HOME FEDERAL BANK SECOND AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT
HOME
FEDERAL BANK
Third
Amended and Restated
HOME
FEDERAL BANK
SECOND
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 and
loan association located in Nampa, Idaho (the “Bank”), and XXX X. XXXXXXXX (the
“Executive”).
This Agreement amends and restates the
prior HOME FEDERAL SAVINGS & LOAN ASSOCIATION SALARY CONTINUATION AGREEMENT
between the Bank and the Executive, originally effective as of October 1, 2006
(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:
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1.1
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“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 (“APB 12”) as amended by Statement of
Financial Accounting Standards Number 106 (“FAS 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.
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1.2
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“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.
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1.3
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“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.
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1.4
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“Board” means
the Board of Directors of the Company as from time to time
constituted.
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1.5
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“Change in
Control” means
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(i)
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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;
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(ii)
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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;
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(iii)
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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
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(iv)
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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
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or
a change in the composition of the Board at the direction of the OTS or
the FDIC.
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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.
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1.6
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“Code” means the
Internal Revenue Code of 1986, as
amended.
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1.7
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“Commencement
Date” means the date the conversion of the Bank from the mutual to
stock form of organization is
completed.
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1.8
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“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.
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1.9
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“Deferral
Account” means the Bank’s accounting of the Deferrals, plus accrued
interest.
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1.10
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“Deferrals”
means the amount treated as Deferrals under the Prior
Agreement.
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1.11
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“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.
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1.12
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“Discount Rate”
means the rate used by the Plan Administrator for determining the Accrual
Balance. The Discount Rate is seven and one-half percent
(7.5%).
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1.13
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“Early
Retirement” means the Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for
Cause, or Involuntary Termination.
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1.14
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“Early Retirement
Date” means the month, day and year in which Early Retirement
occurs.
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1.15
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“Effective Date”
means October 1, 2006.
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1.16
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“Final Salary”
means the average of the Executive’s final thirty-six (36) months of base
salary.
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1.17
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“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.
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1.18
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“Normal Retirement
Age” means the Executive’s sixty-fifth (65th)
birthday.
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1.19
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“Normal Retirement
Date” means the later of Normal Retirement Age or Termination of
Employment.
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1.20
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“Plan
Administrator” means the Board or such committee or person as the
Board shall appoint.
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1.21
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“Plan Year”
means each twelve (12) month period commencing on October 1st
and ending on September 30th
of each year.
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1.22
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“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.
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1.23
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“Specified
Employee” means a key employee (as defined in Code Section 416(i)
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.
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1.24
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“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.
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1.25
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“Termination of
Employment” means the termination of the Executive’s employment
with the Bank (and any entity required to be affiliated with the Bank
under Section 409A) for reasons other than death. Whether a
Termination of Employment takes place is determined in accordance with the
requirements of Section 409A (taking into account all special rules and
presumptions provided for in the regulations under Section 409A) based on
the facts and circumstances surrounding the termination of the Executive’s
employment, and whether the Executive and the Bank reasonably anticipate
that no further services will be performed by the Executive after a
certain date, or that the level of bona fide services the Executive would
provide to the Bank or an affiliate after such date (whether as an
employee or independent contractor) would permanently decrease to no more
than 20 percent of the average level of bona fide services performed
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period (or the full period of services to the bank if
the Executive has been providing services to the Bank less than 36
months).
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1.26
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“Vested Accrual
Balance” means the following vesting schedule applied to the
Accrual Balance:
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End
of Plan Year
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Vesting
Percentage
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1
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10%
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2
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20%
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3
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30%
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4
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40%
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5
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50%
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6
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60%
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7
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70%
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8
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80%
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9
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90%
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10+
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100%
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Article
2
Distributions
During Lifetime
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2.1
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Normal Retirement
Benefit. Upon the Normal Retirement Date, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this
Article.
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2.1.1
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Amount of
Benefit. The annual benefit under this Section 2.1 is
fifty percent (50%) of Final
Salary.
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2.1.2
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Distribution 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
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Normal
Retirement Benefit shall be paid to the Executive for a period of fifteen
(15) years.
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2.2
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Early Retirement
Benefit. If Early Retirement occurs, the Bank shall
distribute to the Executive the benefit described in this Section 2.2 in
lieu of any other benefit under this
Article.
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2.2.1
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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.
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2.2.2
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Distribution 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.
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2.3
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Disability
Benefit. If the
Executive experiences a Disability prior to Early Retirement Age, the Bank
shall distribute to the Executive the benefit described in this Section
2.3 in lieu of any other benefit under this
Article.
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2.3.1
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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.
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2.3.2
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Distribution 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
Termination of Employment.
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2.4
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Change in Control
Benefit. Upon Involuntary Termination within twenty-four
(24) months following a Change in Control while the Executive is in the
active service of the Bank, the Bank shall distribute 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.
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2.4.1
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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 Involuntary
Termination
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2.4.2
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Distribution 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.
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2.4.3
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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.
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2.5
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Restriction on
Commencement 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 or provided for in the
Plan.
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2.6
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Distributions Upon
Income Inclusion Under Section 409A; Other Circumstances. 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
Section 409A, the Executive may petition the Plan Administrator for a
distribution of that portion of the amount the Bank has accrued with
respect to the Bank’s obligations hereunder 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 amount the Bank has accrued with respect to the
Bank’s obligations hereunder required to be included in income as a result
of the failure of this Agreement to meet the requirements of Section 409A,
within ninety (90) days. Such a distribution shall affect and
reduce the Executive’s benefits to be paid under this
Agreement. At the discretion of the Plan Administrator,
distribution also may be made from the Plan prior to the Executive’s
Termination of Employment for any other reason permitted under Treasury
Regulation Section 1.409A-3(j)(4) or subsequent Section 409A guidance
(including but not limited to the following: pursuant to a domestic
relations order, to comply with an ethics order, to effect a limited
cashout,
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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to
pay employment taxes, to pay state, local or foreign taxes, to offset
certain debt obligations and to resolve a bona fide dispute regarding the
Executive’s benefits under the
Plan).
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2.7
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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:
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(a)
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must
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
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(b)
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must,
for benefits distributable under Section 2.2 and 2.4, be made at least
twelve (12) months prior to the first scheduled
distribution;
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(c)
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must,
for benefits distributable under Sections 2.1, 2.2, and 2.4, delay the
commencement of the distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be made; and
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(d)
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must
take effect not less than twelve (12) months after the election is
made.
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Article
3
Distribution
at Death
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3.1
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Death During Active
Service. If the Executive dies prior to Termination of
Employment, the Bank shall distribute to the Beneficiary the benefit
described in this Section 3.1. This benefit shall be
distributed in lieu of any benefit under Article
2.
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3.1.1
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Amount of
Benefit. The benefit under this Section 3.1 is Projected
Benefit.
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3.1.2
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Distribution 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.
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3.2
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Death During
Distribution of a Benefit. If the Executive dies after
any benefit distributions have commenced under this Agreement but before
receiving all such distributions, the Bank shall distribute to the
Beneficiary the remaining benefits at the same time and in the same
amounts they would have been distributed to the Executive had the
Executive survived.
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3.3
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Death After
Termination of Employment But Before Benefit Distributions
Commence. If the Executive
is entitled to benefit distributions under this Agreement but dies prior
to the commencement of said benefit distributions, the Bank shall
distribute to the Beneficiary the same benefits to which the Executive was
entitled prior to death, except that the
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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benefit
distributions shall commence within thirty (30) days following receipt by
the Bank of the Executive’s death
certificate.
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Article
4
Beneficiaries
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4.1
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In
General. 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 designated under any other plan of the Bank
in which the Executive
participates.
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4.2
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Designation. 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. If the Executive names someone other
than the Executive’s spouse as a Beneficiary, the Plan Administrator may,
in its sole discretion, determine that spousal consent is required to be
provided in a form designated by the Plan Administrator, executed by the
Executive’s spouse and returned to the Plan Administrator. 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. 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.
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4.3
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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.
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4.4
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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.
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4.5
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Facility of
Distribution. 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 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
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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shall
be a distribution for the account of the Executive and the Beneficiary, as
the case may be, and shall completely discharge any liability under this
Agreement for such distribution
amount.
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Article
5
General
Limitations
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5.1
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Termination for
Cause. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not distribute any benefit in excess of
Deferrals under this Agreement if the Executive’s employment with the Bank
is terminated due to a Termination for
Cause.
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5.2
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Suicide or
Misstatement. No benefit shall be distributed if the
Executive commits suicide within two (2) years after the Effective Date of
this Agreement, or if an insurance company which issued a life insurance
policy covering the Executive and owned by the Bank denies coverage (i)
for material misstatements of fact made by the Executive on an application
for such life insurance, or (ii) for any other
reason.
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5.3
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Removal. Notwithstanding
any provision of this Agreement to the contrary, the Bank shall not
distribute any benefit in excess of Deferrals under this Agreement if the
Executive is subject to a final removal or prohibition order issued by an
appropriate federal banking agency pursuant to Section 8(e) of the Federal
Deposit Insurance Act. Notwithstanding anything herein to the
contrary, any payments made to the Executive pursuant to this Agreement,
or otherwise, shall be subject to and conditioned upon compliance with 12
U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute
Indemnification Payments and any other regulations or guidance promulgated
thereunder.
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Article
6
Administration
of Agreement
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6.1
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Plan Administrator
Duties. The Plan Administrator shall administer this
Agreement according to its express terms and 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 this
Agreement to the extent the exercise of such discretion and authority does
not conflict with Section 409A.
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6.2
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Agents. In
the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as the Plan
Administrator 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.
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6.3
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Binding Effect of
Decisions. Any decision or action of the Plan
Administrator with respect to any question arising out of or in connection
with the administration, interpretation or application of this Agreement
and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in this
Agreement.
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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6.4
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Indemnity of Plan
Administrator. The Bank shall indemnify and hold
harmless 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.
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6.5
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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, Disability or Termination of Employment
of the Executive, and such other pertinent information as the Plan
Administrator may reasonably
require.
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6.6
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Annual
Statement. The Plan Administrator shall provide to the Executive,
within one hundred twenty (120) days after the end of each Plan Year, a
statement setting forth the benefits to be distributed under this
Agreement.
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Article
7
Claims
And Review Procedures
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7.1
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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:
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7.1.1
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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.
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7.1.2
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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.
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7.1.3
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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:
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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(a)
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The
specific reasons for the denial;
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(b)
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A
reference to the specific provisions of this Agreement on which the denial
is based;
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(c)
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A
description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is
needed;
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(d)
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An
explanation of this Agreement’s review procedures and the time limits
applicable to such procedures; and
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(e)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
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7.2
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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:
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7.2.1
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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.
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7.2.2
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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.
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7.2.3
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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.
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7.2.4
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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.
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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7.2.5
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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:
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(a)
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The
specific reasons for the denial;
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(b)
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A
reference to the specific provisions of this Agreement on which the denial
is based;
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(c)
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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
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(d)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
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Article
8
Amendments
and Termination
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8.1
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Amendments. This
Agreement may be amended only by a written agreement signed by the Bank
and the Executive, provided such amendment does not cause the Plan to
violate Section 409A. 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.
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8.2
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Plan Termination
Generally. This Agreement may be terminated only by a
written agreement signed by the Bank and the Executive. The
benefit shall be the sum of: (a) the Accrual Balance as of the
date this Agreement is terminated; and (b) the Deferral Account
balance. Except as provided in Section 8.3, the termination of
this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, upon such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
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8.3
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Plan Terminations
Under Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if the Bank terminates this Agreement in the
following circumstances:
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(a)
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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 Code Section
409A(2)(A)(v), provided that all distributions are made no later than
twelve (12) months following such termination of this Agreement and
further provided that all the
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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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;
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(b)
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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
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(c)
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Upon
the Bank’s termination of this and all other plans required by Section
409A to be aggregated with this Plan, provided that (i) the Plan’s
termination and liquidation does not occur proximate to a downturn in the
financial health of the Bank; (2) all distributions in connection with the
termination of the Plan are made no earlier than twelve (12) months and no
later than twenty-four (24) months following the date the Bank takes all
actions necessary to irrevocably terminate and liquidate the Plan (the
“Termination Date”); and (3) the Bank does not adopt any new plan that
would be required by Section 409A to be aggregated with this Plan at any
time within three years following the Termination
Date;
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the Bank
may distribute the sum of the Accrual Balance and the Deferral Account 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 8.3 shall be
administered and interpreted in a manner consistent with Section
409A.
Article
9
Miscellaneous
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9.1
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Binding
Effect. This Agreement shall bind the Executive and the
Bank and their beneficiaries, survivors, executors, administrators and
transferees.
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9.2
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No Guarantee of
Employment. This Agreement is not a contract for
employment. It does not give the Executive the right to remain
as an employee of the Bank nor 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.
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9.3
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Non-Transferability. Benefits
under this Agreement cannot be sold, transferred, assigned, pledged,
attached or encumbered in any
manner.
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9.4
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Tax Withholding and
Reporting. The Bank shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under
Section 409A from the benefits provided under this
Agreement. The Executive acknowledges that the Bank’s
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
|
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sole
liability regarding taxes is to forward any amounts withheld to the
appropriate taxing authorities. The Bank shall satisfy all
applicable reporting requirements, including those under Section
409A.
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9.5
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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.
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9.6
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Unfunded
Arrangement. The Executive 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 distribute 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 or other
informal funding asset is a general asset of the Bank to which the
Executive and Beneficiary have no preferred or secured
claim. The Plan shall not be funded in a manner inconsistent
with the requirements of Section
409A.
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9.7
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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 an event, the term
“Bank” as used in this Agreement shall be deemed to refer to the successor
or survivor entity.
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9.8
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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.
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9.9
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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.
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9.10
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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 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
(without the consent of the
Executive).
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9.11
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Headings. Article
and section headings are for convenient reference only and shall not
control or affect the meaning or construction of any provision
herein.
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9.12
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Validity. If
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
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HOME
FEDERAL BANK
Third
Amended and Restated
Salary
Continuation Agreement
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be
construed and enforced as if such illegal or invalid provision had never
been included herein.
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9.13
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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:
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Home
Federal Bank
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X.X.
Xxx 000
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Xxxxx,
XX 00000
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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.
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9.14
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Deduction Limitation
on Benefit Payments. If the Bank reasonably anticipates
that the Bank’s deduction with respect to any distribution under this
Agreement would be limited or eliminated by application of Code Section
162(m), then to the extent deemed necessary by the Bank to ensure that the
entire amount of any distribution from this Agreement is deductible, the
Bank may delay payment of any amount that would otherwise be distributed
under this Agreement. The delayed amounts shall be distributed
to the Executive (or the Beneficiary in the event of the Executive's
death) at the earliest date the Bank reasonably anticipates, should
reasonably anticipate, that the deduction of the payment of the amount
will not be limited or eliminated by application of Code Section
162(m).
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9.15
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Compliance with
Section 409A. This Agreement shall be interpreted and
administered consistent with Section
409A.
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IN
WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank
have signed this Agreement.
| EXECUTIVE: | BANK: | |
| HOME FEDERAL BANK | ||
| ____________________ | By: ___________________________________ | |
| XXX X. XXXXXXXX | Title: Director | |
HOME
FEDERAL BANK
Second
Amended and Restated
Salary
Continuation Agreement
Beneficiary
Designation Form
{ } New
Designation
{ } Change
in Designation
I, XXX X.
XXXXXXXX, designate the following as Beneficiary under this
Agreement:
|
Primary:
___________________________________________________________
___________________________________________________________
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_____%
_____%
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Contingent:
___________________________________________________________
___________________________________________________________
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_____%
_____%
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Notes:
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·
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Please
PRINT CLEARLY or TYPE the names of the
beneficiaries.
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·
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To
name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact
name and date of the trust
agreement.
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·
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To
name your estate as Beneficiary, please write “Estate of [your
name]”.
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·
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Be
aware that none of the contingent beneficiaries will receive anything
unless ALL of the primary beneficiaries predecease
you.
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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: _________________________________
