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Exhibit
10.3
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is entered
into as of the 14th day of February, 2008, by and between HopFed
Bancorp, Inc. (the “Company”) and Michael F. Stalls
(the “Employee”).
WHEREAS, the Employee serves
in a position of substantial authority; and
WHEREAS, the Company desires
to ensure the Employee’s services for the term of this
Agreement ;and
WHEREAS, the Employee is
willing to continue to serve in the employ of the Company on the
terms and conditions set forth below, and the Board of Directors of
the Company (the “Board”) has determined that such
terms are reasonable and in the best interests of the
Company.
NOW, THEREFORE, it is AGREED
as follows:
1. Employment . The
Employee is hereby employed by the Company as its Vice President.
Except to the extent that the President and Chief Executive Officer
of the Company shall have delegated a portion of such authority to
one or more other officers, as Vice President of the Company the
Employee shall perform such administrative and management services
for the Company as are currently rendered and as are customarily
performed by persons situated in a similar executive capacity. The
Employee shall also promote, by entertainment or otherwise, as and
to the extent permitted by law, the business of the
Company.
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, Heritage Bank
(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
. 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.
(c) Expenses . The
Employee shall be reimbursed for all reasonable out-of-pocket
business expenses that he 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
date hereof and ending June 30, 2010 (or such earlier date as
is determined in accordance with Section 9 hereof).
Additionally, prior to July 1 of each year, the
Employee’s term of employment and this Agreement shall be
extended for an additional one-year period beyond the then
effective expiration date, provided that the Compensation Committee
of 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. Prior to
July 1 of each such year, the Compensation Committee and the
Board shall meet to review the Employee’s performance and
determine whether the term of this Agreement shall be extended. By
written notice, the Board or the Chief Executive Officer will
inform the Employee as soon as possible after the Board’s
annual review whether the Board has determined to extend the term
of this Agreement.
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.
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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
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