hfb_8k0724ex109.htm


    

      Exhibit
        10.9

       

      


       

      AMENDED
        AND RESTATED EMPLOYMENT AGREEMENT

       

      This
        Amended and Restated Agreement, is made and dated as of July 25, 2007, by
        and
        among Home Federal Savings Bank, a state chartered commercial bank (“Employer”),
        Home Federal Bancorp, an Indiana corporation, which owns all of the capital
        stock of the Employer (the “Holding Company”), and Charles R. Farber, a resident
        of Bartholomew County, Indiana (“Employee”), but effective as of January 1,
        2005.

       

      This
        Agreement amends and restates the prior Employment Agreement among the Employer,
        the Holding Company and the Employee dated March 18, 2002 (the “Prior
        Agreement”).  It has been amended and restated for compliance with the
        final regulations under Section 409A of the Internal Revenue Code of 1986,
        as
        amended.

       

      WITNESSETH

      


      WHEREAS,
        Employee is employed by Employer as an Executive Vice President and has made
        valuable contributions to the profitability and financial strength of
        Employer;

       

      WHEREAS,
        Employer desires to encourage Employee to continue to make valuable
        contributions to Employer’s business operations and not to seek or accept
        employment elsewhere;

       

      WHEREAS,
        Employee desires to be assured of a secure minimum compensation from Employer
        for his services over a defined term;

       

      WHEREAS,
        Employer desires to assure the continued services of Employee on behalf of
        Employer on an objective and impartial basis and without distraction or conflict
        of interest in the event of an attempt by any person to obtain control of
        Employer or of the Holding Company.

       

      WHEREAS,
        Employer recognizes that when faced with a proposal for a change of control
        of
        Employer, Employee will have a significant role in helping the Board of
        Directors assess the options and advising the Board of Directors on what
        is in
        the best interests of Employer and its shareholders, and it is necessary
        for
        Employee to be able to provide this advice and counsel without being influenced
        by the uncertainties of his own situation;

       

      WHEREAS,
        Employer desires to provide fair and reasonable benefits to Employee on the
        terms and subject to the conditions set forth in this Agreement;

       

      WHEREAS,
        Employer desires reasonable protection of its confidential business and customer
        information which it has developed over the years at substantial expense
        and
        assurance that Employee will not compete with Employer for a reasonable period
        of time after termination of his employment with Employer, except as otherwise
        provided herein.

       

      NOW,
        THEREFORE, in consideration of these premises, the mutual covenants and
        undertakings herein contained and the continued employment of Employee by
        Employer as one of its Executive Vice Presidents, Employer and Employee,
        each
        intending to be legally bound, covenant and agree as follows:

       


      
        
          
          

        

        
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      1.           Upon
        the terms and subject to the conditions set forth in this Agreement, Employer
        employs Employee as an Executive Vice President of Employer, and Employee
        accepts such employment.

       

      2.           Employee
        agrees to serve as an Executive Vice President of Employer and to perform
        such
        duties in that office as may reasonably be assigned to him by Employer’s Board
        of Directors; provided, however that such duties shall be performed in or
        from
        the offices of Employer currently located at Columbus, Indiana and Indianapolis,
        Indiana.  Employee shall not be required to be absent from the
        location of the offices of Employer at which he works on travel status or
        otherwise more than 45 days in any calendar year.  Although while
        employed by Employer, Employee shall devote substantially all his business
        time
        and efforts to Employer’s business and shall not engage in any other related
        business, Employee may use his discretion in fixing his hours and schedule
        of
        work consistent with the proper discharge of his duties.

       

      3.           The
        term of this Agreement shall begin on March 18, 2002 (the “Effective Date”) and
        shall end on the date which is three years following such date; provided,
        however, that such term shall be extended for an additional year on each
        anniversary of the Effective Date if Employer’s Board of Directors determines by
        resolution to extend this Agreement prior to such anniversary of the Effective
        Date, unless either party hereto gives written notice to the other party
        not to
        so extend prior to such anniversary, in which case no further automatic
        extension shall occur and the term of this Agreement shall end two years
        subsequent to the anniversary as of which the notice not to extend for an
        additional year is given (such term including any extension thereof shall
        herein
        be referred to as the “Term”).  Notwithstanding the foregoing, this
        Agreement shall automatically terminate (and the Term of this Agreement shall
        thereupon end) without notice when Employee attains 65 years of
        age.

       

      4.           Employee
        shall receive an annual salary of $180,000 effective June 1, 2006 (“Base
        Compensation”), payable at regular intervals in accordance with Employer’s
        normal payroll practices now or hereafter in effect.  Employer may
        consider and declare from time to time increases in the salary it pays Employee
        and thereby increases in his Base Compensation.  Prior to a Change of
        Control, Employer may also declare decreases in the salary it pays Employee
        if
        the operating results of Employer are significantly less favorable than those
        for the fiscal year ending June 30, 2001, and Employer makes similar decreases
        in the salary it pays to other executive officers of Employer. After a Change
        in
        Control, Employer shall consider and declare salary increases based upon
        the
        following standards:

       

      Inflation;

      


      Adjustments
        to the salaries of other senior management personnel; and

      


      Past
        performance of Employee and the contribution which Employee makes to the
        business and profits of Employer during the Term.

      


      Any
        and
        all increases or decreases in Employee’s salary pursuant to this section shall
        cause the level of Base Compensation to be increased or decreased by the
        amount
        of each such increase or decrease for purposes of this Agreement.  The
        increased or decreased level of Base Compensation as provided in this section
        shall become the level of Base Compensation for the

       


      
        
          
          

        

        
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      remainder
        of the Term of this Agreement until there is a further increase or decrease
        in
        Base Compensation as provided herein.

       

      5.           So
        long as Employee is employed by Employer pursuant to this Agreement, he shall
        be
        included as a participant in all present and future employee benefit,
        retirement, and compensation plans generally available to employees of Employer,
        consistent with his Base Compensation and his position as an Executive Vice
        President of Employer, including, without limitation, Employer’s Pension Plan,
        401(k) Plan, Stock Option Plan, and hospitalization, major medical, disability
        and group life insurance plans, each of which Employer agrees to continue
        in
        effect on terms no less favorable than those currently in effect as of the
        date
        hereof (as permitted by law) during the Term of this Agreement unless prior
        to a
        Change of Control the operating results of Employer are significantly less
        favorable than those for the fiscal year ended June 30, 2001, and unless
        (either
        before or after a Change of Control) changes in the accounting or tax treatment
        of such plans would adversely affect Employer’s operating results or financial
        condition in a material way, and the Board of Directors of Employer concludes
        that modifications to such plans need to be made to avoid such adverse
        effects.

       

      6.           So
        long as Employee is employed by Employer pursuant to this Agreement, Employee
        shall receive reimbursement from Employer for all reasonable business expenses
        incurred in the course of his employment by Employer, upon submission to
        Employer of written vouchers and statements for reimbursement. So long as
        Employee is employed by Employer pursuant to the terms of this Agreement,
        Employer shall continue in effect reasonable vacation policies applicable
        to
        Employee.

       

      7.           Subject
        to the respective continuing obligations of the parties, including but not
        limited to those set forth in subsections 9(A) and 9(B) hereof, Employee’s
        employment by Employer may be terminated prior to the expiration of the Term
        of
        this Agreement as follows:

       

      
        	
                 

              	
                (A)

              	
                Employer,
                  by action of its Board of Directors and upon written notice to
                  Employee,
                  may terminate Employee’s employment with Employer immediately for
                  cause.  For purposes of this subsection 7(A), “cause” shall be
                  defined as (i) personal dishonesty, (ii) incompetence, (iii) willful
                  misconduct, (iv) breach of fiduciary duty involving personal profit,
                  (v)
                  intentional failure to perform stated duties, (vi) willful violation
                  of
                  any law, rule, or regulation (other than traffic violations or
                  similar
                  offenses) or final cease-and-desist order, or (vii) any material
                  breach of
                  any term, condition or covenant of this
                  Agreement.

              


      

       

      
        	
                 

              	
                (B)

              	
                Employer,
                  by action of its Board of Directors, may terminate Employee’s employment
                  with Employer without cause at any
                  time.

              


      

       

      
        	
                 

              	
                (C)

              	
                Employee,
                  by written notice to Employer, may terminate his employment with
                  Employer
                  immediately for cause. For purposes of this subsection 7(C), “cause” shall
                  be defined as (i) any action by Employer’s Board of Directors to remove
                  the Employee as an Executive Vice President of Employer, except
                  where the
                  Employer’s Board of Directors properly acts to remove Employee from such
                  office for “cause” as defined in subsection 7(A) hereof, (ii) any action
                  by Employer’s Board of Directors to materially limit, increase, or
                  modify

              


      

       


      
        
          
          

        

        
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                Employee’s
                  duties and/or authority as an Executive Vice President of Employer
                  (including his authority, subject to corporate controls no more
                  restrictive than those in effect on the date hereof, to hire and
                  discharge
                  employees who are not bona fide officers of Employer), (iii) any
                  failure
                  of Employer to obtain the assumption of the obligation to perform
                  this
                  Agreement by any successor or the reaffirmation of such obligation
                  by
                  Employer, as contemplated in section 19 hereof; or (iv) any intentional
                  breach by Employer of a term, condition or covenant of this
                  Agreement.

              


      

       

      
        	
                 

              	
                (D)

              	
                Employee,
                  upon thirty (30) days written notice to Employer, may terminate
                  his
                  employment with Employer without
                  cause.

              


      

       

      
        	
                 

              	
                (E)

              	
                Employee’s
                  employment with Employer shall terminate in the event of Employee’s death
                  or disability.  For purposes hereof, “disability” shall be
                  defined as Employee’s inability by reason of illness or other physical or
                  mental incapacity to perform the duties required by his employment
                  for any
                  consecutive One Hundred Eighty (180) day period, provided that
                  notice of
                  any termination by Employer because of Employee’s “disability” shall have
                  been given to Employee prior to the full resumption by him of the
                  performance of such duties.

              


      

       

      8.           In
        the event of termination of Employee’s employment with Employer pursuant to
        section 7 hereof other than simultaneously with or following a Change of
        Control
        (as hereinafter defined), compensation shall continue to be paid by Employer
        to
        Employee as follows:

       

      
        	
                 

              	
                (A)

              	
                In
                  the event of termination pursuant to subsection 7(A) or 7(D), compensation
                  provided for herein (including Base Compensation) shall continue
                  to be
                  paid, and Employee shall continue to participate in the employee
                  benefit,
                  retirement, and compensation plans and other perquisites as provided
                  in
                  sections 5 and 6 hereof, through the date of termination specified
                  in the
                  notice of termination.  Any benefits payable under insurance,
                  health, retirement and bonus plans as a result of Employee’s participation
                  in such plans through such date shall be paid when due under those
                  plans.  The date of termination specified in any notice of
                  termination pursuant to Subsection 7(A) shall be no later than
                  the last
                  business day of the month in which such notice is provided to
                  Employee.

              


      

       

      
        	
                 

              	
                (B)

              	
                In
                  the event of termination pursuant to subsection 7(B) or 7(C), compensation
                  provided for herein (including Base Compensation) shall continue
                  to be
                  paid, and Employee shall continue to participate in the employee
                  benefit,
                  retirement, and compensation plans and other perquisites as provided
                  in
                  Sections 5 and 6 hereof, through the date of termination specified
                  in the
                  notice of termination.  Any benefits payable under insurance,
                  health, retirement and bonus plans as a result of Employee’s participation
                  in such plans through such date shall be paid when due under those
                  plans.  In addition, Employee shall be entitled to continue to
                  receive from Employer his Base Compensation at the rates in effect
                  at the
                  time of termination for the remaining Term of the Agreement.  In
                  addition, during such periods, Employer will maintain in full force
                  and
                  effect for the continued benefit of Employee each employee welfare
                  benefit
                  plan and each employee pension

              


      

       


      
        
          
          

        

        
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                benefit
                  plan (as such terms are defined in the Employee Retirement Income
                  Security
                  Act of 1974, as  amended) in which Employee was entitled to
                  participate immediately prior to the date of his termination, unless
                  an
                  essentially equivalent and no less favorable benefit is provided
                  by a
                  subsequent employer of Employee.  If the terms of any employee
                  welfare benefit plan or employee pension benefit plan of Employer
                  do not
                  permit continued participation by Employee, Employer will arrange
                  to
                  provide to Employee a benefit substantially similar to, and no
                  less
                  favorable than, the benefit he was entitled to receive under such
                  plan at
                  the end of the period of coverage.

              


      

       

      
        	
                 

              	
                (C)

              	
                In
                  the event of termination pursuant to subsection 7(E) other than
                  simultaneously with or following a Change in Control (as hereinafter
                  defined), compensation provided for herein (including Base Compensation)
                  shall continue to be paid, and Employee shall continue to participate
                  in
                  the employee benefit, retirement, and compensation plans and other
                  perquisites as provided in sections 5 and 6 hereof, (i) in the
                  event of
                  Employee’s death, through the date of death, or (ii) in the event of
                  Employee’s disability, through the date of proper notice of disability as
                  required by subsection 7(E).  Any benefits payable under
                  insurance, health, retirement and bonus plans as a result of Employer’s
                  participation in such plans through such date shall be paid when
                  due under
                  those plans.

              


      

       

      
        	
                 

              	
                (D)

              	
                In
                  the event there is a Change in Control during the Term, Employer
                  will
                  permit Employee or his personal representative(s) or heirs to require
                  Employer, upon written request, as of the effective date of the
                  Change in
                  Control,  to purchase all outstanding stock options previously
                  granted to Employee under any stock option plan of Employer or
                  any Holding
                  Company of Employer then in effect whether or not such options
                  are then
                  exercisable or have terminated at a cash purchase price equal to
                  the
                  amount by which the aggregate “fair market value” of the shares subject to
                  such options exceeds the aggregate option price for such
                  shares.  For purposes of this Agreement, the term “fair market
                  value” shall mean the higher of (1) the average of the highest asked
                  prices for Employer or Holding Company shares in the over-the-counter
                  market as reported on the NASDAQ system if the shares are traded
                  on such
                  system for the 30 business days preceding such termination, or
                  (2) the
                  average per share price actually paid for the most highly priced
                  1% of the
                  Employer or Holding Company shares acquired in connection with
                  the Change
                  of Control by any person or group acquiring such
                  control.

              


      

       

      
        	
                 

              	
                (E)

              	
                In
                  the event there is a Change of Control during the Term and without
                  regard
                  to whether the Employee’s employment is terminated in connection with the
                  Change of Control, this Agreement shall terminate upon payment
                  to the
                  Employee of a lump sum payment equal to three (3) times his Base
                  Compensation, any amounts owed to Employee under Section 8(D),
                  and the
                  continued payment to Employee through the date of termination of
                  this
                  Agreement of all compensation and benefits provided for in Sections
                  5 and
                  6 hereof.  Employer shall pay to Employee such amounts no later
                  than the effective date of the Change in Control.  For purposes
                  of this Agreement, a “Change of Control” shall mean any of the
                  following:

              


      

       

       

       

      
        
          
          

        

        
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                (1)

              	
                a
                  change in the ownership of the Employer or the Holding Company,
                  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 Employer
                  or the
                  Holding Company 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 Employer or the Holding
                  Company.  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
                  Employer or the Holding Company, the acquisition of additional
                  stock by
                  the same person or persons is not considered to cause a change
                  in the
                  ownership of the Employer or the Holding Company (or to cause a
                  change in
                  the effective control of the Employer or the Holding Company (within
                  the
                  meaning of subsection (2)).  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 Employer or the Holding Company 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 Employer or the Holding
                  Company
                  (or issuance of stock of the Employer or the Holding Company) and
                  stock in
                  the Employer or the Holding Company remains outstanding after the
                  transaction.

              


      

       

      
        	
                 

              	
                (2)

              	
                a
                  change in the effective control of the Employer or the Holding
                  Company,
                  which shall occur only on either of the following
                  dates:

              


      

       

      
        	
                 

              	
                (i)

              	
                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
                  Employer or the Holding Company possessing thirty percent (30%)
                  or more of
                  the total voting power of the stock of the Employer or the Holding
                  Company.

              


      

       

      
        	
                 

              	
                (ii)

              	
                the
                  date a majority of members of the Holding Company’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 Holding
                  Company’s board of directors before the date of the appointment or
                  election; provided, however, that this provision shall not apply
                  if
                  another corporation is a majority shareholder of the Holding
                  Company.

              


      

       

      If
        any
        one person, or more than one person acting as a group, is considered to
        effectively control the Employer or the Holding Company, the acquisition
        of
        additional control of the Employer or the Holding Company by the same person
        or
        persons is not considered to cause a change in the effective control of the
        Employer or the Holding Company (or to cause a change in the ownership of
        the
        Employer or the Holding Company within the meaning of subsection (1) of this
        section).

       

       

      
        
          
          

        

        
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                (3)

              	
                a
                  change in the ownership of a substantial portion of the Employer’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 Employer 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 Employer immediately before
                  such
                  acquisition or acquisitions.  For this purpose, gross fair
                  market value means the value of the assets of the Employer, 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 (3) when there is a transfer
                  to an
                  entity that is controlled by the shareholders of the Employer immediately
                  after the transfer.  A transfer of assets by the Employer is not
                  treated as a change in the ownership of such assets if the assets
                  are
                  transferred to –

              


      

       

      
        	
                 

              	
                (i)

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

              


      

       

      
        	
                 

              	
                (ii)

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

              


      

       

      
        	
                 

              	
                (iii)

              	
                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 Employer;
                  or

              


      

       

      
        	
                 

              	
                (iv)

              	
                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
                  (iii).

              


      

       

      For
        purposes of this subsection (3) and except as otherwise provided in paragraph
        (i) 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
        Employer.  If a person, including an entity, owns stock in both
        corporations that enter into a merger, consolidation, purchase or acquisition
        of
        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.

       

       

      
        
          
          

        

        
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                (F)

              	
                To
                  the extent the Employee is a “specified employee” (as defined below),
                  payments due to the Employee under this Section 8 (other than those
                  provided for in Sections 8(D) and 8(E)) shall begin no sooner than
                  six
                  months after the Employee’s separation from service; provided, however,
                  that any payments not made during the six month period described
                  in this
                  Section 8(F) shall be made in a single lump sum as soon as
                  administratively practicable after the expiration of such six month
                  period; provided, further, that the six month delay required under
                  this
                  Section 8(F) shall not apply to the portion of any payment resulting
                  from the Employee’s “involuntary separation from service” (as defined in
                  Treasury Reg. Section 1.409A-1(n) and including a “separation from
                  service for good reason,” as defined in Treasury Reg.
                  Section 1.409A-1(n)(2)) that (i) is payable no later than the last
                  day of the second year following the year in which the separation
                  from
                  service occurs, and (ii) does not exceed two times the lesser of
                  (1) the
                  Employee’s annualized compensation for the year prior to the year in which
                  the separation from service occurs, or (2) the dollar limit described
                  in
                  Section 401(a)(17) of the
                  Code.

              


      

       

      To
        the
        extent any life, health, disability or other welfare benefit coverage provided
        to the Employee under this Section 8 would be taxable to the Employee, the
        taxable amount of such coverage shall not exceed the applicable dollar amount
        under Section 402(g)(1)(B) of the Code determined as of the year in which
        the Employee’s separation from service occurs.  The intent of the
        foregoing sentence is to permit the Holding Company and the Employer to treat
        the provision of such benefits as a limited payment under Treasury Reg.
        Section 1.409A-1(a)(9)(v)(D) so as to avoid application of the six month
        delay rule for specified employees.  For purposes of this
        Section 8, any reference to severance of employment or termination of
        employment shall mean a “separation from service” as defined in Treasury Reg.
        Section 1.409A-1(h).

       

      For
        purposes of this Agreement, the term “specified employee” shall have the meaning
        set forth in Treasury Reg. Section 1.409A-1(i) and shall include, without
        limitation, (1) an officer of the Employer or the Holding Company having
        annual
        compensation greater than $130,000 (as adjusted for inflation under the Code),
        (2) a five percent owner of the Employer or the Holding Company, or (3) a
        one
        percent owner of the Employer or the Holding Company having annual compensation
        of more than $150,000.  The determination of whether the Employee is a
“specified employee” shall be made by the Employer in good faith applying the
        applicable Treasury regulations.

       

      9.           In
        order to induce Employer to enter into this Agreement, Employee hereby agrees
        as
        follows:

       

      
        	
                 

              	
                (A)

              	
                While
                  Employee is employed by Employer and for a period of three years
                  after
                  termination of such employment for reasons other than those set
                  forth in
                  subsections 7(B) or (C) of this Agreement, Employee shall not divulge
                  or
                  furnish any trade secrets (as defined in IND. CODE § 24-2-3-2) of
                  Employer or any confidential information acquired by him while
                  employed by
                  Employer

              


      

       


      
        
          
          

        

        
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      concerning
        the policies, plans, procedures or customers of Employer to any person, firm
        or
        corporation, other than Employer or upon its written request, or use any
        such
        trade secret or confidential information directly or indirectly for Employee’s
        own benefit or for the benefit of any person, firm or corporation other than
        Employer, since such trade secrets and confidential information are confidential
        and shall at all times remain the property of Employer.

       

      
        	
                 

              	
                (B)

              	
                If
                  Employee’s employment by Employer is terminated for reasons other than
                  those set forth in subsections 7(B) or (C) of this Agreement, Employee
                  will turn over immediately thereafter to Employer all business
                  correspondence, letters, papers, reports, customers’ lists, financial
                  statements, credit reports or other confidential information or
                  documents
                  of Employer or its affiliates in the possession or control of Employee,
                  all of which writings are and will continue to be the sole and
                  exclusive
                  property of Employer or its
                  affiliates.

              


      

       

      If
        Employee’s employment by Employer is terminated during the Term of this
        Agreement for reasons set forth in subsections 7(B) or (C) of this Agreement,
        Employee shall have no obligations to Employer with respect to trade secrets
        or
        confidential information under this section 9.

       

      10.           Any
        termination of Employee’s employment with Employer as contemplated by section 7
        hereof, except in the circumstances of Employee’s death, shall be communicated
        by written “Notice of Termination” by the terminating party to the
        other  party hereto.  Any “Notice of Termination” pursuant
        to subsections 7(A), 7(C) or 7(E) shall indicate the specific provisions
        of this
        Agreement relied upon and shall set forth in reasonable detail the facts
        and
        circumstances claimed to provide a basis for such termination.

       

      11.           If
        Employee is suspended and/or temporarily prohibited from participating in
        the
        conduct of Employer’s affairs by a notice served under section 8(e)(3) or (g)(1)
        of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) and (g)(1)),
        Employer’s obligations under this Agreement shall be suspended as of the date of
        service, unless stayed by appropriate proceedings.  If the charges in
        the notice are dismissed, Employer may in its discretion (i) pay Employee
        all or
        part of the compensation withheld while its obligations under this Agreement
        were suspended and (ii) reinstate (in whole or in part) any of its obligations
        which were suspended.

       

      12.           If
        Employee is removed and/or permanently prohibited from participating in the
        conduct of Employer’s affairs by an order issued under section 8(e)(4) or (g)(1)
        of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)),
        all obligations of Employer under this Agreement shall terminate as of the
        effective date of the order, but vested rights of the parties to the Agreement
        shall not be affected.  If Employer is in default (as defined in
        section 3(x)(1) of the Federal Deposit Insurance Act), all obligations under
        this Agreement shall terminate as of the date of default, but this provision
        shall not affect any vested rights of Employer or Employee.

       

      13.           All
        obligations under this Agreement may be terminated except to the extent
        determined that the continuation of the Agreement is necessary for the continued
        operation of Employer:  (i) by the Director of the Indiana Department
        of Financial Institutions, or his

       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


      designee
        (the “Director”), at the time the Federal Deposit Insurance Corporation enters
        into an agreement to provide assistance to or on behalf of Employer under
        the
        authority contained in Section 13(c) of the Federal Deposit Insurance Act;
        or
        (ii) by the Director at the time the Director approves a supervisory merger
        to
        resolve problems related to operation of Employer or when Employer is determined
        by the Director to be in an unsafe and unsound condition.  Any rights
        of the parties that have already vested, however, shall not be affected by
        such
        action.

       

      14.           Anything
        in this Agreement to the contrary notwithstanding, in the event that the
        Employer’s independent public accountants determine that any payment by the
        Employer to or for the benefit of the Employee, whether paid or payable pursuant
        to the terms of this Agreement, would be non-deductible by the Employer for
        federal income tax purposes because of Section 280G of the Internal Revenue
        Code
        of 1986, as amended (the “Code”), then the amount payable to or for the benefit
        of the Employee pursuant to this Agreement shall be reduced (but not below
        zero)
        to the Reduced Amount.  For purposes of this section 14, the “Reduced
        Amount” shall be the amount that maximizes the amount payable without causing
        the payment to be non-deductible by the Employer because of Section 280G
        of the
        Code.  In the event the Employee is entitled to receive payments
        following a Change in Control under a Supplemental Retirement Agreement with
        the
        Employer which payments, together with the amounts payable to the Employee
        under
        this Agreement would result in a tax under §4999 of the Code, the amounts
        payable to the Employee pursuant to this Agreement shall be reduced first,
        before any reduction is made in payments under the Supplemental Retirement
        Agreement, to the extent necessary to avoid a tax imposed under §4999 of the
        Code.

       

      15.           If
        a dispute arises regarding the termination of Employee pursuant to section
        7
        hereof or as to the interpretation or enforcement of this Agreement and Employee
        obtains a final judgment in his favor in a court of competent jurisdiction
        or
        his claim is settled by Employer prior to the rendering of a judgment by
        such a
        court, all reasonable legal fees and expenses incurred by Employee in contesting
        or disputing any such termination or seeking to obtain or enforce any right
        or
        benefit provided for in this Agreement or otherwise pursuing his claim shall
        be
        paid by Employer, to the extent permitted by law.

       

      16.           Should
        Employee die after termination of his employment with Employer while any
        amounts
        are payable to him hereunder, this Agreement shall inure to the benefit of
        and
        be enforceable by Employee’s executors, administrators, heirs, distributees,
        devisees and legatees and all amounts payable hereunder shall be paid in
        accordance with the terms of this Agreement to Employee’s devisee, legatee or
        other designee or, if there is no such designee, to his estate.

       

      17.           For
        purposes of this Agreement, notices and all other communications provided
        for
        herein shall be in writing and shall be deemed to have been given when delivered
        or mailed by United States registered or certified mail, return receipt
        requested, postage prepaid, addressed as follows:

       

      
        	 	
                If
                  to Employee:

              	
                Charles
                  R. Farber

              
	 	 	
                650
                  Shoreline Dr.

              
	 	 	
                Columbus,
                  IN 47201

              


      

       

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
 

      
        	 	
                If
                  to Employer:

              	
                Home
                  Federal Savings Bank

              
	 	 	
                Attn:  CEO

              
	 	 	
                501
                  Washington Street

              
	 	 	
                Columbus,
                  IN 47201

              


      

      


      or
        to
        such address as either party hereto may have furnished to the other party
        in
        writing in accordance herewith, except that notices of change of address
        shall
        be effective only upon receipt.

       

      18.           The
        validity, interpretation, and performance of this Agreement shall be governed
        by
        the laws of the State of Indiana.

       

      19.           Employer
        shall require any successor (whether direct or indirect, by purchase, merger,
        consolidation or otherwise) to all or substantially all of the business or
        assets of Employer, by agreement in form and substance satisfactory to Employee
        to expressly assume and agree to perform this Agreement in the same manner
        and
        same extent that Employer would be required to perform it if no such succession
        had taken place.  Failure of Employer to obtain such agreement prior
        to the effectiveness of any such succession shall be a material intentional
        breach of this Agreement and shall entitle Employee to terminate his employment
        with Employer pursuant to subsection 7(C) hereof. As used in this Agreement,
        “Employer” shall mean Employer as hereinbefore defined and any successor to its
        business or assets as aforesaid.

       

      20.           No
        provision of this Agreement may be modified, waived or discharged unless
        such
        waiver, modification or discharge is agreed to in writing signed by Employee
        and
        Employer.  No waiver by either party hereto at any time of any breach
        by the other party hereto of, or compliance with, any condition or provision
        of
        this Agreement to be performed by such other party shall be deemed a waiver
        of
        dissimilar provisions or conditions at the same or any prior subsequent
        time.  No agreements or representation, oral or otherwise, express or
        implied, with respect to the subject matter hereof have been made by either
        party which are not set forth expressly in this Agreement.

       

      21.           The
        invalidity or unenforceability of any provisions of this Agreement shall
        not
        affect the validity or enforceability of any other provisions of this Agreement
        which shall remain in full force and effect.

       

      22.           This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed an original but all of which together shall constitute one and the
        same
        agreement.

       

      23.           This
        Agreement is personal in nature and neither party hereto shall, without consent
        of the other, assign or transfer this Agreement or any rights or obligations
        hereunder except as provided in section 16 and section 19
        above.  Without limiting the foregoing, Employee’s right to receive
        compensation hereunder shall not be assignable or transferable, whether by
        pledge, creation of a security interest or otherwise, other than a transfer
        by
        his will or by the laws of descent or distribution as set forth in section
        16
        hereof, and in the event of any attempted assignment or transfer contrary
        to
        this paragraph, Employer shall have no liability to pay any amounts so attempted
        to be assigned or transferred.

       


      
        
          
          

        

        
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      24.           The
        Holding Company agrees that if it shall be determined for any reason that
        any
        obligation on the part of Employer to continue to make any payments due under
        this Agreement to Employee or to satisfy any other obligation under this
        Agreement for the benefit of Employee is unenforceable for any reason, the
        Holding Company agrees to honor the terms of this Agreement and continue
        to make
        any such payments due hereunder to Employee or to satisfy any such obligation
        pursuant to the terms of this Agreement, as though it were the Employer
        hereunder.

       

      IN
        WITNESS WHEREOF, the parties have caused this Amended and Restated Employment
        Agreement to be executed and delivered as of the day and year first above
        set
        forth.

       

      


      
        	 	
                HOME
                  FEDERAL SAVINGS BANK

              
	 	 	 
	 	 	 
	 	
                By:

              	/s/
                John K. Keach, Jr.
	 	 	
                John
                  K. Keach, Jr., President and Chief Executive Officer

              
	 	 
	 	
                “Employer”

              
	 	 	 
	 	 	 
	 	 	 
	 	/s/
                Charles R. Farber
	 	
                Charles
                  R. Farber

              
	 	 	 
	 	
                “Employee”

              
	 	 	 
	 	
                HOME
                  FEDERAL BANCORP

              
	 	 	 
	 	 	 
	 	
                By:

              	/s/
                John K. Keach, Jr.
	 	 	
                John
                  K. Keach, Jr., President and Chief Executive Officer

              
	 	 	 
	 	
                “Holding
                  Company”

              


      

      


      


      
 

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