HOPFED BANCORP INC
EXHIBIT 10.2
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<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>dex102.txt
<DESCRIPTION>EXHIBIT 10.2
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                                                                   Exhibit 10.2


                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is entered into as of the 1st day of June, 2001, by and
between Hopkinsville Federal Bank (the "Bank") and Billy C. Duvall (the
"Employee").

         WHEREAS, the Bank desires to employ the Employee; and

         WHEREAS, the Employee is willing to commence employment with 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 is hereby employed by the Bank. The
Employee shall serve as Vice President, Chief Financial Officer and Treasurer of
the Bank. 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, the Employee shall (i) have custody of the Bank's corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements; (ii) render to the President and Chief Executive Officer and the
Board (or, as appropriate, the Audit Committee of the Board) accounts of all
transactions and of the financial condition and results of operations of the
Bank; and (iii) perform such other administrative and management services for
the Bank as are currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee shall also promote, by
entertainment or otherwise, as and to the extent permitted by law, the business
of the Bank.

         2. Base Compensation. The Bank agrees to pay the Employee as Vice
President, Chief Financial Officer and Treasurer during the term of this
Agreement a salary (the "Base Salary") at the rate of $70,000 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.

         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.
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                  (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.

                  (d) Relocation  Expenses.  The Bank shall assist the Employee
  with reasonable expenses incurred in moving furniture, normal household goods
  and personal belongings to Hopkinsville, Kentucky. Some or all of such
  relocation expenses may be taxable income to the Employee.

         5. Term. The Bank hereby employs the Employee, and the Employee hereby
accepts such employment under this Agreement, for the period commencing on June
1, 2001 and ending 36 months thereafter (or such earlier date as is determined
in accordance with Section 9 hereof). Not more than 24 months from June 1, 2001,
the Board shall meet to review the Employee's performance and shall determine in
a duly adopted resolution whether the performance of the Employee has met the
Board's requirements and standards and whether this Agreement shall be extended.

         6. Loyalty, Full Time and Attention.

                  (a) During the period of his employment hereunder and except
for illness, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all his full business time, attention, skill, and efforts
to the faithful performance of his duties hereunder; provided that, from time to
time, the Employee may serve on the board of directors of, and hold any other
offices or positions in, companies or organizations, that will not present any
conflict of interest with the Bank or any of its subsidiaries or affiliates, or
unfavorably affect the performance of Employee's duties pursuant to this
Agreement, or will not violate any applicable statute or regulation. "Full
business time" is hereby defined as that amount of time usually devoted to like
companies by similarly situated executive officers. During the term of his
employment under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the Bank, or be
gainfully employed in any other position or job other than as provided above.

                  (b) Nothing contained in this Section 6 shall be deemed to
prevent or limit the Employee's right to invest in the capital stock or other
securities of any business dissimilar from that of the Bank, or, solely as a
passive or minority investor, in any business.

         7. Standards. The Employee shall perform his duties under this
Agreement in accordance with such reasonable standards as the Board may
establish from time to time. The Bank will provide the Employee with the working
facilities and staff customary for similar executive officers and necessary for
him to perform his duties.

                                      -2-
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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 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. The Employee's employment
hereunder may be terminated under the following circumstances:

                  (a) Death. The Employee's employment under this Agreement
shall terminate upon his death during the term of this Agreement, in which event
the Employee's estate shall be entitled to receive the compensation due the
Employee through the last day of the calendar month in which his death occurred.

                  (b) Disability. The Bank may terminate the Employee's
employment after having established, through a determination by the Board, the
Employee's Disability. For purposes of this Agreement, "Disability" means a
physical or mental infirmity that impairs the Employee's ability to
substantially perform his duties under this Agreement and that results in the
Employee becoming eligible for long-term disability benefits under the Bank's
long-term disability plan (or, if the Bank has no such plan in effect, that
impairs the Employee's ability to substantially perform his duties under this
Agreement for a period of 180 consecutive days). The Employee shall be entitled
to the compensation and benefits provided for under this Agreement for (i) any
period during the term of this Agreement and prior to the establishment of the
Employee's Disability during which the Employee is unable to work due to the
physical or mental infirmity, or (ii) any period of Disability that is prior to
the Employee's termination of employment pursuant to this Section 9(b); provided
that any benefits paid pursuant to the Bank's long-term disability plan will
continue as provided in such plan.

                                      -3-
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                  (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 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
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. Said sum
shall be paid, at the option of the Employee, either (1) in periodic payments
over the remaining term of this Agreement, as if the Employee's employment had
not terminated, or (2) 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 Sections 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA") (12 U.S.C. ss.1818(e)(4) or (g)(1)), all
obligations of the Bank under this Agreement shall terminate, as of the
effective date of the order, but vested rights of the parties shall not be
affected.

                           (2)       If the Bank is in default  (as defined in
Section  3(x)(1) of FDIA),  all  obligations  under this Agreement shall
terminate as of the date of default; however, this Paragraph
9(e)(2) shall not affect the vested rights of the parties.

                           (3)      All obligations  under this Agreement shall
terminate,  except to the extent that  continuation of this Agreement is
necessary for the continued operation of the Bank: (A) by the Director of the
Office of Thrift Supervision ("OTS"), or his or her designee, at
the time that the Federal Deposit Insurance Corporation enters into an agreement
to provide assistance to or on behalf of the Bank under the authority contained
in Section 13(c) of the FDIA; or (B) by the Director of the OTS, or his or her
designee, at the time that the Director of the OTS, or his or her designee,
approves a supervisory merger to resolve problems related to operation of the

                                      -4-
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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.ss.1818(e)(3)  or (g)(1)) suspends and/or
temporarily prohibits the Employee from participating in the conduct of the
Bank's affairs, the Bank's obligations under this Agreement shall
be suspended as of the date of such service unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion (A) pay the Employee all or part of the compensation withheld while
its contract obligations were suspended, and (B) reinstate (in whole or in part)
any of its obligations that were suspended.

                           (5)      If any of the provisions of this Paragraph
9(e) conflict with 12 C.F.R.ss. 563.39(b),  the latter shall prevail.

                  (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. 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. ss. 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.  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.

         12.  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.

                                      -5-
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         13. 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.

         14.  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

         15.  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.

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

ATTEST:                           HOPKINSVILLE FEDERAL BANK


                                  By:
------------------------               ------------------------------------
Secretary                               John E. Peck, President and
                                        Chief Executive Officer

WITNESS:

------------------------               -------------------------------------
                                        Billy C. Duvall


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