Change in Control Agreement
Exhibit
10.1
This
Change In Control Agreement (“Agreement”) is made and
entered into and effective as of this 22nd day of January, 2008, by and between
HomeFederal Bank, an Indiana commercial bank whose address is 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxx 00000 (which, together with any successor thereto
which executes and delivers the assumption agreement provided for in Section
11(a) hereof or which otherwise becomes bound by the terms and provisions of
this Agreement by operation of law, is hereinafter referred to as the “Bank”), and Xxxx X. Xxxxxx,
whose residence address is 00000 Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxx 00000-0000 (the “Employee”).
Whereas,
the Employee is currently serving as Executive Vice President and Chief
Financial Officer of the Bank; and
Whereas,
the Bank is a wholly-owned subsidiary of Home Federal Bancorp, a publicly traded
corporation organized under Indiana law (the “Holding Company”);
and
Whereas,
the Board of Directors of the Bank recognizes that, as is the case with publicly
held corporations generally, the possibility of a change in control of the
Holding Company may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure
or
distraction of key management personnel to the detriment of the Bank, the
Holding Company and its shareholders; and
Whereas,
the Board of Directors of the Bank believes it is in the best interests of
the
Bank to enter into this Agreement with the Employee in order to assure
continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to his or her assigned duties
without distraction in the face of potentially disruptive circumstances arising
from the possibility of a change in control of the Holding Company, although
no
such change is now contemplated; and
Whereas,
the parties intend for this Change in Control Agreement to supersede and replace
the Amended and Restated Employment Agreement (“Employment Agreement”) between
the Employee and the Bank dated July 24, 2007, which currently has a fixed
term
that ends on July 8, 2009; and
Whereas,
this Change in Control Agreement, unlike the Employment Agreement, contemplates
the possibility of annual extensions and therefore the protections provided
herein could extend beyond July 8, 2009, and for that reason Employee has agreed
to a termination of his Employment Agreement in exchange for that possible
benefit; and
Whereas,
the Board of Directors of the Bank has approved and authorized the execution
of
this Agreement with the Employee to take effect as stated in Section 1
hereof;
Now,
Therefore, in consideration of the foregoing and of the respective covenants
and
agreements of the parties herein contained, it is agreed as
follows:
1.
Term of
Agreement. The
term
of this Agreement shall be deemed to have commenced as of January 22, 2008
(the
“Effective Date”) and
shall continue until January 1, 2009. Prior to January 1, 2009, and
at each anniversary date thereafter, the Board of Directors may review this
Agreement and, in its discretion, authorize extension thereof for an additional
one-year period. Notwithstanding the foregoing, this Agreement shall
expire upon the Employee’s termination of employment for any
reason.
2.
Payments to the Employee
Upon
Change in Control.
(a)
Upon the occurrence of a change in control of the Bank or the Holding Company
(as herein defined), at any time during the term of this Agreement followed
within 12 months by the involuntary or voluntary termination of the Employee’s
employment with the Bank, whether or not such termination occurs during the
term
of this Agreement, the provisions of Section 3 shall apply.
(b)
A “change in control”
shall mean any of
the following:
(i)
a change in the ownership of the Bank or the Holding Company, which shall occur
on the date that any one person, or more than one person acting as a group,
acquires ownership of stock of the Bank or the Holding Company that, together
with stock held by such person or group, constitutes more than fifty percent
(50%) of the total fair market value or total voting power of the stock of
the
Bank or the Holding Company. However, if any one person, or more than one person
acting as a group, is considered to own more than fifty percent (50%) of the
total fair market value or total voting power of the stock of the Bank or the
Holding Company, the acquisition of additional stock by the same person or
persons is not considered to cause a change in the ownership of the Bank or
the
Holding Company (or to cause a change in the effective control of the Bank
or
the Holding Company (within the meaning of subsection (ii)). An increase in
the
percentage of stock owned by any one person, or persons acting as a group,
as a
result of a transaction in which the Bank or the Holding Company acquires its
stock in exchange for property will be treated as an acquisition of stock for
purposes of this subsection. This subsection applies only when there is a
transfer of stock of the Bank or the Holding Company (or issuance of stock
of
the Bank or the Holding Company) and stock in the Bank or the Holding Company
remains outstanding after the transaction.
(ii)
a change in the effective control of the Bank or the Holding Company, which
shall occur only on either of the following dates:
1)
the date any one person, or more than one person acting as a group acquires
(or
has acquired during the 12 month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Bank or the
Holding Company possessing thirty percent (30%) or more of the total voting
power of the stock of the Bank or the Holding Company.
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2)
the date a majority of members of the Holding Company’s board of directors is
replaced during any 12 month period by directors whose appointment or election
is not endorsed by a majority of the members of the Holding Company’s board of
directors before the date of the appointment or election; provided, however, that this
provision shall not apply if another corporation is a majority shareholder
of
the Holding Company.
If
any
one person, or more than one person acting as a group, is considered to
effectively control the Bank or the Holding Company, the acquisition of
additional control of the Bank or the Holding Company by the same person or
persons is not considered to cause a change in the effective control of the
Bank
or the Holding Company (or to cause a change in the ownership of the Bank or
the
Holding Company within the meaning of subsection (i) of this
section).
(iii)
a change in the ownership of a substantial portion of the Bank’s assets, which
shall occur on the date that any one person, or more than one person acting
as a
group, acquires (or has acquired during the 12 month period ending on the date
of the most recent acquisition by such person or persons) assets from the Bank
that have a total gross fair market value equal to or more than forty percent
(40%) of the total gross fair market value of all of the assets of the Bank
immediately before such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the Bank,
or
the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets. No change in control event
occurs under this subsection (iii) when there is a transfer to an entity that
is
controlled by the shareholders of the Bank immediately after the
transfer. A transfer of assets by the Bank is not treated as a change
in the ownership of such assets if the assets are transferred to –
1)
a shareholder of the Bank (immediately before the asset transfer) in exchange
for or with respect to its stock;
2)
an entity, 50 percent or more of the total value or voting power of which is
owned, directly or indirectly, by the Bank.
3)
a person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Bank; or
4)
an entity, at least 50 percent of the total value or voting power of which
is
owned, directly or indirectly, by a person described in paragraph
(3).
For
purposes of this subsection (iii) and except as otherwise provided in paragraph
1) above, a person’s status is determined immediately after the transfer of the
assets.
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(iv)
For purposes of this section, persons will not be considered to be acting as
a
group solely because they purchase or own stock of the same corporation at
the
same time, or as a result of the same public offering. Persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Bank or the Holding Company; provided,
however, that they will not be considered to be acting as a group if they are
owners of a corporation that merges into the Bank or the Holding Company where
the Bank or the Holding Company is the surviving corporation.
(c)
The Employee’s employment under this Agreement may be terminated at any time by
the Board of Directors of the Bank.
(d)
The terms “involuntary
termination” or “involuntarily terminated” in
this Agreement shall refer to the termination of the employment of Employee
without his or her express written consent. In addition, a material
diminution of or interference with the Employee’s duties, responsibilities and
benefits shall be deemed and shall constitute an involuntary termination of
employment to the same extent as express notice of such involuntary termination;
provided, however, that the Employee must provide the Bank notice of Employee’s
intent to terminate employment and at least a 30 day period to remedy the
condition giving rise to termination. By way of example and not by
way of limitation, any of the following actions, if unreasonable and materially
adverse to the Employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (1) any action by the Bank’s Board of
Directors to remove the Employee as Executive Vice President and Chief Financial
Officer of the Bank; (2) a material reduction in the Employee’s salary,
perquisites, contingent benefits or vacation time as in effect on the date
of
the change in control as the same may be changed by mutual agreement from time
to time, unless part of an institution-wide reduction; (3) the assignment to
the
Employee of duties and responsibilities materially different from those normally
associated with his or her position as referenced in this Agreement; or (4)
a
material diminution or reduction in the Employee’s responsibilities or authority
(including reporting responsibilities) in connection with his or her employment
with the Bank.
(e)
For purposes of determining whether the Employee is entitled to a benefit under
Section 3 of this Agreement, “termination of employment” means the
termination of the Employee’s employment with the Bank for reasons other than
death or total and permanent disability. Whether a termination of
employment takes place is determined based on the facts and circumstances
surrounding the termination of the Employee’s employment. A
termination of employment will be considered to have occurred if it is
reasonably anticipated that:
1)
the Employee will not perform any services for the Bank after termination of
employment, or
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2)
the Employee will continue to provide services to the Bank at an annual rate
that is less than fifty percent (50%) of the bona fide services rendered during
the immediately preceding twelve (12) months of employment.
Any
reference in this Agreement to a “termination of employment,” severance from
employment or separation from employment shall be deemed to mean a termination
of employment.
3.
Payments Upon a Change in
Control.
(a)
If during the term of this Agreement there is a change in control of the Bank
or
the Holding Company and within 12 months following such change in control there
is a voluntary or an involuntary termination of the Employee’s employment with
the Bank, whether or not such termination occurs during the term of this
Agreement, the Bank shall pay to the Employee in a lump sum in cash within
31
business days after the termination of employment an amount equal to 300 percent
of the Employee’s “base amount” of compensation, as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (“Code”).
(b)
If during the term of this Agreement there is a change in control, and within
12
months following such change in control there is a voluntary or an involuntary
termination of the Employee’s employment, whether or not such termination occurs
during the term of this Agreement, the Bank shall cause to be continued life,
health and disability coverage substantially identical to the coverage
maintained by the Bank for the Employee prior to his
severance. Subject to applicable federal and state laws, such
coverage shall cease upon the earlier of the Employee’s obtaining similar
coverage by another employer or twelve (12) months from the date of the
Employee’s termination. In the event the Employee obtains new
employment and receives less coverage for life, health or disability, the Bank
shall provide coverage substantially identical to the coverage maintained by
the
Bank for the Employee prior to termination for the balance of the twelve (12)
month period.
4.
Certain Reduction of Payments
by the Bank.
(a)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Bank to or for
the
benefit of the Employee (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be
nondeductible (in whole or part) by the Bank for Federal income tax purposes
because of Section 280G of the Code, then the aggregate present value of amounts
payable or distributable to or for the benefit of the Employee pursuant to
this
Agreement (such amounts payable or distributable pursuant to this Agreement
are
hereinafter referred to as “Agreement Payments”) shall be
reduced to the Reduced Amount. The “Reduced Amount” shall be an
amount, not less than zero, expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment to
be
nondeductible by the Bank because of Section 280G of the Code. For
purposes of this Section 4, present value shall be determined in accordance
with
Section 280G(d)(4) of the Code.
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(b)
All determinations required to be made under this Section 4 shall be made by
the
Bank’s independent auditors, or at the election of such auditors by such other
firm or individuals of recognized expertise as such auditors may select (such
auditors or, if applicable, such other firm or individual, are hereinafter
referred to as the “Advisory
Firm”). The Advisory Firm shall within ten business days of termination
of the Employee’s employment by the Bank or the Holding Company resulting in
benefit payments hereunder (the “Date of Termination”), or at
such earlier time as is requested by the Bank, provide to both the Bank and
the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full
amount of the Agreement Payments and that the Employee has substantial authority
not to report on his or her federal income tax return any excise tax imposed
by
Section 4999 of the Code with respect to the Agreement Payments. Any
such determination and opinion by the Advisory Firm shall be binding upon the
Bank and the Employee. The Employee shall determine which and how
much, if any, of the Agreement Payments shall be eliminated or reduced
consistent with the requirements of this Section 4, provided that, if the
Employee does not make such determination within ten business days of the
receipt of the calculations made by the Advisory Firm, the Bank shall elect
which and how much, if any, of the Agreement Payments shall be eliminated or
reduced consistent with the requirements of this Section 4 and shall notify
the
Employee promptly of such election. Within five business days of the
earlier of (i) the Bank’s receipt of the Employee’s determination pursuant to
the immediately preceding sentence of this Agreement or (ii) the Bank’s election
in lieu of such determination, the Bank shall pay to or distribute to or for
the
benefit of the Employee such amounts as are then due the Employee under this
Agreement. The Bank and the Employee shall cooperate fully with the
Advisory Firm, including without limitation providing to the Advisory Firm
all
information and materials reasonably requested by it, in connection with the
making of the determinations required under this Section 4.
(c)
As a result of uncertainty in application of Section 280G of the Code at the
time of the initial determination by the Advisory Firm hereunder, it is possible
that Agreement Payments will have been made by the Bank which should not have
been made (“Overpayment”) or that
additional Agreement Payments will not have been made by the Bank which should
have been made (“Underpayment”), in each case,
consistent with the calculations required to be made hereunder. In
the event that the Advisory Firm, based upon the assertion by the Internal
Revenue Service against the Employee of a deficiency which the Advisory Firm
believes has a high probability of success, determines that an Overpayment
has
been made, any such Overpayment paid or distributed by the Bank to or for the
benefit of Employee shall be treated for all purposes as a loan abinitio
which the Employee
shall repay to the Bank together with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code; provided, however, that no
such loan shall be deemed to have been made and no amount shall be payable
by
the Employee to the Bank if and to the extent such deemed loan and payment
would
not either reduce the amount on which the Employee is subject to tax under
Section 1 and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Advisory Firm, based upon controlling
precedent or other substantial authority, determines that an Underpayment has
occurred, any such Underpayment shall be
6
promptly
paid by the Bank to or for the benefit of the Employee together with interest
at
the applicable federal rate provided for in Section 7872(f)(2) of the
Code.
5.
Required Regulatory
Provisions.
(a)
The Bank may terminate the Employee’s employment at any time, but any
termination by the Bank on or after a change in control shall not prejudice
the
Employee’s right to compensation or other benefits under this
Agreement.
(b)
If the Employee is suspended and/or temporarily prohibited from participating
in
the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or
(g)(1) of the Federal Deposit Insurance Act, 12 U.S. C. §1818 (e)(3) and (g)(1),
the Bank’s obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in
the notice are dismissed, the Bank may in its discretion (i) pay the Employee
all or part of the compensation withheld while its obligations under this
Agreement were suspended, and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
(c)
If the Employee is removed from office and/or permanently prohibited from
participating in the conduct of the Bank’s affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §
1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall
terminate, as of the effective date of the order, but vested rights of the
parties shall not be affected.
(d)
If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act), all obligations under this Agreement shall terminate as of
the
date of default, but this provision (d) shall not affect any vested rights
of
the parties.
(e)
All obligations under this Agreement may be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued
operation of the Bank: (i) by the Director of the Indiana Department of
Financial Institutions (the “Director”), or his or her
designee, at the time the Federal Deposit Insurance Corporation enters into
an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C.
§1823(c), or (ii) by the Director, or his or her designee, at the time the
Director or his or her designee approves a supervisory merger to resolve
problems related to operation of the Bank or when the Bank is determined by
the
Director to be in an unsafe or unsound condition. Any rights of the
parties that have already vested, however, shall not be affected by any such
action.
6.
Reinstatement of Benefits
Under
Section 3. In
the event the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice described in
Section 5(b) hereof (the “Notice”) during the term
of
this Agreement and a change in control occurs, the Bank will assume its
obligation to pay and the Employee will be entitled to receive all of the
termination benefits provided for under Section 3 of this Agreement, as
applicable, upon the Bank’s receipt of a dismissal of charges in the
Notice.
7
7.
Effect on Prior
Agreements. This
Agreement contains the entire understanding between the parties hereto and
supersedes any prior agreement between the Bank and the Employee relating to
matters covered by this Agreement.
8.
No
Attachment.
(a)
Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to affect any such action shall be null, void, and
of
no effect.
(b)
This Agreement shall be binding upon, and inure to the benefit of, the Employee,
the Bank and their respective successors and assigns.
9.
Modification and
Waiver.
(a)
This Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.
(b)
No term or condition of this Agreement shall be deemed to have been waived,
nor
shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver
or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to
the
specific term or condition waived and shall not constitute a waiver of such
term
or condition for the future or as to any act other than that specifically
waived.
10.
No
Mitigation. Except
as expressly provided herein, the amount of any payment or benefit provided
for
in this Agreement shall not be reduced by any compensation earned by the
Employee as the result of employment by another employer, by retirement benefits
after the date of termination or otherwise.
11.
No
Assignments.
(a)
This Agreement is personal to each of the parties hereto, and neither party
may
assign or delegate any of its rights or obligations hereunder without first
obtaining the written consent of the other party; provided, however, that the
Bank will require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the
business and/or assets of the Bank, by an assumption agreement in form and
substance satisfactory to the Employee, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Bank would
be
required to perform it if no such succession or assignment had taken
place. Failure of the Bank to obtain such an assumption agreement
prior to the effectiveness of any such succession or assignment shall be a
breach of this Agreement and shall entitle the Employee to compensation from
the
Bank in the same amount and on the same terms as the compensation pursuant
to
Section 3 hereof. For purposes of
8
implementing
the provisions of this Section 11(a), the date on which any such succession
becomes effective shall be deemed the Date of Termination.
(b)
This Agreement and all rights of the Employee hereunder shall inure to the
benefit of and be enforceable by the Employee’s personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Employee should die while any amounts
would still be payable to the Employee hereunder if the Employee had continued
to live, all such amounts, unless otherwise provided herein, shall be paid
in
accordance with the terms of this Agreement to the Employee’s devisee, legatee
or other designee or if there is no such designee, to the Employee’s
estate.
12.
Notice. For
the purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
on
the first page of this Agreement (provided that all notices to the Bank shall
be
directed to the attention of the Board of Directors of the Bank with a copy
to
the Secretary of the Bank), or to such other address as either party may have
furnished to the other in writing in accordance herewith.
13.
Amendments. No
amendments or additions to this Agreement shall be binding unless in writing
and
signed by both parties, except as herein otherwise provided.
14.
Paragraph
Headings. The
paragraph headings used in this Agreement are included solely for convenience
and shall not affect, or be used in connection with, the interpretation of
this
Agreement.
15.
Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
16.
Governing
Law. This
Agreement shall be governed by the laws of the United States to the extent
applicable and otherwise by the laws of the State of Indiana.
17.
Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered an the arbitrator’s award in any court having jurisdiction.
18.
Reimbursement. If
in any event it is determined by a court of competent jurisdiction or by an
arbitrator pursuant to Section 17 that the Bank has failed to make timely
payment of any amounts owed to the Employee under this Agreement, the Employee
shall be entitled to reimbursement for all reasonable costs, including
attorneys’ fees, incurred in challenging such termination or collecting such
amounts. Such reimbursement shall be in addition to all rights to
which the Employee is otherwise entitled under this Agreement.
19.
Specified Employee
Limits.
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(a)
It is intended that payments under Section 3 of this Agreement will be made
no
later than March 15 of the year immediately following the year in which the
Employee’s benefit under this Agreement is no longer subject to a substantial
risk of forfeiture (the “Short-Term Deferral Payment Deadline”), so as to comply
with the short-term deferral rule of Treas. Reg.
§1.409A-1(b)(4). Alternatively, it is expected that the exception for
participation in a voluntary window program under Treas. Reg.
§1.409A-1(b)(9)(vi) would apply. In either event, Section 409A
of the Code would not apply to this Agreement and the provisions of Sections
19(b), (c) and (d) shall not apply. If the voluntary window program
exception does not apply and if, due to the timing of a change in control and
the Employee’s termination of employment, it is not possible to pay a benefit to
an Employee on or before the Short-Term Deferral Payment Deadline, it is
expected that Section 409A would apply to this Agreement and the provisions
of Section 19(b), (c) and (d) shall apply.
(b)
To the extent the Employee is a “specified employee” (as defined below), any
payments due to the Employee upon his separation from service with the Bank
under this Agreement shall begin no sooner than six months after the Employee’s
separation from service; provided, however, that any
payments not made during the six month period described in this Section 19
shall
be made in a single lump sum as soon as administratively practicable after
the
expiration of such six month period; provided, further, that the six month
delay
required under this Section 19(b) shall not apply to the portion of any payment
made to the extent such amount is payable solely as a result of the Employee’s
“involuntary separation from service” (as defined in Treasury Reg.
Section 1.409A-1(n) and including a “separation from service for good
reason,” as defined in Treasury Reg. Section 1.409A-1(n)(2)) or made
pursuant to a “window program” (as defined in Treas. Reg. §1,409A-1(b)(9)(vi)
that (i) is payable no later than the last day of the second year following
the
year in which the separation from service occurs, and (ii) does not exceed
two
times the lesser of (1) the Employee’s annualized compensation for the year
prior to the year in which the separation from service occurs, or (2) the dollar
limit described in Section 401(a)(17) of the Code.
(c)
To the extent any life, health, disability or other welfare benefit coverage
provided to the Employee under this Agreement would be taxable to the Employee,
the taxable amount of such coverage shall not exceed the applicable dollar
amount under Section 402(g)(1)(B) of the Code determined as of the year in
which the Employee’s separation from service occurs. The intent of
the foregoing sentence is to permit the Bank to treat the provision of such
benefits as a limited payment under Treasury Reg.
Section 1.409A-1(a)(9)(v)(D) so as to avoid application of the six month
delay rule for specified employees. For purposes of this Agreement,
the phrase “separation from service” shall be as defined in Treasury Reg.
Section 1.409A-1(h).
(d)
For purposes of this Agreement, the term “specified employee” shall have the
meaning set forth in Treasury Reg. Section 1.409A-1(i) and shall include,
without limitation, (1) an officer of the Bank or Holding Company having annual
compensation greater than $130,000 (as adjusted for inflation under the Code),
(2) a five percent owner of the Bank or Holding Company, or (3) a one percent
owner of the Bank or Holding Company having annual compensation of more than
$150,000. For purposes of (1), no
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more
than
50 employees of the Bank and Holding Company (or the greater of 3 employees
or
10% of the total number of employees of the Bank and Holding Company)shall
be
treated as officers of the Bank or Holding Company. The determination
of whether the Employee is a “specified employee” shall be made by the Bank in
good faith applying the applicable Treasury regulations.
20.
Survival. Any
obligation of the Bank to pay benefits under Section 3 of this Agreement shall
survive termination or expiration of this Agreement.
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In
Witness Whereof, the parties have executed this Change in Control Agreement
as
of the day and year first above written.
THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE
PARTIES.
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“Bank”
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By:
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/s/ Xxxx X. Xxxxx Xx. | |
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Xxxx
X. Xxxxx, Xx., President
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“Employee”
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| /s/ Xxxx X. Xxxxxx | ||
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Xxxx
X. Xxxxxx
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The
undersigned, Home Federal Bancorp, sole shareholder of Bank, agrees that if
it
shall be determined for any reason that any obligation on the part of Bank
to
continue to make any payments due under this Agreement to Employee is
unenforceable for any reason, Home Federal Bancorp agrees to honor the terms
of
this Agreement and continue to make any such payments due hereunder to Employee
or to satisfy any such obligation pursuant to the terms of this Agreement,
as
though it were the Bank hereunder.
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By:
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/s/ Xxxx X. Xxxxx Xx. | |
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Xxxx
X. Xxxxx, Xx., President
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