Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered
into as of the 18th day of March, 2015, by and between Heritage Bank USA, Inc.
(the “Bank”) and Paul Michael Foley III (the “Employee”).

WHEREAS, the Employee and the Bank previously entered into an employment
agreement dated as of November 23, 2011 (the “Prior Agreement”); and

WHEREAS, the Employee and the Bank desire to amend and restate the Prior
Agreement in its entirety; and

WHEREAS, the Employee and the Bank acknowledge and agree that this Agreement
shall supersede the Prior Agreement and all prior agreements and understandings
(whether written or oral) between the Bank and the Employee with respect to the
subject matter herein; and

WHEREAS, the Employee serves in a position of substantial authority; and
WHEREAS, the Bank 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 Bank
on the terms and conditions set forth below, and the Board of Directors of the
Bank (the “Board”) has determined that such terms and conditions are reasonable
and in the best interests of the Bank.

NOW, THEREFORE, it is AGREED as follows:

1. Employment. The Employee shall continue to be employed by the Bank as its
Senior Vice President, Chief Credit Officer. Except to the extent that the
President and Chief Executive Officer of the Bank shall have delegated a portion
of such authority to one or more other officers, as Sr. Vice President, Chief
Credit Officer of the Bank the Employee shall have the duties outlined in
Appendix A hereto. 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 as Vice President,
Chief Credit Officer during the term of this Agreement a salary (the “Base
Salary”) at the rate of $191,100 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 Base Salary, and in its sole discretion may decide to increase
his Base 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.

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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. 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.

(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 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 date
hereof and ending June 30, 2018 (or such earlier date as is determined in
accordance with Section 9 hereof). Additionally, prior to July 1 of each year
beginning in 2016, 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, however, 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 the term of 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 no later than July 1 whether
the Board has determined to extend the term of this Agreement, and if the
Employee is not so notified, the term of this Agreement shall be deemed to have
been 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 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.

 

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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
at 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

 

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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 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, however, 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 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 that 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 Section 9(c) and specifying the
particulars thereof in detail.

(d) Without Just Cause. 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 Base Salary
provided pursuant to Section 2 hereof as of the date of termination, up to the
date of expiration of the current term (including any renewal term then in
effect) of this Agreement. Said sum shall be paid in one lump sum within 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 the Federal
Deposit Insurance Act (“FDIA”), 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.

 

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(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) If the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under the
FDIA, 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. The Employee may voluntarily terminate
employment with the Bank during the term of this Agreement, upon at least 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. Any payments made to the Employee
pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with 12 U.S.C. § 1828(k) and FDIC regulation 12 CFR Part 359,
Golden Parachutte and Indemnification Payments.

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, or the Employee resigns for Good Reason in connection with
or within 12 months after any change in control of the Bank or HopFed Bancorp,
Inc. (the “Company”), the Employee shall be paid an amount equal to 2.9 times
the Employee’s Base Salary as of the date of termination. Said sum shall be paid
in one lump sum within 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 voting stock of the Bank or of the Company, (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 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

 

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specifically listed herein. Termination by the Employee for “Good Reason” as
used herein shall mean, termination by the Employee based on: (1) without the
Employee’s express written consent, a material reduction by the Bank of the
Employee’s Base Salary as the same may be increased from time to time;
(2) without the Employee’s express written consent, a material diminution in the
Employee’s authority, duties, or responsibilities; (3) a material diminution in
the authority, duties or responsibilities of the supervisor to whom the Employee
is required to report; (4) the principal executive office of the Bank is
relocated more than thirty (30) miles from Hopkinsville, Kentucky, or the Bank
requires the Employee to be based anywhere other than an area in which the
Bank’s principal executive office is located, except for reasonably required
travel on behalf of the business of the Bank; or (5) the failure by the Bank to
obtain the assumption of and agreement to perform this Agreement by any
successor as contemplated in Section 13(a) hereof. The Employee must provide
written notice to the Bank or its successor of the existence of the condition
that constitutes Good Reason within 90 days of the initial existence of such
condition. The Bank shall have 30 days after receipt of such notice to remedy
the condition, and, if remedied, the Employee shall not be entitled to be paid
the benefits described in this Section 11 in connection with the Employee’s
termination of employment.

(b) Notwithstanding any contrary provision in this Agreement, in the event that
it shall be determined (as hereinafter provided) that any payment or
distribution by the Company, the Bank, or any of their subsidiaries to or for
the benefit of Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise pursuant to or by reason of
any other agreement, policy, plan, program or arrangement including, without
limitation, any restricted stock or similar right or the lapse or termination of
any restriction on, or the vesting or exercisability of, any of the foregoing
(the “Total Payment”), would be subject, but for the application of this
Section 11(b), to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”), or any successor provision thereto (the
“Excise Tax”), by reason of being considered “contingent on a change in
ownership or control” of the Company, within the meaning of Code
Section 280G(b)(2), or any successor provision thereto, then

(i) if the After-Tax Payment Amount would be greater by reducing the amount of
the Total Payment otherwise payable to Employee to the minimum extent necessary
(but in no event less than zero) so that, after such reduction, no portion of
the Total Payment would be subject to the Excise Tax, then the Total Payment
shall be so reduced; and

(ii) if the After-Tax Payment Amount would be greater without the reduction then
there shall be no reduction in the Total Payment.

As used in this Section 11(b), “After-Tax Payment Amount” means (i) the amount
of the Total Payment, less (ii) the amount if federal income taxes payable with
respect to the Total Payment calculated at the maximum marginal income tax rate
for each year in which the Total Payment shall be paid to Executive (based upon
the rate in effect for such year as set forth in the Code at the time of the
Total Payment), less (iii) the amount of the Excise Tax, if any, imposed on the
Total Payment. For purposes of any reduction made under this Section 11(b), the
portion of the Total Payment that shall be reduced shall be those that provide
Employee the best economic benefits, and to the extent any individual components
of the Total Payment are economically equivalent, each shall be reduced pro
rata.

 

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(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 the 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 10 days of the 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. Non-Interference. Upon termination of employment other than in connection
with or within 12 months after any change in control of the Company or the Bank
(as defined in Section 11(a)), the Employee agrees that the Employee will not
initiate contact with any of the employees of the Company or the Bank with whom
he had contact during the course of his employment with the Bank for the purpose
of soliciting such employee for hire, whether as an employee or independent
contractor, or otherwise, disrupting such employee’s relationship with the
Company or the Bank.

13. 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.

14. 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.

15. 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.

16. 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.

 

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17. Entire Agreement. This Agreement, together with any understanding or
modification hereof as agreed to in writing by the parties, shall constitute the
entire agreement between the parties hereto.

18. Section 409A of the Internal Revenue Code. The severance payments provided
in this Agreement are intended to qualify as short-term deferrals under
Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations and guidance thereunder.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.

 

ATTEST: HERITAGE BANK USA, INC.

/s/ Michael L. Woolfolk

By:

/s/ John E. Peck

Secretary John E. Peck, President and Chief Executive Officer WITNESS: EMPLOYEE

/s/ Angela Ford

/s/ P. Michael Foley

Paul Michael Foley III

 

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