**Exhibit 10.18**

 

 

**CONFIDENTIAL**

**SEPARATION AGREEMENT**

ThisSeparation Agreement (“Agreement”) is made by and between Home Federal Bank(“the Company”), a federally chartered savings institution, and Gene F. Uher(“Employee”).

RECITALS

Employeehas been employed by Home Federal Bank as an Officer and Employee in theposition of President/Home Federal Bank. The purpose of this Separation Agreement is to set forth the terms andconditions under which their employment relationship will be terminated.

AGREEMENT

In consideration of therecitals stated above and the mutual promises made below, the

partiesagree as follows:

1.                                       Termination ofEmployment:  Employeewill be relieved of all of his responsibilities as an Officer effective 12:00noon, February 26, 2002 and as an Employee of the Company as of 12:00 midnight,March 29,2002.  Employee will berelieved of his daily responsibilities no later than 12:00 noon, February 26,2002, unless mutually agreed to an earlier date.  Employee shall provide consultation and information to theCompany when requested through the March 29, 2002.

2.                                       Final Wages:  On March 29, 2002, the Employee will receivea final payroll earnings payment, including any accrued but unused PersonalTime Off (“PTO”) as of March 15, 2002. The Company shall deduct customary withholdings, including FederalIncome tax, Medicare tax and Social Security tax from this final earningscheck.  In addition, Employee will bereimbursed by the Company for any ordinary/reasonable expenses advanced orincurred in the performance of his duties up to February 26, 2002.  In addition, in accordance with Section 6(b) of the Employment Agreement dated March 3rd, 1997, Employee shall receivehis current base salary ($148,000 annual) through April 8, 2003, on the currentsemi-monthly cycle.  The Company shalldeduct customary withholdings, including FICA, Medicare tax and Federal incometax from these earnings.

3.                                       EmployeeBenefit Plans:

HealthCoverage:  Employeemay continue his health coverage under the Company’s group health plan, withthe Company paying the Employer portion of

 

 

 

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the monthly rate, with the Employee portion deductedfrom his semi-monthly salary payments through April 30, 2003.  On that date, Employee will incur aqualifying event for COBRA continuation of health coverage and at that timewill be notified of the opportunity available to him to elect to continue toparticipate in the Company’s group health benefits program as a COBRA continueeas allowed by law and the terms of those Employee benefit plans, and subject toEmployee’s payment of the monthly COBRA rates by the 1st of the month for whichthe

coverage is provided during the continuation periodprovided by law, for a period of up to eighteen (18) months from April 30,2003.  Any payment by the Company ofhealth plan monthly rates shall cease if/when the Employee later obtains othergroup medical coverage (without pre-existing conditions being excepted).  The Employee is under an affirmativeobligation to immediately notify the Company when he becomes covered underanother group health plan.

Other Benefits: Employee’s dental,short-term, long-term disability and life insurance will be terminated as ofMarch 31, 2002.  **The Company currently provides Employee with amembership in a local country club.  TheCompany will not continue paying the membership dues after March 29, 2002.**

Retirement Plans: The Employee shall be 100%vested in the HF Financial Corp. Pension Plan and the HF Financial Corp.Retirement Savings Plan as of June 30, 2002. No Employer contributions will be credited or allocated to the Employeeafter the date of his termination of employment on March 29, 2002 except forallocation of Matching Contribution to the Retirement Savings Plan for the lastpay period in March.  Distribution ofvested benefits will be provided under the terms of the respective Plans.

4.                                       Stock Options:  The Company acknowledges that, under theterms of the 1991 Stock Option and Incentive Plan for HF Financial Corp.,Employee may exercise those options to purchase shares of HF Financial Corp.stock in which he is vested if he notifies the Company in writing of hisintention to exercise and pays the exercise price.  He must take such action within the three months immediatelyfollowing the cessation of his continuous service on March 29, 2002.  Employee is vested in the right to acquirecertain shares of HF Financial Corp. stock under the terms of Stock OptionAgreements between himself and the Company.

5.                                       HF FinancialCorp. Excess Pension Plan for Executives and the Deferred Compensation Plan forExecutives:  Employeeis vested in the balances credited to him under these plans, the HF FinancialExcess Pension Plan for Executives and the Deferred Compensation Plan forExecutives.  Distribution of benefitsshall meet the requirements of each plan.

 

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6.                                       Outplacement Services:  Right Management Consultants will provideOutplacement services.  Employee will beeligible to utilize the Employee Assistance Program.

 

7.                                       Return ofProperty:  Employeeagrees to return promptly all files, documents, or property of any kind inEmployee’s possession or control relating to, or the property of, the Company,its affiliates or customers, including but not limited to any and all officekeys, credit cards, security cards, computers, office equipment, softwareproducts, including diskettes and tapes, or Company products.  Employee acknowledges that this obligationis continuing and agrees to promptly return to the Company any subsequentlydiscovered property as described above.

8.                                       Indemnification:  Employee will be covered by theindemnification provisions of the Company’s Articles and Bylaws, as well asapplicable insurance policies (subject to the conditions stated therein), forhis actions on behalf of the Company during the term of his employment.

9.                                       Non-Disparagement:  Employee agrees to not make any negative ordisparaging remarks or comments about the Company; it’s affiliated or relatedcompanies, or any of the foregoing entities’ directors, officers, employees orproducts.

10.                                 Non-Admission:  The Company expressly denies any and allliability to Employee and the parties agree that nothing in this Agreement isintended to be, nor shall be deemed to be, an admission of liability orwrongdoing, an admission of the existence of any facts upon which liability orwrongdoing could be based, or a waiver of any defense to any such liability orwrongdoing.

11.                                 Confidentiality:  Employee agrees to keep the terms andconditions of this Agreement confidential and not disclose them to any personother than Employee’s immediate family, taxing authorities, attorneys, oraccountants as necessary or required by law. Employee further acknowledges that during the course of his employmentwith the Company he had access to and knowledge of confidential, trade secret,and proprietary information of the Company. Employee agrees to not disclose to anyone outside or inside the Company,or use for his own benefit or the benefit of others, this information withoutthe express written consent of the Company. Employee acknowledges that unauthorized disclosure or use of thisinformation would be unfair and would cause the Company irreparable harm.

12.                                 Breach:  If Employee breaches any of Employee’sobligations contained in this Agreement, the Company may pursue any and alllegal remedies and seek damages for breach of this Agreement.  Employee also agrees that the Company shall,in addition to any relief afforded by law, be entitled to injunctive relief.

 

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Employee understands and agrees that both damages atlaw and injunctive relief shall be proper modes of relief and are not to beconsidered alternative remedies.

13.                                 Severability:  In case any one or more of the provisions ofthis Agreement should be determined invalid, illegal, or unenforceable in anyrespect by a court of competent jurisdiction, the validity, legality, andenforceability of the remaining provisions contained in this Agreement will notin any way be affected or impaired thereby.

14.                                 Heirs,Successors, and Assigns: This Agreement shall be binding upon Employee and upon Employee’s heirs,administrators, representatives, or executors, and upon the Company’ssuccessors or assigns.  Employee shallmake no assignment of this Agreement, and such purported assignment shall benull and void.

15.                                 Governing Law: ThisAgreement shall be construed and interpreted in accordance with the internallaws of the State of South Dakota, without regard to conflict of lawsprovisions.

                **IN WITNESS WHEREOF**,the parties have caused this Separation Agreement to be executed on the dateset forth below.
|                 |   | **COMPANY**        |
|----------------------|--------|--------------------|
|                 |   |               |
|                 |   | HOME  FEDERAL BANK |
|                 |   |               |
|                 |   |               |
| Dated:  2/26/02 |   | By:                | /s/  Curtis L. Hage |
|                 |   | Its:               | Chairman/CEO |
|                 |   |               |
|                 |   |               |
|                 |   | **EMPLOYEE**       |
|                 |   |               |
|                 |   |               |
| Dated:  3/01/02 |   | /s/  Gene F. Uher  |
|                 |   | Gene F. Uher       |
|                 |   |               |
|                 |   |               |
|                 |   |               |

 

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