EXHIBIT 10.2


 


HOME FEDERAL BANK


 


RESTATED EMPLOYMENT AGREEMENT


 


THIS RESTATED
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this 31st
day of December, 2008, contemporaneously with the Restated Change-in-Control
Agreement, by and between HOME FEDERAL BANK, a South Dakota corporation
(hereinafter referred to as the “Bank”), P. O. Box 5000, Sioux Falls, South
Dakota 57117-5000 and                                       
(the “Employee”).


 


RECITALS


 


	
  A.

  	
   

  	
  The Employee is currently serving as                                             .

  
	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  The Board of Directors of the Bank
  recognizes the important service that the Employee provides and will continue
  to provide for the Bank.

  
	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  The Board of Directors of the Bank has
  previously approved and authorized the execution of an Employment Agreement
  with the Employee.

  
	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  The Board of Directors of the Bank has
  previously approved and authorized the execution of a Change-in-Control
  Agreement with the Employee.

  
	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  South Dakota Codified Law
  Section 53-8-7 allows written agreements to be amended without
  additional consideration.

  
	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  The Board of Directors of the Bank and the
  Employee desire to make certain changes in the Employment Agreement and
  Change-in-Control Agreement.

  
	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  The changes to the Employment Agreement are
  contained in this Restated Employment Agreement (this “Agreement”).

  
	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  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 with the
  Employee.

  



 


COVENANTS


 


NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained and further contained
in the Restated Change-in-Control Agreement between the parties executed
contemporaneously herewith, the parties agree as follows:


 

















 


1.             Term


 


This
agreement shall commence on the date set forth above and shall continue in
effect through June 30, 2009, provided,
however, that commencing on
July 1, 2009 and on each July 1 thereafter, the term of this
agreement shall automatically be extended for one additional year unless, no
later than March 31 of the previous year, the Bank or the Employee shall
have given notice that this Agreement shall not be extended. Except as
otherwise provided in the Restated Change-in-Control Agreement, the Employee’s
Restated Change-in-Control Agreement shall terminate when this Agreement
terminates.


 


2.             Employment


 


The
Employee serves as                                     
of the Bank and shall have all such authority, powers, duties, and
responsibilities as may be given to the Employee from time to time by the Chief
Executive Officer. The Employee shall devote substantially all of the Employee’s
working time and efforts to the affairs of the Bank.


 


3.             Compensation


 


(a)           The Bank shall pay
the Employee a base salary at a rate of no less than                                                                 
($                )
per year during the term of this Agreement upon the same frequency and on the
same basis that that Bank normally makes salary payments to other Employee
personnel. Appropriate adjustments will be made to the Employee’s base salary
giving consideration to the value of the Employee’s services and to comparable
adjustments to salaries paid to other executive employees of the Bank.


 


(b)           The Employee shall
participate in the same manner as other executives in the Bank’s executive
incentive plans.


 


4.             Benefits


 


The
Bank shall provide the Employee, in addition to the base salary, all benefits
made available to other officers of the Bank as described in the Bank’s benefit
plan(s) including, but not limited to group term life insurance, group
medical, dental and disability coverage, paid Personal Time Off (PTO), and
retirement.


 


5.             Termination


 


(a)           Termination for Cause.  The
Bank shall have the right to immediately discharge the Employee for Cause.
Cause shall include:


 


(i)            Material
violation of a law or regulation which:


 


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(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 the Employee’s
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 this Agreement; and


 


(viii)        Willful and material misconduct.


 


Nothing in this provision shall prevent the Bank from putting the
Employee on a paid or unpaid administrative leave during the pendency of
criminal charges against the Employee, during an investigation (internal or
otherwise) into any suspected misconduct or illegal conduct of the Employee, or
for any other reason deemed appropriate in the reasonable discretion of the
Bank. Nothing in this provision shall prohibit the Bank from reasonably
disciplining the Employee for wrongdoing or misconduct in a manner that does
not result in termination. Discipline or discharge under this section shall be
preceded by a fair and complete investigation, including an opportunity for the
Employee to provide information which the Employee deems relevant.


 


(b)           Termination  Without Cause.
The Employee’s employment under this
Agreement may be terminated without Cause at any time upon sixty (60) days
written notice to the Employee.


 


The Employee may terminate this Agreement at any time upon sixty (60)
days written notice to the Bank’s Chief Executive Officer.


 


(c)           Absenteeism.  If the Employee is absent from work in
partial-day or full-day increments for any reason, including but not limited to
illness or injury, for a period of time or in a manner that materially affects
the functioning of 


 


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the Employee’s department or of the Employee’s direct or indirect
reports, the Bank may, in its reasonable discretion, terminate the Employee’s
employment with the Bank without prior notice. Nothing in this absenteeism
provision shall relieve the Bank from fulfilling any duties it may have under
the Americans with Disabilities Act, any applicable State Human Rights Act, the
Family and Medical Leave Act, or any other applicable law or regulation nor
shall it preclude the Employee from receiving benefits to which the Employee
may be entitled under any disability plan or agreement sponsored by the Bank.


 


(d)           Death.  The Employee’s employment hereunder shall
terminate automatically upon the Employee’s death.


 


(e)           Severance  Terms.  Upon
termination of the Employee’s employment under this Section 5, the
Employee shall forfeit all rights to future compensation under Section 3;
provided, however, that if employment is terminated as a result of the Employee’s
death or disability as described in Section 5(e)(iii), compensation under Section 3(b) will
not be forfeited, and will be payable to the Employee’s Estate/heirs in
accordance with the terms of the Bank’s executive incentive plans. Except where
termination follows a change in control, as defined in the Employee’s Restated
Change-in-Control Agreement, and subject to the Employee’s signing and not
revoking a release of claims in a form reasonably acceptable to the Bank, and
further subject to compliance with Section 6 below (Agreement Not to
Compete), the Employee shall receive the following amounts, except to the
extent previously paid by the Bank to the Employee, as full payment, compromise
and settlement of all non-vested compensation, and as additional consideration
for the restrictive covenants contained in this Agreement:


 


(i)            In
the event the Employee’s
employment is terminated by the Bank for Cause, the Bank shall pay the Employee
the Employee’s full salary through the date of termination for Cause, at the
rate in effect at the time of notice of termination, and the Bank shall
thereafter have no further obligation to the Employee under this Agreement;


 


(ii)           In the event the Employee’s employment is
terminated by the Bank without Cause, other than by reason of death or
disability as described in Section 5(e)(iii), the Employee shall be paid
the Employee’s full salary through the date of termination and in addition,
shall be paid each month on the first of the month for twelve months
one-twelfth of the total of:  (a) the
Employee’s monthly salary in effect at the time of termination times the number
of months remaining until expiration of this Agreement plus (b) an amount
equal to one year’s annual base salary. Provided, however, that, subject to the
provisions of subsection (vii) of this Section 5(e), 


 


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the first payment shall be made on the first
day of the third month coincident with or next following the Employee’s
termination of employment and shall include all monthly payments theretofore
due under this Agreement;


 


(iii)          In the event the Employee’s employment is
terminated by the Bank because of disability (as defined by and determined
under the Bank’s Disability Plan), the Bank will pay the Employee through the
last day of the month in which the Employee is terminated plus on the 90th day
following the Employer’s termination of employment an amount equal to three (3) month’s
base salary;


 


(iv)          In the event of the Employee’s death, the
Bank shall pay the Employee’s spouse, beneficiary, or the Employee’s estate,
the Employee’s then current salary through the last day of the month in which
such death occurs;


 


(v)           In the event the Employee’s employment is
terminated by the Employee, and if the Employee provides written notice as
required in Section 5(b), the Bank shall, subject to the provisions of
subsection (vii) of this Section 5(e), pay the Employee’s current
salary through the month of termination and on the 60th day following the
Employee’s termination of employment one additional month’s salary. Failure to
give such notice shall result in forfeiture of accrued PTO and the Employee
shall be paid only through the last day worked;


 


(vi)          In the event the Employee’s employment is
terminated because the Employee has chosen not to extend the term of the
Agreement pursuant to Section 1, the Bank shall pay the Employee the
Employee’s full salary during the period of time that the Employee continues to
work (but not beyond the end of the term), at the rate then in effect, plus
accrued PTO.  However, the Bank may
request the Employee to terminate employment before the end of the term in
which event the Bank shall pay the Employee the Employee’s full salary through
the end of the term of the Agreement, at the rate then in effect, plus accrued
PTO. In the event the Employee’s employment is terminated because the Bank has
chosen not to extend the term of the Agreement pursuant to Section 1 the
Bank shall pay the Employee the Employee’s full salary through the end of the
term of the Agreement, at the rate then in effect, plus accrued PTO; and


 


(vii)         Notwithstanding the foregoing payment provisions, if the Bank determines that any
payments described above are subject to 409A(a)(2)(B)(i) of the Internal
Revenue Code of 1986, as amended (“Code”) (or a successor provision), the
payments


 


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described above 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 include all payments theretofore due under
this Agreement.  Provided, however, that
no payments shall be made and payments already made shall be returned to the
Bank if the Employee violates the non-compete provisions contained in Section 6.


 


Compensation following a change
in control, as defined in the Employee’s Restated Change in Control Agreement,
shall be governed by the terms of that Agreement.


 


6.                                      Agreement
Not to Compete


 


The Employee agrees that during the term of the Employee’s
employment hereunder and for a period of one (1) year after termination of
this Agreement by the Employee or by the Bank for any reason, voluntarily or
involuntarily, with or without Cause under Section 5(b), the Employee will
not:  either directly or indirectly, on
the Employee’s own behalf or as a partner, member, officer, employee,
consultant, stockholder (except by ownership of less than 1% of the outstanding
stock of a publicly held corporation, or the ownership does not involve any
managerial or operation responsibility), director or trustee of any person,
firm, or corporation or otherwise, engage in or assist others to engage in any
business, competing with the business carried on by the Bank, or solicit
business from any customers of the Bank, within the cities, towns,
municipalities, or counties where the Bank conducts business. “Bank” as used in
this provision shall include all branch operations and locations. If the
Employee violates the non-compete provisions of this Section 6 the
Employee shall return to the Bank any severance payments received after
termination under Section 5(e) or under Section 4(a)(iii) of
the Employee’s Restated Change in Control Agreement.


 


7.                                      Solicitation
of Employees


 


The Employee agrees that during
the term of the Employee’s employment and for one (1) year after the termination of such
employment, the Employee will not induce or attempt to induce any person who is an employee of the Bank to
leave the employ of the Bank and engage in any business which competes with the
Bank’s business.


 


8.                                      Confidential
Information


 


The Employee acknowledges that as a result of employment
with the Bank, the Employee has access to and knowledge of confidential, trade
secret and proprietary information of the Bank. In exchange for the
consideration set forth herein and for the consideration set forth in the
Restated Change-in-Control Agreement contemporaneously executed, the Employee
agrees not to disclose to 


 


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anyone inside or outside the Bank or use for the Employee’s
own benefit or the benefit of others, any of this information without the
express written consent of the Bank. The Employee acknowledges an unauthorized
disclosure or use of this information would be unfair and would cause the Bank
irreparable harm.


 


9.                                      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”) 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 9, “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 Change in Control Agreement, the Long Term Incentive Plan, the Short Term
Incentive Plan, any individual incentive program, the Excess Pension Plan and
the Deferred Compensation Agreement.


 


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 


 


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Employee and the Bank agree to
negotiate such changes promptly and in good faith.


 


This Section 9 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 9 and without violating the provisions of Section 409A
of the Code).


 


10.                               No
Assignments


 


This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank, by an assumption
agreement in form and substance satisfactory to the Employee in the Employee’s
reasonable discretion, to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Bank would be required to
perform it if no such succession or assignment had taken place. Failure of the
Bank to obtain such an assumption agreement prior to the effective date of any
such succession or assignment shall be a breach of this Agreement.


 


11.                               Notice


 


For the purposes 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 personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed to the attention of the Chief Executive
Officer of the Bank with a copy to the Secretary of the Bank), or to such other
address as either party may have furnished to the other in writing in
accordance herewith. Notices shall be effective upon receipt.


 


12.                               Entire
Agreement/Waivers


 


This Agreement, the contemporaneously executed Restated Change-in-Control
Agreement, and the Letter Agreement dated November     ,
2008, between the Employee and HF Financial Corp. in connection with the CPP
addressed in Section 9 of this Agreement, as any of the same may be
amended from time to time, represent the entire agreement between the parties
and supersede all previous communications, representations, understandings, and
agreements, either oral or written, between the Bank and the Employee with
respect to the employment of the Employee by the Bank. No waiver of the terms
of this Agreement shall be binding upon either party unless in writing, signed
by the party to be charged. The waiver or failure of either party to enforce
the terms of this Agreement in one instance shall 


 


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not constitute a waiver of that party’s rights under this
Agreement with respect to other violations.


 


13.                               Severability


 


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


 


14.                               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. This
Agreement shall be interpreted in a manner consistent with that intent. In that
regard, the concept of “termination of employment” shall be interpreted to mean
“separation from service” within the meaning of Section 409A.


 


15.                               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.


 


16.                               Arbitration
and Remedies


 


(a)                                  Except as otherwise expressly provided in
this Agreement, any dispute or claim arising under or with respect to this
Agreement, or the termination of this Agreement, will be resolved by
arbitration in the state of South Dakota in accordance with the National Rules for
the Resolution of Employment Disputes 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;


 


(b)                                  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
injunctive relief;


 


(c)                                  Employee acknowledges that compliance with
Sections 6, 7, and 8 is necessary to protect the business and good will of the
Bank, and that a breach of these sections would irreparably and continually
damage the Bank for which money damages may not be adequate. Consequently, the
Employee agrees that the Bank will be entitled to injunctive and other
equitable relief from the courts for breach or threatened breach of these
sections and the Employee agrees that it will not be a defense to any 


 


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request for such relief that the Bank has an adequate remedy at law.
For purposes of any such proceeding, the Bank and the Employee submit to the
non-exclusive jurisdiction of the courts of the state of South Dakota, and of
the United States located in the State of South Dakota, and each agrees not to
raise and waives any objection to or defense based on the venue of any such
court or forum non-conveniens;


 


(d)                                  If a court of competent jurisdiction
determines that any provision of this Agreement is unreasonable in scope, time,
or geography, it is hereby authorized by the Employee and the Bank to enforce
the same in such narrower scope, shorter time or lesser geography as such court
determines to be reasonable and proper under all the circumstances. The restrictive
covenants in Section 6 shall be deemed separate covenants for each and
every state, county, municipality, and town, and in the event the covenants for
one or more of the geographic territories is determined to be unenforceable,
the remaining covenants shall continue to be effective; and


 


(e)                                  The Bank will also have such other legal
remedies as may be appropriate under the circumstances including, but not
limited to, recovery of damages occasioned by a breach.


 


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


 




	
  EMPLOYEE

  	
   

  	
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Curtis L. Hage

  
	
   

  	
   

  	
  By:

  	
  Curtis L. Hage

  
	
   

  	
   

  	
  Its:

  	
  Chairman and Chief Executive Officer

  






 


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