THIS THIRD
AMENDED EMPLOYMENT AGREEMENT (the “Agreement”) is made
and entered into as of this 21st day of April, 2009 by and includes
the amendments made on December 30, 2008, on January 30, 2008 and
on December 21, 2007, between Home Federal Bank (the “Savings
Bank”), and Len E. Williams (the
“Employee”). References to the
“Company” mean Home Federal Bancorp, Inc., a Maryland
corporation.
WHEREAS, the
Employee has made and will continue to make a major contribution to
the success of the Savings Bank in the position of President and
Chief Executive Officer;
WHEREAS, the
Board of Directors of the Savings Bank (the “Board of
Directors”) recognizes that the possibility of a change in
control of the Savings Bank or the Company may occur and that such
possibility, and the uncertainty and questions which may arise
among management, may result in the departure or distraction of key
management to the detriment of the Savings Bank;
WHEREAS, the
Board of Directors believes that 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
its subsidiaries; and
WHEREAS, the
Board of Directors has approved and authorized the execution of
this Agreement with the Employee; and
NOW, THEREFORE,
in consideration of the foregoing and of the respective covenants
and agreements of the parties herein, it is AGREED as
follows:
(a) “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 Effective 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 Effective 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.
(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 experiences a Separation from Service from the Savings
Bank, as specified in a notice of termination pursuant to Section 8
of this Agreement or the date a succession becomes effective under
Section 10.
(d) The
term “Effective Date” means September 11, 2006, the
original effective date of this Agreement.
(e) The
term “Involuntary Termination” means the
Employee’s Separation from Service (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 occurs 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 Effective Date, except for
reasonable travel on 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-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) the failure of the Board of
Directors (or a board of directors of a successor of the Savings
Bank) to elect the Employee as President and Chief Executive
Officer of the Savings Bank (or a successor of the Savings Bank) or
any action by the Board of Directors (or a board of directors of a
successor of the Savings Bank) removing the Employee from such
office. The term “Involuntary Termination”
does not include Termination for Cause, Separation from Service due
to death or permanent disability pursuant to Section 7(f) of this
Agreement, 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”).
(f) The
term “Section 409A” shall mean Section 409A of the Code
and the regulations and guidance of general applicability issued
thereunder.
(g) The
term “Separation from Service” shall have the same
meaning as in Section 409A.
(h) The
terms “Termination for Cause” and “Terminated for
Cause” mean the Employee’s Separation from Service
with the Savings Bank 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. 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.
2.
Term . The initial term of this Agreement shall
be a period of one year, commencing on the Effective Date, subject
to earlier termination as provided herein (the “Initial
Term”). Beginning on the first anniversary of the Effective
Date, the term of this Agreement shall be extended for a period of
two years, provided that (i) neither the Employee nor the
Company has given notice to the other in writing at least 90 days
prior to the end of such two-year term that this Agreement shall
not be extended further; and (ii) prior to the end of such two-year
term, the Board of Directors, or a committee of the Board of
Directors which has been delegated authority to act on such matters
by the Board of Directors (“Committee”), explicitly
reviews and approves the extension (the “Second
Term”). Assuming the Employee’s employment
has not been previously terminated pursuant to the preceding
sentence, or otherwise under this Agreement, on the third
anniversary of the Effective Date, and on each anniversary
thereafter, the term of this Agreement shall be extended for a
period of one year, provided that (i) neither the Employee
nor the Company has given notice to the other in writing at least
90 days prior to such anniversary
that the term
of this Agreement shall not be extended further; and (ii) prior to
such anniversary, the Board of Directors, or the Committee,
explicitly reviews and approves the extension (an “Extended
Term”). Reference herein to the term of this
Agreement shall refer to both such initial term and such extended
terms.
3.
Employment . The Employee shall be employed as
the President and Chief Executive Officer of the Savings
Bank. As such, the Employee shall render all services
and possess the powers as are customarily performed by persons
situated in similar executive capacities, and shall have such other
powers and duties as the Board of Directors may prescribe from time
to time. The Employee shall also render services to the
Company or any subsidiary or subsidiaries of the Company or Savings
Bank as requested by the Savings Bank from time to time consistent
with his executive position. The Employee shall devote
his best efforts and reasonable time and attention to the business
and affairs of the Savings Bank to the extent necessary to
discharge his responsibilities hereunder. The Employee
may (i) serve on charitable or civic boards or committees and, in
addition, on such corporate boards as are approved in a resolution
adopted by a majority of the Board of Directors or the Committee,
which approval shall not be withheld unreasonably and (ii) manage
personal investments, so long as such activities do not interfere
materially with performance of his responsibilities
hereunder.
(a)
Salary . The Savings Bank agrees to pay the
Employee during the term of this Agreement a base salary (the
“Salary”) in the annualized amount of
$200,000. The Salary shall be paid no less
frequently than monthly and shall be subject to customary tax
withholding. The amount of the Employee's Salary shall
be increased (but shall not be decreased) from time to time in
accordance with the amounts of salary approved by the Board of
Directors or the Committee or the board of directors or the
appropriate committee of the Savings Bank after the Effective
Date. The amount of the Salary shall be reviewed by the
Board of Directors or the Committee at least annually during the
term of this Agreement.
(b)
Bonuses . The Employee shall be entitled to
participate in an equitable manner with all other executive
officers of the Savings Bank in such performance-based and
discretionary bonuses, if any, as are authorized and declared by
the Board of Directors or the Committee for executive
officers. Bonuses provided for under this Agreement
shall be paid no later than 2½ months after the end of the
year in which the Employee obtains a legally binding right to such
payments.
(c)
Expenses . The Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to the
executive officers of the Savings Bank, provided that the
Employee accounts for such expenses as required under such policies
and procedures.
