Document:

Exhibit 10.29 to Deluxe Corporation Form 10-K dated December 31, 2006

Exhibit 10.29

	
            DELUXE
 CORPORATION
 	
            PERFORMANCE ACCELERATED
 RESTRICTED STOCK AWARD AGREEMENT
 

 

	
            AWARDED TO
 	
            AWARD DATE
 	
            NUMBER OF SHARES OF RESTRICTED STOCK
 	
            MARKET PRICE ON
DATE OF AWARD
 
	
             

 	
             
 	
             
 	
             
 

	
            1.
 	
            The Award. Deluxe Corporation, a Minnesota corporation (“Deluxe”), hereby grants to you as of the above Award Date the above number of restricted shares of Deluxe common stock, par value $1.00 per share (the “Shares”) on the terms and conditions contained in this Restricted Stock Award Agreement (this “Agreement”) and the Deluxe Corporation 2000 Stock Incentive Plan, as amended (the “Plan”). 
 

	
            2.
 	
            Restricted Period. The Shares are subject to the restrictions contained in this Agreement and the Plan for a period (the “Restricted Period”) commencing on the Award Date and ending on the third anniversary of the Award Date, subject to the provisions of Section 4 below. 
 

	
            3.
 	
            Restrictions. The Shares shall be subject to the following restrictions during the Restricted Period: 
 

	
             
 	
            (a)
 	
            The Shares shall be subject to forfeiture to Deluxe as provided in this Agreement and the Plan. 
 

 

	
             
 	
            (b)
 	
            The Shares may not be sold, assigned, transferred or pledged during the Restricted Period. You may not transfer the right to receive the Shares, other than by will or the laws of descent and distribution, and any such attempted transfer shall be void. 
 

 

	
             
 	
            (c) 
 	
The Shares will be issued in your name, either by book-entry registration or issuance of a stock certificate, which certificate will be held by Deluxe. If any certificate is issued, the certificate will bear an appropriate legend referring to the restrictions applicable to the Shares. 
 

 

	
             
 	
            (d) 
 	
Any stock dividends or other non-cash distributions paid on the Shares during the Restricted Period shall be held by Deluxe until the end of the Restricted Period, at which time Deluxe will pay you all such dividends and other distributions, less any applicable tax withholding amounts. If the Shares are forfeited as described in Section 4 of this Agreement, then all rights to such payments shall also be forfeited. 
 

 

	
4. 
 	
Acceleration of Vesting.  
 

	
             
 	
            (a) 
 	
The restrictions with respect to fifty percent (50%) of the Shares will lapse (i.e., the Shares will “vest”), and such Shares shall thereupon become non-forfeitable and transferable, as of the first anniversary of the Award Date, provided (i) you are an employee of the Company on such anniversary date and (ii) the Company has achieved the Performance Threshold set forth in the Addendum to this Agreement, as determined by the Compensation Committee of Deluxe’s Board of Directors.  
 

 

	
             
 	
            (b) 
 	
In the event your employment with the Company is terminated by reason of death, Disability or Qualified Retirement prior to the third anniversary of the Award Date, all of the Shares will vest and the Shares shall become non-forfeitable and transferable as of the date of such termination.  
 

 

	
             
 	
            (c) 
 	
Subject to subparagraph 4(d), in the event your employment is terminated during the Restricted Period by reason of involuntary termination without Cause, a pro-rata portion of the Shares (based on the number of completed months elapsed since the Award Date) then subject to restrictions shall vest and become non-forfeitable and transferable as of the date of such termination.  
 

 

	
             
 	
(d) 
 	
Notwithstanding
any provision contained in this Agreement that would result in Shares vesting in full or in part at a later date, if,
in connection with any “Change of Control” (as defined in the Addendum), the acquiring Person, surviving or acquiring
corporation or entity, or an affiliate of such corporation or entity, elects to continue this Agreement in effect and to replace the
Shares with other equity securities that are registered under the Securities Act of 1933 and are freely transferable under all
applicable federal and state securities laws and regulations, the Shares then subject to restriction shall vest in full if, within
twelve months of the date of the Change of Control, 
 

	
             
 	
            (i) 
 	
Your employment with the Company (or any successor company or affiliated entity with which you are then employed) is terminated by the Company or such other employer without Cause, 
 

	
             
 	
            (ii) 
 	
Your employment with the Company (or any successor company or affiliated entity with which you are then employed) is terminated by you for “Good Reason” (as defined in the Addendum), or 
 

	
             
 	
            (iii) 
 	
Any earlier date provided under this Agreement. 
 

In the event of any such Change of
Control, the number of replacement equity securities shall be determined by multiplying the exchange ratio used in connection with
the Change of Control for determining the number of replacement equity securities issuable for the outstanding shares of
Deluxe’s common stock, or if there is no such ratio, an exchange ratio established or accepted by the Continuing Directors
(as defined in the Addendum) so as to preserve the same economic value in this Award as existed prior to the  

 

Ver. 2/07

Change of Control. In the event of any such Change of Control, all references herein to the Shares shall thereafter
be deemed to refer to the replacement equity securities, references to Deluxe shall thereafter be deemed to refer to the issuer of
such replacement equity securities, and all other terms of this Agreement shall continue in effect except as and to the extent
modified by this subparagraph. 

	
  
 	
(e) 
 	
If the Change of Control does not meet the continuation or replacement criteria specified in subparagraph 4(d) above, all Shares then subject to restriction shall vest in full immediately upon the Change of Control. 
 

	
5. 
 	
Forfeiture.  
 

	
             
 	
(a) 
 	
Subject to the provisions of Section 4, in the event your employment is terminated prior to the third anniversary of the Award Date, or you engage in a Forfeiture Activity (as defined below), your rights to all of the Shares then subject to restrictions shall be immediately and irrevocably forfeited. 
 

	
  
 	
(b) 
 	
If, at any time within 12 months after the date any portion of this Award has vested, you engage in any Forfeiture Activity (as defined below), then the value of the Shares received by you pursuant to such vesting must be paid to Deluxe within 30 days of demand by Deluxe. For purposes hereof, the value received by you shall be determined by multiplying the number of Shares that vested times the closing price on the New York Stock Exchange of a share of Deluxe’s common stock on the vesting date (without regard to any subsequent increase or decrease in the fair market value of such shares). 
 

	
             
 	
            (c)
 	
            As used herein, you shall be deemed to have engaged in a Forfeiture Activity if you (i) directly or indirectly, engage in any business activity on your own behalf or as a partner, stockholder, director, trustee, principal, agent, employee, consultant or otherwise of any person or entity which is in any respect in competition with or competitive with the Company or you solicit, entice or induce any employee or representative of the Company to engage in any such activity, (ii) directly or indirectly solicit, entice or induce (or assist any other person or entity in soliciting, enticing or inducing) any customer or potential customer (or agent, employee or consultant of any customer or potential customer) with whom you had contact in the course of your employment with the Company to deal with a competitor of the Company, (iii) fail to
hold in a fiduciary capacity for the benefit of the Company all confidential information, knowledge and data, including customer
lists and information, business plans and business strategy (“Confidential Data”) relating in any way to the business of
the Company for so long as such Confidential Data remains confidential, or (iv) are terminated by the Company for
Cause.
 

	
             
 	
            (d)
 	
If any court of competent
jurisdiction shall determine that the foregoing forfeiture provisions are invalid in any respect, the court so holding may limit
such provisions in any manner which the court determines such that the provision shall be enforceable against you.

	
             
 	
(e) 
 	
By accepting this Agreement, you consent to a deduction from any amounts Company owes you from time to time (including amounts owed to you as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to you by Company), to the extent of the amount you owe Company under the foregoing provisions. Whether or not Company elects to make any set-off in whole or in part, if Company does not recover by means of set-off the full amount you owe, calculated as set forth above, you agree to pay immediately the unpaid balance to Company. 
 

	
  
 	
(f)  
 	
You will be released from the forfeiture provisions of subparagraph (c)(i) in the event your employment with the Company has been involuntarily terminated without Cause due to a job elimination or other reduction in force. Otherwise, you may be released from the foregoing forfeiture provisions only if the Compensation Committee of the Deluxe Board (or is duly appointed agent) determines in its sole discretion that such action is in the best interests of Company.  
 

	
6. 
 	
Rights. Upon issuance of the Shares, you shall, subject to the restrictions of this Agreement and the Plan, have all of the rights of a shareholder with respect to the Shares, including the right to vote the Shares and receive any cash dividends and any other distributions thereon, unless and until the Shares are forfeited. Cash dividends will be paid to you at the time such dividends are paid on shares of Deluxe common stock, less any applicable tax withholding amounts, and may, at Deluxe’s discretion, be paid through its normal payroll process. 
 

	
            7. 
 	
Income Taxes. You are
liable for any federal and state income or other taxes applicable upon the grant of the Restricted Stock if you make an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended, within 30 days of the date of grant, or upon the lapse of
the restrictions on the Shares, and the subsequent disposition of the Shares, and you acknowledge that you should consult with
your own tax advisor regarding the applicable tax consequences. Upon the lapse of the restrictions on the Shares, you shall
promptly pay to Deluxe in cash, or in previously acquired shares of Deluxe common stock having a fair market value equal to the
amount of, all applicable taxes required by Deluxe to be withheld or collected upon the lapse of the restrictions on the Shares.
In the alternative, prior to the end of the Restricted Period, you may direct Deluxe to withhold from the Shares the number of
Shares having a fair market value equal to the amount of all applicable taxes required by Deluxe to be withheld upon the lapse of
the restrictions on the Shares. 
 

	
8. 
 	
Terms and Conditions. This Agreement does not guarantee your continued employment or alter the right of Deluxe or its affiliates to terminate your employment at any time. This Award is granted pursuant to the Plan and is subject to its terms. In the event of any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern. 
 

 

	
             
 	
             
 	
            DELUXE CORPORATION
 
	 
	
             
 	
             
 	
             
 
	
              
 	
             
 	
            By: 
 	
              
 
	
             
 	
             
 	
             
 	
             
 

ADDENDUM TO

PERFORMANCE ACCELERATED

RESTRICTED STOCK AWARD AGREEMENT

 

For the purposes hereof the terms used herein shall have the following meanings:

 

“Company” shall mean Deluxe and its Affiliates, as herein defined.

 

The “Performance Threshold” for purposes of section 4(a) of this Agreement shall be as follows: net cash provided by operating activities of continuing operations equal to or exceeding $___ million for the Company’s 20__ fiscal year, as derived from the Company’s Consolidated Statement of Cash Flows for the year ended December 31, 20__.

 

“Qualified Retirement” shall mean any termination of employment that the Compensation Committee of Deluxe’s Board of Directors approves as a qualified retirement, provided (i) you have at least twenty years of service with Deluxe and/or its Affiliates (“Service Years”), and (ii) the sum of your age and Service Years equals or exceeds seventy-five.

 

“Disability” shall mean your permanent disability as defined by the provisions of the long term disability plan of Deluxe or any Affiliate by which you are employed at the time of such disability. In the event that any such Affiliate does not have a long term disability plan in effect at such time, you shall be deemed disabled for the purposes hereof if you would have qualified for long term disability payments under Deluxe’s long term disability plan had you then been an employee of Deluxe.

 

“Cause” shall mean (i) you have breached
your obligations of confidentiality to Deluxe or any of its Affiliates; (ii) you have otherwise failed to perform your employment
duties and do not cure such failure within thirty (30) days after receipt of written notice thereof; (iii) you commit an act, or
omit to take action, in bad faith which results in material detriment to Deluxe or any of its
Affiliates; (iv) you have had excessive absences unrelated to illness or
vacation (“excessive” shall be defined in accordance with local employment customs); (v) you have committed fraud,
misappropriation, embezzlement or other act of dishonesty in connection with Deluxe or any of its Affiliates or its or their
businesses; (vi) you have been convicted or have pleaded guilty or nolo contendere to criminal misconduct constituting a felony or
a gross misdemeanor, which gross misdemeanor involves a breach of ethics, moral turpitude, or immoral or other conduct reflecting
adversely upon the reputation or interest of Deluxe or its Affiliates; (vii) your use of narcotics, liquor or illicit drugs has
had a detrimental effect on your performance of employment responsibilities; or (viii)You are in material default under any
agreement between you and Deluxe or any of its Affiliates following any applicable notice and cure period.

 

“Good Reason” shall mean (i) except with your written consent given in your discretion, (a) the assignment to you of any position and/or duties which represent or otherwise entail a material diminution in your position, authority, duties or responsibilities, or (b) any other action by the Company which results in a material diminution in your position (or positions) with the Company, excluding for this purposes an isolated, insubstantial or inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by you and excluding any diminution attributable solely to the fact that Deluxe is no longer a public company; (ii) any material reduction in your aggregate compensation and incentive opportunities, or any failure by the Company to comply with any other written agreement between you and the Company, other than an isolated,
insubstantial or inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by you; (iii) the Company’s requiring you to be based at any location more than 50 miles from your then current location; (iv) any purported termination by the Company of your employment which is not effected pursuant to a written notice of termination specifying the reasons for your termination and the manner by which such reasons constitute “Cause” (as defined herein); or (v) any request or requirement by the Company that you take any action or omit to take any action that is inconsistent with or in violation of the Company’s ethical guidelines and policies as the same existed within the 120-day period prior to the termination date or any professional ethical guidelines or principles that may be applicable to you.

 

A “Change of Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied:

 

 

	
            Addendum
 	
             
 
	
            Page 1 of 2
 	
            Ver. 2/07
 

ADDENDUM TO 

PERFORMANCE ACCELERATED

RESTRICTED STOCK AWARD AGREEMENT

 

	
             
 	
            (I) 
 	
            any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Deluxe representing 20% or more of the combined voting power of Deluxe’s then outstanding securities excluding, at the time of their original acquisition, from the calculation of securities beneficially owned by such Person, any securities acquired directly from Deluxe or its Affiliates or in connection with a transaction described in clause (a) of paragraph III below; or
 

 

	
             
 	
            (II) 
 	
            individuals who at the Grant Date constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Deluxe) whose appointment or election by the Board or nomination for election by Deluxe’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the Grant Date or whose appointment, election or nomination for election was previously so approved or recommended (such directors collectively being referred to as “Continuing Directors”), cease for any reason to constitute a majority thereof; or
 

 

	
             
 	
            (III) 
 	
            there is consummated a merger or consolidation of Deluxe or any Affiliate with any other company, other than (a) a merger or consolidation which would result in the voting securities of Deluxe outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of Deluxe or any Affiliate, at least 65% of the combined voting power of the voting securities of Deluxe or such surviving entity or parent thereof outstanding immediately after such merger or consolidation, or (b) a merger or consolidation effected to implement a recapitalization of Deluxe (or similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Deluxe representing 20% or more of the combined voting power of Deluxe’s then outstanding securities; or
 

 

	
             
 	
            (IV) 
 	
            the shareholders of Deluxe approve a plan of complete liquidation of Deluxe or there is consummated an agreement for the sale or disposition by Deluxe of all or substantially all Deluxe’s assets, other than a sale or disposition by Deluxe of all or substantially all of Deluxe’s assets to an entity, at least 65% of the combined voting power of the voting securities of which are owned by shareholders of Deluxe in substantially the same proportions as their ownership of Deluxe immediately prior to such sale.
 

 

Notwithstanding the foregoing, a “Change in
Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the common stock of Deluxe immediately prior to such transaction or
series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of Deluxe immediately following such transaction or series of transactions. 

 

“Person” shall have the meaning defined in Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934, as amended, except that such term shall not include (i) Deluxe or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Deluxe or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of Deluxe in substantially the same proportions as their ownership of stock of Deluxe. 

 

“Beneficial Owner” shall have the meaning defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

 

“Affiliate” shall mean a company controlled directly or indirectly by Deluxe, where “control” shall mean the right, either directly or indirectly, to elect a majority of the directors thereof without the consent or acquiescence of any third party.

 

Addendum

Page 2 of 2Agreement, General Release, And Confidentiality Statement

Exhibit 10.1

 

Agreement,
General Release, And Confidentiality Statement

 

This
Agreement, General Release, and Confidentiality Statement (“Agreement”), is
between HomeFederal
Bank
(“Bank”) and
S. Elaine
Pollert
(“Employee”), a
resident of Jackson County, Indiana.

 

Recitals

 

A. Employee’s
positions with the Bank and Home Federal Bancorp, the Bank’s sole shareholder
(the “Corporation”), will end effective February 16, 2007.

 

B. Bank
enters into this Agreement based solely on Employee’s representation that this
Agreement will resolve any and all claims Employee has or could have against
Bank for any issue relating to her employment or the separation of her
employment and that Employee has waived any right to pursue any claim or lawsuit
against Bank with respect to her employment, the separation of that employment,
or any other issue that arose prior to her execution of this
Agreement.

 

C. In an
effort to end the employment relationship on an amicable basis, and in
consideration of the mutual covenants, promises, and obligations contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Parties hereby agree as
follows:

 

Agreement

 

1.     Definition.
Throughout this Agreement, the term “Bank,” when capitalized and used alone,
shall encompass the following:

 

(a) Bank and
any other subsidiary, parent company, affiliated entity, related entity, or
division of any of the foregoing; and

 

(b) Any
current or former officer, director, trustee, agent, employee, insurer,
shareholder, representative, or employee benefit or welfare program or plan
(including the administrators, trustees, and fiduciaries of such program or
plan) of an entity referenced in or encompassed by subparagraph 1(a), whether
acting in their representative or individual status.

 

2.     Employment.
Employee’s positions and employment with, and authority to conduct business on
behalf of, the Bank and the Corporation shall terminate effective February 16,
2007. Employee agrees that as a condition of this Agreement, she will not seek
re-employment with Bank or the Corporation at any time and should she apply in
the future, her application for employment will not be considered by Bank or the
Corporation and will be null and void. Effective as of February 16, 2007,
Employee’s Employment Agreement with Bank and the Corporation dated December 17,
1996, as amended prior to the date hereof (the “Employment
Agreement”) shall
be terminated and no longer of any force or effect. Employee hereby waives and
releases any and all claims, demands, or causes of action against the Bank or
the Corporation, or its successors and/or assigns, or against the Bank’s or the
Corporation’s officers, employees, directors or agents, whether acting in their
representative or individual

 

 

capacity,
arising out of or in any way related to the Employment Agreement or the
termination of the Employment Agreement or as to any rights or benefits covered
by the Employment Agreement.

3.     Lump
Sum Payment. Bank, on
behalf of itself, its officers, directors, employees, and agents, shall pay
Employee (via wire transfer) the gross sum of Seven Hundred Fifty-Three Thousand
Four Hundred Thirty-One Dollars ($753,431.00), less all applicable taxes and
withholdings. The payment reflected in this Paragraph 3 shall be paid to
Employee via wire transfer six (6) months following the Effective Date of this
Agreement.

 

4.     Legal
Fees and Outplacement Services. In
addition, the Bank agrees to reimburse Employee for her attorney’s fees incurred
in connection with the matters that led to this Agreement and the negotiation of
this Agreement as well as for outplacement services utilized by Employee within
12 months following the Effective Date; provided, however, that in no event
shall the Bank be obligated for more than a total of Thirty Five Thousand
Dollars ($35,000.00) under this Paragraph 4.

 

5.     Health
Insurance.
Employee at her cost shall be entitled to any COBRA health benefits to which she
and her children are entitled under law (which would permit her and her
currently covered family members to continue their group health coverage for the
periods specified in COBRA, as a result of her termination of employment as of
the Effective Date). To the fullest extent permitted by law and the terms of the
applicable plans, she will be permitted to convert her Bank life insurance, long
term disability, and accidental death and dismemberment policies to personal
policies.

 

6.     Tax
Consequences and Other Matters. In
paying the amounts and benefits specified in Paragraphs 3, 4, 5, 8 and 9, makes
no representation as to the tax consequences or liability arising from said
payments and benefits. Moreover, the parties understand and agree that any tax
consequences and/or liability arising from the payments and benefits provided to
Employee shall be the sole responsibility of Employee. To this extent, Employee
acknowledges and agrees that she will pay any and all income taxes and
employment taxes which may be determined to be due from Employee in connection
with the payments and benefits described in Paragraphs 3, 4, 5, 8 and
9.

 

All
payments and benefits described in Paragraphs 3, 4, 5, 8 and 9 reflect
consideration provided to Employee over and above anything of value to which
Employee is already entitled.

 

7.     General
Release and Waiver of Claims.
Employee, for herself, her heirs, executors, and administrators, hereby releases
and discharges Bank, its officers, directors, employees, affiliates, insurers
and agents (either in their representative or individual capacity) from any
claim, demand, action, or cause of action, known or unknown, which arose at any
time from the beginning of time to the effective date of the Agreement and
waives all claims relating to, arising out of or in any way connected with her
employment with Bank or the cessation of that employment including, without
limitation, any claim, demand, action, cause of action, including money damages
and claims for attorneys’ fees, based on but not limited to:

 

(a) The Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), 29 U.S.C. § 621,
et
seq;

 

(b) The
Americans With Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12101, et
seq.;

 

2

 

(c) The
Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et
seq.;

 

(d) The
Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. § 2601, et
seq.;

 

(e) The Civil
Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981;

 

(f) The
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001,
et
seq.;

 

(g) Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e),
et
seq.;

 

(h) The Fair
Credit Reporting Act, 15 U.S.C. § 1681 et
seq.;

 

(i) The
Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et
seq.;

 

(j) The
Indiana Civil Rights Law, Ind. Code § 22-9-1-1, et
seq., the
Indiana wage payment statute, Ind. Code § 22-2-4-1, et
seq., and any
Indiana wage law;

 

(k) Any
existing or potential entitlement under any Bank program or plan, including
wages or other paid leave;

 

(l) Any
existing or potential agreement, contract, representation, policy, procedure, or
statement (whether any of the foregoing are express or implied, oral or
written); and 

 

(m) Claims
arising under any other federal, state and local fair employment practices law,
disability benefits law, and any other employee or labor relations statute,
executive order, law or ordinance, and any duty or other employment-related
obligation, claims arising from any other type of statute, executive order, law
or ordinance, claims arising from contract or public policy, as well as tort,
tortious cause of conduct, breach of implied covenant of good faith and fair
dealing, breach of contract, intentional infliction of emotional distress,
negligence, discrimination, harassment, and retaliation, together with all
claims for monetary and equitable relief, punitive and compensatory relief and
attorneys’ fees and costs.

 

Employee
understands and agrees that she is releasing Bank from any and all claims by
which she is giving up the opportunity to recover any compensation, damages, or
any other form of relief in any proceeding brought by Employee or on Employee’s
behalf. This Paragraph and this Agreement shall not operate to waive or bar any
claim or right which -- by express and unequivocal terms of law -- may not under
any circumstances be waived or barred. Notwithstanding the foregoing, this
Agreement is not intended to operate as a waiver of any retirement or pension
benefits that are vested (including Employee’s benefits under her Supplemental
Executive Retirement Agreements with the Bank dated April 1, 2001, and November
28, 2005)(collectively “SRP”), the eligibility and entitlement to which shall be
governed by the terms of the applicable plan. Employee shall also be indemnified
under the Bank’s or Home Federal Bancorp’s articles of incorporation, as well as
covered by the Bank’s 

 

3

Directors
and Officers Liability Policy, to the same extent as any other former officer of
the Bank. Moreover, this Agreement shall not operate to waive rights or claims
under the ADEA if those rights or claims arise after the date Employee signs
this Agreement, nor preclude Employee from challenging the validity of the
Agreement under the ADEA. Before December 31, 2007, Bank and Employee agree to
enter into any amendments to the SRP that may be required to avoid adverse tax
consequences under Section 409A of the Internal Revenue Code. 

 

With the
exception of any claims arising under this Agreement or after the Effective Date
of this Agreement, the Bank hereby irrevocably and unconditionally releases and
forever discharges Employee from all claims, liabilities, or obligations arising
out of facts known to the Bank’s Board of Directors as of the date hereof
concerning Employee’s employment by, or service as an officer of, the Bank or
the Corporation.

 

8.     LTIP. The
Bank hereby agrees to pay to Employee the pro rata amount (based on the number
of full months in which she was employed during the Performance Period (as
defined in Home Federal Bancorp’s Long-Term Incentive Plan (the “LTIP”)) of any
Final Award (as defined in the LTIP) attributable to awards made in 2005 and
2006 to which she would have been entitled had she remained employed through
December 31, 2008. Thus, she will be entitled to 25/36 of any Final Award made
with respect to her award made in 2005 and 13/36 of any Final Award made with
respect to her award made in 2006. Those pro rata portions of awards will be
paid in a lump sum in cash at the same time other such awards for such years are
paid under the LTIP to other executive officers of the Bank, with an appropriate
written explanation thereof, and shall be subject to appropriate withholdings
for employment tax purposes.

 

9.     Stock
Options. Employee
acknowledges that she has no right to exercise her non-vested options for 15,406
shares of the Corporation’s common stock. On or before February 16, 2007,
Employee has the right to exercise her stock options for an aggregate of 78,744
shares of the Corporation’s common stock granted to her under the Corporation’s
stock option plans. In order to effect a “cashless exercise” of these options
for 78,744 shares, Employee hereby exercises such options as of February 16,
2007, for the aggregate exercise option price of $1,715,723 and hereby sells the
78,744 shares acquired upon exercise of such options to the Corporation, and the
Corporation hereby accepts such exercise as being a valid exercise under all
relevant plan and grant documents, and hereby purchases such 78,744 shares from
Employee for $28.75 per share, or an aggregate purchase price of $2,263,890. To
effect these two offsetting transactions on a net basis, the Corporation shall
pay Employee a lump sum cash payment of $548,167 (less applicable withholding
and employment taxes), at which point the stock options shall be terminated and
no longer in effect and the 78,744 shares shall be deemed repurchased and
restored to the status of authorized but unissued shares. Such payment shall be
made to Employee by the Corporation, via wire transfer on February 16, 2007.
Employee understands that any taxes required to be withheld as the result of
Employee’s exercise of these stock options will be deducted from the payment to
be made to Employee under Section 0 of this
Agreement. The Corporation represents and warrants to Employee that the
transactions described by this Section 0 have
been approved by the Corporation’s Board of Directors. 

 

10.     Disclaimer
of Liability. This
Agreement is not to be construed as an admission of liability or wrongdoing by
either party, but is entered into in an effort to provide Employee with a
severance package and to end the parties’ employment relationship on an amicable
basis.

 

11.     Return
of Property.
Employee certifies and declares that she has returned to the custody of Bank or
will return within two days of the Effective Date hereof, all company

 

4

property
and documents, as well as any copies of company property and documents, in her
possession. The phrase “company documents” is defined to include any writings,
contracts, records, files, tape recordings, correspondence, photographs,
communications, summaries, data, notes, memoranda, diskettes, or any other
source containing information which relates to or references Bank and which was
provided by Bank or obtained as a result of Employee’s relationship/employment
with Bank.

12.     Confidentiality
Obligations. Employee
agrees that the information she obtained as a result of her position with Bank
was sensitive, private, proprietary, and/or confidential information. Employee
hereby agrees that (i) she will keep all such information confidential and (ii)
she will not volunteer or disclose any such information to anyone without first
obtaining express authorization to do so from the undersigned representative of
Bank. For purposes of this Agreement, “proprietary” or “confidential”
information would include, but is not limited to (whether written or not), trade
secrets (as defined by applicable law), all information about Bank’s services
and programs, products, systems, manuals, processes, research, operations,
customers and/or customer or prospective customer lists, personnel, finances,
purchasing, costs, marketing plans, sales plans, sales, formulas, inventions,
vendor lists, contracts, licenses, strategic and financial plans, financial
reports, revenue information, margins, quotations, commission information,
pricing, credit history and credit terms, engineering specifications, business
methods or strategies, future business plans, databases, software, computer
programs and other business aspects of Bank which are not generally known to the
public and/or which provide Bank with a competitive advantage. Employee will not
make any legally impermissible statements or representations that disparage,
demean, or impugn the Bank or the Corporation, including, without limitation,
any legally impermissible statements impugning the personnel or professional
character of any director, officers, employee, or consultant for the Bank. The
Bank will take all reasonable efforts to make certain that its board members and
officers will not make any legally impermissible statements or representations
that disparage, demean, or impugn Employee, including, without limitation, any
legally impermissible statements impugning the personal or professional
character of Employee. Further, the Bank agrees to provide a truthful,
favorable, letter of reference on the letterhead of the Bank, in the form set
forth and attached hereto as “Exhibit A,” to be finalized and signed by a Board
Member and delivered to Employee within ten (10) days of the date of this
Agreement.

 

13.     Covenant
Against Soliciting Employees. From
the date Employee receives this Agreement through a period of twelve (12) months
following the Effective Date of this Agreement, Employee agrees not to employ,
solicit for employment, advise, or recommend to any employee of the Bank or any
person known by Employee to be a prospective employee of the Bank, that the
employee or prospective employee modify his/her employment with or work for any
person, firm, association, syndicate, company, corporation, or other entity
other than the Bank. Employee agrees during the same aforementioned time-frame
not to advise or recommend to any other persons, businesses, or entities that
they hire any current employees of Bank or any persons known by Employee to be a
prospective employee of Bank.

 

14.     Successors. This
Agreement shall apply to, be binding upon, and inure to the benefit of, the
predecessors, successors, and assigns of Bank and each past, present, or future
employee, agent, representative, officer, or director of Bank and any division,
subsidiary, parent, or affiliated entity.

 

15.     Severability. The
parties acknowledge and agree that the provisions of this Agreement are both
reasonable and enforceable. However, the provisions of this Agreement
are

 

5

severable,
and the invalidity of any one or more provisions shall not affect or limit the
enforceability of the remaining provisions. In the unlikely event, therefore,
that a court of competent jurisdiction determines that any of the terms,
provisions, or covenants of the Agreement are unreasonable, the court shall
limit the application of any such term, provision or covenant, or modify such
term, provision or covenant and proceed to enforce those terms as so limited or
modified.

16.     Applicable
Law/Enforcement. This
Agreement shall be interpreted, enforced, and governed under the laws of
Indiana. If any legal action or other proceeding is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any provisions of this Agreement, the
non-breaching party or parties shall be entitled to recover from the breaching
party any reasonable attorney fees, court costs and all expenses, even if not
taxable as court costs (including, without limitation, all such fees, costs and
expenses incident to appeals) incurred in that action or proceeding, in addition
to any other relief to which such party or parties may be entitled.

 

17.     Nonwaiver. The
waiver by Bank of a breach of any provision of this Agreement by Employee shall
not operate or be construed as a waiver of any subsequent breach by Employee.
The waiver by Employee of a breach of any provision of this Agreement by Bank
shall not operate or be construed as a waiver of any subsequent breach by
Bank.

 

18.     Knowledge
and Understanding.
Employee declares, that:

 

(a) She has
been and is hereby advised to consult with her attorney prior to executing this
Agreement and she has done so;

 

(b) She has
been given a period of twenty-one (21) days within which to consider this
Agreement and has waived said time period; 

 

(c) She has
availed herself of all opportunities she deems necessary to make a voluntary,
knowing, and fully informed decision; and

 

(d) She is
fully aware of her rights and has carefully read and fully understands all
provisions of this Agreement before signing.

 

This
notice is provided in accordance with the ADEA.

 

19.     Effective
Date. If
Employee consents to and signs this Agreement within twenty-one (21) days of
receipt, Employee shall have an additional seven (7) days after signing the
Agreement to revoke it. Employee expressly states that if she executes this
Agreement before the expiration of the 21-day period, such execution is knowing,
voluntary, and done on the advice of counsel. Any revocation shall be in writing
and faxed to the attention of John Beatty at 812-522-5640. This Agreement shall
not become effective, therefore, and none of the benefits set forth in this
Agreement shall become effective until the 8th day
after Employee executes this Agreement (the “Effective
Date”).

 

Because
Employee and her Counsel have reviewed this Agreement, the normal rule that
ambiguity should be construed against the drafting party shall not be employed
in the interpretation of this Agreement.

 

20.     Complete
Agreement. This
Agreement sets forth the complete agreement between the parties. Notwithstanding
the foregoing, nothing in this Agreement is intended to or

 

6

shall
limit, supersede, nullify, or affect any duty or responsibility Employee may
have or owe to Bank by virtue of any separate agreement or otherwise. Employee
represents and acknowledges that in executing this Agreement she does not rely
and has not relied upon any representations or statements not set forth herein
made by Bank or any of its employees, agents, representatives, officers, or
directors with regard to the subject matter, basis, or effect of this Agreement
or otherwise. Bank hereby represents and warrants that it has authority to sign
on behalf of the Corporation and to bind the Corporation to the Corporation’s
obligations hereunder.

(signature
page follows)

7

 

BY
SIGNING THIS RELEASE, I STATE THAT: I HAVE READ IT; I UNDERSTAND IT AND KNOW
THAT I AM GIVING UP IMPORTANT RIGHTS; I AGREE TO ALL THE TERMS CONTAINED WITHIN
THE AGREEMENT; I AM AWARE OF MY RIGHT TO CONSULT WITH MY ATTORNEY BEFORE SIGNING
IT; I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.

 

The
parties have each executed this Agreement on the dates indicated
below.

 

	 /s/
      S. Elaine Pollert	 	
      HomeFederal
      Bank

	
      Employee
	 	 	 
	 	 	
      By:
	 /s/
      Harold Force
	 	 	 	
       

      Its
      Authorized Representative

	 	 	 
	
      Dated:
      February 16,
      2007                             
	 	
      Dated:
      February 16, 2007                

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}]]