EXHIBIT 10.2


 


HF Financial Corp. and Home Federal Bank (the “Company”) anticipates
entering into a Securities Purchase Agreement (the “Participation Agreement”),
with the United States Department of Treasury (“Treasury”) that provides for
the Company’s participation in the Treasury’s TARP Capital Purchase Program
(the “CPP”). If the Company does not participate or ceases at any time to
participate in the CPP, this letter shall be of no further force and effect,
except to the extent the EESA requires continued application of all or some of
the restrictions below.


 


For the Company to participate in the CPP and as a condition to the
closing of the investment contemplated by the Participation Agreement, the
Company is required to establish specified standards for incentive compensation
to its senior executive officers and to make changes to its compensation
arrangements. To comply with these requirements, and in consideration of the
benefits that you will receive as a result of the Company’s participation in
the CPP, you agree as follows:


 


1.               No Golden Parachute Payments. The Company is prohibiting any
golden parachute payment to you during any “CPP Covered Periods.” A “CPP
Covered Period” is any period during which (A) you are a senior executive
officer and (B) Treasury holds an equity or debt position acquired from
the Company in the CPP.


 


2.               Recovery of Bonus and Incentive Compensation. Any bonus and
incentive compensation paid to you during a CPP Covered Period and while you
are a senior executive officer is subject to recovery or “clawback” by the
Company if the payments were based on materially inaccurate financial
statements or any other materially inaccurate performance metric criteria.


 


3.               Compensation Program Amendments. Each of the Company’s
compensation, bonus, incentive and other benefit plans, arrangements and
agreements (including golden parachute, severance and employment agreements)
(collectively, “Benefit Plans”) with respect to you is hereby amended to the
extent necessary to give effect to provisions (1) and (2). For reference,
certain affected Benefit Plans are set forth in Appendix A to this letter.
Appendix A is not necessarily an exhaustive list of affected Benefit Plans.


 


In addition, the Company is required to review its Benefit Plans to
ensure that they do not encourage senior executive officers to take unnecessary
and excessive risks that threaten the value of the Company. To the extent any
such review requires revisions to any Benefit Plan with respect to you that the
Company does not have the authority to change unilaterally, you and the Company
agree to negotiate such changes promptly and in good faith.


 

















 


4.               Waiver. You agree to execute the waiver of claims set forth
in Annex B of the Participation Agreement if you are a senior executive officer
on the Closing Date.


 


5.               Definitions and Interpretation. This letter shall be
interpreted as follows:


 


·                  “Senior
executive officer” means the Company’s “senior executive officers” as defined
in subsection 111(b)(3) of EESA as reasonably determined by the Company.


 


·                  “Golden
parachute payment” is used with same meaning as in Section 111(b)(2)(C) of
EESA.


 


·                  “EESA” means the
Emergency Economic Stabilization Act of 2008 as implemented by guidance or
regulation issued by the Department of the Treasury and as published in the
Federal Register on October 20, 2008.


 


·                  The term “Company”
includes any entities treated as a single employer with the Company under 31
C.F.R. Section 30.1(b) (as in effect on the Closing Date). If you are
also delivering a waiver pursuant to the Participation Agreement, then as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.


 


·                  The term “CPP
Covered Period” shall be limited by, and interpreted in a manner consistent
with, 31 C.F.R. section 30.11 (as in effect on the Closing Date).


 


·                  Provisions (1) and
(2) of this letter are intended to, and will be interpreted, administered
and construed to, comply with section 111 of EESA (and, to the maximum extent
consistent with the preceding, to permit operation of the Benefit Plans in
accordance with their terms before giving effect to this letter).


 


6.               Miscellaneous. To the extent not subject to federal law,
this letter will be governed by and construed in accordance with the laws of
South Dakota. This letter may be executed in two or more counterparts, each of
which will be deemed to be an original. A signature transmitted by facsimile will
be deemed an original signature.


 

















 


The Board appreciates the concessions you are making and looks forward
to your continued leadership during these financially challenging times.


 


	
   

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
  HF Financial Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


Intending to be legally bound, I agree with and

accept the foregoing terms on the date set forth

below.


 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  



 

















 


Appendix A


 


Employment Agreement


Change in Control Agreement


Long Term Incentive Plan


Short Term Incentive Plan


Individual Incentive Program


Deferred Compensation Agreement