HOMEFEDERAL BANK DIRECTOR DEFERRED FEE AGREEMENT

1.1

“ Beneficiary ” means each designated person, or the estate of a deceased Director, entitled to benefits, if any, upon the death of the Director determined pursuant to Article 6.

1.2

“ Beneficiary Designation Form ” means the form established from time to time by the Plan Administrator that the Director completes, signs and returns to the Plan Administrator to designate one or more beneficiaries.

1.3

“ Board ” means the Board of Directors of the Bank as from time to time constituted.

1.4

“ Code ” means the Internal Revenue Code of 1986, as amended.

1.5

“ Corporation ” means Home Federal Bancorp or its successor.

1.6

“ Deferral Account ” means the balance of the Director’s accumulated fee deferrals, plus accrued interest.

1.7

“ Distribution Period Crediting Rate ” means a rate equal to 2.00% over the average yield on the 10-year Treasury Bond for the month prior to commencement of benefit payments, provided that such crediting rate shall not be more than 12.00%, nor less than 8.00%.

1.8

“ Early Termination ” means Separation from Service before Normal Benefit Age for reasons other than death or Termination for Cause.

1.9

“ Effective Date ” means January 1, 2006.

1.10

“ Normal Benefit Age ” means the Director attaining age sixty (60).

1.11

“ Plan Administrator ” means the plan administrator described in Article 8.

1.12

“ Plan Year ” means the calendar year.

1.13

“ Pre-Distribution Period Crediting Rate ” means an annual rate equal to the trailing 3-year average ROE, provided such average ROE shall not exceed 12.00%, nor be less than 8.00%. For example, the rate for 2006 will be the average ROE for 2003, 2004, and 2005.

1.14

“ Prescribed Form of Payment ” shall mean one hundred eighty (180) equal monthly installments. Interest shall be credited on the unpaid Deferral Account balance during the payment period at an annual rate equal to the Distribution Period Crediting Rate, compounded monthly. The Distribution Period Crediting Rate shall be set at the inception of the payment period and shall not be adjusted thereafter.

1.15

“ ROE ” means the average return on equity, as reported in the published financial statements of the Corporation.

1.16

“ Rollover Balance” means the balance of $283,661 from the Prior Agreement.

1.17

“ Secretary ” means the Secretary of the United States Department of the Treasury.

1.18

“ Separation from Service ” means that the Director’s service, as a director and independent contractor, to the Bank and any member of a controlled group as defined in Section 414 of the Code to which the Bank belongs, has terminated for any reason, other than by reason of a leave of absence approved by the Bank or the death of the Director.

1.19

“ Termination for Cause ” has that meaning set forth in Section 7.1.

3.1

Crediting . The Bank shall credit to the Director’s Deferral Account the following amounts:

3.1.1

Rollover. The Rollover Balance from the Prior Agreement.

3.1.2

Interest . On the last day of each month and continuing until the commencement of benefit payments, interest shall be credited on the unpaid Deferral Account balance at an annual rate equal to the Pre-Distribution Period Crediting Rate, compounded monthly.

3.2

Statement of Accounts . The Plan Administrator shall provide to the Director, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the Deferral Account balance.

3.3

Accounting Device Only . The Deferral Account is solely a device for measuring amounts to be paid under this Agreement. The Deferral Account is not a trust fund of any kind. The Director is a general unsecured creditor of the Bank for the distribution of benefits. The benefits represent the mere Bank promise to pay such benefits. The Director's rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Director's creditors.

4.1

Normal Retirement Benefit . Upon the Director reaching Normal Benefit Age, the Bank shall pay to the Director the benefit described in this Section 4.1 in lieu of any other benefit under this Article.

4.1.1

Amount of Benefit . The benefit under this Section 4.1 is the Deferral Account balance at the Director's Normal Benefit Age.

4.1.2

Distribution of Benefit . The Bank shall pay the benefit to the Director in the Prescribed Form of Payment commencing as of the first day of the month following the Director’s Normal Benefit Age.

4.2

Early Termination Benefit . In the event of the Director’s Early Termination, the Bank shall pay to the Director the benefit described in this Section 4.2 in lieu of any other

4.2.1

Amount of Benefit . The benefit under this Section 4.2 is the Deferral Account balance at the Director's Normal Benefit Age.

4.2.2

Distribution of Benefit . The Bank shall pay the benefit to the Director in the Prescribed Form of Payment commencing on the first day of the month following the Director’s Normal Benefit Age.

4.3

Restriction on Timing of Distribution .  Notwithstanding any provision of this Agreement to the contrary and to the extent this Agreement is subject to Section 409A of the Code, if the Director is considered a “specified employee” under Section 409A of the Code and regulations thereunder, benefit distributions that qualify as a "separation from service" under Section 409A of the Code and regulations thereunder may not commence earlier than six (6) months after the date of such separation from service. In the event this Section 4.3 applies, the Prescribed Form of Payment shall be deemed to have commenced when it otherwise would have and any monthly payments that may not be made during the first six (6) months following separation from service shall be paid in a lump sum as of the first month payment is permitted.

5.1

Death During Active Service . If the Director dies while in active service to the Bank, the Bank shall pay to the Beneficiary the greater of the Deferral Account or $539,393. This benefit shall be paid to the Beneficiary, in the Prescribed Form of Payment commencing on the first day of the month following receipt by the Bank of the Director’s death certificate.

5.2

Death During Distribution of a Benefit . If the Director dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall pay to the Beneficiary the remaining benefits at the same time and in the same amounts as they would have been paid to the Director had the Director survived.

5.3

Death After Separation from Service But Before Benefit Distributions Commence . If the Director is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Bank shall pay to the Beneficiary the same benefits that the Director was entitled to prior to death except that the benefit distributions shall commence on the first day of the month following receipt by the Bank of the Director’s death certificate.

6.1

Beneficiary . Each Director shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefits