HopFed Bancorp (HFBC)

Base Salary

Base salary ranges are established based on a number of factors, including the KBA Survey of similar asset sized financial institutions as well as other market data. The KBA Survey illustrates the market rate for select executive positions expressed as a percentage of the median paid by the respondent companies. Executive positions are individually benchmarked against these survey sources annually to establish a competitive salary range for each position, which is typically targeted to be at or slightly above the median of the survey results.

The actual base salary of each executive officer relative to the target established above is determined by the executive’s performance, which is evaluated annually by the CEO and reviewed and approved by the Committee. In the case of the CEO, the Committee also considers the performance of the Company, and the anticipated level of difficulty of replacing the CEO with someone of comparable experience and skill. Based on these factors, the Committee established the CEO’s base salary at $270,480 per year beginning July 1, 2008. Salaries for the named executive officers are set forth on the Summary Compensation Table.

The Committee adjusted the salaries of Mr. Bennett to $145,946. The Committee adjusted the salaries of Messrs Duvall, Woolfolk, Stalls and Clark to $147,780, $202,703, $162,151 and $128,817, respectively at July 1, 2008 and will review their salaries in June 2009, with any changes in base salary effective as of July 1, 2009.

Base Salary

Base salary ranges are established based on a number of factors, including the KBA Survey of similar asset sized financial institutions as well as other market data. The KBA Survey illustrates the market rate for select executive positions expressed as a percentage of the median paid by the respondent companies. Executive positions are individually benchmarked against these survey sources annually to establish a competitive salary range for each position, which is typically targeted to be at or slightly above the median of the survey results.

The actual base salary of each executive officer relative to the target established above is determined by the executive’s performance, which is evaluated annually by the CEO and reviewed and approved by the Committee. In the case of the CEO, the Committee also considers the performance of the Company, and the anticipated level of difficulty of replacing the CEO with someone of comparable experience and skill. Based on these factors, the Committee established the CEO’s base salary at $241,500 per year in June 2007. Salaries for the named executive officers are set forth on the Summary Compensation Table.

The Committee adjusted the salaries of Mr. Bennett to $140,946, Mr. Lawson to $125,000 and Mr. Burrow to $125,417 effective January 1, 2008. The Committee adjusted the salaries of Messrs Duvall, Woolfolk, Stalls and Clark to $131,947, $184,275, $144,779 and $117,107, respectively at July 1, 2007 and will review their salaries in June 2008, with any changes in base salary effective as of July 1, 2008.

Base Salary

Base salary ranges are established based on a number of factors, including the KBA Survey of similar asset sized financial institutions as well as other market data. The KBA Survey illustrates the market rate for select executive positions expressed as a percentage of the median paid by the respondent companies. Executive positions are individually benchmarked against these survey sources annually to establish a competitive salary range for each position, which is typically targeted to be at or slightly above the median of the survey results.

The actual base salary of each executive officer relative to the target established above is determined by the executive’s performance, which is evaluated annually by the CEO and reviewed and approved by the Committee. In the case of the CEO, the Committee also considers the performance of the Company, and the anticipated level of difficulty of replacing the CEO with someone of comparable experience and skill. Based on these factors, the Committee established the CEO’s base salary at $230,000 per year in June 2006. Salaries for the named executive officers are set forth on the Summary Compensation Table.

The Committee adjusted the salaries of Mr. Bennett to $135,000 and Mr. Burrow to $121,200 effective January 1, 2007. The Committee will adjust the salaries for the remaining name executives in June 2007, with any changes in base salary effective as of July 1, 2007.

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