EXHIBIT 10.6
HOME FEDERAL BANK
RESTATED CHANGE-IN-CONTROL
AGREEMENT
This Restated Change-in-Control
Agreement (this “Agreement”) is entered into as of this
31st day of December, 2008, by and between Home Federal Bank, a
federally chartered savings bank and
(the “Employee”). As used herein, the term “the
Bank” shall mean Home Federal Bank, or if the context
requires, its successor.
WHEREAS, the Employee is currently
serving as
of the Bank; and
WHEREAS, the Bank is a wholly-owned
subsidiary of HF Financial Corp., (the Holding Company”), and
the Holding Company offers its common stock for sale to the public
and is subject to supervision by the Securities and Exchange
Commission (“SEC”); and
WHEREAS, both the Bank and the
Holding Company are subject to supervision by the Office of Thrift
Supervision (the “OTS”); 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
stockholders; and
WHEREAS, the Board of Directors of
the Bank believes it is in the best interests of the Bank to enter
into a Change-in-Control 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 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 known of; and
WHEREAS, the Board of Directors of
the Bank has previously approved and authorized the execution of a
Change-in-Control Agreement with the Employee; and
WHEREAS, the parties desire to make
changes to such Agreement to better conform to Section 409A of
the Internal Revenue Code (the “Code”) and for other
reasons; and
WHEREAS, Section 53-8-7 of the
South Dakota Codified Laws permits parties to a written contract to
alter the contract in writing without further consideration;
and
WHEREAS, the HF Financial Corp.
Personnel, Compensation and Benefits Committee has authorized the
Chairman and Chief Executive Officer of the Bank to finalize and
sign the Agreement 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
. This Agreement will commence on
the date hereof and shall continue while the Employee is employed
with the Bank; provided, however, that if either party gives a
notice of nonextension with respect to the Employee’s
Restated Employment Agreement, this Agreement shall terminate when
the Restated Employment Agreement terminates, except that if such
notice of nonextension is given by the Bank at a time when the Bank
is actively negotiating a transaction with a third party that may
result in a Change-in-Control or at a time when shareholders of the
Holding Company are being solicited to vote for directors who would
not be Continuing Directors as defined in Section 2 below and
the election of such directors would effect a Change-in-Control or
at a time when shareholders of the Holding Company are being
solicited to tender their shares in an offering that if successful
would result in a Change-in-Control, this Agreement shall not
terminate until nine months following the termination of the
Restated Employment Agreement.
2.
Change-in-Control
. No benefits shall be payable
hereunder unless there shall have been a Change-in-Control, as set
forth below, and the Employee’s employment is terminated as
described in this Agreement. For purposes of this Agreement, a
“Change-in-Control” shall mean:
a.
a change-in-control of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
whether or not the Holding Company is then subject to such
reporting requirement; or
b.
the public announcement (which, for
purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange
Act) by the Holding Company or any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange
Act) that such person has become the “beneficial owner”
(as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Holding Company
(i) representing 20% or more, but not more than 50%, of the
combined voting power of the Holding Company’s then
outstanding securities unless the transaction resulting in such
ownership has been approved in advance by the Continuing Directors
(as hereinafter defined); or (ii) representing more than 50%
of the combined voting power of the Holding Company’s then
outstanding securities (regardless of any approval by the
Continuing Directors); provided, however, that notwithstanding the
foregoing, no Change-in-Control shall be deemed to have occurred
for purposes of this Agreement by reason of the ownership of 20% or
more of the total voting capital stock of the Holding Company then
issued and outstanding by the Holding Company, any subsidiary of
the Holding Company or any employee benefit plan of the Holding
Company or of any subsidiary of the Holding Company or any
entity
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holding shares of the Common Stock organized,
appointed or established for, or pursuant to the terms of, any such
plan (any such person or entity described in this clause is
referred to herein as a “Company Entity”);
or
c.
any acquisition of control as
defined in 12 Code of Federal Regulations Section 574.4, or
any successor regulation, of the Holding Company which would
require the filing of an application for acquisition of control or
notice of Change-in-Control in a manner which is set forth in 12
CFR Section 574.3, or any successor regulation; or
d.
the Continuing Directors (as
hereinafter defined), cease to constitute a majority of the Holding
Company’s Board of Directors; or
e.
the shareholders of the Holding
Company approve (i) any consolidation or merger of the Holding
Company in which the Holding Company is not the continuing or
surviving Holding Company or pursuant to which shares of Holding
Company stock would be converted into cash, securities or other
property, other than a merger of the Holding Company in which
shareholders immediately prior to the merger have the same
proportionate ownership of stock of the surviving Holding Company
immediately after the merger; (ii) any sale, lease, exchange
or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the
Holding Company; or (iii) any plan of liquidation or
dissolution of the Holding Company.
For purposes of this definition,
“Continuing Director” shall mean any person who is a
member of the Board of Directors of the Holding Company, while such
person is a member of the Board of Directors, who is not an
Acquiring Person (as defined below) or an Affiliate or Associate
(as defined below) of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, and who
(i) was a member of the Board of Directors on July 2,
2007; or (ii) subsequently becomes a member of the Board of
Directors, if such person’s initial nomination for election
or initial election to the Board of Directors is recommended or
approved by a majority of the Continuing Directors. For purposes of
this definition, “Acquiring Person” shall mean any
“person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) who or which,
together with all Affiliates and Associates of such person, is the
“beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act) directly or indirectly, of
securities of the Holding Company representing 20% or more of the
combined voting power of the Holding Company’s then
outstanding securities, but shall not include the Investors or any
Holding Company Entity; and “Affiliate” and
“Associate” shall have their respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act.
3.
Termination Following a
Change-in-Control . If a
Change-in-Control shall have occurred during the term of this
Agreement, the Employee shall be entitled to the benefits provided
in Section 4(a) hereof upon termination of the
Employee’s employment within 24 months following the month in
which a Change-in-Control occurs unless such termination is:
(i) because of the Employee’s death or Disability (as
defined
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below); (ii) by the Bank for Cause (as
defined below); or (iii) by the Employee other than for Good
Reason (as defined below):
a.
Cause . Termination by the Bank of the
Employee’s employment for “Cause” shall mean
termination upon (i) material violation of a law or regulation
which: (a) governs the Employee’s conduct as an officer
of the Bank; or (b) in the reasonable opinion of the Bank
affects the Employee’s fitness to serve in his position;
(ii) substantial neglect of the Employee’s duties;
(iii) action or inaction, which materially and adversely
impacts the Bank’s safety, soundness, security, assets,
customers or employees; (iv) dishonesty of a material nature;
(v) failure to comply with material rules, regulations or
policies of the Bank; (vi) engaging in personal conduct which,
when considering the Employee’s position with the Bank, would
materially detract from its business reputation in the community
served; (vii) material breach of any material covenant or
condition of the Employee’s Restated Employment Agreement;
and (viii) willful and material misconduct.
Termination for Cause shall be
preceded by a fair and complete investigation, including an
opportunity for the Employee to provide information the Employee
deems relevant.
b.
Good Reason
. The Employee’s termination
of employment for “Good Reason” shall mean termination
by the Employee upon the occurrence, without his express written
consent, within 24 months following a Change-in-Control of any one
or more of the following:
(i)
the assignment to the Employee of
any duties inconsistent in any respect with the Employee’s
position (including status, offices, titles, and reporting
requirements), authorities, duties, or other responsibilities as in
effect immediately prior to the Change-in-Control or any other
action of the Bank which results in a diminishment in such
position, authority, duties, or responsibilities, other than an
insubstantial and inadvertent action which is remedied by the Bank
promptly after receipt of notice thereof given by the
Employee;
(ii)
a reduction by the Bank in the
Employee’s base salary as in effect on the date hereof or as
the same shall be increased from time-to-time;
(iii)
the failure by the Bank to
(a) continue in effect any material compensation or benefit
plan, program, policy or practice in which the Employee was
participating at the time of the Change-in-Control, or
(b) provide the Employee with compensation and benefits at
least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each employee benefit
plan, program, policy and practice as in effect immediately prior
to the Change-in-Control (or as in effect following the
Change-in-Control, if greater);
(iv)
the failure of the Bank to obtain a
satisfactory agreement from any successor to the Bank to assume and
agree to perform this Agreement, as contemplated in Section 8
hereof; and
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(v)
any purported termination by the
Bank of the Employee’s employment that is not effected
pursuant to a Notice of Termination (as defined below).
The Bank’s right to terminate
Employee’s employment pursuant to this Subsection shall not
be affected by the Employee’s Disability as defined below.
The Employee’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder. Employee’s termination of
employment for Good Reason as defined in this Subsection
3(b) shall constitute termination for Good Reason for all
purposes of this Agreement, notwithstanding that the Employee may
also thereby be deemed to have “retired” under any
applicable retirement programs of the Bank.
c.
Disability
. Disability shall mean incapacity
due to physical or mental illness as determined by the Bank’s
disability plan.
d.
Notice of Termination
. Any purported termination of the
Employee’s employment by the Bank or by the Employee (other
than by reason of the Employee’s death) within 24 months
following the month in which a Change-in-Control occurs, shall be
communicated by Notice of Termination to the other party hereto in
accordance with Section 9 hereof. No purported termination of
the Employee’s employment by the Bank shall be effective if
it is not pursuant to a Notice of Termination. Failure by the
Employee to provide Notice of Termination shall not limit any of
the Employee’s rights under this Agreement except to the
extent the Bank can demonstrate that it
