SECOND AMENDED CHANGE IN CONTROL
SEVERANCE AGREEMENT
THIS SECOND AMENDED CHANGE IN CONTROL SEVERANCE
AGREEMENT (the "Agreement") is made and entered into as of this
21st day of April, 2009 by and includes the amendments made on
December 21, 2007, between HOME FEDERAL BANK (which, together with
any successor thereto which executes and delivers the assumption
agreement provided for in Section 5(a) hereof or which otherwise
becomes bound by all of the terms and provisions of this Agreement
by operation of law, is hereinafter referred to as the "Savings
Bank"), and Steven D. Emerson (the "Employee").
WHEREAS, the Employee is currently serving as
Executive Vice President and Chief Lending Officer
WHEREAS, the Board of Directors of the Savings
Bank (the "Board") recognizes that the possibility of a change in
control of the Savings Bank or of its holding company, Home Federal
Bancorp, Inc., a Maryland corporation (the "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 to the detriment of the Savings Bank,
the Company and its stockholders; and
WHEREAS, the Board believes it is in the best
interests of the Savings Bank to enter into this Agreement with the
Employee in order to assure continuity of management of the Savings
Bank and to reinforce and encourage the continued attention and
dedication of the Employee to the Employee's assigned duties
without distraction in the face of potentially disruptive
circumstances arising from the possibility of a change in control
of the Company and/or the Savings Bank, although no such change is
now contemplated; and
WHEREAS, it is necessary to amend this Agreement
to reflect a change in the Severance Benefits to be provided under
this Agreement; and
WHEREAS, the Board has approved and authorized
the execution of this Agreement with the Employee;
NOW, THEREFORE, in consideration of the
foregoing and of the respective covenants and agreements of the
parties herein, it is AGREED as follows:
(a) The
term "Change in Control" means (i) any "person," as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any
Consolidated Subsidiaries (as hereinafter defined), any person (as
hereinabove defined) acting on behalf of the Company as underwriter
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
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting
power of the
Company '
s then outstanding securities; (ii)
individuals who are 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 was appointed as a result
of a change at the direction of the Office of Thrift Supervision
("OTS") or the Federal Deposit Insurance Corporation ("FDIC"),
shall be considered a member of the Incumbent Board; (iii) the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than (1) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger
or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no person (as hereinabove defined) acquires
more than 25% of the combined voting power of the Company's then
outstanding securities; or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction
having a similar effect); provided that the term "Change in
Control" shall not include an acquisition of securities by an
employee benefit plan of the Savings Bank or the Company or a
change in the composition of the Board at the direction of the OTS
or the FDIC. Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred in the event of a conversion
of the Company's mutual holding company to stock form or in
connection with any reorganization or action used to effect such
conversion. Neither the conversion of Home Federal MHC
from the mutual to stock form of organization nor any transaction
related to or occurring in connection therewith, shall constitute a
Change in Control event for purposes of this Agreement.
The term "Commencement Date" means December 1st,
2006, the original effective date of this Agreement.
(b) 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 1504 of the Internal Revenue Code of
1986, as amended (the "Code"), without regard to subsection (b)
thereof) that includes the Savings Bank, including but not limited
to the Company.
(c) The term "Date of
Termination" means the date upon which the Employee ceases to serve
as an employee of the Savings Bank.
(d) The term
"Involuntary Termination" means the termination of the employment
of Employee (i) by the Savings Bank, without the Employee's express
written consent; or (ii) by the Employee by reason of a material
diminution of or interference with his duties, responsibilities or
benefits, including (without limitation) if the termination of
employment is within 30 days of any of the following actions unless
consented to in writing by
the Employee:
(1) a requirement that the Employee be based at any place other
than Nampa, Idaho, or within a radius of 35 miles from the location
of the Savings Bank's administrative offices as of the Commencement
Date, except for reasonable travel on Company or Savings Bank
business; (2) a material demotion of the Employee; (3) a material
reduction in the number or seniority of personnel reporting to the
Employee or a material reduction in the frequency with which, or in
the nature of the matters with respect to which such personnel are
to report to the Employee, other than as part of a Savings Bank- or
Company-wide reduction in staff; (4) a reduction in the Employee's
salary or a material adverse change in the Employee's perquisites,
benefits, contingent benefits or vacation, other than as part of an
overall program applied uniformly and with equitable effect to all
members of the senior management of the Savings Bank; (5) a
material permanent increase in the required hours of work or the
workload of the Employee; or (6) any purported termination of the
Employee's employment, except for Termination for Cause (and, if
applicable, the requirements of Section 1(0 hereof), which
purported termination shall not be effective for purposes of this
Agreement. The term "Involuntary Termination" does not include
Termination for Cause, retirement or suspension or temporary or
permanent prohibition from participation in the conduct of the
Savings Bank's affairs under Section 8 of the Federal Deposit
Insurance Act ("FDIA").
(e) The
terms "Termination for Cause" and "Terminated for Cause" mean
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
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