Exhibit 10.8

HOMEFEDERAL BANK
AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME AGREEMENT
FOR
CHARLES R. FARBER

THIS AMENDED & RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME AGREEMENT (the
“Agreement”) is adopted this 25th day of July, 2007, by and between HOMEFEDERAL
BANK f/k/a HOME FEDERAL SAVINGS BANK, a state-chartered bank located in
Columbus, Indiana (the “Bank”) and Charles R. Farber (the “Executive”).

This agreement amends and restates the prior SUPPLEMENTAL EXECUTIVE RETIREMENT
INCOME AGREEMENT between the Bank and the Executive dated November 1, 2002 and
subsequently amended (the “Prior Agreement”).

The Bank intends this Amended and Restated Agreement to be a material
modification of the Prior Agreement such that all amounts earned and vested
prior to December 31, 2004 shall be subject to the provisions of Section 409A of
the Code and the regulations promulgated thereunder.

The purpose of this Agreement is to provide specified benefits to the Executive,
a member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development, and future business
success of the Bank.  This Agreement shall be unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended from time to time.

Article 1
Definitions

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

1.1
“Accrued Benefit” means the portion of the Supplemental Executive Retirement
Income Benefit which is required to be expensed and accrued generally accepted
accounting principles by any appropriate methodology.  Such Accrued
Benefit  shall be paid to the Executive in one hundred and eighty (180) equal
monthly installments.  The interest factor used to annuities the Accrued Benefit
shall equal to the average Cost of Funds of the Bank for the prior twelve (12)
month period.

1.2
“Act” means the Employee Retirement Income Security Act of 1974, as amended from
time and time.

1.3
“Bank” means HOMEFEDERAL BANK f/k/a HOME FEDERAL SAVINGS BANK, and any successor
thereto.

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1.4
“Beneficiary” means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive
determined pursuant to Article 4.

1.5
“Beneficiary Designation Form” means the form established from time to time by
the Plan Administrator that the Executive completes, signs, and returns to the
Plan Administrator to designate one or more Beneficiaries.

1.6
“Board” means the Board of Directors of the Bank as from time to time
constituted.

1.7
“Change of Control” shall mean any of the following:

 
(i)
a change in the ownership of the Bank or the Corporation, which shall occur on
the date that any one person, or more than one person acting as a group,
acquires ownership of stock of the Bank or the Corporation that, together with
stock held by such person or group, constitutes more than fifty percent (50%) of
the total fair market value or total voting power of the stock of the Bank or
the Corporation.  However, if any one person, or more than one person acting as
a group, is considered to own more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Bank or the Corporation,
the acquisition of additional stock by the same person or persons is not
considered to cause a change in the ownership of the Bank or the Corporation (or
to cause a change in the effective control of the Bank or the Corporation
(within the meaning of subsection (ii)).  An increase in the percentage of stock
owned by any one person, or persons acting as a group, as a result of a
transaction in which the Bank or the Corporation acquires its stock in exchange
for property will be treated as an acquisition of stock for purposes of this
subsection.  This subsection applies only when there is a transfer of stock of
the Bank or the Corporation (or issuance of stock of the Bank or the
Corporation) and stock in the Bank or the Corporation remains outstanding after
the transaction.

 
 
(ii)
a change in the effective control of the Bank or the Corporation, which shall
occur only on either of the following dates:

 
 
(a)
the date any one person, or more than one person acting as a group acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Bank or the
Corporation possessing thirty percent (30%) or more of the total voting power of
the stock of the Bank or the Corporation.

 
 
(b)
the date a majority of members of the Corporation’s board of directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Corporation’s board of
directors before the date of the appointment or election; provided,

 

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however, that this provision shall not apply if another corporation is a
majority shareholder of the Corporation
 
If any one person, or more than one person acting as a group, is considered to
effectively control the Bank or the Corporation, the acquisition of additional
control of the Bank or the Corporation by the same person or persons is not
considered to cause a change in the effective control of the Bank or the
Corporation (or to cause a change in the ownership of the Bank or the
Corporation within the meaning of subsection (i) of this section).
 
 
(iii)
a change in the ownership of a substantial portion of the Bank’s assets, which
shall occur on the date that any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) assets from the Bank
that have a total gross fair market value equal to or more than forty percent
(40%) of the total gross fair market value of all of the assets of the Bank
immediately before such acquisition or acquisitions.  For this purpose, gross
fair market value means the value of the assets of the Bank, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets.  No change in control event occurs under this
subsection (iii) when there is a transfer to an entity that is controlled by the
shareholders of the Bank immediately after the transfer.  A transfer of assets
by the Bank is not treated as a change in the ownership of such assets if the
assets are transferred to –

 
 
(a)
a shareholder of the Bank (immediately before the asset transfer) in exchange
for or with respect to its stock;

 
 
(b)
an entity, 50 percent or more of the total value or voting power of which is
owned, directly or indirectly, by the Bank.

 
 
(c)
a person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Bank; or

 
 
(d)
an entity, at least 50 percent of the total value or voting power of which is
owned, directly or indirectly, by a person described in paragraph (c)

 
for purposes of this subsection (iii) and except as otherwise provided in
paragraph (a) above, a person’s status is determined immediately after the
transfer of the assets.  For purposes of this section, persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.  However, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction with the Bank.  If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of
 

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stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders only with respect to the ownership in that
corporation before the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.
 
1.8
“Children” means the Executive’s children, both natural and adopted.

1.9
“Code” means the Internal Revenue Code of 1986, as amended.

1.10
“Corporation” means Home Federal Bancorp, an Indiana corporation, and the sole
shareholder of the Bank.

1.11
“Cost of Funds” shall be equal to total interest expense, divided by the monthly
weighted average of total interest-bearing liabilities.  The time frame for
measuring Cost of Funds shall be the last twelve (12) complete months
immediately prior to the event which triggered the need for measurement.

1.12
“Disability” means Executive: (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months; or (ii) is, by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering
employees of the Bank.  Medical determination of Disability may be made by
either the Social Security Administration or by the provider of an accident or
health plan covering employees of the Bank.  Upon the request of the Plan
Administrator, the Executive must submit proof to the Plan Administrator of the
Social Security Administration’s or the provider’s determination.

1.13
“Early Retirement” means Termination of Employment before Normal Retirement Age
except when such Termination of Employment occurs: (i) within twelve (12) months
following a Change in Control; or (ii) due to death, Disability, or Termination
for Cause.

1.14
“Early Retirement Age” means the Executive attaining age sixty (60) and
completing five (5) Years of Service.

1.15
“Early Termination for Good Cause” means a Termination of Employment, for
reasons other than death, Disability or Termination for Cause, at any time
during the twelve (12) month period following a Change of Control, but prior to
Early Retirement Age, if the Executive is (i) involuntarily terminated by the
Bank or (ii) if at any time during such period, the Executive is demoted,
undergoes a material change in title, position, duties or responsibilities, or
has a material reduction in compensation, including fringe benefits, and the
Executive voluntarily terminates employment with the Bank.

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1.16
“Effective Date” means January 1, 2005.

 
1.17
“Estate” means the Estate of the Executive.

 
1.18
“Normal Retirement Age” means the Executive attaining age sixty five (65).

 
1.19
“Normal Retirement Date” means the later of Normal Retirement Age or Termination
of Employment.

 
1.20
“Plan Administrator” means the plan administrator described in Article 6.

 
1.21
“Plan Year” means each twelve-month period commencing on July 1 and ending on
June 30 of each year.  The initial Plan Year shall commence on the Effective
Date of this Agreement and end on the following June 30, 2006.

 
1.22
“Specified Employee” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank
or any entity required to be aggregated with the Bank under Section 414(b) or
Section 414(c) of the Code is publicly traded on an established securities
market or otherwise.

 
1.23
“Spouse” means the individual to whom the Executive is legally married at the
time of the Executive’s death.

 
1.24
“Suicide” means the act of intentionally killing oneself.

 
1.25
“Supplemental Retirement Income Benefit” means an annual amount equal to an
annualized benefit of Fifty Thousand Dollars ($50,000).  Payments shall be made
in equal monthly installments for one hundred eighty months (180).

 
1.26
“Survivor’s Benefit” means monthly level payments totaling Fifty Thousand
Dollars ($50,000) annually for fifteen (15) years.

 
1.27
“Termination for Cause” means Termination of Employment for:

 
 
(a)
Personal dishonesty; or

 
(b)
Incompetence; or

 
(c)
Willful misconduct; or

 
(d)
Breach of fiduciary duty involving personal profit; or

 
(e)
Intentional failure to perform stated duties; or

 
(f)
Willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order.

1.28
“Termination of Employment” means the termination of the Executive’s employment
with the Bank for reasons other than death or Disability.  Whether a Termination
of Employment takes place is determined based on the facts and circumstances
surrounding

 

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the termination of the Executive’s employment.  A Termination of Employment will
be considered to have occurred if it is reasonably anticipated that:

 
 
(a)
the Executive will not perform any services for the Bank after Termination of
Employment, or

 
 
(b)
the Executive will continue to provide services to the Bank at an annual rate
that is less than fifty percent (50%) of the bona fide services rendered during
the immediately preceding twelve (12) months of employment.

 
1.29
“Vested” means the non-forfeitable portion of the benefit to which the Executive
is entitled.

1.30
“Vested Accrued Benefit” means the portion of the Executive’s Accrued Benefit in
which he is vested.  It is computed by multiplying the Accrued Benefit by the
vesting percentage specified in Section 3.6.

1.31
“Years of Service” means the total number of complete calendar years of
continuous employment (including authorized leaves of absence), beginning from
the date of execution of this Agreement.

Article 2
Distribution at Death

2.1
Death During Active Service.  In the event of the Executive’s death prior to
Termination of Employment with the Bank, while covered by the provisions of this
Agreement, the Executive’s Beneficiary shall be paid the Survivor’s
Benefit.  Payments shall commence within thirty (30) days after the date of the
Executive’s death.

2.2
Death During Distribution of a Benefit.  Except as provided in Section 2.3
below, if the Executive dies after any benefit distributions have commenced
under this Agreement but before receiving all such distributions, the Bank shall
distribute to the Beneficiary the remaining benefits at the same time and in the
same amounts that would have been distributed to the Executive had the Executive
survived.

 
2.3
Death After Termination of Employment But Before Benefit Distributions
Commence. If the Executive is entitled to benefit distributions under this
Agreement, but dies prior to the commencement of said benefit distributions, the
Bank shall distribute to the Beneficiary the same benefits that the Executive
was entitled to prior to death except that the benefit distributions shall
commence within sixty (60) days following receipt by the Bank of the Executive’s
death certificate.

2.4
Burial Benefit.  In addition to the above-described death benefits, the
Executive’s Beneficiary shall be entitled to a one-time lump sum death benefit
in the amount of Fifteen Thousand Dollars ($15,000).  The payment shall be made
within thirty (30) days following receipt by the Bank of the Executive’s death
certificate.

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Article 3

Distributions During Lifetime

3.1
Normal Retirement Benefit.  Upon the Normal Retirement Date, the Bank shall
distribute to the Executive the benefit described in this Section 3.1 in lieu of
any other benefit under this Article.

 
 
3.1.1
Amount of Benefit.  The annual benefit under this Section 3.1 is Fifty Thousand
Dollars ($50,000).

 
 
3.1.2
Distribution of Benefit.  The Bank shall distribute the annual benefit to the
Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Termination of Employment.  The annual benefit shall be
distributed to the Executive for one hundred eighty (180) months.

 
3.2
Early Retirement Benefit.  Upon Early Retirement on or after Early Retirement
Age, the Bank shall distribute to the Executive the benefit described in this
Section 3.2 in lieu of any other benefit under this Article.

 
 
3.2.1
Amount of Benefit.  The annual benefit under this Section 3.2 is the benefit
specified in Section 3.1, reduced by 4.5% per year for each year that Early
Retirement precedes Normal Retirement Date and discounted to present value by an
interest factor equal to the Bank’s average Cost of Funds for the twelve (12)
month period prior to Early Retirement Date.

 
 
3.2.2
Distribution of Benefit.  The Bank shall distribute the annual benefit to the
Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Early Retirement.  The annual benefit shall be
distributed to the Executive for one hundred eighty (180) months.

 
3.3
Disability Benefit.  If the Executive experiences a Disability prior to Normal
Retirement Age, the Bank shall distribute to the Executive the benefit described
in this Section 3.3 in lieu of any other benefit under this Article.

 
 
3.3.1
Amount of Benefit.  The benefit under this Section 3.3 is the Accrued Benefit at
the time of such Disability.

 
 
3.3.2
Distribution of Benefit.  The Bank shall distribute the benefit to the Executive
in twelve (12) equal monthly installments commencing on the first day of the
month following such Disability.  The annual benefit shall be distributed to the
Executive for one hundred eighty (180) months.

 
3.4
Change in Control Benefit.  Upon a Change in Control followed within twelve (12)
months by an Early Termination for Good Cause, the Bank shall distribute to the

 

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Executive the benefit described in this Section 3.4 in lieu of any other benefit
under this Article.
 
 
3.4.1
Amount of Benefit.  The benefit under this Section 3.4 is the present value
determined as of the Change in Control of fifteen years of annual installments
of the Normal Retirement Benefit as set forth in Section 3.1.1. For purposes of
calculating the present value, the discount rate shall be determined by
multiplying the Bank’s Cost of Funds by a factor equal to one (1) minus the
Bank’s tax rate.

 
 
3.4.2
Distribution of Benefit.  The Bank shall distribute the benefit to the Executive
in lump sum within thirty (30) days following Early Termination for Good Cause.

 
3.5
Termination of Employment Prior to Early Retirement Age.  Upon Termination of
Employment prior to Early Retirement Age for reasons other than (i) Termination
of Employment within twelve (12) months following a Change in Control; or (ii)
due to death, Disability, or Termination for Cause, the Bank shall distribute to
the Executive the benefit described in this Section 3.5 in lieu of any other
benefit under this Article.

 
 
3.5.1
Amount of Benefit.  The benefit under this Section 3.5 is the Vested Accrued
Benefit at the time of Termination of Employment.

 
 
3.5.2
Distribution of Benefit.  The Bank shall distribute the annual benefit to the
Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Termination of Employment.  The annual benefit shall be
distributed to the Executive for one hundred eighty (180) months.

 
3.6
Vesting.  The benefits provided by the Bank to the Executive under this
Agreement shall vest in the Executive according to the following schedule:

 

 
Years of Service
 
Percentage of Total Benefit Vested
             
1 year
 
20%
   
2 year
 
40%
   
3 year
 
60%
   
4 year
 
80%
   
5 year
 
100%
 

3.7
Restriction on Timing of Distribution.  Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee
at Termination of Employment under such procedures as established by the Bank in
accordance with Section 409A of the Code, benefit distributions that are made
upon Termination of Employment may not commence earlier than six (6) months
after the date of such Termination of Employment; provided, however, that the
six (6) month delay required under this Section 3.7 shall not apply to the
portion of any payment resulting from the Executive’s “involuntary separation
from service” (as defined in Treas. Reg. § 1.409A-1(n) and including a
“separation from service for good reason,” as defined in Treas. Reg.

 

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§ 1.409A-1(n)(2)) that (a) is payable no later than the last day of the second
year following the year in which the separation from service occurs, and (b)
does not exceed two times the lesser of (i) the Executive’s annualized
compensation for the year prior to the year in which the separation from
services occurs, or (ii) the dollar limit described in Section 401(a)(17) of the
Code.  Therefore, in the event this Section 3.7 is applicable to the Executive,
any distribution which would otherwise be paid to the Executive within the first
six months following the Termination of Employment shall be accumulated and paid
to the Executive in a lump sum on the first day of the seventh month following
the Termination of Employment.  All subsequent distributions shall be paid in
the manner specified.

 
3.8
Distributions Upon Income Inclusion Under Section 409A of the Code.  Upon the
inclusion of any portion of the Accrued Benefit into the Executive’s income as a
result of the failure of this non-qualified deferred compensation plan to comply
with the requirements of Section 409A of the Code, to the extent such tax
liability can be covered by the Accrued Benefit, a distribution shall be made as
soon as is administratively practicable following the discovery of the plan
failure.

 
3.9
Change in Form or Timing of Distributions.  All changes in the form or timing of
distributions hereunder must comply with the following requirements.  The
changes:

 
 
(a)
may not accelerate the time or schedule of any distribution, except as provided
in Section 409A of the Code and the regulations thereunder;

 
(b)
must, for benefits distributable under Sections 3.1, 3.2, 3.4 and 3.5 delay the
commencement of distributions for a minimum of five (5) years from the date the
first distribution was originally scheduled to be made; and

 
(c)
must take effect not less than twelve (12) months after the election is made.

Article 4
Beneficiaries

4.1
Beneficiary.  The Executive shall have the right, at any time, to designate a
Beneficiary to receive any benefit distributions under this Agreement upon the
death of the Executive.  The Beneficiary designated under this Agreement may be
the same as or different from the beneficiary designation under any other plan
of the Bank in which the Executive participates.

 
4.2
Beneficiary Designation; Change.  The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form, and delivering it to
the Plan Administrator or its designated agent.  The Executive's beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage
is subsequently dissolved.  The Executive shall have the right to change a
Beneficiary by completing, signing and

 

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otherwise complying with the terms of the Beneficiary Designation Form and the
Plan Administrator’s rules and procedures, as in effect from time to time.  Upon
the acceptance by the Plan Administrator of a new Beneficiary Designation Form,
all Beneficiary designations previously filed shall be cancelled.  The Plan
Administrator shall be entitled to rely on the last Beneficiary Designation Form
filed by the Executive and accepted by the Plan Administrator prior to the
Executive’s death.

4.3
Acknowledgment.  No designation or change in designation of a Beneficiary shall
be effective until received, accepted and acknowledged in writing by the Plan
Administrator or its designated agent.

 
4.4
No Beneficiary Designation.  If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then
the Executive’s spouse shall be the designated Beneficiary.  If the Executive
has no surviving spouse, the benefits shall be made to the personal
representative of the Executive's estate.

 
4.5
Facility of Distribution.  If the Plan Administrator determines in its
discretion that a benefit is to be distributed to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of that
person’s property, the Plan Administrator may direct distribution of such
benefit to the guardian, legal representative or person having the care or
custody of such minor, incompetent person or incapable person.  The Plan
Administrator may require proof of incompetence, minority or guardianship as it
may deem appropriate prior to distribution of the benefit.  Any distribution of
a benefit shall be a distribution for the account of the Executive and the
Executive’s Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Agreement for such distribution amount.

 

Article 5
General Limitations

5.1
Termination for Cause.  Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this Agreement if the
Executive’s employment with the Bank is terminated due to a Termination for
Cause.

5.2
Suicide or Misstatement.  No benefits shall be distributed if the Executive
commits suicide within two years after the Effective Date of this Agreement, or
if an insurance company which issued a life insurance policy covering the
Executive and owned by the Bank denies coverage (i) for material misstatements
of fact made by the Executive on an application for such life insurance, or (ii)
for any other reason.

5.3
Removal. Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not distribute any benefit under this Agreement if the Executive is
subject to a final removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

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5.4
Non-compete.  The Executive expressly agrees that, as consideration for the
agreements of the Bank contained herein and as a condition to the performance by
the Bank of its obligations hereunder, throughout the entire period beginning
with the date of this Agreement and continuing until the final payment is made
to the Executive, as provided herein, he will not, without prior written consent
of the Bank, engage in, become interested in, directly or indirectly, as a sole
proprietor, as a partner in a partnership, or as a substantial shareholder in a
corporation, nor become associated with, in the capacity of an employee,
director, officer, principal, agent, trustee or in any other capacity
whatsoever, any enterprise conducted within a radius of 25 miles of the main
office of the Bank which enterprise is, or may deemed to be, competitive with
any business carried on by the Bank as of the date of Termination of
Employment.  The conditions set forth in this Section 5.4 shall not be
applicable if the Executive is discharged without cause or if the Executive is
discharged for any reason following a Change in Control.  In the event of any
breach by the Executive of the agreements and covenants contained herein, the
Board of Directors of the Bank shall direct that any unpaid balance of any
payments to the Executive under this Agreement be suspended, and shall thereupon
notify the Executive of such suspensions, in writing.  Thereupon, if the Board
of Directors of the Bank shall determine that said breach by the Executive has
continued for a period of one (1) month following notification of such
suspension, all rights of the Executive and any Beneficiary under this
Agreement, including rights to further payments hereunder, shall thereupon
terminate.

Article 6
Administration of Agreement

6.1
Plan Administrator Duties.  This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s)
as the Board shall appoint.  The Plan Administrator shall administer this
Agreement according to its express terms and shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administra­tion of this Agreement and (ii) decide or resolve
any and all ques­tions including interpretations of this Agreement, as may arise
in connection with the Agreement to the extent the exercise of such discretion
and authority does not conflict with Section 409A of the Code and regulations
thereunder.

6.2
Agents.  In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.

6.3
Binding Effect of Decisions.  The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement.

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6.4
Indemnity of Plan Administrator.  The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.

6.5
Bank Information.  To enable the Plan Administrator to perform its functions,
the Bank shall supply full and timely information to the Plan Administrator on
all matters relating to the date and circum­stances of the retirement,
Disability, death, or Termination of Employment of the Executive, and such other
pertinent information as the Plan Administrator may reasonably require.

 

Article 7
Claims And Review Procedures

7.1
Claims Procedure.  An Executive or Beneficiary (“claimant”) who has not received
benefits under the Agreement that he or she believes should be distributed shall
make a claim for such benefits as follows:

 
7.1.1
Initiation – Written Claim.  The claimant initiates a claim by submitting to the
Plan Administrator a written claim for the benefits.  If such a claim relates to
the contents of a notice received by the claimant, the claim must be made within
sixty (60) days after such notice was received by the claimant.  All other
claims must be made within one hundred eighty (180) days of the date on which
the event that caused the claim to arise occurred.  The claim must state with
particularity the determination desired by the claimant.

 
 
7.1.2
Timing of Plan Administrator Response.  The Plan Administrator shall respond to
such claimant within 90 days after receiving the claim.  If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional 90 days by notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period is required.  The notice of
extension must set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.

 
 
7.1.3
Notice of Decision.  If the Plan Administrator denies part or all of the claim,
the Plan Administrator shall notify the claimant in writing of such denial.  The
Plan Administrator shall write the notification in a manner calculated to be
understood by the claimant.  The notification shall set forth:

 
 
(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of the Agreement on which the denial is
based;

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(c)
A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed;

 
(d)
An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures; and

 
(e)
A statement of the claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

7.2
Review Procedure.  If the Plan Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as follows:

 
 
7.2.1
Initiation – Written Request.  To initiate the review, the claimant, within 60
days after receiving the Plan Administrator’s notice of denial, must file with
the Plan Administrator a written request for review.

 
 
7.2.2
Additional Submissions – Information Access.  The claimant shall then have the
opportunity to submit written comments, documents, records and other information
relating to the claim.  The Plan Administrator shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 
 
7.2.3
Considerations on Review.  In considering the review, the Plan Administrator
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

 
 
7.2.4
Timing of Plan Administrator Response.  The Plan Administrator shall respond in
writing to such claimant within 60 days after receiving the request for
review.  If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional 60 days by notifying the claimant in writing,
prior to the end of the initial 60-day period, that an additional period is
required.  The notice of extension must set forth the special circumstances and
the date by which the Plan Administrator expects to render its decision.

 
 
7.2.5
Notice of Decision.  The Plan Administrator shall notify the claimant in writing
of its decision on review.  The Plan Administrator shall write the notification
in a manner calculated to be understood by the claimant.  The notification shall
set forth:

 

 
(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of the Agreement on which the denial is
based;

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(c)
A statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits; and

 
(d)
A statement of the claimant’s right to bring a civil action under ERISA Section
502(a).

Article 8
Amendments and Termination

8.1
Amendments.  The Bank may amend this Agreement unilaterally by written
action.  No amendment shall directly or indirectly deprive the Executive of all
or any portion of any benefit payment which has commenced prior to the effective
date of the resolution amending the Agreement.

8.2
Plan Termination Generally.  The Bank and Executive may terminate this Agreement
at any time.  Except as provided in Section 8.3, the termination of this
Agreement shall not cause a distribution of benefits under this
Agreement.  Rather, after such termination benefit distributions will be made at
the earliest distribution event permitted under Article 2 or Article 3.

8.3
Plan Terminations Under Section 409A.  Notwithstanding anything to the contrary
in Section 8.2, if this Agreement terminates in the following circumstances:

 
(a)
Within thirty (30) days before or twelve (12) months after a change in the
ownership or effective control of the Bank or of the Corporation, or in the
ownership of a substantial portion of the assets of the Bank or of the
Corporation as described in Section 409A(2)(A)(v) of the Code, provided that
termination of this Agreement was effected through an irrevocable action taken
by the Bank and provided further that all distributions are made no later than
twelve (12) months following such termination of the Agreement and that all the
Bank's arrangements which are substantially similar to the Agreement are
terminated so the Executive and all participants in the similar arrangements are
required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the termination of the arrangements;

 
 
(b)
Upon the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the Executive's
gross income in the latest of (i) the calendar year in which the Agreement
terminates; (ii) the calendar year in which the amount is no longer subject to a
substantial risk of forfeiture; or (iii) the first calendar year in which the
distribution is administratively practical; or

 
(c)
Upon the Bank’s termination of this and all other non-account balance plans (as
referenced in Section 409A of the Code or the regulations thereunder), provided

14

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that all distributions are made no earlier than twelve (12) months and no later
than twenty-four (24) months following such termination, provided further that
the termination of this Agreement does not occur proximate to the downturn in
the financial health of the Bank and provided further that the Bank does not
adopt any new non-account balance plans for a minimum of three (3) years
following the date of such termination;

then the Bank may distribute the present value of the Executive’s accrued
benefit determined as of the date of the termination of the Agreement, to the
Executive in a lump sum subject to the above terms.

Article 9
Miscellaneous

9.1
Binding Effect.  This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, administrators and transferees.

9.2
No Guarantee of Employment.  This Agreement is not a contract for
employment.  It does not give the Executive the right to remain as an employee
of the Bank, nor does it interfere with the Bank's right to discharge the
Executive.  It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

9.3
Non-Transferability.  Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

9.4
Tax Withholding and Reporting.  The Bank shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under Section
409A of the Code and regulations thereunder, from the benefits provided under
this Agreement.  The Executive acknowledges that the Bank’s sole liability
regarding taxes is to forward any amounts withheld to the appropriate taxing
authority(ies).  Further, the Bank shall satisfy all applicable reporting
requirements, including those under Section 409A of the Code and regulations
thereunder.

9.5
Applicable Law.  The Agreement and all rights hereunder shall be governed by the
laws of the State of Indiana, except to the extent preempted by the laws of the
United States of America.

9.6
Unfunded Arrangement.  The Executive and the Beneficiary are general unsecured
creditors of the Bank for the distribution of benefits under this
Agreement.  The benefits represent the mere promise by the Bank to distribute
such benefits.  The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors.  Any insurance on the Executive's life
or other informal funding asset is a general asset of the Bank to which the
Executive and Beneficiary have no preferred or secured claim.

15

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9.7
Reorganization. The Bank shall not merge or consolidate into or with another
bank, or reorganize, or sell substantially all of its assets to another bank,
firm, or person unless such succeeding or continuing bank, firm, or person
agrees to assume and discharge the obligations of the Bank under this
Agreement.  Upon the occurrence of such event, the term “Bank” as used in this
Agreement shall be deemed to refer to the successor or survivor bank.

 
9.8
Entire Agreement. This Agreement constitutes the entire agreement between the
Bank and the Executive as to the subject matter hereof.  No rights are granted
to the Executive by virtue of this Agreement other than those specifically set
forth herein.

 
9.9
Interpretation.  Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

9.10
Alternative Action.  In the event it shall become impossible for the Bank or the
Plan Administrator to perform any act required by this Agreement, the Bank or
Plan Administrator may in its discretion perform such alternative act as most
nearly carries out the intent and purpose of this Agreement and is in the best
interests of the Bank, provided that such alternative acts do not violate
Section 409A of the Code.

9.11
Headings.  Article and section headings are for convenient reference only and
shall not control or affect the meaning or construction of any of its
provisions.

9.12
Validity.  In case any provision of this Agreement shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Agreement shall be construed and enforced as if such
illegal and invalid provision has never been inserted herein.

9.13
Notice.  Any notice or filing required or permitted to be given to the Bank or
Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

 

 
HomeFederal Bank
   
Attention:  CEO
   
501 Washington Street
   
Columbus, IN  47201
 

 
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

Any notice or filing required or permitted to be given to the Executive under
this Agreement shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Executive.

16

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9.14
Litigation Expenses.  Any legal Expenses incurred by the Executive or any
Beneficiary relating to the enforcement or enforceability of any benefit
obligations hereunder shall be paid or reimbursed by the Bank to the extent
permitted by law; provided however, that except as provided below, the maximum
aggregate payment and reimbursement of legal expenses under this Section 9.14
with respect to the Executive or any Beneficiary shall not exceed Ten Thousand
Dollars ($10,000); provided further, that this Ten Thousand Dollar ($10,000)
limitation shall be reduced by the amount of any legal expenses incurred by the
Executive or any Beneficiary which were paid or reimbursed by the Bank under any
other plan or arrangement entered into by the Bank and
Executive.  Notwithstanding anything contained in this Section 9.14 to the
contrary, the Executive or any Beneficiary shall be entitled to payment or
reimbursement of legal expenses in excess of Ten Thousand Dollars ($10,000) if
the expenses were incurred as a result of bona fide claims under this Agreement
in which the Executive or any Beneficiary obtains a final judgment in their
favor from a court of competent jurisdiction or their claim is settled by the
Bank prior to the rendering of a judgment by such a court.

 
9.15
Compliance with Section 409A.  This Agreement shall at all times be administered
and the provisions of this Agreement shall be interpreted consistent with the
requirements of Section 409A of the Code and any and all regulations thereunder,
including such regulations as may be promulgated after the Effective Date of
this Agreement.

 
9.16
280G Limits.  Anything in this Agreement to the contrary notwithstanding, in the
event that the Bank’s independent public accountants determine that any payment
by the Bank to or for the benefit of the Executive, whether paid or payable
pursuant to the terms of this Agreement, would be non-deductible by the Bank for
federal income tax purposes because of Section 280G of the Code, then the amount
payable to or for the benefit of the Executive pursuant to this Agreement shall
be reduced (but not below zero) to the Reduced Amount.  For purposes of this
Section 9.16, the “Reduced Amount” shall be the amount which maximizes the
amount payable without causing the payment to be non-deductible by the Bank
because of Section 280G of the Code.

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank have signed this Agreement.

EXECUTIVE:
 
HOMEFEDERAL BANK
                /s/ Charles R. Farber  
By
/s/ John K. Keach, Jr.
Charles R. Farber
 
Title
Chairman/CEO

17

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HOMEFEDERAL BANK                            
Executive Supplemental Retirement Income Agreement        
BENEFICIARY DESIGNATION FORM
 
 

--------------------------------------------------------------------------------

{  }           New Designation
{  }           Change in Designation

I, __________________________, designate the following as Beneficiary under the
Agreement:

Primary:
   ___________________________________________________________
 
   ___________________________________________________________
 
 
_____%
 
_____%
 
Contingent:
   ___________________________________________________________
 
   ___________________________________________________________
 
 
_____%
 
_____%
 

 
Notes:

 
·
Please PRINT CLEARLY or TYPE the names of the beneficiaries.

 
·
To name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust agreement.

 
·
To name your estate as Beneficiary, please write “Estate of [your name]”.

 
·
Be aware that none of the contingent beneficiaries will receive anything unless
ALL of the primary beneficiaries predecease you.

I understand that I may change these beneficiary designations by delivering a
new written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death.  I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and our
marriage is subsequently dissolved.

Name:                                _______________________________

Signature:                        _______________________________                      Date:    ___________

Received by the Plan Administrator this ________ day of ___________________,
2_____

By:            _________________________________

Title:         _________________________________