EXHIBIT 10.6


 


HOME
FEDERAL BANK


 


RESTATED
CHANGE-IN-CONTROL AGREEMENT


 


This Restated Change-in-Control Agreement (this “Agreement”) is entered
into as of this 31st day of December, 2008, by and between Home Federal Bank, a
federally chartered savings bank and                                                 
(the “Employee”). As used herein, the term “the Bank” shall mean Home Federal
Bank, or if the context requires, its successor.


 


WHEREAS, the Employee is currently serving as                                                 
of the Bank; and


 


WHEREAS, the Bank is a wholly-owned subsidiary of HF Financial Corp.,
(the Holding Company”), and the Holding Company offers its common stock for
sale to the public and is subject to supervision by the Securities and Exchange
Commission (“SEC”); and


 


WHEREAS, both the Bank and the Holding Company are subject to
supervision by the Office of Thrift Supervision (the “OTS”); and


 


WHEREAS, the Board of Directors of the Bank recognizes that, as is the
case with publicly held corporations generally, the possibility of a
change-in-control of the Holding Company may exist and that such possibility,
and the uncertainty and questions which it may raise among management, may
result in the departure or distraction of key management personnel to the
detriment of the Bank, the Holding Company and its stockholders; and


 


WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into a Change-in-Control Agreement with the
Employee in order to assure continuity of management of the Bank and to
reinforce and encourage the continued attention and dedication of the Employee
to his assigned duties without distraction in the face of potentially
disruptive circumstances arising from the possibility of a change-in-control of
the Holding Company, although no such change is now known of; and


 


WHEREAS, the Board of Directors of the Bank has previously approved and
authorized the execution of a Change-in-Control Agreement with the Employee;
and


 


WHEREAS, the parties desire to make changes to such Agreement to better
conform to Section 409A of the Internal Revenue Code (the “Code”) and for
other reasons; and


 


WHEREAS, Section 53-8-7 of the South Dakota Codified Laws permits
parties to a written contract to alter the contract in writing without further
consideration; and


 

















 


WHEREAS, the HF Financial Corp. Personnel, Compensation and Benefits
Committee has authorized the Chairman and Chief Executive Officer of the Bank
to finalize and sign the Agreement to take effect as stated in Section 1
hereof.


 


NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:


 


1.                                       Term
of Agreement. This Agreement will commence on the date hereof and shall
continue while the Employee is employed with the Bank; provided, however, that
if either party gives a notice of nonextension with respect to the Employee’s
Restated Employment Agreement, this Agreement shall terminate when the Restated
Employment Agreement terminates, except that if such notice of nonextension is
given by the Bank at a time when the Bank is actively negotiating a transaction
with a third party that may result in a Change-in-Control or at a time when
shareholders of the Holding Company are being solicited to vote for directors
who would not be Continuing Directors as defined in Section 2 below and
the election of such directors would effect a Change-in-Control or at a time
when shareholders of the Holding Company are being solicited to tender their
shares in an offering that if successful would result in a Change-in-Control,
this Agreement shall not terminate until nine months following the termination
of the Restated Employment Agreement.


 


2.                                      Change-in-Control.
No benefits shall be payable hereunder unless there shall have been a
Change-in-Control, as set forth below, and the Employee’s employment is
terminated as described in this Agreement. For purposes of this Agreement, a “Change-in-Control”
shall mean:


 


a.                                       a
change-in-control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or
not the Holding Company is then subject to such reporting requirement; or


 


b.                                      the
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Holding Company or any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) that such person has
become the “beneficial owner” (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of the Holding Company
(i) representing 20% or more, but not more than 50%, of the combined
voting power of the Holding Company’s then outstanding securities unless the
transaction resulting in such ownership has been approved in advance by the
Continuing Directors (as hereinafter defined); or (ii) representing more
than 50% of the combined voting power of the Holding Company’s then outstanding
securities (regardless of any approval by the Continuing Directors); provided,
however, that notwithstanding the foregoing, no Change-in-Control shall be
deemed to have occurred for purposes of this Agreement by reason of the
ownership of 20% or more of the total voting capital stock of the Holding
Company then issued and outstanding by the Holding Company, any subsidiary of
the Holding Company or any employee benefit plan of the Holding Company or of
any subsidiary of the Holding Company or any entity 


 


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holding shares of
the Common Stock organized, appointed or established for, or pursuant to the
terms of, any such plan (any such person or entity described in this clause is
referred to herein as a “Company Entity”); or


 


c.                                       any
acquisition of control as defined in 12 Code of Federal Regulations Section 574.4,
or any successor regulation, of the Holding Company which would require the
filing of an application for acquisition of control or notice of
Change-in-Control in a manner which is set forth in 12 CFR Section 574.3,
or any successor regulation; or


 


d.                                      the
Continuing Directors (as hereinafter defined), cease to constitute a majority
of the Holding Company’s Board of Directors; or


 


e.                                       the
shareholders of the Holding Company approve (i) any consolidation or
merger of the Holding Company in which the Holding Company is not the
continuing or surviving Holding Company or pursuant to which shares of Holding
Company stock would be converted into cash, securities or other property, other
than a merger of the Holding Company in which shareholders immediately prior to
the merger have the same proportionate ownership of stock of the surviving
Holding Company immediately after the merger; (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Holding Company;
or (iii) any plan of liquidation or dissolution of the Holding Company.


 


For purposes of this definition, “Continuing Director” shall mean any
person who is a member of the Board of Directors of the Holding Company, while
such person is a member of the Board of Directors, who is not an Acquiring
Person (as defined below) or an Affiliate or Associate (as defined below) of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, and who (i) was a member of the Board of Directors
on July 2, 2007; or (ii) subsequently becomes a member of the Board
of Directors, if such person’s initial nomination for election or initial
election to the Board of Directors is recommended or approved by a majority of
the Continuing Directors. For purposes of this definition, “Acquiring Person”
shall mean any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) who or which, together with all Affiliates and Associates of
such person, is the “beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act) directly or indirectly, of securities of
the Holding Company representing 20% or more of the combined voting power of
the Holding Company’s then outstanding securities, but shall not include the
Investors or any Holding Company Entity; and “Affiliate” and “Associate” shall
have their respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act.


 


3.                                       Termination
Following a Change-in-Control. If a Change-in-Control shall have occurred
during the term of this Agreement, the Employee shall be entitled to the
benefits provided in Section 4(a) hereof upon termination of the
Employee’s employment within 24 months following the month in which a
Change-in-Control occurs unless such termination is: (i) because of the
Employee’s death or Disability (as defined 


 


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below); (ii) by
the Bank for Cause (as defined below); or (iii) by the Employee other than
for Good Reason (as defined below):


 


a.                                       Cause.
Termination by the Bank of the Employee’s employment for “Cause” shall mean
termination upon (i) material violation of a law or regulation which: (a) governs
the Employee’s conduct as an officer of the Bank; or (b) in the reasonable opinion of the Bank affects the Employee’s
fitness to serve in his position; (ii) substantial neglect of the
Employee’s duties; (iii) action or inaction, which materially and
adversely impacts the Bank’s safety, soundness, security, assets, customers or
employees; (iv) dishonesty of a material nature; (v) failure to
comply with material rules, regulations or policies of the Bank; (vi) engaging
in personal conduct which, when considering the Employee’s position with the
Bank, would materially detract from its business reputation in the community
served; (vii) material breach of any material covenant or condition of the
Employee’s Restated Employment Agreement; and (viii) willful and material
misconduct.


 


Termination for Cause shall be preceded by a fair and complete
investigation, including an opportunity for the Employee to provide information
the Employee deems relevant.


 


b.                                      Good
Reason. The Employee’s termination of employment for “Good Reason” shall
mean termination by the Employee upon the occurrence, without his express
written consent, within 24 months following a Change-in-Control of any one or
more of the following:


 


(i)                                           the
assignment to the Employee of any duties inconsistent in any respect with the
Employee’s position (including status, offices, titles, and reporting requirements),
authorities, duties, or other responsibilities as in effect immediately prior
to the Change-in-Control or any other action of the Bank which results in a
diminishment in such position, authority, duties, or responsibilities, other
than an insubstantial and inadvertent action which is remedied by the Bank
promptly after receipt of notice thereof given by the Employee;


 


(ii)                                        a
reduction by the Bank in the Employee’s base salary as in effect on the date
hereof or as the same shall be increased from time-to-time;


 


(iii)                                     the
failure by the Bank to (a) continue in effect any material compensation or
benefit plan, program, policy or practice in which the Employee was
participating at the time of the Change-in-Control, or (b) provide the
Employee with compensation and benefits at least equal (in terms of benefit
levels and/or reward opportunities) to those provided for under each employee
benefit plan, program, policy and practice as in effect immediately prior to
the Change-in-Control (or as in effect following the Change-in-Control, if
greater);


 


(iv)                                    the
failure of the Bank to obtain a satisfactory agreement from any successor to
the Bank to assume and agree to perform this Agreement, as contemplated in Section 8
hereof; and


 


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(v)                                       any
purported termination by the Bank of the Employee’s employment that is not
effected pursuant to a Notice of Termination (as defined below).


 


The Bank’s right to terminate Employee’s employment pursuant to this
Subsection shall not be affected by the Employee’s Disability as defined below.
The Employee’s continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason
hereunder. Employee’s termination of employment for Good Reason as defined in
this Subsection 3(b) shall constitute termination for Good Reason for all
purposes of this Agreement, notwithstanding that the Employee may also thereby
be deemed to have “retired” under any applicable retirement programs of the
Bank.


 


c.                                       Disability.
Disability shall mean incapacity due to physical or mental illness as
determined by the Bank’s disability plan.


 


d.                                      Notice
of Termination. Any purported termination of the Employee’s employment by
the Bank or by the Employee (other than by reason of the Employee’s death)
within 24 months following the month in which a Change-in-Control occurs, shall
be communicated by Notice of Termination to the other party hereto in
accordance with Section 9 hereof. No purported termination of the Employee’s
employment by the Bank shall be effective if it is not pursuant to a Notice of
Termination. Failure by the Employee to provide Notice of Termination shall not
limit any of the Employee’s rights under this Agreement except to the extent
the Bank can demonstrate that it suffered actual damages by reason of such
failure. For purposes of this Agreement, a “Notice of Termination” shall mean a
written notice which shall indicate the specific termination provision in this
Agreement relied upon and the Date of Termination (as defined below) and shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee’s employment under the provision so
indicated.


 


e.                                       Date
of Termination. “Date of Termination” shall mean the date specified in the
Notice of Termination (except in the case of the Employee’s death, in which
case Date of Termination shall be the date of death); provided, however, that
if the Employee’s employment is terminated by the Bank, the date specified in
the Notice of Termination shall be at least 30 days from the date the Notice of
Termination is given to the Employee and if the Employee terminates his
employment for Good Reason, the date specified in the Notice of Termination
shall not be more than 60 days from the date the Notice of Termination is given
to the Bank.


 


4.                                       Compensation
Upon Termination. Following a Change-in-Control that occurs during the term
of this Agreement, and upon the Employee’s termination of employment within 24
months following the month in which the Change-in-Control occurred, the
Employee shall be entitled to the following benefits:


 


a.                                       If
employment by the Bank is terminated (A) by the Bank for any reason other
than Cause, or (B) by the Employee for Good Reason, the Employee shall be
entitled to the benefits, to be funded from the general assets of the Bank,
provided below:


 


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(i)                                           the
Bank shall pay the Employee his full annual base salary through the Date of Termination
at the rate in effect at the time Notice of Termination is given;


 


(ii)                                        the
Bank shall pay the Employee in accordance with the terms of the Short-Term
Incentive Plan, any incentive payment Employee has a right to receive on the
last day of the fiscal year prior to Employee’s Date of Termination.


 


(iii)                                     the
Bank shall pay as severance pay to the Employee, a lump sum severance payment
equal to 1.5 times the sum of (A) the Employee’s annual base salary in
effect at the time Notice of Termination is given or immediately prior to the
date of the Change-in-Control, whichever is greater, and (B) the amount
determined as follows: (1) the amount that the Employee had accrued during
the plan year under the Short-Term Incentive Plan as of the first of the month
following the month in which the Change in Control occurred, annualized by
dividing the amount accrued by the number of months from the start of the plan
year to the first of the month following the month in which the Change in
Control occurred multiplied by twelve; plus, (2) the amount of each of the
Short-Term Incentive Awards, if any, awarded to the Employee in the three years
immediately prior to the Change in Control divided by four; provided, however,
that payments under this subparagraph will be conditioned upon compliance with Section 6
of the Employee’s Restated Employment Agreement (Agreement Not to Compete) and
payments made under this subparagraph must be returned to the Bank if the
Employee violates the non-compete provisions contained in that non-compete
Section;


 


(iv)                                    the
Bank shall pay the Employee the amount that has accrued to the Employee under
the Long-Term Incentive Plan as of the first day of the month following the
Date of Termination;


 


(v)                                       (A) for
and during the period of time that the Employee is eligible for and properly
elects continued coverage under the Bank’s health and dental plans, the Bank
will continue to subsidize that coverage as if the Employee remained an active
employee of the Bank but for no more than 36 months following the Date of
Termination and only with respect to the level of health and dental insurance
coverage in which the Employee was enrolled immediately prior to the Notice of
Termination (e.g., single or family).  If
the Employee’s continuation coverage terminates for reasons other than
nonpayment of the Employee’s share of the cost of the coverage or fraud before
the Employee has received 36 months of coverage, then the Bank shall reimburse
the Employee for replacement health and dental coverage during the remainder of
the 36 months following the Date of Termination, but only with respect to the
level of health and dental insurance coverage in which the Employee was
enrolled immediately prior to the Notice of Termination (e.g., single or
family), and only in an amount up to the difference between the then COBRA
premium charged by the Bank (or its successor) to COBRA continuees and the
amount that active employees are required to pay for their coverage.  Such reimbursement may be made directly to
the provider of the Employee’s health and dental coverage or as a reimbursement
to the Employee upon the presentation of evidence of the cost and continuation
of such coverage.  Provided,


 


6
















 


however, that all
health and dental benefits receivable by the Employee pursuant to this
Subsection (v)(A) shall be discontinued if the Employee obtains full-time
employment providing comparable health and dental benefits to Employee provided
in accordance with this Subsection (v)(A) during the 36-month period
following the Date of Termination; and


 


(B) for an 18-month period after the
Date of Termination, the Bank will continue to pay the premiums on the
Executive Disability Policy then covering the Employee, as well as the premiums
on the life insurance policy into which the Employee is permitted to convert
the Employee’s group term coverage from the Bank, but only during the time and
to the extent that the Employee continues such coverage under policies.


 


(vi)                                    payment
in accordance with the HF Financial Corp. Excess Plan for Executives;


 


(vii)                                 the
Bank shall pay for individual out-placement counseling services for the
Employee in an amount that shall not exceed $10,000 for a period of time not
extending beyond the end of the second calendar year following the calendar
year of the Employee’s Date of Termination to be reimbursed no later than 12
months following the date the expenses were incurred;


 


(viii)                              a
lump sum payment equal to $5,000 in lieu of reimbursement for financial
planning and tax preparation expenses;


 


(ix)                                      a
lump sum payment equal to the value of any other fringe benefits or perquisites
provided to the Employee immediately prior to the Employee’s Date of
Termination; and


 


(x)                                         in
accordance with the HF Financial Corp. 1991 and 2002 Stock Option and Incentive
Plan, the vesting of awards and lapsing of restrictions as set forth in the HF
Financial Corp. 1991 and 2002 Stock Option and Incentive Plan and vesting of
similar awards under any successor equity incentive plan.


 


The payments provided for in Section 4(a) (i), (iii), (iv),
(viii), and (ix) above shall be made on the 60th day following the date
the Employee separated from service as defined in Section 409A of the Code
and regulations and guidance issued thereunder. The payments provided for in Section 4(a)(v),
if paid as reimbursements, shall be made within 30 days of a request for
reimbursement but only if the request is made within 60 days of the date that
the premium payment is due. Notwithstanding the above, if the Bank determines
that any of the payments in Section 4(a) are subject to 409A(a)(2)(B)(i) of
the Code (or a successor provision), then any such payments shall be delayed until the earlier of the Employee’s death or
the first day of the month coincident with or next following the sixth month
anniversary of the Employee’s termination of employment and shall be
paid in a lump sum on that date.


 


b.                                      The
Bank shall also pay to the Employee any reasonable legal fees and reasonable
expenses incurred by the Employee (i) as a result of successful 


 


7

















 


litigation against
the Bank for nonpayment of any benefit hereunder, or (ii) in connection
with any dispute with any Federal, state, or local governmental agency with
respect to benefits claimed under this Agreement. If the Employee utilizes
arbitration to resolve any such dispute, the Bank will pay any reasonable legal
fees and reasonable expenses incurred by the Employee in connection therewith.
Such reimbursement must be requested no later than two months after the
conclusion of the successful litigation and shall be paid within two months
after the request for reimbursement.


 


c.             The Employee shall
not be required to mitigate the amount of any payment provided for in this Section 4
by seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Section 4 be reduced by any compensation earned by
the Employee as the result of employment by another employer after the Date of
Termination, or otherwise, except as set forth in Section 4(a)(v) hereof.


 


5.                                       Certain
Reduction of Payments by the Bank. 
Anything in this Agreement to the contrary notwithstanding, in the event
it shall be determined that any payment or distribution by the Bank to or for
the benefit of the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”)
would be nondeductible (in whole or part) by the Bank for Federal income tax
purposes because of Section 280G of the Code, then the aggregate present
value of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such amounts payable or distributable pursuant to
this Agreement are hereinafter referred to as “Agreement Payments”) shall be
reduced to the Reduced Amount.  The “Reduced
Amount” shall be an amount, not less than zero, expressed in present value,
which maximizes the aggregate present value of Agreement Payments without causing
any Payment to be nondeductible by the Bank because of Section 280G of the
Code.  For purposes of this Section 5,
present value shall be determined in accordance with Section 280G(d)(4) of
the Code, or its successor. The Bank shall determine the reductions in such a
manner that to the extent possible, the provisions of Section 409A of the
Code are not violated.


 


6.                                       No
Exclusivity Rights. Nothing in this Agreement shall prevent or limit the
Employee’s continuing or future participation in any benefit, bonus, incentive,
retirement or other plan or program provided by the Bank and for which the
Employee may qualify, nor, except as provided in Section 14, shall
anything herein limit or reduce such rights as the Employee may have under any
other agreement with, or plan, program, policy or practice of the Bank. Amounts
which are vested benefits or which the Employee is otherwise entitled to
receive under any agreement with, or plan, program, policy or practice of the
Bank (including, without limitation, the cash out of unused vacation days upon
termination of employment) shall be payable in accordance with such agreement,
plan, program, policy or practice, except as explicitly modified by this
Agreement.


 


7.                                       Compensation
Restrictions under CPP.  Anything in
this Agreement to the contrary notwithstanding, because HF Financial Corp. is
participating in the capital purchase program (“CPP”) of the United States
Treasury Department (“Treasury”) 


 


8

















 


established under
the Emergency Economic Stabilization Act of 2008 (“EESA”), compensation to the
Employee shall be restricted as follows:


 


a.                                       No
Golden Parachute Payments. The Bank is prohibiting any golden parachute payment
to the Employee during any “CPP Covered Periods.” A “CPP Covered Period” is any
period during which (i) the Employee is a senior executive officer and (ii) Treasury
holds an equity or debt position acquired from the Bank in the CPP. “Golden
parachute payment” is used with same meaning as in Section 111(b)(2)(C) of
EESA.  For purposes of this Section 7,
“Bank” includes any entities treated as a single employer with the Bank under
31 C.F.R. Section 30.1(b) (as in effect on the Closing Date of the
CPP purchase). The Bank shall determine any reductions in such a manner that to
the extent possible, the provisions of Section 409A of the Code are not
violated.


 


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


 


c.                                       Compensation
Program Amendments. Each of the Bank’s compensation, bonus, incentive and other
benefit plans, arrangements and agreements (including golden parachute,
severance and employment agreements) (collectively, “Benefit Plans”) with
respect to the Employee is hereby amended to the extent necessary to give
effect to provisions (a) and (b), including, but not limited to this
Agreement, the Employment Agreement, the Long Term Incentive Plan, the Short
Term Incentive Plan, any individual incentive program, and the Excess Pension
Plan.


 


In addition, the
Bank 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 Bank. To the extent any such review requires
revisions to any Benefit Plan with respect to the Employee that the Bank does
not have the authority to change unilaterally, the Employee and the Bank agree
to negotiate such changes promptly and in good faith.


 


This Section 7 is 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 Section 7 and
without violating the provisions of Section 409A of the Code).


 


8.                                       Successors.


 


a.                                       The
Bank will require any successor (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the
business and/or assets of the Bank or of any division or subsidiary thereof
employing the Employee to expressly assume and agree to perform this Agreement
in the same 


 


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manner and to the
same extent that the Bank would be required to perform if no such succession
had taken place. Failure of the Bank to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Employee to terminate employment within 24
months following the Change-in-Control and to receive compensation from the
Bank in the same amount and on the same terms as he would be entitled hereunder
if his employment were terminated for Good Reason following a
Change-in-Control.


 


b.             This Agreement
shall inure to the benefit of and be enforceable by the Employee’s personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Employee should die while any
amount would still be payable to him hereunder if he had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to his devisee, legatee or other designee or,
if there is no such designee, to his estate or, if no estate, in accordance
with applicable law.


 


9.                                       Notice.
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
postage prepaid, addressed to the other party as follows:


 


	
  If to the Bank, to:

  	
   

  	
   

  
	
   

  	
   

  	
  Home Federal Bank

  
	
   

  	
   

  	
  Attention: Corporate Secretary

  
	
   

  	
   

  	
  225 South Main Avenue

  
	
   

  	
   

  	
  Sioux Falls, SD 57104

  



 


	
  If to Employee, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


or to the home address which is maintained on file with the Bank.


 


Either party to this Agreement may change its address for purposes of
this Section 9 by giving 15 days’ prior notice to the other party hereto.


 


10.                                 Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
the Employee and such officer as may be specifically designated by the Board to
sign on behalf of the Bank. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
South Dakota.


 


11.                                 Validity.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.


 


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12.           Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.


 


13.           Arbitration.
Any disputes under this Agreement will be resolved by arbitration, in the state
of South Dakota, in accordance with the National Rules for the Resolution
of Employment Dispute of the American Arbitration Association by a mutually
agreeable neutral arbitrator. The decision or award of the arbitrator shall be
final and binding upon the parties and may be entered as a judgment or order in
any Court of competent jurisdiction. All information and documentation
submitted by the parties or received from any other source, together with all
transcripts of the hearing(s) or other proceedings, and the arbitrator’s
findings, shall be treated by the arbitrator and the parties as confidential
information and the participants agree not to disclose or turn over any such
information or documentation to a third party without the prior written consent
of the parties, or pursuant to a lawful subpoena or court order, or an order to
obtain a injunctive relief.


 


14.           Employment
Agreement. Reference is hereby made to that certain Agreement, dated
contemporaneously with this Restated Change-in-Control Agreement, by and
between the Bank and the Employee. All terms and conditions of the Employee’s
Restated Employment Agreement, including the non-compete provisions in Section 6,
shall continue in force and effect (until termination of the Restated
Employment Agreement in accordance with its terms), including following a
Change-in-Control, except as expressly modified by this Section, except that
when the Employee is terminated following a Change-in-Control, the severance
provisions in the Employee’s Restated Employment Agreement shall not apply and
payments to the Employee shall be governed by this Agreement. The mutual
promises in this Agreement and in the Restated Employment Agreement shall serve
as consideration for each agreement contemporaneously executed, to the extent
such consideration is required.


 


15.           Effective Date.
This Agreement shall become effective as of the date first set forth above.


 


16.           Employment.
This Agreement does not constitute a contract of employment or impose on the
Bank any obligation to retain the Employee as an employee, to continue his
current employment status, or to change any employment policies of the Bank.


 


17.           Section 409A
of the Code.  It is the intent of the
parties that this Agreement be construed to avoid the excise tax and penalties
described in Section 409A of the Code. The Agreement shall be interpreted
in a manner consistent with that intention. In that regard, the concept of “termination of employment” shall be
interpreted to mean “separation from service” within the meaning of Section 409A.


 


18.           Amendments.
No amendments or additions to this Agreement shall be binding unless stipulated
in writing and signed by the party to be changed, except as herein otherwise
provided.


 


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19.           Severability.
The provisions of this Agreement shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the validity or
unenforceability of the other provisions hereof.


 


20.           Governing Law.
The laws of the United States to the extent applicable and otherwise the laws
of the State of South Dakota shall govern this Agreement.


 


IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.


 


	
   

  	
   

  	
  HOME FEDERAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Curtis L. Hage

  
	
   

  	
   

  	
  By: Curtis L. Hage

  
	
   

  	
   

  	
  Its: Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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