Document:

Force Fee Agreement

    

      EXHIBIT
        10.1

      

      HOMEFEDERAL
        BANK

      DIRECTOR
        DEFERRED FEE AGREEMENT

      

      WHEREAS
        THIS AGREEMENT AMENDS AND RESTATES the prior HomeFederal Bank Directors Deferred
        Compensation Plan (the “Plan”) between the HomeFederal Bank and the Director
        effective April 1, 1992, as amended by the First Amendment dated February
        18,
        1993, the Second Amendment effective June 1, 1992, and the Third Amendment
        effective July 1, 1996 (collectively, the Plan, the First Amendment and the
        Second Amendment are referred to as the “Prior Agreement”), this DIRECTOR
        DEFERRED FEE AGREEMENT (the “Agreement”) is made this _______ day of
        ________________, 2005, by HOMEFEDERAL BANK (the “Bank”), a federally-chartered
        bank located in Columbus, Indiana and Harold Force (the “Director”). The purpose
        of this Agreement is to encourage the Director to remain a member of the
        Bank’s
        Board of Directors. 

        

      Article
        1

      Definitions

      

      Whenever
        used in this Agreement, the following words and phrases shall have the meanings
        specified:

      

      
        	
                1.1

              	
                “Beneficiary”
                  means each designated person, or the estate of a deceased Director,
                  entitled to benefits, if any, upon the death of the Director determined
                  pursuant to Article 6.

              

      

      

      
        	
                1.2

              	
                “Beneficiary
                  Designation Form”
                  means the form established from time to time by the Plan Administrator
                  that the Director completes, signs and returns to the Plan Administrator
                  to designate one or more
                  beneficiaries.

              

      

      

      
        	
                1.3

              	
                “Board”
                  means the Board of Directors of the Bank as from time to time
                  constituted.

              

      

      

      
        	
                1.4

              	
                “Code”
                  means the Internal Revenue Code of 1986, as
                  amended.

              

      

      

      
        	
                1.5

              	
                “Corporation”
                  means Home Federal Bancorp or its
                  successor.

              

      

      

      
        	
                1.6

              	
                “Deferral
                  Account”
                  means the balance of the Director’s accumulated fee deferrals, plus
                  accrued interest. 

              

      

      

      
        	
                1.7

              	
                “Distribution
                  Period Crediting Rate”
                  means a rate equal to 2.00% over the average yield on the 10-year
                  Treasury
                  Bond for the month prior to commencement of benefit payments, provided
                  that such crediting rate shall not be more than 12.00%, nor less
                  than
                  8.00%.

              

      

      

      
        	
                1.8

              	
                “Early
                  Termination”
                  means Separation from Service before Normal Benefit Age for reasons
                  other
                  than death or Termination for
                  Cause.

              

      

      

      
        	
                1.9

              	
                “Effective
                  Date”
                  means January 1, 2006.

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                1.10

              	
                “Normal
                  Benefit Age”
                  means the Director attaining age sixty
                  (60).

              

      

      

      
        	
                1.11

              	
                “Plan
                  Administrator”
                  means the plan administrator described in Article
                  8.

              

      

      

      
        	
                1.12

              	
                “Plan
                  Year”
                  means the calendar year. 

              

      

      

      
        	
                1.13

              	
                “Pre-Distribution
                  Period Crediting Rate”
                  means an annual rate equal to the trailing 3-year average ROE,
                  provided
                  such average ROE shall not exceed 12.00%, nor be less than 8.00%.
                  For
                  example, the rate for 2006 will be the average ROE for 2003, 2004,
                  and
                  2005. 

              

      

      

      
        	
                1.14

              	
                “Prescribed
                  Form of Payment”
                  shall mean one hundred eighty (180) equal monthly installments.
                  Interest
                  shall be credited on the unpaid Deferral Account balance during
                  the
                  payment period at an annual rate equal to the Distribution Period
                  Crediting Rate, compounded monthly. The Distribution Period Crediting
                  Rate
                  shall be set at the inception of the payment period and shall not
                  be
                  adjusted thereafter.

              

      

      

      
        	
                1.15

              	
                “ROE”
                  means the average return on equity, as reported in the published
                  financial
                  statements of the Corporation. 

              

      

      

      
        	
                1.16

              	
                “Rollover
                  Balance”
                  means the balance of $283,661 from the Prior
                  Agreement.

              

      

      

      
        	
                1.17

              	
                “Secretary”
                  means the Secretary of the United States Department of the
                  Treasury.

              

      

      

      
        	
                1.18

              	
                “Separation
                  from Service”
                  means that the Director’s service, as a director and independent
                  contractor, to the Bank and any member of a controlled group as
                  defined in
                  Section 414 of the Code to which the Bank belongs, has terminated
                  for any
                  reason, other than by reason of a leave of absence approved by
                  the Bank or
                  the death of the Director.

              

      

      

      
        	
                1.19

              	
                “Termination
                  for Cause”
                  has that meaning set forth in Section
                  7.1.

              

      

      

      Article
        2

      Relationship
        of this Agreement to the Prior Agreement

      

      Inasmuch
        as all amounts payable to or on behalf of the Director under this Agreement
        were
        accrued and vested under the Prior Agreement prior to January 1, 2005, it
        is the
        express intent of this Agreement that:

      

      (a)    this
        Agreement and the Prior Agreement shall not be subject to Section 409A of
        the
        Code;

      

      (b)    no
        provision of this Agreement shall be enforceable with respect to the vested
        accrued benefit of the Directors as of December 31, 2004, to the extent it
        would
        constitute a “material modification” under Treasury Regulation section
        1.409A-6(a)(4);

      

      (c)    to
        the
        extent any benefit is deemed to have accrued or vested on or after January
        1,2005, this Agreement shall be deemed to be amended to the extent minimally
        necessary to comply with Section 409A of the Code; and

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      (d)   except
        for the elimination of payment in the event of the Director’s disability, the
        timing and form of payment of benefits reflected in this Agreement are intended
        to be the same as provided in the Prior Agreement (and shall be so
        interpreted).

      

      Article
        3

      Deferral
        Account

      

      
        	
                3.1

              	
                Crediting.
                  The Bank shall credit to the Director’s Deferral Account the following
                  amounts:

              

      

      

      
        	 	
                3.1.1

              	
                Rollover.
                  The Rollover Balance from the Prior
                  Agreement.

              

      

      

      
        	 	
                3.1.2

              	
                Interest.
                  On
                  the last day of each month and continuing until the commencement
                  of
                  benefit payments, interest shall be credited on the unpaid Deferral
                  Account balance at an annual rate equal to the Pre-Distribution
                  Period
                  Crediting Rate, compounded monthly.

              

      

      

      
        	
                3.2

              	
                Statement
                  of Accounts.
                  The Plan Administrator shall provide to the Director, within one
                  hundred
                  twenty (120) days after the end of each Plan Year, a statement
                  setting
                  forth the Deferral Account balance.

              

      

      

      
        	
                3.3

              	
                Accounting
                  Device Only.
                  The Deferral Account is solely a device for measuring amounts to
                  be paid
                  under this Agreement. The Deferral Account is not a trust fund
                  of any
                  kind. The Director is a general unsecured creditor of the Bank
                  for the
                  distribution of benefits. The benefits represent the mere Bank
                  promise to
                  pay such benefits. The Director's rights are not subject in any
                  manner to
                  anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
                  attachment, or garnishment by the Director's
                  creditors.

              

      

      

      Article
        4

      Distributions
        During Lifetime

      

      
        	
                4.1

              	
                Normal
                  Retirement Benefit.
                  Upon the Director reaching Normal Benefit Age, the Bank shall pay
                  to the
                  Director the benefit described in this Section 4.1 in lieu of any
                  other
                  benefit under this Article.

              

      

      

      
        	 	
                4.1.1

              	
                Amount
                  of Benefit.
                  The benefit under this Section 4.1 is the Deferral Account balance
                  at the
                  Director's Normal Benefit Age.

              

      

      

      
        	 	
                4.1.2

              	
                Distribution
                  of Benefit.
                  The Bank shall pay the benefit to the Director in the Prescribed
                  Form of
                  Payment commencing as of the first day of the month following
                  the Director’s Normal Benefit
                  Age.

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      
        	
                4.2

              	
                Early
                  Termination Benefit.
                  In the event the Director’s Early Termination, the Bank shall pay to the
                  Director the benefit described in this Section 4.2 in lieu of any
                  other
                  benefit under this Article.

              

      

      

      
        	 	
                4.2.1

              	
                Amount
                  of Benefit.
                  The benefit under this Section 4.2 is the Deferral Account balance
                  at the
                  Director's Normal Benefit Age.

              

      

      

      
        	 	
                4.2.2

              	
                Distribution
                  of Benefit.
                  The Bank shall pay the benefit to the Director in the Prescribed
                  Form of
                  Payment commencing on the first day of the month following the
                  Director’s
                  Normal Retirement Age.

              

      

      

      
        	
                4.3

              	
                Restriction
                  on Timing of Distribution. 
                  Notwithstanding any provision of this Agreement to the contrary
                  and to the
                  extent this Agreement is subject to Section 409A of the Code, if
                  the
                  Director is considered a “specified employee” under Section
                  409A of the Code and regulations thereunder, benefit
                  distributions that qualify as a "separation from service" under
                  Section 409A of the Code and regulations thereunder may not commence
                  earlier than six (6) months after the date of such separation
                  from service. In the event this Section 4.3 applies, the Prescribed
                  Form of Payment shall be deemed to have commenced when it otherwise
                  would
                  have and any monthly payments that may not be made during the first
                  six
                  (6) months following separation from service shall be paid in a
                  lump sum
                  as of the first month payment is
                  permitted.

              

      

      

      Article
        5

      Distributions
        at Death

      

      
        	
                5.1

              	
                Death
                  During Active Service.
                  If the Director dies while in active service to the Bank, the Bank
                  shall
                  pay to the Beneficiary the greater of the Deferral Account or $539,393.
                  This benefit shall be paid to the Beneficiary, in the Prescribed
                  Form of
                  Payment commencing on the first day of the month following receipt
                  by the
                  Bank of the Director’s death
                  certificate.

              

      

      

      
        	
                5.2

              	
                Death
                  During Distribution of a Benefit.
                  If the Director dies after any benefit distributions have commenced
                  under
                  this Agreement but before receiving all such distributions, the
                  Bank shall
                  pay to the Beneficiary the remaining benefits at the same time
                  and in the
                  same amounts as they would have been paid to the Director had the
                  Director
                  survived. 

              

      

      

      
        	
                5.3

              	
                Death
                  After Separation from Service But Before Benefit Distributions
                  Commence.
                  If the Director is entitled to benefit distributions under this
                  Agreement,
                  but dies prior to the commencement of said benefit distributions,
                  the Bank
                  shall pay to the Beneficiary the same benefits that the Director
                  was
                  entitled to prior to death except that the benefit distributions
                  shall
                  commence on the first day of the month following receipt by the
                  Bank of
                  the Director’s death
                  certificate.

              

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      Article
        6

      Beneficiaries

      

      
        	
                6.1

              	
                Beneficiary.
                  Each Director shall have the right, at any time, to designate a
                  Beneficiary(ies) to receive any benefits payable under the Agreement
                  to a
                  Beneficiary upon the death of the Director. The Beneficiary designated
                  under this Agreement may be the same as or different from the beneficiary
                  designation under any other plan of the Bank in which the Director
                  participates.

              

      

      

      
        	
                6.2

              	
                Beneficiary
                  Designation Change.
                  The Director shall designate a Beneficiary by completing and signing
                  the
                  Beneficiary Designation Form, and delivering it to the Plan Administrator
                  or its designated agent. The Director's beneficiary designation
                  shall be
                  deemed automatically revoked if the Beneficiary predeceases the
                  Director
                  or if the Director names a spouse as Beneficiary and the marriage
                  is
                  subsequently dissolved. The Director shall have the right to change
                  a
                  Beneficiary by completing, signing and otherwise complying with
                  the terms
                  of the Beneficiary Designation Form and the Plan Administrator’s rules and
                  procedures, as in effect from time to time. Upon the acceptance
                  by the
                  Plan Administrator of a new Beneficiary Designation Form, all Beneficiary
                  designations previously filed shall be cancelled. The Plan Administrator
                  shall be entitled to rely on the last Beneficiary Designation Form
                  filed
                  by the Director and accepted by the Plan Administrator prior to
                  the
                  Director’s death.

              

      

      

      
        	
                6.3

              	
                Acknowledgment.
                  No designation or change in designation of a Beneficiary shall
                  be
                  effective until received, accepted and acknowledged in writing
                  by the Plan
                  Administrator or its designated
                  agent.

              

      

      

      
        	
                6.4

              	
                No
                  Beneficiary Designation.
                  If the Director dies without a valid Beneficiary designation, or
                  if all
                  designated Beneficiaries predecease the Director, then the Director’s
                  spouse shall be the designated Beneficiary. If the Director has
                  no
                  surviving spouse, the benefits shall be made to the personal
                  representative of the Director's
                  estate.

              

      

      

      
        	
                6.5

              	
                Facility
                  of Distribution.
                  If the Plan Administrator determines in its discretion that a benefit
                  is
                  to be paid to a minor, to a person declared incompetent, or to
                  a person
                  incapable of handling the disposition of that person’s property, the Plan
                  Administrator may direct distribution of such benefit to the guardian,
                  legal representative or person having the care or custody of such
                  minor,
                  incompetent person or incapable person. The Plan Administrator
                  may require
                  proof of incompetence, minority or guardianship as it may deem
                  appropriate
                  prior to distribution of the benefit. Any distribution of a benefit
                  shall
                  be a distribution for the account of the Director and the Beneficiary,
                  as
                  the case may be, and shall be a complete discharge of any liability
                  under
                  the Agreement for such distribution
                  amount.

              

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      Article
        7

      General
        Limitations

      

      
        	
                7.1

              	
                Termination
                  for Cause.
                  Notwithstanding any provision of this Agreement to the contrary,
                  the Bank
                  shall not pay any benefit under this Agreement that is in excess
                  of the
                  Director’s Deferrals (i.e. Deferral Account minus interest credited
                  thereon) if Director’s service is terminated by the Board or by the Bank's
                  shareholder(s) for:

              

      

      

      
        	 	
                (a)
                  

              	
                Gross
                  negligence or gross neglect of duties to the Bank;
                  or

              

      

      
        	 	
                (b)
                  

              	
                Conviction
                  of a felony or of a gross misdemeanor involving moral turpitude
                  in
                  connection with the Director’s service to the Bank;
                  or

              

      

      
        	 	
                (c)
                  

              	
                Fraud,
                  disloyalty, dishonesty or willful violation of any law or significant
                  Bank
                  policy committed in connection with the Director's service and
                  resulting
                  in an adverse effect on the Bank;
                  or

              

      

      
        	 	
                (d)
                  

              	
                Issuance
                  of a final removal or prohibition order issued by a state or federal
                  banking agency with jurisdiction over the Bank.

              

      

      

      
        	
                7.2

              	
                No
                  Withdrawal Election.
                  Except as expressly provided herein, the Director may not elect,
                  at any
                  time, to withdraw any portion of the Deferral Account balance. 

              

      

      

      Article
        8

      Administration
        of Agreement

      

      8.1    Plan
        Administrator Duties.
        This
        Agreement shall be administered by a Plan Administrator which shall consist
        of
        the Board, or such committee or person(s) as the Board shall appoint. The
        Plan
        Administrator shall also have the discretion and authority to (i) make, amend,
        interpret and enforce all appropriate rules and regulations for the
        administration of this Agreement and (ii) decide or resolve any and all
        ques-tions including interpretations of this Agreement, as may arise in
        connection with the Agreement.

      

      8.2    Agents.
        In the
        administration of this Agreement, the Plan Administrator may employ agents
        and
        delegate to them such administrative duties as it sees fit (including acting
        through a duly appointed representative), and may from time to time consult
        with
        counsel who may be counsel to the Bank

      

      8.3    Binding
        Effect of Decisions.
        The
        decision or action of the Plan Administrator with respect to any question
        arising out of or in connection with the administration, interpretation and
        application of the Agreement and the rules and regulations
        promulgated

      hereunder
        shall be final and conclusive and binding upon all persons having any interest
        in the Agreement.

      

      8.4    Indemnity
        of Plan Administrator.
        The
        Bank shall indemnify and hold harmless the members of the Plan Administrator
        against any and all claims, losses, damages, expenses or liabilities arising
        from any action or failure to act with respect to this Agreement,

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      except
        in
        the case of willful misconduct by the Plan Administrator or any of its
        members.

      

      8.5    Bank
        Information.
        To
        enable the Plan Administrator to perform its functions, the Bank shall supply
        full and timely information to the Plan Administrator on all matters relating
        to
        the date and circumstances of the death or Separation from Service of the
        Director, and such other pertinent information as the Plan Administrator
        may
        reasonably require.

      

      

      Article
        9

      Claims
        and Review Procedures

      

      
        	
                9.1

              	
                Claims
                  Procedure.
                  The Director or Beneficiary (“claimant”) who has not received benefits
                  under the Agreement that he or she believes should be paid shall
                  make a
                  claim for such benefits as follows:

              

      

      

      
        	 	
                9.1.1

              	
                Initiation
                  - Written Claim.
                  The claimant initiates a claim by submitting to the Bank a written
                  claim
                  for the benefits.

              

      

      

      
        	 	
                9.1.2

              	
                Timing
                  of Bank Response.
                  The Bank shall respond to such claimant within 90 days after receiving
                  the
                  claim. If the Bank determines that special circumstances require
                  additional time for processing the claim, the Bank can extend the
                  response
                  period by an additional 90 days by notifying the claimant in writing,
                  prior to the end of the initial 90-day period, that an additional
                  period
                  is required. The notice of extension must set forth the special
                  circumstances and the date by which the Bank expects to render
                  its
                  decision.

              

      

      

      
        	 	
                9.1.3

              	
                Notice
                  of Decision.
                  If the Bank denies part or all of the claim, the Bank shall notify
                  the
                  claimant in writing of such denial. The Bank shall write the notification
                  in a manner calculated to be understood by the claimant. The notification
                  shall set forth:

              

      

      
        	 	
                (a)

              	
                The
                  specific reasons for the denial, 

              

      

      
        	 	
                (b)

              	
                A
                  reference to the specific provisions of the Agreement on which
                  the denial
                  is based, 

              

      

      
        	 	
                (c)

              	
                A
                  description of any additional information or material necessary
                  for the
                  claimant to perfect the claim and an explanation of why it is needed,
                  and

              

      

      
        	 	
                (d)

              	
                An
                  explanation of the Agreement’s review procedures and the time limits
                  applicable to such procedures.

              

      

      

      
        	
                9.2

              	
                Review
                  Procedure.
                  If the Bank denies part or all of the claim, the claimant shall
                  have the
                  opportunity for a full and fair review by the Bank of the denial,
                  as
                  follows:

              

      

      

      
        	 	
                9.2.1

              	
                Initiation
                  - Written Request.
                  To initiate the review, the claimant, within 60 days after receiving
                  the
                  Bank’s notice of denial, must file with the Bank a written request for
                  review.

              

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      
        	 	
                9.2.2

              	
                Additional
                  Submissions - Information Access.
                  The claimant shall then have the opportunity to submit written
                  comments,
                  documents, records and other information relating to the claim.
                  The Bank
                  shall also provide the claimant, upon request and free of charge,
                  reasonable access to, and copies of, all documents, records and
                  other
                  information relevant to the claimant’s claim for
                  benefits.

              

      

      

      
        	 	
                9.2.3

              	
                Considerations
                  on Review.
                  In considering the review, the Bank shall take into account all
                  materials
                  and information the claimant submits relating to the claim, without
                  regard
                  to whether such information was submitted or considered in the
                  initial
                  benefit determination.

              

      

      

      
        	 	
                9.2.4

              	
                Timing
                  of Bank Response.
                  The Bank shall respond in writing to such claimant within 60 days
                  after
                  receiving the request for review. If the Bank determines that special
                  circumstances require additional time for processing the claim,
                  the Bank
                  can extend the response period by an additional 60 days by notifying
                  the
                  claimant in writing, prior to the end of the initial 60-day period,
                  that
                  an additional period is required. The notice of extension must
                  set forth
                  the special circumstances and the date by which the Bank expects
                  to render
                  its decision.

              

      

      

      
        	 	
                9.2.5

              	
                Notice
                  of Decision.
                  The Bank shall notify the claimant in writing of its decision on
                  review.
                  The Bank shall write the notification in a manner calculated to
                  be
                  understood by the claimant. The notification shall set
                  forth:

              

      

      
        	 	
                (a)

              	
                The
                  specific reasons for the denial, 

              

      

      
        	 	
                (b)

              	
                A
                  reference to the specific provisions of the Agreement on which
                  the denial
                  is based, and

              

      

      
        	 	
                (c)

              	
                A
                  statement that the claimant is entitled to receive, upon request
                  and free
                  of charge, reasonable access to, and copies of, all documents,
                  records and
                  other information relevant to the claimant’s claim for
                  benefits.

              

      

      

      Article
        10

      Amendments
        and Termination

      

      
        	
                10.1

              	
                Amendment. 
                  This Agreement may be amended only by a written agreement signed
                  by the
                  Bank and the Director.  Provided, however, that the Bank may amend
                  this Agreement to conform with legislative requirements or written
                  directives to the Bank from its banking regulators.
                  

              

      

      

      
        	
                10.2

              	
                Termination.
                  This Agreement may be terminated only by a written agreement signed
                  by the
                  Bank and the Director.  Upon such termination, the Deferral Account
                  balance shall be paid to the Director in the form and at the earliest
                  possible time as specified in this Agreement and permitted under
                  Section
                  409A of the Code and any applicable subsequent
                  authority.

              

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      Article
        11

      Miscellaneous

      

      
        	
                11.1

              	
                Binding
                  Effect.
                  This Agreement shall bind the Director and the Bank and their
                  beneficiaries, survivors, executors, administrators and
                  transferees.

              

      

      

      
        	
                11.2

              	
                No
                  Guarantee of Service.
                  This Agreement is not a contract for services. It does not give
                  the
                  Director the right to remain a director of the Bank, nor does it
                  interfere
                  with the Bank's or Bank shareholder(s)' right to discharge the
                  Director.
                  It also does not require the Director to remain a director nor
                  interfere
                  with the Director's right to separate from service at any
                  time.

              

      

      

      
        	
                11.3

              	
                Non-Transferability.
                  Benefits under this Agreement cannot be sold, transferred, assigned,
                  pledged, attached or encumbered in any
                  manner.

              

      

      

      
        	
                11.4

              	
                Tax
                  Withholding.
                  The Bank shall withhold any taxes that are required to be withheld
                  from
                  the benefits provided under this Agreement. The Director acknowledges
                  that
                  the Bank’s sole liability regarding taxes is to forward any amounts
                  withheld to the appropriate taxing
                  authority(ies).

              

      

      

      
        	
                11.5

              	
                Applicable
                  Law.
                  The Agreement and all rights hereunder shall be governed by the
                  laws of
                  the State of Indiana, except to the extent preempted by the laws
                  of the
                  United States of America.

              

      

      

      
        	
                11.6

              	
                Unfunded
                  Arrangement.
                  The Director and the Beneficiary are general unsecured creditors
                  of the
                  Bank for the distribution of benefits under this Agreement. The
                  benefits
                  represent the mere promise by the Bank to pay such benefits. The
                  rights to
                  benefits are not subject in any manner to anticipation, alienation,
                  sale,
                  transfer, assignment, pledge, encumbrance, attachment, or garnishment
                  by
                  creditors. Any insurance on the Director's life or other informal
                  funding
                  asset is a general asset of the Bank to which the Director and
                  the
                  Beneficiary have no preferred or secured
                  claim.

              

      

      

      
        	
                11.7

              	
                Reorganization.
                  The Bank shall not merge or consolidate into or with another Bank,
                  or
                  reorganize, or sell substantially all of its assets to another
                  bank, firm,
                  or person unless such succeeding or continuing bank, firm, or person
                  agrees to assume and discharge the obligations of the Bank under
                  this
                  Agreement. Upon the occurrence of such event, the term
                  “Bank” as used in this Agreement shall be deemed to refer to the successor
                  or survivor bank.

              

      

      

      
        	
                11.8

              	
                Entire
                  Agreement. This
                  Agreement constitutes the entire agreement between the Bank and
                  the
                  Director as to the subject matter hereof. No rights are granted
                  to the
                  Director by virtue of this Agreement other than those specifically
                  set
                  forth herein.

              

      

      

      
        	
                11.9

              	
                Interpretation.
                  Wherever the fulfillment of the intent and purpose of this Agreement
                  requires, and the context will permit, the use of the masculine
                  gender
                  includes the 

              

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

         
        feminine and use of the singular includes the plural. 

      

      
        	
                11.10

              	
                Alternative
                  Action.
                  In the event it shall become impossible for the Bank or the Plan
                  Administrator to perform any act required by this Agreement, the
                  Bank or
                  Plan Administrator may in its discretion perform such alternative
                  act as
                  most nearly carries out the intent and purpose of this Agreement
                  and is in
                  the best interests of the Bank.

              

      

      

      
        	
                11.11

              	
                Headings.
                  Article and section headings are for convenient reference only
                  and shall
                  not control or affect the meaning or construction of any of its
                  provisions.

              

      

      

      
        	
                11.12

              	
                Validity.
                  In case any provision of this Agreement shall be illegal or invalid
                  for
                  any reason, said illegality or invalidity shall not affect the
                  remaining
                  parts hereof, but this Agreement shall be construed and enforced
                  as if
                  such illegal and invalid provision has never been inserted
                  herein.

              

      

      

      
        	
                11.13

              	
                Notice.
                  Any notice or filing required or permitted to be given to the Plan
                  Administrator under this Agreement shall be sufficient if in writing
                  and
                  hand-delivered, or sent by registered or certified mail, to the
                  address
                  below:

              

      

      

      
        	 	
                HomeFederal
                  Bank

              	 
	 	
                501
                  Washington St.

              	 
	 	
                P.O.
                  Box 408

              	 
	 	
                Columbus,
                  IN 47201-6229

              	 

      

       

      Such
        notice shall be deemed given as of the date of delivery or, if delivery is
        made
        by mail, as of the date shown on the postmark or the receipt for registration
        or
        certification.

       

      

      Any
        notice or filing required or permitted to be given to the Director under
        this
        Agreement shall be sufficient if in writing and hand-delivered, or sent by
        mail,
        to the last known address of the Director.

      

      IN
        WITNESS WHEREOF, the Director and the Bank have signed this Agreement as
        of
        __________________________, 2005.

      

      
        	
                DIRECTOR:

              	
                BANK:

              	 

      

      

      
        	 	 	 
	 	
                HOMEFEDERAL
                  BANK

              
	 	 	 
	 	
                By:

              	 
	
                Harold
                  Force

              	 	 
	 	
                Title:

              	 

      

      

      
10Beatty Fee Agreement

    

      EXHIBIT
        10.2

      

      HOMEFEDERAL
        BANK

      DIRECTOR
        DEFERRED FEE AGREEMENT

      

      WHEREAS
        THIS AGREEMENT AMENDS AND RESTATES the prior HomeFederal Bank Directors Deferred
        Compensation Plan (the “Plan”) between the HomeFederal Bank and the Director
        effective April 1, 1992, as amended by the First Amendment dated February
        18,
        1993, and the Second Amendment dated effective July 1, 1996 (collectively,
        the
        Plan, the First Amendment and the Second Amendment are referred to as the
“Prior
        Agreement”), this DIRECTOR DEFERRED FEE AGREEMENT (the “Agreement”) is made this
        _______ day of ________________, 2005, by HOMEFEDERAL BANK (the “Bank”), a
        federally-chartered bank located in Columbus, Indiana and John T. Beatty
        (the
“Director”). The purpose of this Agreement is to encourage the Director to
        remain a member of the Bank’s Board of Directors. 

        

      Article
        1

      Definitions

      

      Whenever
        used in this Agreement, the following words and phrases shall have the meanings
        specified:

      

      
        	
                1.1

              	
                “Beneficiary”
                  means each designated person, or the estate of a deceased Director,
                  entitled to benefits, if any, upon the death of the Director determined
                  pursuant to Article 6.

              

      

      

      
        	
                1.2

              	
                “Beneficiary
                  Designation Form”
                  means the form established from time to time by the Plan Administrator
                  that the Director completes, signs and returns to the Plan Administrator
                  to designate one or more
                  beneficiaries.

              

      

      

      
        	
                1.3

              	
                “Board”
                  means the Board of Directors of the Bank as from time to time
                  constituted.

              

      

      

      
        	
                1.4

              	
                “Code”
                  means the Internal Revenue Code of 1986, as
                  amended.

              

      

      

      
        	
                1.5

              	
                “Corporation”
                  means Home Federal Bancorp or its
                  successor.

              

      

      

      
        	
                1.6

              	
                “Deferral
                  Account”
                  means the balance of the Director’s accumulated fee deferrals, plus
                  accrued interest. 

              

      

      

      
        	
                1.7

              	
                “Distribution
                  Period Crediting Rate”
                  means a rate equal to 2.00% over the average yield on the 10-year
                  Treasury
                  Bond for the month prior to commencement of benefit payments, provided
                  that such crediting rate shall not be more than 12.00%, nor less
                  than
                  8.00%.

              

      

      

      
        	
                1.8

              	
                “Early
                  Termination”
                  means Separation from Service before Normal Benefit Age for reasons
                  other
                  than death or Termination for
                  Cause.

              

      

      

      
        	
                1.9

              	
                “Effective
                  Date”
                  means January 1, 2006.

              

      

      

      
        	
                1.10

              	
                “Normal
                  Benefit Age”
                  means the Director attaining age sixty
                  (60).

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      
        	
                1.11

              	
                “Plan
                  Administrator”
                  means the plan administrator described in Article
                  8.

              

      

      

      
        	
                1.12

              	
                “Plan
                  Year”
                  means the calendar year. 

              

      

      

      
        	
                1.13

              	
                “Pre-Distribution
                  Period Crediting Rate”
                  means an annual rate equal to the trailing 3-year average ROE,
                  provided
                  such average ROE shall not exceed 12.00%, nor be less than 8.00%.
                  For
                  example, the rate for 2006 will be the average ROE for 2003, 2004,
                  and
                  2005. 

              

      

      

      
        	
                1.14

              	
                “Prescribed
                  Form of Payment”
                  shall mean one hundred eighty (180) equal monthly installments.
                  Interest
                  shall be credited on the unpaid Deferral Account balance during
                  the
                  payment period at an annual rate equal to the Distribution Period
                  Crediting Rate, compounded monthly. The Distribution Period Crediting
                  Rate
                  shall be set at the inception of the payment period and shall not
                  be
                  adjusted thereafter.

              

      

      

      
        	
                1.15

              	
                “ROE”
                  means the average return on equity, as reported in the published
                  financial
                  statements of the Corporation.

              

      

      

      
        	
                1.16

              	
                “Rollover
                  Balance”
                  means the balance of $283,661 from the Prior
                  Agreement.

              

      

      

      
        	
                1.17

              	
                “Secretary”
                  means the Secretary of the United States Department of the
                  Treasury.

              

      

      

      
        	
                1.18

              	
                “Separation
                  from Service”
                  means that the Director’s service, as a director and independent
                  contractor, to the Bank and any member of a controlled group as
                  defined in
                  Section 414 of the Code to which the Bank belongs, has terminated
                  for any
                  reason, other than by reason of a leave of absence approved by
                  the Bank or
                  the death of the Director.

              

      

      

      
        	
                1.19

              	
                “Termination
                  for Cause”
                  has that meaning set forth in Section
                  7.1.

              

      

      

      Article
        2

      Relationship
        of this Agreement to the Prior Agreement

      

      Inasmuch
        as all amounts payable to or on behalf of the Director under this Agreement
        were
        accrued and vested under the Prior Agreement prior to January 1, 2005, it
        is the
        express intent of this Agreement that:

      

      (a)    this
        Agreement and the Prior Agreement shall not be subject to Section 409A of
        the
        Code;

      

      (b)    no
        provision of this Agreement shall be enforceable with respect to the vested
        accrued benefit of the Directors as of December 31, 2004, to the extent it
        would
        constitute a “material modification” under Treasury Regulation section
        1.409A-6(a)(4);

      

      (c)    to
        the
        extent any benefit is deemed to have accrued or vested on or after January
        1,2005, this Agreement shall be deemed to be amended to the extent minimally
        necessary to comply with Section 409A of the Code; and

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      

      (d)    except
        for the elimination of payment in the event of the Director’s disability, the
        timing and form of payment of benefits reflected in this Agreement are intended
        to be the same as provided in the Prior Agreement (and shall be so
        interpreted).

      

      

      Article
        3

      Deferral
        Account

      

      
        	
                3.1

              	
                Crediting.
                  The Bank shall credit to the Director’s Deferral Account the following
                  amounts:

              

      

      

      
        	 	
                3.1.1

              	
                Rollover.
                  The Rollover Balance from the Prior
                  Agreement.

              

      

      

      
        	 	
                3.1.2

              	
                Interest.
                  On
                  the last day of each month and continuing until the commencement
                  of
                  benefit payments, interest shall be credited on the unpaid Deferral
                  Account balance at an annual rate equal to the Pre-Distribution
                  Period
                  Crediting Rate, compounded monthly.

              

      

      

      
        	
                3.2

              	
                Statement
                  of Accounts.
                  The Plan Administrator shall provide to the Director, within one
                  hundred
                  twenty (120) days after the end of each Plan Year, a statement
                  setting
                  forth the Deferral Account balance.

              

      

      

      
        	
                3.3

              	
                Accounting
                  Device Only.
                  The Deferral Account is solely a device for measuring amounts to
                  be paid
                  under this Agreement. The Deferral Account is not a trust fund
                  of any
                  kind. The Director is a general unsecured creditor of the Bank
                  for the
                  distribution of benefits. The benefits represent the mere Bank
                  promise to
                  pay such benefits. The Director's rights are not subject in any
                  manner to
                  anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
                  attachment, or garnishment by the Director's
                  creditors.

              

      

      

      Article
        4

      Distributions
        During Lifetime

      

      
        	
                4.1

              	
                Normal
                  Retirement Benefit.
                  Upon the Director reaching Normal Benefit Age, the Bank shall pay
                  to the
                  Director the benefit described in this Section 4.1 in lieu of any
                  other
                  benefit under this Article.

              

      

      

      
        	 	
                4.1.1

              	
                Amount
                  of Benefit.
                  The benefit under this Section 4.1 is the Deferral Account balance
                  at the
                  Director's Normal Benefit Age.

              

      

      

      
        	 	
                4.1.2

              	
                Distribution
                  of Benefit.
                  The Bank shall pay the benefit to the Director in the Prescribed
                  Form of
                  Payment commencing as of the first day of the month following the
                  Director’s Normal Benefit Age.

              

      

      

      
        	
                4.2

              	
                Early
                  Termination Benefit.
                  In the event of the Director’s Early Termination, the Bank shall pay to
                  the Director the benefit described in this Section 4.2 in lieu
                  of any
                  other

              

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

         
        benefit under this Article.

      

      
        	 	
                4.2.1

              	
                Amount
                  of Benefit.
                  The benefit under this Section 4.2 is the Deferral Account balance
                  at the
                  Director's Normal Benefit Age.

              

      

      

      
        	 	
                4.2.2

              	
                Distribution
                  of Benefit.
                  The Bank shall pay the benefit to the Director in the Prescribed
                  Form of
                  Payment commencing on the first day of the month following the
                  Director’s
                  Normal Benefit Age.

              

      

      

      
        	
                4.3

              	
                Restriction
                  on Timing of Distribution. 
                  Notwithstanding any provision of this Agreement to the contrary
                  and to the
                  extent this Agreement is subject to Section 409A of the Code, if
                  the
                  Director is considered a “specified employee” under Section
                  409A of the Code and regulations thereunder, benefit
                  distributions that qualify as a "separation from service" under
                  Section 409A of the Code and regulations thereunder may not commence
                  earlier than six (6) months after the date of such separation
                  from service. In the event this Section 4.3 applies, the Prescribed
                  Form of Payment shall be deemed to have commenced when it otherwise
                  would
                  have and any monthly payments that may not be made during the first
                  six
                  (6) months following separation from service shall be paid in a
                  lump sum
                  as of the first month payment is
                  permitted.

              

      

      

      Article
        5

      Distributions
        at Death

      

      
        	
                5.1

              	
                Death
                  During Active Service.
                  If the Director dies while in active service to the Bank, the Bank
                  shall
                  pay to the Beneficiary the greater of the Deferral Account or $539,393.
                  This benefit shall be paid to the Beneficiary, in the Prescribed
                  Form of
                  Payment commencing on the first day of the month following receipt
                  by the
                  Bank of the Director’s death
                  certificate.

              

      

      

      
        	
                5.2

              	
                Death
                  During Distribution of a Benefit.
                  If the Director dies after any benefit distributions have commenced
                  under
                  this Agreement but before receiving all such distributions, the
                  Bank shall
                  pay to the Beneficiary the remaining benefits at the same time
                  and in the
                  same amounts as they would have been paid to the Director had the
                  Director
                  survived. 

              

      

      

      
        	
                5.3

              	
                Death
                  After Separation from Service But Before Benefit Distributions
                  Commence.
                  If the Director is entitled to benefit distributions under this
                  Agreement,
                  but dies prior to the commencement of said benefit distributions,
                  the Bank
                  shall pay to the Beneficiary the same benefits that the Director
                  was
                  entitled to prior to death except that the benefit distributions
                  shall
                  commence on the first day of the month following receipt by the
                  Bank of
                  the Director’s death certificate.

              

      

      

      Article
        6

      Beneficiaries

      

      
        	
                6.1

              	
                Beneficiary.
                  Each Director shall have the right, at any time, to designate a
                  Beneficiary(ies) to receive any benefits payable under the Agreement
                  to a
                  Beneficiary upon the death of the Director. The Beneficiary designated
                  under this Agreement may be

              

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

          the
        same as or different from the beneficiary designation under any other plan
        of
        the Bank in which the Director participates.

      

      
        	
                6.2

              	
                Beneficiary
                  Designation Change.
                  The Director shall designate a Beneficiary by completing and signing
                  the
                  Beneficiary Designation Form, and delivering it to the Plan Administrator
                  or its designated agent. The Director's beneficiary designation
                  shall be
                  deemed automatically revoked if the Beneficiary predeceases the
                  Director
                  or if the Director names a spouse as Beneficiary and the marriage
                  is
                  subsequently dissolved. The Director shall have the right to change
                  a
                  Beneficiary by completing, signing and otherwise complying with
                  the terms
                  of the Beneficiary Designation Form and the Plan Administrator’s rules and
                  procedures, as in effect from time to time. Upon the acceptance
                  by the
                  Plan Administrator of a new Beneficiary Designation Form, all Beneficiary
                  designations previously filed shall be cancelled. The Plan Administrator
                  shall be entitled to rely on the last Beneficiary Designation Form
                  filed
                  by the Director and accepted by the Plan Administrator prior to
                  the
                  Director’s death.

              

      

      

      
        	
                6.3

              	
                Acknowledgment.
                  No designation or change in designation of a Beneficiary shall
                  be
                  effective until received, accepted and acknowledged in writing
                  by the Plan
                  Administrator or its designated
                  agent.

              

      

      

      
        	
                6.4

              	
                No
                  Beneficiary Designation.
                  If the Director dies without a valid Beneficiary designation, or
                  if all
                  designated Beneficiaries predecease the Director, then the Director’s
                  spouse shall be the designated Beneficiary. If the Director has
                  no
                  surviving spouse, the benefits shall be made to the personal
                  representative of the Director's
                  estate.

              

      

      

      
        	
                6.5

              	
                Facility
                  of Distribution.
                  If the Plan Administrator determines in its discretion that a benefit
                  is
                  to be paid to a minor, to a person declared incompetent, or to
                  a person
                  incapable of handling the disposition of that person’s property, the Plan
                  Administrator may direct distribution of such benefit to the guardian,
                  legal representative or person having the care or custody of such
                  minor,
                  incompetent person or incapable person. The Plan Administrator
                  may require
                  proof of incompetence, minority or guardianship as it may deem
                  appropriate
                  prior to distribution of the benefit. Any distribution of a benefit
                  shall
                  be a distribution for the account of the Director and the Beneficiary,
                  as
                  the case may be, and shall be a complete discharge of any liability
                  under
                  the Agreement for such distribution
                  amount.

              

      

      

      Article
        7

      General
        Limitations

      

      
        	
                7.1

              	
                Termination
                  for Cause.
                  Notwithstanding any provision of this Agreement to the contrary,
                  the Bank
                  shall not pay any benefit under this Agreement that is in excess
                  of the
                  Director’s Deferrals (i.e. Deferral Account minus interest credited
                  thereon) if Director’s service is terminated by the Board or by the Bank's
                  shareholder(s) for:

              

      

      

      
        	 	
                (a)
                  

              	
                Gross
                  negligence or gross neglect of duties to the Bank;
                  or

              

      

      
        	 	
                (b)
                  

              	
                Conviction
                  of a felony or of a gross misdemeanor involving moral turpitude
                  in
                  connection with the Director’s service to the Bank;
                  or

              

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      
        	 	
                (c)
                  

              	
                Fraud,
                  disloyalty, dishonesty or willful violation of any law or significant
                  Bank
                  policy committed in connection with the Director's service and
                  resulting
                  in an adverse effect on the Bank;
                  or

              

      

      
        	 	
                (d)
                  

              	
                Issuance
                  of a final removal or prohibition order issued by a state or federal
                  banking agency with jurisdiction over the Bank.

              

      

      

      
        	
                7.2

              	
                No
                  Withdrawal Election.
                  Except as expressly provided herein, the Director may not elect,
                  at any
                  time, to withdraw any portion of the Deferral Account balance. 

              

      

      

      Article
        8

      Administration
        of Agreement

      

      8.1   Plan
        Administrator Duties.
        This
        Agreement shall be administered by a Plan Administrator which shall consist
        of
        the Board, or such committee or person(s) as the Board shall appoint. The
        Plan
        Administrator shall also have the discretion and authority to (i) make, amend,
        interpret and enforce all appropriate rules and regulations for the
        administra-tion of this Agreement and (ii) decide or resolve any and all
        ques-tions including interpretations of this Agreement, as may arise in
        connection with the Agreement.

      

      8.2   Agents.
        In the
        administration of this Agreement, the Plan Administrator may employ agents
        and
        delegate to them such administrative duties as it sees fit (including acting
        through a duly appointed representative), and may from time to time consult
        with
        counsel who may be counsel to the Bank.

      

      8.3   Binding
        Effect of Decisions.
        The
        decision or action of the Plan Administrator with respect to any question
        arising out of or in connection with the administration, interpretation and
        application of the Agreement and the rules and regulations promulgated hereunder
        shall be final and conclusive and binding upon all persons having any interest
        in the Agreement.

      

      8.4   Indemnity
        of Plan Administrator.
        The
        Bank shall indemnify and hold harmless the members of the Plan Administrator
        against any and all claims, losses, damages, expenses or liabilities arising
        from any action or failure to act with respect to this Agreement, except
        in the
        case of willful misconduct by the Plan Administrator or any of its
        members.

      

      8.5   Bank
        Information.
        To
        enable the Plan Administrator to perform its functions, the Bank shall supply
        full and timely information to the Plan Administrator on all matters relating
        to
        the date and circumstances of the death or Separation from Service of the
        Director, and such other pertinent information as the Plan Administrator
        may
        reasonably require.

      

      

      Article
        9

      Claims
        and Review Procedures

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

      

      
        	
                9.1

              	
                Claims
                  Procedure.
                  The Director or Beneficiary (“claimant”) who has not received benefits
                  under the Agreement that he or she believes should be paid shall
                  make a
                  claim for such benefits as follows:

              

      

      

      
        	 	
                9.1.1

              	
                Initiation
                  - Written Claim.
                  The claimant initiates a claim by submitting to the Bank a written
                  claim
                  for the benefits.

              

      

      

      
        	 	
                9.1.2

              	
                Timing
                  of Bank Response.
                  The Bank shall respond to such claimant within 90 days after receiving
                  the
                  claim. If the Bank determines that special circumstances require
                  additional time for processing the claim, the Bank can extend the
                  response
                  period by an additional 90 days by notifying the claimant in writing,
                  prior to the end of the initial 90-day period, that an additional
                  period
                  is required. The notice of extension must set forth the special
                  circumstances and the date by which the Bank expects to render
                  its
                  decision.

              

      

      

      
        	 	
                9.1.3

              	
                Notice
                  of Decision.
                  If the Bank denies part or all of the claim, the Bank shall notify
                  the
                  claimant in writing of such denial. The Bank shall write the notification
                  in a manner calculated to be understood by the claimant. The notification
                  shall set forth:

              

      

      
        	 	
                (a)

              	
                The
                  specific reasons for the denial, 

              

      

      
        	 	
                (b)

              	
                A
                  reference to the specific provisions of the Agreement on which
                  the denial
                  is based, 

              

      

      
        	 	
                (c)

              	
                A
                  description of any additional information or material necessary
                  for the
                  claimant to perfect the claim and an explanation of why it is needed,
                  and

              

      

      
        	 	
                (d)

              	
                An
                  explanation of the Agreement’s review procedures and the time limits
                  applicable to such procedures.

              

      

      

      
        	
                9.2

              	
                Review
                  Procedure.
                  If the Bank denies part or all of the claim, the claimant shall
                  have the
                  opportunity for a full and fair review by the Bank of the denial,
                  as
                  follows:

              

      

      

      
        	 	
                9.2.1

              	
                Initiation
                  - Written Request.
                  To initiate the review, the claimant, within 60 days after receiving
                  the
                  Bank’s notice of denial, must file with the Bank a written request for
                  review.

              

      

      

      
        	 	
                9.2.2

              	
                Additional
                  Submissions - Information Access.
                  The claimant shall then have the opportunity to submit written
                  comments,
                  documents, records and other information relating to the claim.
                  The Bank
                  shall also provide the claimant, upon request and free of charge,
                  reasonable access to, and copies of, all documents, records and
                  other
                  information relevant to the claimant’s claim for
                  benefits.

              

      

      

      
        	 	
                9.2.3

              	
                Considerations
                  on Review.
                  In considering the review, the Bank shall take into account all
                  materials
                  and information the claimant submits relating to the claim, without
                  regard
                  to whether such information was submitted or considered in the
                  initial
                  benefit determination.

              

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      
        	 	
                9.2.4

              	
                Timing
                  of Bank Response.
                  The Bank shall respond in writing to such claimant within 60 days
                  after
                  receiving the request for review. If the Bank determines that special
                  circumstances require additional time for processing the claim,
                  the Bank
                  can extend the response period by an additional 60 days by notifying
                  the
                  claimant in writing, prior to the end of the initial 60-day period,
                  that
                  an additional period is required. The notice of extension must
                  set forth
                  the special circumstances and the date by which the Bank expects
                  to render
                  its decision.

              

      

      

      
        	 	
                9.2.5

              	
                Notice
                  of Decision.
                  The Bank shall notify the claimant in writing of its decision on
                  review.
                  The Bank shall write the notification in a manner calculated to
                  be
                  understood by the claimant. The notification shall set
                  forth:

              

      

      
        	 	
                (a)

              	
                The
                  specific reasons for the denial, 

              

      

      
        	 	
                (b)

              	
                A
                  reference to the specific provisions of the Agreement on which
                  the denial
                  is based, and

              

      

      
        	 	
                (c)

              	
                A
                  statement that the claimant is entitled to receive, upon request
                  and free
                  of charge, reasonable access to, and copies of, all documents,
                  records and
                  other information relevant to the claimant’s claim for
                  benefits.

              

      

      

      Article
        10

      Amendments
        and Termination

      

      
        	
                10.1

              	
                Amendment. 
                  This Agreement may be amended only by a written agreement signed
                  by the
                  Bank and the Director.  Provided, however, that the Bank may amend
                  this Agreement to conform with legislative requirements or written
                  directives to the Bank from its banking regulators.
                  

              

      

       

      
        	
                10.2

              	
                Termination.
                  This Agreement may be terminated only by a written agreement signed
                  by the
                  Bank and the Director.  Upon such termination, the Deferral Account
                  balance shall be paid to the Director in the form and at the earliest
                  possible time as specified in this Agreement and permitted under
                  Section
                  409A of the Code and any applicable subsequent
                  authority.

              

      

      

      Article
        11

      Miscellaneous

      

      
        	
                11.1

              	
                Binding
                  Effect.
                  This Agreement shall bind the Director and the Bank and their
                  beneficiaries, survivors, executors, administrators and
                  transferees.

              

      

      

      
        	
                11.2

              	
                No
                  Guarantee of Service.
                  This Agreement is not a contract for services. It does not give
                  the
                  Director the right to remain a director of the Bank, nor does it
                  interfere
                  with the Bank's or Bank shareholder(s)' right to discharge the
                  Director.
                  It also does not require the Director to remain a director nor
                  interfere
                  with the Director's right to separate from service at any
                  time.

              

      

      

      
        	
                11.3

              	
                Non-Transferability.
                  Benefits under this Agreement cannot be sold, transferred, assigned,
                  pledged, attached or encumbered in any
                  manner.

              

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

      

      
        	
                11.4

              	
                Tax
                  Withholding.
                  The Bank shall withhold any taxes that are required to be withheld
                  from
                  the benefits provided under this Agreement. The Director acknowledges
                  that
                  the Bank’s sole liability regarding taxes is to forward any amounts
                  withheld to the appropriate taxing
                  authority(ies).

              

      

      

      
        	
                11.5

              	
                Applicable
                  Law.
                  The Agreement and all rights hereunder shall be governed by the
                  laws of
                  the State of Indiana, except to the extent preempted by the laws
                  of the
                  United States of America.

              

      

      

      
        	
                11.6

              	
                Unfunded
                  Arrangement.
                  The Director and the Beneficiary are general unsecured creditors
                  of the
                  Bank for the distribution of benefits under this Agreement. The
                  benefits
                  represent the mere promise by the Bank to pay such benefits. The
                  rights to
                  benefits are not subject in any manner to anticipation, alienation,
                  sale,
                  transfer, assignment, pledge, encumbrance, attachment, or garnishment
                  by
                  creditors. Any insurance on the Director's life or other informal
                  funding
                  asset is a general asset of the Bank to which the Director and
                  the
                  Beneficiary have no preferred or secured
                  claim.

              

      

      

      
        	
                11.7

              	
                Reorganization.
                  The Bank shall not merge or consolidate into or with another Bank,
                  or
                  reorganize, or sell substantially all of its assets to another
                  bank, firm,
                  or person unless such succeeding or continuing bank, firm, or person
                  agrees to assume and discharge the obligations of the Bank under
                  this
                  Agreement. Upon the occurrence of such event, the term “Bank” as used in
                  this Agreement shall be deemed to refer to the successor or survivor
                  bank.

              

      

      

      
        	
                11.8

              	
                Entire
                  Agreement. This
                  Agreement constitutes the entire agreement between the Bank and
                  the
                  Director as to the subject matter hereof. No rights are granted
                  to the
                  Director by virtue of this Agreement other than those specifically
                  set
                  forth herein.

              

      

      

      
        	
                11.9

              	
                Interpretation.
                  Wherever the fulfillment of the intent and purpose of this Agreement
                  requires, and the context will permit, the use of the masculine
                  gender
                  includes the feminine and use of the singular includes the plural
                  

              

      

      

      
        	
                11.10

              	
                Alternative
                  Action.
                  In the event it shall become impossible for the Bank or the Plan
                  Administrator to perform any act required by this Agreement, the
                  Bank or
                  Plan Administrator may in its discretion perform such alternative
                  act as
                  most nearly carries out the intent and purpose of this Agreement
                  and is in
                  the best interests of the Bank.

              

      

      

      
        	
                11.11

              	
                Headings.
                  Article and section headings are for convenient reference only
                  and shall
                  not control or affect the meaning or construction of any of its
                  provisions.

              

      

      

      
        	
                11.12

              	
                Validity.
                  In case any provision of this Agreement shall be illegal or invalid
                  for
                  any reason, said illegality or invalidity shall not affect the
                  remaining
                  parts hereof, but this Agreement shall be construed and enforced
                  as if
                  such illegal and invalid provision has never been inserted
                  herein.

              

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      
        	
                11.13

              	
                Notice.
                  Any notice or filing required or permitted to be given to the Plan
                  Administrator under this Agreement shall be sufficient if in writing
                  and
                  hand-delivered, or sent by registered or certified mail, to the
                  address
                  below:

              

      

      

      
        	 	
                HomeFederal
                  Bank

              	 
	 	
                501
                  Washington St.

              	 
	 	
                P.O.
                  Box 408

              	 
	 	
                Columbus,
                  IN 47201-6229

              	 

      

       

      Such
        notice shall be deemed given as of the date of delivery or, if delivery is
        made
        by mail, as of the date shown on the postmark or the receipt for registration
        or
        certification.

       

      

      Any
        notice or filing required or permitted to be given to the Director under
        this
        Agreement shall be sufficient if in writing and hand-delivered, or sent by
        mail,
        to the last known address of the Director.

      

      

      
        	
                DIRECTOR:

              	
                BANK:

              	 
	 	 	 
	 	
                HOMEFEDERAL
                  BANK

              
	 	 	 
	 	
                By:

              	 
	
                John
                  T. Beatty

              	 	 
	 	
                Title:

              	 

      

       

       

       

      10

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