HOME FEDERAL BANK THIRD AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT
HOME
FEDERAL BANK
THIRD
AMENDED AND RESTATED
THIS THIRD AMENDED AND RESTATED SALARY
CONTINUATION AGREEMENT (the “Agreement”) is adopted this 21st day of
April, 2009, by and between HOME FEDERAL BANK, a federally-chartered savings
bank located in Nampa, Idaho (the “Bank”), and ▇▇▇▇▇▇ ▇. ▇▇▇▇ (the
“Executive”).
This
Agreement amends and restates the prior HOME FEDERAL SAVINGS & LOAN
ASSOCIATION SALARY CONTINUATION AGREEMENT between the Bank and the Executive
dated December 17, 2007, (the “Prior Agreement”) and all subsequent
amendments.
This
Agreement is amended and restated to reflect a change in the Change in Control
Benefit, herein defined, and to include certain definitional terms.
The
purpose of this Agreement is to provide specified benefits to the Executive, a
member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development and future business
success of the Bank. This Agreement shall be unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended from time to time.
Article
1
Definitions
Whenever used in this Agreement, the
following words and phrases shall have the meanings specified:
|
1.1
|
“Accrual
Balance” means the liability that should be accrued by the Bank,
under Generally Accepted Accounting Principles (“GAAP”), for the Bank’s
obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion Number 12 as amended by Statement of Financial
Accounting Standards Number 106 and the Discount Rate. Any one
of a variety of amortization methods may be used to determine the Accrual
Balance. However, once chosen, the method must be consistently
applied.
|
|
1.2
|
“Beneficiary”
means each designated person or entity, or the estate of the deceased
Executive, entitled to any benefits upon the death of the Executive
pursuant to Article 4.
|
|
1.3
|
“Beneficiary
Designation Form” means the form established from time to time by
the Plan Administrator that the Executive completes, signs and returns to
the Plan Administrator to designate one or more
Beneficiaries.
|
|
1.4
|
“Board” means
the Board of Directors of the Company as from time to time
constituted.
|
|
1.5
|
“Change in
Control” means
|
|
(i)
|
Any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other
than the Company or any person (as hereinafter defined) acting on behalf
of the Company as underwrite pursuant to an offering who is temporarily
holding securities in connection with such offering, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the “beneficiary owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of the combined
voting power of the Company’s then outstanding
securities;
|
|
(ii)
|
Individuals
who were members of the Board on the Commencement Date (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof,
provided that any
person becoming a director subsequent to the Commencement Date whose
election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board or whose nomination for election
by the Company’s stockholders was approved by the nominating committee
serving under an Incumbent Board or who as appointed as a result of a
change at the direction of the OTS or the FDIC, shall be considered a
member of the Incumbent Board;
|
|
(iii)
|
The
stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (1) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no person (as hereinabove defined) acquires more
than 25% of the combined voting power of the Company’s then outstanding
securities; or
|
|
(iv)
|
The
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets (or any transaction having a
similar effect); provided that the term
“Change in Control” shall not include an acquisition of securities by an
employee benefit plan of the Bank or the Company or a change in the
composition of the Board at the direction of the OTS or the
FDIC.
|
|
|
Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred
in the event of a conversion of the Company’s mutual holding company to
stock form or in connection with any reorganization or action used to
effect such conversion (the “Conversion”). Furthermore, neither
the Conversion nor any transaction related to or occurring in connection
therewith, shall constitute a Change in Control
event.
|
|
1.6
|
“Change in Control
Benefit” means the benefit described in Section
2.4.
|
|
1.7
|
“Code” means the
Internal Revenue Code of 1986, as amended, and all regulations and
guidance thereunder, including such regulations and guidance as may be
promulgated after the Effective Date of this
Agreement.
|
|
1.8
|
“Commencement
Date” means the date the conversion of the Bank from the mutual to
stock form of organization was
completed.
|
|
1.9
|
“Company” means
Home Federal Bancorp, Inc., a Federal Corporation. Upon the
effective time of the Conversion (as previously defined), the Company
shall mean Home Federal Bancorp, Inc., a Maryland
corporation.
|
|
1.10
|
“Disability”
means the Executive’s suffering a sickness, accident or injury which has
been determined by the insurance carrier of any individual or group
disability insurance policy covering the Executive, or by the Social
Security Administration, to be a disability rendering the Executive
totally and permanently disabled. The Executive must submit
proof to the Plan Administrator of the insurance carrier’s or Social
Security Administration’s determination upon the request of the Plan
Administrator.
|
|
1.11
|
“Disability
Benefit” means the benefit described in Section
2.3.
|
|
1.12
|
“Discount Rate”
means, solely for purposes of this Agreement,
7.50%.
|
|
1.13
|
“Early
Retirement” means Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for
Cause or Involuntary Termination.
|
|
1.14
|
“Early Retirement
Benefit” means the benefit described in Section
2.2.
|
|
1.15
|
“Early Retirement
Date” means the month, day and year in which Early Retirement
occurs.
|
|
1.16
|
“Effective Date”
means January 1, 2008.
|
|
1.17
|
“Final Salary”
means the average of the Executive’s final thirty-six (36) months of base
salary.
|
|
1.18
|
“Involuntary
Termination” means the Executive has been notified in writing by
the Bank of a Termination of Employment before Normal Retirement Age for
reasons other than due to death, Disability, Early Retirement or
Termination for Cause.
|
|
1.19
|
“Normal Retirement
Age” means the Executive’s sixty-fifth (65th)
birthday.
|
|
1.20
|
“Normal Retirement
Benefit” means the benefit described in Section
2.1.
|
|
1.21
|
“Plan
Administrator” means the plan administrator described in Article
8.
|
|
1.22
|
“Plan Year”
means each twelve (12) month period commencing on October 1st
and ending on September 30th
of each year. The initial Plan Year shall commence on the
Effective Date and end on the following September
30.
|
|
1.23
|
“Projected
Benefit” means the annual Normal Retirement Benefit the Executive
would have received under Section 2.1.1 if the Executive survived until
Normal Retirement Age, assuming the Executive’s base salary increased at
an annual rate of four percent (4%) from the date of death until Normal
Retirement Age.
|
|
1.24
|
“Specified
Employee” means a key employee (as defined in Section 419(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as determined by the Plan Administrator based on the twelve
(12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification
period.
|
|
1.25
|
“Termination
for Cause “means termination of the employment of the Employee because of
the Employee's personal dishonesty, incompetence, willful misconduct,
breach of a fiduciary duty involving personal profit, intentional failure
to perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this
Agreement. No act or failure to act by the Employee shall be considered
willful unless the Employee acted or failed to act with an absence of good
faith and without a reasonable belief that his action or failure to act
was in the best interest of the Company or the Bank. The Employee shall
not be deemed to have been Terminated for Cause unless and until there
shall have been delivered to the Employee a copy of a resolution, duly
adopted by the Board of Directors at a meeting of the Board duly called
and held for such purpose (after reasonable notice to the Employee and an
opportunity for the Employee, together with the Employee's counsel, to be
heard before the Board), stating that in the good faith opinion of the
Board of Directors the Employee has engaged in conduct described in
the
|
|
|
preceding
sentence and specifying the particulars thereof in
detail.
|
|
1.26
|
“Termination
of Employment” means
termination of the Executive’s employment with the Bank for reasons other
than death or Disability. Whether a Separation from Service has
occurred is determined in accordance with the
requirements of Code Section 409A based on whether the facts and
circumstances indicate that the Bank and Executive reasonably anticipated
that no further services would be performed after a certain date or that
the level of bona fide services the Executive would perform after such
date (whether as an employee or as an independent contractor) would
permanently decrease to no more than twenty percent (20%) of the average
level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding thirty-six (36)
month period (or the full period of services to the Bank if the Executive
has been providing services to the Bank less than thirty-six (36)
months).
|
|
1.27
|
“Vested Accrual
Balance” means the following vesting schedule applied to the
Accrual Balance:
|
|
Plan
Year
|
Vested
Percentage
|
|
1
|
10%
|
|
2
|
20%
|
|
3
|
30%
|
|
4
|
40%
|
|
5
|
50%
|
|
6
|
60%
|
|
7
|
70%
|
|
8
|
80%
|
|
9
|
90%
|
|
10+
|
100%
|
Article
2
Distributions
During Lifetime
|
2.1
|
Normal Retirement
Benefit. Upon Termination of Employment on or after
Normal Retirement Age for reasons other than death, the Bank shall pay to
the Executive the benefit described in this Section 2.1 in lieu of any
other benefit under this Article.
|
|
2.1.1
|
Amount of
Benefit. The annual benefit under this Section 2.1 is
fifty percent (50%) of Final
Salary.
|
|
2.1.2
|
Payment of
Benefit. The Bank shall pay the annual Normal Retirement
Benefit to the Executive in twelve (12) equal monthly installments
commencing with the first of the month following Termination of
Employment. The annual Normal Retirement Benefit shall be paid
to the Executive for a period of fifteen (15)
years.
|
|
2.2
|
Early Retirement
Benefit. Upon Early Retirement, the Bank shall pay to
the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Article.
|
|
2.2.1
|
Amount of
Benefit. The Early Retirement Benefit under this Section
2.2 is the Vested Accrual Balance as of the end of the month prior to the
Early Retirement Date.
|
|
2.2.2
|
Payment of
Benefit. The Bank shall pay the Early Retirement Benefit
to the Executive in one hundred eighty (180) equal monthly installments,
crediting interest equal to the Discount Rate compounded monthly on the
unpaid Vested Accrual Balance, commencing with the first of the month
following Normal Retirement Age.
|
|
2.3
|
Disability
Benefit. Upon
Disability prior to Normal Retirement Age, the Bank shall pay to the
Executive the benefit described in this Section 2.3 in lieu of any other
benefit under this Article.
|
|
2.3.1
|
Amount of
Benefit. The
Disability Benefit under this Section 2.3 is one hundred percent (100%) of
the Accrual Balance as of the end of the month prior to
Disability.
|
|
2.3.2
|
Payment of
Benefit. The Bank shall pay the Disability Benefit to
the Executive in one hundred eighty (180) equal monthly installments,
crediting interest equal to the Discount Rate compounded monthly on the
unpaid Accrual Balance, commencing with the first of the month following
Disability.
|
|
2.4
|
Change in Control
Benefit. Upon Involuntary Termination within twenty-four
(24) months following a Change in Control, the Bank shall pay to the
Executive the benefit described in this Section 2.4 (subject to Section
2.4.3) in lieu of any other benefit under this
Article.
|
|
2.4.1
|
Amount of
Benefit. The Change
in Control Benefit under this Section 2.4 is one hundred percent (100%) of
the Accrual Balance as of the end of the month prior to the Change in
Control.
|
|
2.4.2
|
Payment of
Benefit. The Bank shall
pay the Change in Control Benefit to the Executive in one hundred eighty
(180) equal monthly installments, crediting interest equal to the Discount
Rate compounded monthly on the unpaid Accrual Balance, commencing with the
first of the month following Normal Retirement
Age.
|
|
2.4.3
|
Excess Parachute
Payment. Notwithstanding any other provision of this
Agreement, if payments and the value of benefits received or to be
received under
|
|
|
this
Agreement, together with any other amounts and the value of benefits
received or to be received by the Executive, would cause any amount to be
nondeductible by the Company or any of the Consolidated Subsidiaries for
federal income tax purposes pursuant to or by reason of Section 280G of
the Code, then payments and benefits under this Agreement shall be reduced
(not less than zero) to the extent necessary to as to maximize amounts and
the value of benefits to be received by the Executive without causing any
amount to become nondeductible pursuant to or by reason of Section 280G of
the Code. For this purpose, the term “Consolidated
Subsidiaries” means any subsidiary or subsidiaries of the Company (or its
successors) that are part of the affiliated group (as defined in Section
1054 of the Code, without regard to subsection (b) thereof) that includes
the Bank, including but not limited to the
Company.
|
|
2.5
|
Restriction on Timing
of Distributions. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Termination of Employment, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Termination of Employment occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Termination of Employment, rather, any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Termination of Employment. All
subsequent distributions shall be paid in the manner
specified.
|
|
2.6
|
Distributions Upon
Income Inclusion Under Section 409A of the Code. If any amount is
required to be included in income by the Executive prior to receipt due to
a failure of this Agreement to meet the requirements of Code Section 409A
and related Treasury guidance or Regulations, the Executive may petition
the Plan Administrator for a distribution of that portion of the Accrual
Balance that is required to be included in the Executive’s
income. Upon the grant of such a petition, which grant shall
not be unreasonably withheld, the Bank shall distribute to the Executive
immediately available funds in an amount equal to the portion of the
Accrual Balance required to be included in income as a result of the
failure of this Agreement to meet the requirements of Code Section 409A
and related Treasury guidance or Regulations, within ninety (90)
days. Such a distribution shall affect and reduce the
Executive’s benefits to be paid under this
Agreement.
|
|
2.7
|
Change in Form or
Timing of Distributions. All changes in the form or timing of
distributions hereunder must comply with the following
requirements. The
changes:
|
|
|
|
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Sections 2.2 and 2.4, be made at least
twelve (12) months prior to the first scheduled
distribution;
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
|
(c)
|
must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be made; and
|
|
(d)
|
must
take effect not less than twelve (12) months after the amendment is
made.
|
Article
3
Distribution
at Death
|
3.1
|
Death During Active
Service. If the Executive dies while in the active
service of the Bank, the Bank shall pay to the Beneficiary the benefit
described in this Section 3.1. This benefit shall be paid in
lieu of the benefits under Article 2, and in lieu of any other benefits
under this Article.
|
|
3.1.1
|
Amount of
Benefit. The benefit under this Section 3.1 is Projected
Benefit.
|
|
3.1.2
|
Payment of
Benefit. The Bank shall pay the annual benefit to the
Beneficiary in twelve (12) equal monthly installments commending with the
first of the month following the Executive’s death. The annual
benefit shall be paid to the Beneficiary for a period of fifteen (15)
years.
|
|
3.2
|
Death During Payment
of a Benefit. If the Executive dies after any benefit
payments have commenced under Article 2 of this Agreement but before
receiving all such payments, the Bank shall pay the remaining benefits to
the Beneficiary at the same time and in the same amounts they would have
been paid to the Executive had the Executive
survived.
|
|
3.3
|
Death After
Termination of Employment But Before Payment of a Benefit
Commences. If the Executive
is entitled to any benefit payments under Article 2 of this Agreement, but
dies prior to the commencement of said benefit payments, the Bank shall
pay the same benefit payments to the Beneficiary that the Executive was
entitled to prior to death except that the benefit payments shall commence
on the first day of the month following the date of the Executive’s
death.
|
Article
4
Beneficiaries
|
4.1
|
Beneficiary
Designation. The Executive shall have the right, at any
time, to designate a Beneficiary to receive any benefit distributions
under this Agreement upon the death of the Executive. The
Beneficiary designated under this Agreement may be the same as or
different from the beneficiary designation under any other benefit plan of
the Bank in which the Executive
participates.
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
|
4.2
|
Beneficiary
Designation; Change. The Executive shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form and
delivering it to the Plan Administrator or its designated
agent. The Executive’s Beneficiary designation shall be deemed
automatically revoked if the Beneficiary predeceases the Executive or if
the Executive names a spouse as Beneficiary and the marriage is
subsequently dissolved. The Executive 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 Executive and accepted
by the Plan Administrator prior to the Executive’s
death.
|
|
4.3
|
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.
|
|
4.4
|
No Beneficiary
Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive’s spouse shall be the designated
Beneficiary. If the Executive has no surviving spouse, any
benefit shall be paid to the personal representative of the Executive's
estate.
|
|
4.5
|
Facility of
Payment. If the Plan Administrator determines in its
discretion that a benefit is to be distributed 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 payment 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 payment of a benefit shall be
a payment for the account of the Executive and the Executive’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under this Agreement for such payment
amount.
|
Article
5
General
Limitations
|
5.1
|
Suicide or
Misstatement. The Bank shall not pay any benefit under
this Agreement if the Executive commits suicide within two years after the
Effective Date. In addition, the Bank shall not pay any benefit
under this Agreement if the Executive has made any material misstatement
of fact on any application for life insurance owned by the Bank on the
Executive’s life.
|
Article
6
Claims
And Review Procedures
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
|
6.1
|
Claims
Procedure. An Executive or Beneficiary (“claimant”) who
has not received benefits under this Agreement that he or she believes
should be distributed shall make a claim for such benefits as
follows:
|
|
6.1.1
|
Initiation – Written
Claim. The claimant initiates a claim by submitting to
the Plan Administrator a written claim for the benefits. If
such a claim relates to the contents of a notice received by the claimant,
the claim must be made within sixty (60) days after such notice was
received by the claimant. All other claims must be made within
one hundred eighty (180) days of the date on which the event that
caused the claim to arise occurred. The claim must state with
particularity the determination desired by the
claimant.
|
|
6.1.2
|
Timing of Plan
Administrator Response. The Plan
Administrator shall respond to such claimant within ninety (90) days after
receiving the claim. If the Plan Administrator determines that
special circumstances require additional time for processing the claim,
the Plan Administrator can extend the response period by an additional
ninety (90) days by notifying the claimant in writing, prior to the end of
the initial ninety (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 Plan Administrator expects to
render its decision.
|
|
6.1.3
|
Notice of
Decision. If the Plan Administrator denies part or all
of the claim, the Plan Administrator shall notify the claimant in writing
of such denial. The Plan Administrator 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 this 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;
|
|
|
(d)
|
An
explanation of this Agreement’s review procedures and the time limits
applicable to such procedures; and
|
|
|
(e)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
|
|
6.2
|
Review
Procedure. If the Plan Administrator denies part or all
of the claim, the claimant shall have the opportunity for a full and fair
review by the Plan Administrator of the denial as
follows:
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
|
6.2.1
|
Initiation – Written
Request. To initiate the review, the claimant, within
sixty (60) days after receiving the Plan Administrator’s notice of denial,
must file with the Plan Administrator a written request for
review.
|
|
6.2.2
|
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 Plan Administrator shall
also provide the claimant, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the claimant’s
claim for benefits.
|
|
6.2.3
|
Considerations on
Review. In considering the review, the Plan
Administrator 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.
|
|
6.2.4
|
Timing of Plan
Administrator Response. The Plan Administrator shall
respond in writing to such claimant within sixty (60) days after receiving
the request for review. If the Plan Administrator determines
that special circumstances require additional time for processing the
claim, the Plan Administrator can extend the response period by an
additional sixty (60) days by notifying the claimant in writing, prior to
the end of the initial sixty (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 Plan Administrator expects to
render its decision.
|
|
6.2.5
|
Notice of
Decision. The Plan Administrator shall notify the
claimant in writing of its decision on review. The Plan
Administrator 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 this Agreement on which the denial
is based;
|
|
|
(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 (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits;
and
|
|
|
(d)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
Article
7
Amendments
and Termination
|
7.1
|
Amendments. This
Agreement may be amended only by a written agreement signed by the Bank
and the Executive. However, the Bank may unilaterally amend
this Agreement to conform with written directives to the Bank from its
auditors or banking regulators or to comply with legislative changes or
tax law, including without limitation Section 409A of the Code and any and
all Treasury regulations and guidance promulgated
thereunder.
|
|
7.2
|
Plan Termination
Generally. This Agreement may be terminated only by a
written agreement signed by the Bank and the Executive. The
benefit hereunder shall be the Accrual Balance as of the date the
Agreement is terminated. Except as provided in Section 7.3, the
termination of this Agreement shall not cause a distribution of benefits
under this Agreement. Rather, after such termination benefit
distributions will be made at the earliest distribution event permitted
under Article 2 or Article 3.
|
|
7.3
|
Plan Terminations
Under Section 409A. Notwithstanding anything to the
contrary in Section 7.2, if this Agreement terminates in the following
circumstances:
|
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a change in the
ownership or effective control of the Bank, or in the ownership of a
substantial portion of the assets of the Bank as described in Section
409A(2)(A)(v) of the Code, provided that all distributions are made no
later than twelve (12) months following such termination of this Agreement
and further provided that all the Bank's arrangements which are
substantially similar to this Agreement are terminated so the
Executive and all participants in the similar arrangements are
required to receive all amounts of compensation deferred under the
terminated arrangements within twelve (12) months of such
termination;
|
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under this Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
this Agreement terminates; (ii) the calendar year in which the amount is
no longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
|
(c)
|
Upon
the Bank’s termination of this and all other plans which are substantially
similar to this Agreement (as referenced in Section 409A of the Code or
the regulations thereunder), provided that all distributions are made no
earlier than twelve (12) months and no later than twenty-four (24) months
following such termination, and the Bank does not adopt any new plans
which are substantially similar to this Agreement for a minimum of five
(5) years following the date of such
termination;
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
the Bank
may distribute the Accrual Balance, determined as of the date of the termination
of this Agreement, to the Executive in a lump sum subject to the above terms.
This Section 7.3 shall be administered and interpreted in a manner consistent
with Section 409A.
Article
8
Administration
of Agreement
|
8.1
|
Plan Administrator
Duties. This Agreement shall be administered by the Plan
Administrator which shall consist of the Board, or such committee or
person(s) as the Board shall appoint. The Executive may be a
member of the Plan Administrator. 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 questions 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 questions 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. No Executive or Beneficiary shall be deemed to
have any rights, vested or nonvested, regarding the continued use of any
previously adopted assumptions, including but not limited to the Discount
Rate.
|
|
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 Executive’s Final
Salary, the date and circumstances of the retirement, Disability, death or
Termination of Employment of the Executive, and such other pertinent
information as the Plan Administrator may reasonably
require.
|
|
8.6
|
Annual
Statement. The Plan Administrator shall provide to the
Executive, within ninety (90) days after the end of each Plan Year, a
statement setting forth the benefits payable under this
Agreement.
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
Article
9
Miscellaneous
|
9.1
|
Binding
Effect. This Agreement shall bind the Executive and the
Bank and their beneficiaries, survivors, executors, administrators and
transferees.
|
|
9.2
|
No Guarantee of
Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank's right to
discharge the Executive. It does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
|
|
9.3
|
Non-Transferability. Benefits
under this Agreement cannot be sold, transferred, assigned, pledged,
attached or encumbered in any
manner.
|
|
9.4
|
Tax
Withholding. The Bank shall withhold any taxes that, in
its reasonable judgment, are required to be withheld from the benefits
provided under this Agreement. The Executive acknowledges that
the Bank’s sole liability regarding taxes is to forward any amounts
withheld to the appropriate taxing
authorities.
|
|
9.5
|
Applicable
Law. This Agreement and all rights hereunder shall be
governed by the laws of the State of Idaho, except to the extent preempted
by the laws of the United States of
America.
|
|
9.6
|
Unfunded
Arrangement. The Executive and Beneficiary are general
unsecured creditors of the Bank for the payment 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 Executive's life is a general
asset of the Bank to which the Executive and Beneficiary have no preferred
or secured claim.
|
|
9.7
|
Reorganization. The Bank shall
not merge or consolidate into or with another company, or reorganize, or
sell substantially all of its assets to another company, firm or person
unless such succeeding or continuing company, firm or person agrees to
assume and discharge the obligations of the Bank under this
Agreement. Upon the occurrence of such an event, the term
“Bank” as used in this Agreement shall be deemed to refer to the successor
or survivor entity.
|
|
9.8
|
Entire
Agreement. This Agreement
constitutes the entire agreement between the Bank and the Executive as to
the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set
forth herein.
|
HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
|
9.9
|
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.
|
|
9.10
|
Alternative
Action. In the event it shall become impossible for the
Bank or the Plan Administrator to perform any act required by this
Agreement due to regulatory or other constraints, 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, provided that such alternative act does not
violate Section 409A of the Code.
|
|
9.11
|
Headings. Article
and section headings are for convenient reference only and shall not
control or affect the meaning or construction of any provision
herein.
|
|
9.12
|
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 or invalid provision had never been inserted
herein.
|
|
9.13
|
Notice. Any
notice or filing required or permitted to be given to the Bank or 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:
|
|
Home
Federal Bank
|
|
▇.▇.
▇▇▇ ▇▇▇
|
|
▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
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 on the receipt for registration or
certification.
Any
notice or filing required or permitted to be given to the Executive under this
Agreement shall be sufficient if in writing and hand-delivered or sent by mail
to the last known address of the Executive.
|
9.14
|
Compliance with
Section 409A. This Agreement shall at all times be
administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and any and
all regulations thereunder, including such regulations as may be
promulgated after the Effective Date of this
Agreement.
|
IN
WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank
have signed this Agreement.
| EXECUTIVE: | BANK: | |
| HOME FEDERAL BANK | ||
| ____________________ | By: _______________________________ | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇ | Title: President and CEO | |
HOME
FEDERAL BANK
Salary
Continuation Agreement
Beneficiary
Designation Form
{ } New
Designation
{ } Change
in Designation
I, ▇▇▇▇▇▇
▇. ▇▇▇▇, designate the following as Beneficiary under this
Agreement:
|
Primary:
___________________________________________________________
___________________________________________________________
|
_____%
_____%
|
|
Contingent:
___________________________________________________________
___________________________________________________________
|
_____%
_____%
|
|
|
Notes:
|
|
·
|
Please
PRINT CLEARLY or TYPE the names of the
beneficiaries.
|
|
·
|
To
name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact
name and date of the trust
agreement.
|
|
·
|
To
name your estate as Beneficiary, please write “Estate of [your
name]”.
|
|
·
|
Be
aware that none of the contingent beneficiaries will receive anything
unless ALL of the primary beneficiaries predecease
you.
|
I
understand that I may change these beneficiary designations by delivering a new
written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my
death. I further understand that the designations will be
automatically revoked if the Beneficiary predeceases me, or, if I have named my
spouse as Beneficiary and our marriage is subsequently dissolved.
Name:
_______________________________
Signature: _______________________________ Date: _______
SPOUSAL
CONSENT (Required if spouse is
not named Beneficiary and Plan Administrator requests):
I consent
to the beneficiary designation above, and acknowledge that if I am named
Beneficiary and our marriage is subsequently dissolved, the designation will be
automatically revoked.
Spouse
Name: _______________________________
Signature: _______________________________ Date: _________________
Received
by the Plan Administrator this ________ day of ___________________,
200__
By:
_________________________________
Title: _________________________________