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ESOP PLAN

All Company employees participate in the 2015 HopFed Bancorp, Inc. Employee Stock Ownership Plan (ESOP). The ESOP purchased 600,000 shares of the Company’s common stock from the Company on March 2, 2015, at $13.14 per share. The ESOP borrowed $7.9 million from the Company for the purchase of the stock, using the 600,000 shares of common stock as collateral. The Company makes discretionary contributions to the ESOP. The ESOP utilizes these contributions along with the dividends on the 600,000 held by the ESOP to repay the loan from the Company. When loan payments are made, ESOP shares are released based on reduction in the principal balance of the loan.

The shares are allocated to participants based on relative compensation. Employees who are not employed at the December 31^st of each year are not eligible for participation in the ESOP. The Company anticipates that loan payments will be made at the end of each year. Participants receive shares at the end of employment. The Company has the option to repurchase the shares or to provide the shares directly to the employee.

At September 30, 2015, the ESOP has not made a loan payment to the Company. At September 30, 2015, the Company has an accrued ESOP contribution liability of approximately $630,000. At September 30, 2015, the Company has calculated that our current accrual would be sufficient to release 37,063 shares of ESOP shares to participants. At September 30, 2015, shares held by the ESOP were as follows:


Accrued to allocate to Participants		37,063

Unearned ESOP shares		562,937


Total ESOP shares		600,000


Fair value of unearned shares	$	6,727,097