EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, 1997, by and
between HopFed Bancorp, Inc. (the "Company") and Xxxxx Xxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by Hopkinsville Federal
Savings Bank (the "Bank") as its President and Chief Executive Officer, is
experienced in all phases of the business of the Bank, and has become the
President and Chief Executive Officer 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 President and
----------
Chief Executive Officer of the Company. Except to the extent that the Board of
Directors of the Company (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 Company, 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 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.
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
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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 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.
2
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 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) 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 Company 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.
4
(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 Company and 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) 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 Company'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 Company 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
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.
(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 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
5
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) 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
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, 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.
6
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")
------------------
7
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, l997, by and
between HopFed Bancorp, Inc. (the "Company") and Xxxxx X. Xxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by Hopkinsville Federal
Savings Bank (the "Bank") as its Executive Vice President, Chief Financial
Officer and Chief Operations Officer, is experienced in all phases of the
business of the Bank, and has become the Vice President, Chief Financial Officer
and Treasurer 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 Vice President,
----------
Chief Financial Officer and Treasurer of the Company. Except to the extent that
the Board of Directors of the Company (the "Board") shall have delegated a
portion of such authority to one or more other officers, the Employee shall (i)
have custody of the Company's corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements; (ii) render to the
President and the Board of Directors accounts of all transactions and of the
financial condition and results of operations of the Company; (iii) and perform
such other 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.
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 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.
2
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 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
3
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.
(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) 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 Company 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.
4
(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 Company and 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) 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
Company'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 Company 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
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.
(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 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
5
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) 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
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, 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.
6
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")
-------------------------
7
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the ___ day of _______, l997, by and
between HopFed Bancorp, Inc. (the "Company") and Xxxx X. Xxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by Hopkinsville Federal
Savings Bank (the "Bank") as its Senior Vice President - Loan Administration, is
experienced in all phases of the business of the Bank, and has become the Vice
President and Secretary 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 Vice President and
----------
Secretary of the Company. Except to the extent that the Board of Directors of
the Company (the "Board") shall have delegated a portion of such authority to
one or more other officers, the Employee shall (i) record all the proceedings of
the Board and the Company's stockholders, (ii) give notice of meetings of the
Board and stockholders, (iii) direct compliance with applicable laws and
regulations, as well as the Company's policies and procedures, and (iv) render
such other 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.
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 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.
2
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 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
3
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.
(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) 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 Company 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.
4
(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 Company and 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) 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
Company'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 Company 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
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.
(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 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
5
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) 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 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, 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.
6
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")
-----------------------
7
