank. The Employee's other duties shall be
such as the Board of Directors of the Bank (the "Board") may from time to time
reasonably direct, including normal duties as an officer of the Bank.
2. Base Compensation. The Bank agrees to pay the Employee during the
-----------------
term of this Agreement a salary at the rate of $__________ per annum, payable in
cash not less frequently than monthly. The Board shall 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 Bank in discretionary
bonuses that the Board may award from time to time to the Bank'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 Bank 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 Bank'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-
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 Bank.
5. Term. The Bank 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; 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 Bank 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 Bank, 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 Bank, 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 Bank 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 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 Bank.
2
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 Bank.
5. Term. The Bank 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; 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 Bank 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 Bank, 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 Bank, 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 Bank 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 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 Bank.
2
(b) The Employee shall not receive any additional compensation from
the Bank 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 Bank 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 Bank 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 Bank's long-term disability
plan (or, if the Bank 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 Bank's long-term disability plan will
continue as provided in such plan.
(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
3
(b) The Employee shall not receive any additional compensation from
the Bank 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 Bank 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 Bank 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 Bank's long-term disability
plan (or, if the Bank 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 Bank's long-term disability plan will
continue as provided in such plan.
(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
3
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 Bank 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) Termination or Suspension Under Federal Law.
--------------------------------------------
(1) If the Employee is removed and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. (S) 1818(e)(4) or (g)(1)), all obligations of the Bank under this
Agreement shall terminate, as of the effective date of the order, but vested
rights of the parties shall not be affected.
(2) If the Bank is in default (as defined in Section 3(x)(1)
of FDIA), all obligations under this Agreement shall terminate as of the date of
default; however, this Paragraph 9(e)(2) shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate,
except to the extent that continuation of this Agreement is necessary for the
continued operation of the Bank: (A) by the Director of the Office of Thrift
Supervision ("OTS"), or his or her designee, at the time that the Federal
Deposit Insurance 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
FDIA; or (B) by the Director of the OTS, or his or her designee, at the time
that the Director of the OTS, 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 OTS to be in an unsafe or unsound condition.
Such action shall not affect any vested rights of the parties.
4
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 Bank 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) Termination or Suspension Under Federal Law.
--------------------------------------------
(1) If the Employee is removed and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. (S) 1818(e)(4) or (g)(1)), all obligations of the Bank under this
Agreement shall terminate, as of the effective date of the order, but vested
rights of the parties shall not be affected.
(2) If the Bank is in default (as defined in Section 3(x)(1) of
FDIA), all obligations under this Agreement shall terminate as of the date of
default; however, this Paragraph 9(e)(ii) shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate, except
to the extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (A) by the Director of the Office of Thrift Supervision
("OTS"), or his or her designee, at the time that the Federal Deposit Insurance
Corporation ("FDIC") enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the FDIA;
or (B) by the Director of the OTS, or his or her designee, at the time that the
Director of the OTS, 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 OTS to be in an unsafe or unsound condition. Such action
shall not affect any vested rights of the parties.
4
(4) If a notice served under Section 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. (S) 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits
the Employee from participating in the conduct of the Bank's affairs, the Bank's
obligations under this Agreement shall be suspended as of the date of such
service unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may in its discretion (A) pay the Employee all or part
of the compensation withheld while its contract obligations were suspended, and
(B) reinstate (in whole or in part) any of its obligations that were suspended.
(5) If any of the provisions of this Paragraph 9(e) conflict
with 12 C.F.R. (S) 563.39(b), the latter shall prevail.
(f) Voluntary Termination by Employee. Subject to the provisions of
---------------------------------
Section 11 hereof, the Employee may voluntarily terminate employment with the
Bank 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.
(g) Limitation by Section 18(k) of the FDIA. Notwithstanding any-
---------------------------------------
thing herein to the contrary, any payments made 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.
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 Bank, without
the Employee's prior written consent and for a reason other than for Just Cause,
death or disability in connection with or twelve (12) months after any change in
control of the Bank or HopFed Bancorp, Inc. (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 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
Company's directors, or (3) a change in the ownership or possession of the
ability to exercise a controlling influence over the
5
(4) If a notice served under Section 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. (S) 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits
the Employee from participating in the conduct of the Bank's affairs, the Bank's
obligations under this Agreement shall be suspended as of the date of such
service unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may in its discretion (A) pay the Employee all or part
of the compensation withheld while its contract obligations were suspended, and
(B) reinstate (in whole or in part) any of its obligations that were suspended.
(f) Voluntary Termination by Employee. Subject to the provisions
---------------------------------
of Section 11 hereof, the Employee may voluntarily terminate employment with the
Bank 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.
(G) LIMITATION BY SECTION 18(K) OF THE FDIA. NOTWITHSTANDING ANYTHING
---------------------------------------
HEREIN TO THE CONTRARY, ANY PAYMENTS MADE 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.
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 Bank, without
the Employee's prior written consent and for a reason other than for Just Cause,
death or disability in connection with or twelve (12) months after any change in
control of the Bank or HopFed Bancorp, Inc. (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 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
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
5
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) Notwithstanding the foregoing, but only to the extent required
under federal banking law, the amount payable under Section 11(a) hereof shall
be reduced to the extent that on the date of the Employee's termination of
employment, the amount payable under Section 11(a) exceeds the limitation on
severance benefits set forth in Regulatory Bulletin 27a of the OTS, as in effect
on such termination date.
(c) In the event that any dispute arises between the Employee and
the Bank 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 Bank, 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 favor.
Such reimbursement shall be paid within ten (10) days of Employee's providing
the Bank 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 Bank that shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the corporation.
(b) Since the Bank 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 Bank.
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.
6
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) Notwithstanding the foregoing, but only to the extent required
under federal banking law, the amount payable under Section 11(a) hereof shall
be reduced to the extent that on the date of the Employee's termination of
employment, the amount payable under Section 11(a) exceeds the limitation on
severance benefits set forth in Regulatory Bulletin 27a of the Office of Thrift
Supervision, as in effect on such termination date.
(c) In the event that any dispute arises between the Employee and the
Bank 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 Bank, 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 favor. Such reimbursement
shall be paid within ten (10) days of Employee's providing the Bank 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 Bank that shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the corporation.
(b) Since the Bank 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 Bank.
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
--------------
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.
6
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: HOPKINSVILLE FEDERAL SAVINGS BANK
By:
--------------------------- ------------------------------------------
Secretary Its:
WITNESS:
--------------------------- ------------------------------------------
("Employee")
-----------------------------
7
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: HOPKINSVILLE FEDERAL SAVINGS BANK
_____________________________ By:_______________________________
Secretary Its:
WITNESS:
_____________________________ __________________________________
_____________________("Employee")
7
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, 1997, by and
between Hopkinsville Federal Savings Bank (the "Bank") and Xxxxx X. Xxxx (the
"Employee").
WHEREAS, the Employee has heretofore been employed by the Bank as its
Executive Vice President, Chief Financial Officer and Chief Operations Officer
and is experienced in all phases of the business of the Bank; and
WHEREAS, the parties desire by this writing to establish and to set forth
the continuing employment relationship between the Bank and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is hereby employed as the Executive Vice
----------
President, Chief Financial Officer and Chief Operations Officer of the Bank.
Except to the extent that the Board of Directors of the Bank (the "Board") shall
have delegated a portion of such authority to one or more other officers, the
Employee shall render such administrative and management services for the Bank
as are currently rendered and as are customarily performed by persons situated
in a similar executive capacity. As Executive Vice President, the Employee
shall act in the case of the absence or disability of the President. As Chief
Financial Officer, the Employee shall render to the President and the Board
accounts of the financial condition and results of operations of the Bank. As
Chief Operations Officer, the Employee shall provide general supervision of the
operations of the Bank to insure that assigned duties and responsibilities are
carried out. The Employee shall also promote, by entertainment or otherwise, as
and to the extent permitted by law, the business of the Bank.
2. Base Compensation. The Bank agrees to pay the Employee during the
-----------------
term of this Agreement a salary at the rate of $__________ per annum, payable in
cash not less frequently than monthly. The Board shall 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 Bank in discretionary
bonuses that the Board may award from time to time to the Bank'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 Bank 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 Bank's senior
management employees, including, for example: any stock option or incentive
compensation plans 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 Bank.
5. Term. The Bank 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; 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 Bank 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 Bank, 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 Bank, 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 Bank 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 Bank.
(b) The Employee shall not receive any additional compensation from
the Bank 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 Bank 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 Bank 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 Bank's long-term disability
plan (or, if the Bank 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 Bank's long-term disability plan will
continue as provided in such plan.
(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
3
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 Bank 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) Termination or Suspension Under Federal Law.
--------------------------------------------
(1) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. (S)1818(e)(4) or (g)(1)), all obligations of the Bank under this
Agreement shall terminate, as of the effective date of the order, but vested
rights of the parties shall not be affected.
(2) If the Bank is in default (as defined in Section 3(x)(1) of
FDIA), all obligations under this Agreement shall terminate as of the date of
default; however, this Paragraph 9(e)(2) shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate, except
to the extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (A) by the Director of the Office of Thrift Supervision
("OTS"), or his or her designee, at the time that the Federal Deposit Insurance
Corporation enters into an agreement to provide assistance to
4
or on behalf of the Bank under the authority contained in Section 13(c) of the
FDIA; or (B) by the Director of the OTS, or his or her designee, at the time
that the Director of the OTS, 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 OTS to be in an unsafe or unsound condition.
Such action shall not affect any vested rights of the parties.
(4) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA
(12 U.S.C. (S)1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the
Employee from participating in the conduct of the Bank's affairs, the Bank's
obligations under this Agreement shall be suspended as of the date of such
service unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may in its discretion (A) pay the Employee all or part
of the compensation withheld while its contract obligations were suspended, and
(B) reinstate (in whole or in part) any of its obligations that were suspended.
(5) If any of the provisions of this Paragraph 9(e) conflict with
12 C.F.R. (S)563.39(b), the latter shall prevail.
(f) Voluntary Termination by Employee. Subject to the provisions of
---------------------------------
Section 11 hereof, the Employee may voluntarily terminate employment with the
Bank 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.
(g) Limitation by Section 18(k) of the FDIA. Notwithstanding anything
---------------------------------------
herein to the contrary, any payments made 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.
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 Bank, without
the Employee's prior written consent and for a reason other than for Just Cause,
death or disability in connection with or twelve (12) months after any change in
control of the Bank or HopFed Bancorp, Inc. (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.
5
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 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 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) Notwithstanding the foregoing, but only to the extent required
under federal banking law, the amount payable under Section 11(a) hereof shall
be reduced to the extent that on the date of the Employee's termination of
employment, the amount payable under Section 11(a) exceeds the limitation on
severance benefits set forth in Regulatory Bulletin 27a of the OTS, as in effect
on such termination date.
(c) In the event that any dispute arises between the Employee and the
Bank 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 Bank, 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 favor. Such reimbursement
shall be paid within ten (10) days of Employee's providing the Bank 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 Bank that shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the corporation.
(b) Since the Bank 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 Bank.
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.
6
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: HOPKINSVILLE FEDERAL SAVINGS BANK
By:
----------------------------- ---------------------------------------
Secretary Its:
WITNESS:
----------------------------- ---------------------------------------
("Employee")
---------------------------
7
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, l997, by and
between Hopkinsville Federal Savings Bank (the "Bank") and Xxxx X. Xxxxx (the
"Employee").
WHEREAS, the Employee has heretofore been employed by the Bank as its
Senior Vice President-Loan Administration and is experienced in all phases of
the business of the Bank; and
WHEREAS, the parties desire by this writing to establish and to set forth
the continuing employment relationship between the Bank and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is hereby employed as the Senior Vice
----------
President-Loan Administration of the Bank. Except to the extent that the Board
of Directors of the Bank (the "Board") shall have delegated a portion of such
authority to one or more other officers, the Employee shall (i) direct,
coordinate, manage and control Bank activities concerned with extensions of
credit, (ii) direct compliance with applicable laws and regulations, as well as
the Bank's policies and procedures, and (iii) render such other administrative
and management services for the Bank 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 Bank.
2. Base Compensation. The Bank agrees to pay the Employee during the
-----------------
term of this Agreement a salary at the rate of $__________ per annum, payable in
cash not less frequently than monthly. The Board shall 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 Bank in discretionary
bonuses that the Board may award from time to time to the Bank'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 Bank 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 Bank's senior
management employees, including, for example: any stock option or incentive
compensation plans 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 Bank.
5. Term. The Bank 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; 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 Bank 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 Bank, 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 Bank, 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 Bank 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 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 Bank.
2
(b) The Employee shall not receive any additional compensation from
the Bank 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 Bank 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 Bank 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 Bank's long-term disability
plan (or, if the Bank 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 Bank's long-term disability plan will
continue as provided in such plan.
(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
3
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
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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 Bank 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) Termination or Suspension Under Federal Law.
--------------------------------------------
(1) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. (S)1818(e)(4) or (g)(1)), all obligations of the Bank under this
Agreement shall terminate, as of the effective date of the order, but vested
rights of the parties shall not be affected.
(2) If the Bank is in default (as defined in Section 3(x)(1) of
FDIA), all obligations under this Agreement shall terminate as of the date of
default; however, this Paragraph 9(e)(2) shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate, except
to the extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (A) by the Director of the Office of Thrift Supervision
("OTS"), or his or her designee, at the time that the Federal Deposit Insurance
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 FDIA; or (B) by
the Director of the OTS, or his or her designee, at the time that the Director
of the OTS, 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 OTS to be in an unsafe or unsound condition. Such action shall
not affect any vested rights of the parties.
4
(4) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA
(12 U.S.C. (S)1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the
Employee from participating in the conduct of the Bank's affairs, the Bank's
obligations under this Agreement shall be suspended as of the date of such
service unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may in its discretion (A) pay the Employee all or part
of the compensation withheld while its contract obligations were suspended, and
(B) reinstate (in whole or in part) any of its obligations that were suspended.
(5) If any of the provisions of this Paragraph 9(e) conflict with
12 C.F.R. (S)563.39(b), the latter shall prevail.
(f) Voluntary Termination by Employee. Subject to the provisions of
---------------------------------
Section 11 hereof, the Employee may voluntarily terminate employment with the
Bank 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.
(g) Limitation by Section 18(k) of the FDIA. Notwithstanding anything
---------------------------------------
herein to the contrary, any payments made 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.
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 Bank, without
the Employee's prior written consent and for a reason other than for Just Cause,
death or disability in connection with or twelve (12) months after any change in
control of the Bank or HopFed Bancorp, Inc. (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 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
Company's directors, or (3) a change in the ownership or possession of the
ability to exercise a controlling influence over the
5
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) Notwithstanding the foregoing, but only to the extent required
under federal banking law, the amount payable under Section 11(a) hereof shall
be reduced to the extent that on the date of the Employee's termination of
employment, the amount payable under Section 11(a) exceeds the limitation on
severance benefits set forth in Regulatory Bulletin 27a of the OTS, as in effect
on such termination date.
(c) In the event that any dispute arises between the Employee and the
Bank 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 Bank, 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 favor. Such reimbursement
shall be paid within ten (10) days of Employee's providing the Bank 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 Bank that shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the corporation.
(b) Since the Bank 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 Bank.
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.
6
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: HOPKINSVILLE FEDERAL SAVINGS BANK
By:
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Secretary Its:
WITNESS:
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("Employee")
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