proxy091219.htm
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by
the Registrant ■
Filed by
a Party other than the Registrant □
Check the
appropriate box:
□ Preliminary
Proxy Statement
□ Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).
■ Definitive
Proxy Statement
□ Definitive
Additional Materials
□ Soliciting
Material Pursuant to Rule 14a-12
HOME
FEDERAL BANCORP, INC.
(Name of
Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
■ No
fee required.
□ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction applies:
N/A
(2) Aggregate
number of securities to which transactions applies:
(3) Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
□ Fee
paid previously with preliminary materials:
□
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
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(1) Amount
previously paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
December
18, 2009
Dear
Fellow Stockholder:
On behalf of the Board of Directors and
management of Home Federal Bancorp, Inc., we cordially invite you to attend the
annual meeting of stockholders. The meeting will be held at 3:00
p.m., local time, on Tuesday, January 19, 2010 at the Silverstone Corporate
Plaza, 3405 East Overland Road, Meridian, Idaho.
The matters expected to be acted upon
at the meeting are described in the attached proxy statement. In
addition, we will report on our progress during the past year and address your
questions and comments.
We encourage you to attend the meeting
in person. Whether or not you plan to attend, please read the enclosed proxy
statement and then complete, sign and date the enclosed proxy card and return it
in the accompanying postpaid return envelope as promptly as
possible. This will save us the additional expense
of soliciting proxies and will ensure that your shares are represented at the
annual meeting.
Your Board of Directors and management
are committed to the continued success of Home Federal Bancorp, Inc. and the
enhancement of your investment. As President and Chief Executive
Officer, I want to express my appreciation for your confidence and
support.
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Sincerely,
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/s/Len
E. Williams |
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Len
E. Williams
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President
and Chief Executive Officer
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HOME
FEDERAL BANCORP, INC.
500
12TH
AVENUE SOUTH
NAMPA,
IDAHO 83651
(208)
466-4634
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO
BE HELD ON JANUARY 19, 2010
Notice is hereby given that the annual
meeting of stockholders of Home Federal Bancorp, Inc. will be held at the
Silverstone Corporate Plaza, 3405 East Overland Road, Meridian, Idaho, on
January 19, 2010, at 3:00 p.m., local time. A proxy card and a proxy statement
for the annual meeting are enclosed.
The annual meeting is for the purpose
of considering and voting on the following proposals:
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Proposal
1.
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Election
of two directors of Home Federal Bancorp, Inc. for three-year terms;
and
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Proposal
2.
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Ratification
of the appointment of Crowe Horwath LLP as Home Federal Bancorp, Inc.’s
independent registered public accounting firm for the fiscal year ending
September 30, 2010.
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Stockholders
also will transact such other business as may properly come before the annual
meeting, or any adjournment or postponement thereof. As of the date
of this notice, we are not aware of any other business to come before the annual
meeting.
The Board of Directors has fixed the
close of business on December 4, 2009, as the record date for the annual
meeting. This means that stockholders of record at the close of
business on that date are entitled to receive notice of and to vote at the
meeting and any adjournment thereof. To ensure that your shares are
represented at the meeting, please take the time to vote by signing, dating and
mailing the enclosed proxy card which is solicited on behalf of the Board of
Directors. The proxy will not be used if you attend and vote at the
annual meeting in person. Regardless of the number of shares you own,
your vote is very important. Please act today.
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BY ORDER OF THE
BOARD OF DIRECTORS |
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/s/Eric S.
Nadeau |
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Eric S.
Nadeau |
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Secretary
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Nampa,
Idaho
December
18, 2009
Important: The prompt return of
proxies will save us the expense of further requests for proxies to ensure a
quorum at the annual meeting. A pre-addressed envelope is enclosed
for your convenience. No postage is required if mailed within the
United States.
OF
HOME
FEDERAL BANCORP, INC.
500
12TH
AVENUE SOUTH
NAMPA,
IDAHO 83651
(208)
466-4634
ANNUAL MEETING OF
STOCKHOLDERS
The Board of Directors of Home Federal
Bancorp, Inc. is using this proxy statement to solicit proxies from our
stockholders for use at the annual meeting of stockholders. We are
first mailing this proxy statement and the enclosed form of proxy to our
stockholders on or about December 18, 2009.
The information provided in this proxy
statement relates to Home Federal Bancorp, Inc. and its wholly-owned subsidiary,
Home Federal Bank. Home Federal Bancorp, Inc. may also be referred to
as “Home Federal” or the “Company.” References to “we,” “us” and
“our” refer to Home Federal and, as the context requires, Home Federal
Bank.
INFORMATION ABOUT THE ANNUAL
MEETING
Time
and Place of the Annual Meeting
Our annual meeting will be held as
follows:
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Date: |
Tuesday,
January 19, 2010 |
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Time:
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3:00
p.m., local time
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Place:
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Silverstone
Corporate Plaza, 3405 East Overland Road, Meridian,
Idaho
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Matters
to Be Considered at the Annual Meeting
At the meeting, you will be asked to
consider and vote upon the following proposals:
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Proposal
1.
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Election
of two directors of Home Federal for three-year terms;
and
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Proposal
2.
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Ratification
of the appointment of Crowe Horwath LLP as our independent registered
public accounting firm for the fiscal year ending September 30,
2010.
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You also
will transact any other business that may properly come before the annual
meeting. As of the date of this proxy statement, we are not aware of
any other business to be presented for consideration at the annual meeting other
than the matters described in this proxy statement.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Shareholders to Be Held on January 19, 2010
Our Proxy Statement and Annual Report
to Stockholders, are available at www.myhomefed.com/proxy. The following materials
are available for review:
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Proxy
Statement;
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Proxy
Card;
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Annual
Report to Stockholders; and
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Directions
to attend the annual meeting, where you may vote in
person.
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Who
is Entitled to Vote?
We have fixed the close of business on
December 4, 2009, as the record date for stockholders entitled to notice of and
to vote at our annual meeting. Only holders of record of Home
Federal’s common stock on that date are entitled to notice of and to vote at the
annual meeting. You are entitled to one vote for each share of Home
Federal common stock you own. On December 4, 2009, there were
16,698,168 shares of Home Federal common stock outstanding and entitled to vote
at the annual meeting.
How
Do I Vote at the Annual Meeting?
Proxies are solicited to provide all
stockholders of record on the voting record date an opportunity to vote on
matters scheduled for the annual meeting and described in these
materials. You are a stockholder of record if your shares of Home
Federal common stock are held in your name. If you are a beneficial
owner of Home Federal common stock held by a broker, bank or other nominee
(i.e., in “street name”), please see the instructions in the following
question.
Shares of Home Federal common stock can
only be voted if the stockholder is present in person or by proxy at the annual
meeting. To ensure your representation at the annual meeting, we
recommend you vote by proxy even if you plan to attend the annual
meeting. You can always change your vote at the meeting if you are a
stockholder of record.
Voting instructions are included on
your proxy card. Shares of Home Federal common stock represented by
properly executed proxies will be voted by the individuals named on the proxy
card in accordance with the stockholder’s instructions. Where
properly executed proxies are returned to us with no specific instruction as how
to vote at the annual meeting, the persons named in the proxy will vote the
shares “FOR” the election of each of management’s director nominees and “FOR”
ratification of the appointment of Crowe Horwath LLP as our independent
registered public accounting firm for the fiscal year ending September 30,
2010. If any other matters are properly presented at the annual
meeting for action, the persons named in the enclosed proxy and acting
thereunder will have the discretion to vote on these matters in accordance with
their best judgment. We do not currently expect that any other
matters will be properly presented for action at the annual
meeting.
You may receive more than one proxy
card depending on how your shares are held. For example, you may hold
some of your shares individually, some jointly with your spouse and some in
trust for your children. In this case, you will receive three
separate proxy cards to vote.
What
if My Shares Are Held in “Street Name” by a Broker?
If you are the beneficial owner of
shares held in “street name” by a broker, your broker, as the record holder of
the shares, is required to vote the shares in accordance with your
instructions. If you do not give instructions to your broker, your
broker may nevertheless vote the shares with respect to discretionary items, but
will not be permitted to vote your shares with respect to non-discretionary
items, pursuant to current industry practice. In the case of
non-discretionary items, the shares not voted will be treated as “broker
non-votes.” The proposal to elect directors is considered a
non-discretionary item under the rules governing brokers that are members of the
New York Stock Exchange; therefore, you must provide instructions to your broker
in order to have your shares voted in the election of directors.
If your shares are held in street name,
you will need proof of ownership to be admitted to the annual
meeting. A recent brokerage statement or letter from the record
holder of your shares are examples of proof of ownership. If you want
to vote your shares of common stock held in street name in person at the annual
meeting, you will have to get a written proxy in your name from the broker, bank
or other nominee who holds your shares.
How
Will My Shares of Common Stock Held in the Employee Stock Ownership Plan Be
Voted?
We maintain an employee stock ownership
plan (“ESOP”) which owns 8.14% of Home Federal’s common
stock. Employees of Home Federal and Home Federal Bank participate in
the ESOP. Each ESOP participant may instruct the trustee of the plan
how to vote the shares of Home Federal common stock allocated to his or her
account
under the
ESOP by completing a vote authorization form. If an ESOP participant
properly executes a vote authorization form, the ESOP trustee will vote the
participant’s shares in accordance with the participant’s
instructions. Unallocated shares of Home Federal common stock held by
the ESOP will be voted by trustee in the same proportion as shares for which the
trustee has received voting instructions. Allocated shares for which
proper voting instructions are not received will be voted by the trustee as
directed by the ESOP administrator. In order to give the trustees
sufficient time to vote, all vote authorization forms from ESOP participants
must be received by the transfer agent on or before January 15,
2010.
How
Many Shares Must Be Present to Hold the Meeting?
A quorum must be present at the meeting
for any business to be conducted. The presence at the meeting, in
person or by proxy, of at least a majority of the shares of Home Federal common
stock entitled to vote at the annual meeting as of the record date will
constitute a quorum. Proxies received but marked as abstentions or
broker non-votes will be included in the calculation of the number of shares
considered to be present at the meeting.
What
if a Quorum Is Not Present at the Meeting?
If a quorum is not present at the
scheduled time of the meeting, a majority of the stockholders present or
represented by proxy may adjourn the meeting until a quorum is
present. The time and place of the adjourned meeting will be
announced at the time the adjournment is taken, and no other notice will be
given unless the adjourned meeting is set to be held after April 3, 2010 or a
new record date for the meeting is set. An adjournment will have no
effect on the business that may be conducted at the meeting.
Vote
Required to Approve Proposal 1: Election of Directors
Directors are elected by a plurality of
the votes cast, in person or by proxy, at the annual meeting by holders of Home
Federal common stock. Accordingly, the two nominees for election as
directors who receive the highest number of votes actually cast will be
elected. Pursuant to our Articles of Incorporation, stockholders are
not permitted to cumulate their votes for the election of
directors. Votes may be cast for or withheld from each
nominee. Votes that are withheld and broker non-votes will have no
effect on the outcome of the election because the nominees receiving the
greatest number of votes will be elected. Our Board of Directors unanimously
recommends that you vote “FOR” the election of each of its director
nominees.
Vote
Required to Approval Proposal 2: Ratification of the Appointment of Our
Independent Registered Public Accounting Firm
Ratification of the appointment of
Crowe Horwath LLP as our independent registered public accounting firm for the
fiscal year ending September 30, 2010, requires the affirmative vote of the
majority of shares cast, in person or by proxy, at the annual meeting by holders
of Home Federal common stock. Abstentions will have the effect of a
vote against this proposal. Our Board of Directors unanimously
recommends that you vote “FOR” the proposal to ratify the appointment of Crowe
Horwath LLP as our independent registered public accounting firm for the fiscal
year ending September 30, 2010.
May
I Revoke My Proxy?
You may revoke your proxy before it is
voted by:
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submitting
a new proxy with a later date;
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notifying
the Secretary of Home Federal in writing before the annual meeting that
you have revoked your proxy; or
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voting
in person at the annual
meeting.
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If you plan to attend the annual
meeting and wish to vote in person, we will give you a ballot at the annual
meeting. However, if your shares are held in “street name,” you must
bring a validly executed proxy from the nominee indicating that you have the
right to vote your shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of
December 4, 2009, information regarding share ownership of:
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those
persons or entities (or groups of affiliated person or entities) known by
management to beneficially own more than five percent of Home Federal’s
common stock other than directors and executive
officers;
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each
director and director nominee of Home Federal;
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each
executive officer of Home Federal or Home Federal Bank named in the
Summary Compensation Table appearing under “Executive Compensation” below
(known as “named executive officers”); and
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all
current directors and executive officers of Home Federal and Home Federal
Bank as a group.
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Persons and groups who beneficially own
in excess of five percent of Home Federal’s common stock are required to file
with the Securities and Exchange Commission (“SEC”), and provide a copy to Home
Federal, reports disclosing their ownership pursuant to the Securities Exchange
Act of 1934. To our knowledge, no other person or entity, other than
the ones set forth below, beneficially owned more than five percent of the
outstanding shares of Home Federal’s common stock as of the close of business on
the voting record date.
Beneficial ownership is determined in
accordance with the rules and regulations of the SEC. In accordance
with Rule 13d-3 of the Securities Exchange Act, a person is deemed to be the
beneficial owner of any shares of common stock if he or she has voting and/or
investment power with respect to those shares. Therefore, the table
below includes shares owned by spouses, other immediate family members in trust,
shares held in retirement accounts or funds for the benefit of the named
individuals, and other forms of ownership, over which shares the persons named
in the table may possess voting and/or investment power. In addition,
in computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock subject to
outstanding options that are currently exercisable or exercisable within 60 days
after the voting record date are included in the number of shares beneficially
owned by the person and are deemed outstanding for the purpose of calculating
the person’s percentage ownership. These shares, however, are not
deemed outstanding for the purpose of computing the percentage ownership of any
other person.
As of December 4, 2009, there were
16,698,168 shares of Home Federal common stock outstanding.
Name
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Number
of Shares
Beneficially
Owned (1)
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Percent
of Common Stock
Outstanding
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Beneficial
Owners of More Than 5%
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Keeley
Asset Management Corp.
401
South LaSalle Street
Chicago,
Illinois 60605
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1,615,452
(2)
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9.67
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Capital
World Investors
333
South Hope Street
Los
Angeles, California 90071
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1,504,249
(3)
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9.01
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Home
Federal Bancorp, Inc. Employee Stock Ownership Plan
500
12th
Avenue South
Nampa,
Idaho 83651
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1,359,962
(4)
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8.14
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(Table
continues on following page)
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Name
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Number
of Shares
Beneficially
Owned (1)
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Percent
of Common Stock
Outstanding
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Wellington
Management Company, LLP
75
State Street
Boston,
Massachusetts 02109
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1,020,128(5)
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6.11 |
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Firefly
Management Partners, LP
551
Fifth Ave., 36th
Floor
New
York, NY 10176
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890,014(6) |
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5.33 |
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Columbia
Management Advisors LLC
100
Federal Street
Boston,
MA 02110
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868,430(7) |
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5.20 |
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Castine
Capital Management LLC
One
International Place, Suite 2401
Boston,
MA 02110
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853,051(8) |
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5.11 |
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Dimensional
Fund Advisors, LP
6300
Bee Cave Road
Austin,
TX 78746-5149
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841,669(9) |
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5.04 |
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Directors
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Daniel
L. Stevens
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189,255(10) |
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1.13 |
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N.
Charles Hedemark
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65,763(11) |
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* |
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Brad
J. Little
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10,000 |
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* |
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Richard
J. Navarro
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20,040 |
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* |
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James
R. Stamey
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45,951(12) |
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* |
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Robert
A. Tinstman
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65,263 |
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* |
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Len
E. Williams (13)
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187,918 |
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1.12 |
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Named
Executive Officers
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Eric
S. Nadeau
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39,038 |
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* |
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Steven
D. Emerson
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63,978 |
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* |
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Steven
K. Eyre
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59,936 |
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* |
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Cindy
L. Bateman
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18,954 |
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* |
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Directors
and Executive Officers of Home Federal
and
Home Federal Bank as a group (11 persons)
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766,096 |
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4.59% |
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_____________
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*
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Less
than one percent of shares outstanding.
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(1)
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The
amounts shown also include the following number of shares which the
indicated individuals have the right to acquire within 60 days of the
voting record date through the exercise of stock options: Mr. Stevens -
37,249; Messrs. Hedemark, Stamey and Tinstman - 20,318; Mr. Navarro -
13,632; Mr. Williams - 53,916; Mr. Nadeau -5,000; Mr. Emerson -18,846; Mr.
Eyre -11,360, Ms. Bateman - 1,084; and all directors and officers as a
group - 202,041.
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(2)
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Based
solely on a Schedule 13F dated November 12, 2009 regarding shares owned as
of September 30, 2009.
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(3)
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Based
solely on a Schedule 13F dated November 16, 2009, regarding shares owned
as of September 30, 2009.
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(4)
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Based
solely on a Schedule 13G/A dated February 13, 2009 regarding shares owned
as of December 31, 2008, the Home Federal Bancorp, Inc. Employee Stock
Ownership Plan had sole voting power with respect to 1,114,881 shares,
shared voting power with respect to 245,081 shares and sole dispositive
power with respect to 1,359,962 shares.
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(5)
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Based
solely on a Schedule 13F dated November 16, 2009 regarding shares owned as
of September 30, 2009, reporting sole voting power with respect to 815,180
shares and sole dispositive power with respect to 204,948
shares.
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(6)
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Based
solely on a Schedule 13G filed on November 20, 2009, regarding shares
owned as of September 30, 2009.
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(Footnotes
continue on following page)
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(7)
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Based
solely on a Schedule 13F regarding shares owned as of September 30,
2009. According to that filing, shares are held in several
mutual funds, none of which holds more than five percent of this class of
stock.
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(8)
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Based
solely on a Schedule 13G filed on November 13, 2009 regarding shares owned
as of September 30, 2009.
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(9)
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Based
solely on a Schedule 13F filed on October 29, 2009, regarding shares owned
as of September 30, 2009, representing sole voting power with respect to
806,916 shares and sole dispositive power with respect to 34,753
shares.
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(10)
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Includes
28,400 shares held solely by his wife, all of which have been
pledged.
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(11)
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Includes
28,900 shares held jointly with his wife.
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(12)
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Includes
11,360 shares held jointly with his wife.
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(13)
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Mr.
Williams is also a named executive
officer.
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The Board of Directors has adopted a
stock ownership policy for directors and executive officers of Home Federal and
Home Federal Bank. Directors and executive officers, including the named
executive officers in this proxy statement, are required to own common stock
with a value of at least $20,000 within two years of becoming a director or
executive officer. Each director and executive officer is then required to be
the beneficial owner of at least $20,000 of the Company’s common stock during
their tenure as a Director or Executive Officer.
PROPOSAL 1 – ELECTION OF DIRECTORS
Our Board of Directors consists of
seven members and is divided into three classes. Approximately
one-third of the directors are elected annually to serve for a three-year period
or until their respective successors are elected and qualified. The
table below sets forth information regarding each director of Home Federal and
each nominee for director, including his age, position and term of
office. The Corporate Governance/Nominating Committee of the Board of
Directors selects nominees for election as directors. Each of our
nominees currently serves as a Home Federal director. Each nominee
has consented to being named in this Proxy Statement and has agreed to serve if
elected. If a nominee is unable to stand for election, the Board of
Directors may either reduce the number of directors to be elected or select a
substitute nominee. If a substitute nominee is selected, the proxy
holders will vote your shares for the substitute nominee, unless you have
withheld authority. At this time, we are not aware of any reason why
a nominee might be unable to serve if elected.
The Board of Directors recommends you
vote “FOR” the election of Messrs. Stamey and Tinstman.
Name
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Age
(1)
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Position(s)
Held with Home Federal
and
Home Federal Bank
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Director
Since
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Term
to
Expire
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Nominees
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James
R. Stamey
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66
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Director
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2001
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2013
(2)
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Robert
A. Tinstman
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63
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Director
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1999
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2013 (2)
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Directors
Continuing in Office
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N.
Charles Hedemark
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67
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Director
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1983
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2011
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Len
E. Williams
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50
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Director,
President and Chief Executive Officer
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2007
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2011
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Daniel
L. Stevens
|
|
66
|
|
Chairman
|
|
1996
|
|
2012
|
Richard
J. Navarro
|
|
57
|
|
Director
|
|
2005
|
|
2012
|
Brad
J. Little
|
|
55
|
|
Director
|
|
2009
|
|
2012
|
_______________
(1)
|
As
of September 30, 2009.
|
(2)
|
Assuming
re-election.
|
Set forth below is the principal
occupation of each nominee for director and each director continuing in
office. All nominees and directors have held their present positions
for at least five years unless otherwise indicated.
James R. Stamey is a retired banker,
having been employed by U.S. Bank from 1985 until 2001, where he last served as
President of U.S. Bank, Idaho and Executive Vice President and Manager of
Corporate Banking of the Intermountain Region. He also served as
President of the Library Foundation and President of the Idaho Association of
Commerce and Industry, and served on the Board of Directors for the Boise
Philharmonic, the Idaho Bankers Association and the Boise Rotary
Club.
Robert A. Tinstman is a consultant for
Tinstman and Associates, LLC, a construction consulting company. From
May 2002 until May 2007, he was Executive Chairman of the James Construction
Group, LLC, Baton Rouge, Louisiana, a construction company. Prior to
that, Mr. Tinstman was the sole owner and a consultant of Tinstman &
Associates, Boise, Idaho, a construction consulting company, from May 1999 until
May 2002. He served as President and Chief Executive Officer of the
Morrison-Knudsen Company, Boise, Idaho, an engineering, construction and mining
company, from 1995 until February 1999, where he had been employed since May
1974. Mr. Tinstman is also a director of IDACORP, Inc., Boise, Idaho,
and CNA Surety Corporation, a Chicago, Illinois insurance agency, both of which
are public companies.
N. Charles Hedemark retired as
Executive Vice President and Chief Operating Officer of Intermountain Gas
Company, a natural gas utility company in July 2005, after serving as an
employee since 1965. Mr. Hedemark is a graduate of The College of
Idaho and the Executive Program at Stanford University. He is a
director and past Chairman of Blue Cross of Idaho. Mr. Hedemark is
also a director of the Capital City Development Corporation and is a past
President of the Northwest Gas Association.
Len E. Williams is President and Chief
Executive Officer of Home Federal and Home Federal Bank. He joined
Home Federal Bank as President in September 2006, was appointed as a director of
Home Federal Bank and Home Federal in April 2007 and became President and Chief
Executive Officer of Home Federal and Chief Executive Officer of Home Federal
Bank upon Mr. Stevens’ retirement in January 2008. Mr. Williams has
over 30 years of commercial banking experience serving in many regional and
national leadership roles. Prior to joining Home Federal Bank, Mr.
Williams was Senior Vice President and Head of Business Banking with Fifth Third
Bank. He was charged with creating and growing the business line and
providing leadership over the company’s business banking personnel, processes
and products. From 1987 to 2005, he held several management positions
with Key Bank, including President of Business Banking from 2003 to
2005 and President of the Colorado District from 1999 to 2003. His
prior experience includes regional corporate and commercial banking leadership
responsibility. Mr. Williams is a member of the Board of Directors of
the Boise Metro Chamber of Commerce and has served as chairman of Junior
Achievement and Boys and Girls Clubs. Mr. Williams holds an M.B.A.
from the University of Washington and is a graduate of the Pacific Coast Banking
School.
Daniel L. Stevens is Chairman of the
Board of Home Federal and Home Federal Bank, positions he has held since 2004
and 1999, respectively. He served as President and Chief Executive
Officer of Home Federal from 2004 until he stepped down in January
2008. He also served as Chief Executive Officer of Home Federal Bank
from 1995 until January 2008, and as President of the Bank from 1995 until
September 2006, when he announced his plans for retirement in 2008 and a
successor, Len E. Williams, was appointed President of Home Federal
Bank. Mr. Stevens worked in the financial services industry for over
35 years and served as an executive officer or chief executive officer for four
other mutual and stock thrifts during his career. He is past Vice
Chairman of the Board of Directors of the Federal Home Loan Bank of
Seattle. He served as the Chairman of the Audit Committee and a
member of the Financial Operations Committee of the Federal Home Loan Bank of
Seattle. Mr. Stevens was a director of the Federal Home Loan Bank of
Seattle from 1996 until 2004. He served as a director of America’s Community
Bankers, served on America’s Community Bankers’ Federal Home Loan Bank System
Committee, chaired the America’s Community Bankers Credit Union Committee, and
was First Vice Chair of America’s Community Bankers COMPAC Board of Governors
until the merger of America’s Community Bankers and the American Bankers
Association in 2007. He is a Past Chairman of the Board of the Idaho
Bankers Association, a past Chairman of the Board of Directors and Executive
Committee of the Boise Metro Chamber of Commerce, and a former director of the
Midwest Conference of Community Bankers. He is the former director of
the Boise State University Foundation, and past Chairman of the United Way of
Treasure Valley and the Nampa Neighborhood Housing Services Board of
Directors.
Richard J. Navarro is the Chief
Financial Officer of Albertsons LLC, a retail food and drug company, and has
over 32 years of experience in the industry. Mr. Navarro is a Certified Public
Accountant and from 2004 until 2006, was a consultant providing financial
management services to various business. Prior to that, Mr. Navarro was employed
by Albertsons, Inc. and held several management positions including Senior Vice
President and Controller from 1999 to 2003. He currently serves on the Board of
Directors of TitleOne Corporation and the Boise State University Foundation. He
is also the past Chairman of the Associated Taxpayers of Idaho. Mr. Navarro is a
graduate of Boise State University and the Executive Financial Management
Program at Stanford University, Graduate School of Business.
Brad J. Little serves as Lieutenant
Governor of the State of Idaho. Prior to that appointment, Mr. Little
served as an Idaho State Senator, representing the citizens of Gem and Northern
and Western Canyon Counties since 2000. Since 1980, Mr. Little has
also operated a family cattle, farming, real estate and investment business in
Idaho’s Treasure Valley and has been active in Idaho and national sheep and
public land organizations. He also serves as Vice Chair on the Emmett
School Foundation and on the Idaho Endowment Fund Investment
Board. Mr. Little recently served as Vice Chair of the Idaho
Community Foundation and is past Chairman of the American Sheep Industry Public
Lands Committee, the Idaho Association of Commerce and Industry and Idaho
Business Week. He is a director of Performance Design LLC, a small
manufacturing company in Boise. Mr. Little earned a Bachelor of
Science degree in Agri-Business from the University of Idaho.
MEETINGS AND COMMITTEES OF THE BOARD OF
DIRECTORS
AND
CORPORATE GOVERNANCE MATTERS
Board
of Directors
The Boards of Directors of Home Federal
and Home Federal Bank conduct their business through meetings of the Boards and
through their committees. For the year ended September 30, 2009, both
Boards generally met on a bi-monthly basis, holding additional special meetings
as needed. During the 2009 fiscal year, the Board of Directors of
Home Federal held five regular meetings and no special meetings, and the Board
of Directors of Home Federal Bank held six regular meetings and three special
meetings. No director of Home Federal or Home Federal Bank attended
fewer than 75% of the total meetings of the Boards and committees on which that
person served during this period.
Committees
and Committee Charters
The Board of Directors of Home Federal
has standing Audit, Loan, Compensation, and Corporate Governance/Nominating
Committees, and has adopted written charters for the Audit, Compensation and
Corporate Governance/Nominating Committees. You may obtain a copy of
these documents, free of charge, by writing to: Eric S. Nadeau, Secretary, Home
Federal Bancorp, Inc., 500 12th Avenue
South, Nampa, Idaho 83651, or by calling (208) 466-4634. The charters
are also available on our website at www.myhomefed.com.
Audit
Committee
The Audit Committee consists of
Directors Tinstman (Chairman), Hedemark, Navarro and Stamey. The
Committee meets quarterly and on an as needed basis to evaluate the
effectiveness of Home Federal’s internal controls for safeguarding its assets
and ensuring the integrity of the financial reporting. The Committee
also appoints the independent registered public accounting firm and reviews the
audit report prepared by the independent registered public accounting
firm. The Audit Committee met six times during the year ended
September 30, 2009, and held quarterly conference calls to review our earnings
releases and periodic filings with the SEC.
Each member of the Audit Committee is
“independent” in accordance with the requirements for companies quoted on The
Nasdaq Stock Market. Director Navarro has been designated by the
Board of Directors as the “audit committee financial expert,” as defined by the
SEC. Director Navarro is a certified public accountant and is the
Chief Financial Officer of Albertsons LLC.
Corporate
Governance/Nominating Committee
The Corporate Governance/Nominating
Committee consists of Directors Navarro (Chairman), Hedemark and
Little. The Corporate Governance/Nominating Committee and its Chair
are appointed annually by the Board of Directors. Members of the
Committee are selected from the pool of directors who are not up for election
during the appointment year. The Committee meets annually and on an
as needed basis, and is responsible for selecting qualified individuals to fill
expiring director’s terms and openings on the Board of
Directors. Final approval of director nominees is determined by the
full Board, based on the recommendations of the Committee. The
Committee expanded its role during fiscal year 2009 to include oversight of our
Corporate Governance program. The Committee’s duties include the development and
administration of the Company’s corporate governance standards and the internal
evaluation of the Board’s performance. The Corporate
Governance/Nominating Committee met once during the year ended September 30,
2009.
In its deliberations for selecting
candidates for nominees as director, the Nominating Committee considers the
candidate’s knowledge of the banking business and involvement in community,
business and civic affairs, and also considers whether the candidate would
provide for adequate representation of Home Federal Bank’s market
areas Any director nominated by the Committee must be highly
qualified with regard to some or all the attributes listed in the preceding
sentence. In searching for qualified director candidates to fill
vacancies on the Board, the Committee solicits its current Board of Directors
for names of potentially qualified candidates. Additionally, the
Committee may request that members of the Board of Directors pursue their own
business contacts for the names of potentially qualified
candidates. The Committee would then consider the potential pool of
director candidates, select the top candidate based on the candidates’
qualifications and the Board’s needs, and conduct an investigation of the
proposed candidate’s background to ensure there is no past history that would
cause the candidate not to be qualified to serve as a director of Home
Federal. The Committee will consider director candidates recommended
by the Company’s stockholders. If a stockholder has submitted a proposed
nominee, the Committee would consider the proposed nominee, along with any other
proposed nominees recommended by members of the Board of Directors, in the same
manner in which the Committee would evaluate its nominees for
director. For a description of the proper procedure for stockholder
nominations, see “Stockholder Proposals” in this proxy statement.
Compensation
Committee
The Compensation Committee is comprised
of Directors Hedemark (Chairman), Tintsman, Navarro and Stamey. The
Compensation Committee meets quarterly and on an as needed basis regarding the
personnel, compensation and benefits related matters of Home
Federal. The Committee also meets outside of the presence of Mr.
Williams to discuss his compensation and make its recommendation to the full
Board, which then votes on Mr. Williams’ compensation. Mr. Williams
makes recommendations to the Compensation Committee regarding the compensation
of all other executive officers. The Committee considers the
recommendations of Mr. Williams and makes its recommendation to the full Board,
which then votes on executive compensation. This Committee met six
times during the year ended September 30, 2009.
Corporate
Governance
Director
Independence. Our common stock is listed on the Nasdaq Global
Select Market. In accordance with Nasdaq requirements, at least a
majority of our directors must be independent directors. The Board of
Directors has determined that five of our seven directors are
independent. Directors Hedemark, Little, Stamey, Tinstman and Navarro
are all independent. Only Len E. Williams, who serves as President
and Chief Executive Officer of Home Federal and Home Federal Bank, and Daniel L.
Stevens, who stepped down in January 2008 as President and Chief Executive
Officer of Home Federal and Chief Executive Officer of Home Federal Bank, are
not independent.
Code of Ethics. The
Board of Directors has adopted a written Code of Ethics that applies to our
directors, officers and employees. You may obtain a copy of the Code
of Ethics free of charge by writing to: Eric S. Nadeau, Secretary, Home Federal
Bancorp, Inc., 500 12th Avenue
South, Nampa, Idaho 83651, or by calling (208) 466-4634. In addition,
our Code of Ethics is available on our website at
www.myhomefed.com.
Stockholder Communication with the
Board of Directors. The Board of Directors maintains a process
for stockholders to communicate with the Board of Directors. Stockholders
wishing to communicate with the Board of Directors should send any communication
to Daniel L. Stevens, Chairman of the Board, Home Federal Bancorp, Inc., 500
12th
Avenue South, Nampa, Idaho 83651. Any such communication should state
the number of shares beneficially owned by the stockholder making the
communication.
Annual Meeting Attendance by
Directors. We do not have a policy regarding Board member
attendance at annual meetings of stockholders. All of the members of
the Board of Directors attended the 2009 annual meeting of
stockholders.
Related Party
Transactions. We have followed a policy of granting loans to
our executive officers and directors, which fully complies with all applicable
federal regulations, including those governing loans and other transactions with
affiliated persons of Home Federal Bank. Loans to our directors and
executive officers are made in the ordinary course of business and on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable loans with all customers, and do not
involve more than the normal risk of collectibility or present other unfavorable
features.
All loans and aggregate loans to
individual directors and executive officers, without regard to loan amount, are
completely documented and underwritten using the same underwriting policies,
procedures, guidelines and documentation requirements as are used for
non-director and non-executive customers of Home Federal
Bank. Following the normal underwriting approvals by underwriting
personnel, all such loans are then presented for review and approval by the
Board of Directors of Home Federal Bank, pursuant to Regulation O of the Federal
Reserve Board and the requirements of the Office of Thrift
Supervision. There are no exceptions to these procedures and all
approvals are documented in the Board meeting minutes. There were no
balances outstanding on loans to directors and executive officers at September
30, 2009.
The following table shows the
compensation paid to our non-employee directors for the fiscal year ended
September 30, 2009. Compensation for Len E. Williams, who is the
President and Chief Executive Officer of Home Federal and Home Federal Bank, is
included in the section below entitled “Executive Compensation.”
|
|
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|
|
|
|
|
|
Change
in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
Non-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
qualified
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Deferred
|
|
|
All
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Compen-
|
|
|
Other
|
|
|
|
|
|
|
or
Paid
|
|
|
Stock
|
|
|
Option
|
|
|
Compen-
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|
|
sation
|
|
|
Compen-
|
|
|
|
|
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in
Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
sation
|
|
|
Earnings
|
|
|
sation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)(1)(2)
|
|
|
($)(1)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
L. Stevens
|
|
|
24,000 |
|
|
|
191,636 |
|
|
|
65,338 |
|
|
|
5,701 |
|
|
|
7,659 |
|
|
|
7,780 |
|
|
|
302,114 |
|
N.
Charles Hedemark
|
|
|
27,550 |
|
|
|
32,634 |
|
|
|
11,128 |
|
|
|
6,267 |
|
|
|
3,748 |
|
|
|
1,522 |
|
|
|
82,849 |
|
James
R. Stamey
|
|
|
27,000 |
|
|
|
32,634 |
|
|
|
11,128 |
|
|
|
25,344 |
|
|
|
10,502 |
|
|
|
1,522 |
|
|
|
108,130 |
|
Robert
A. Tinstman
|
|
|
26,550 |
|
|
|
32,634 |
|
|
|
11,128 |
|
|
|
29,115 |
|
|
|
7,207 |
|
|
|
1,522 |
|
|
|
108,156 |
|
Richard
J. Navarro
|
|
|
27,300 |
|
|
|
7,488 |
|
|
|
13,267 |
|
|
|
5,894 |
|
|
|
5,311 |
|
|
|
555 |
|
|
|
59,815 |
|
Brad
Little
|
|
|
12,000 |
|
|
|
2,348 |
|
|
|
1,827 |
|
|
|
-- |
|
|
|
2,450 |
|
|
|
330 |
|
|
|
18,955 |
|
______________
(1) |
|
Represents
the dollar amount of expense recognized for financial statement reporting
purposes in fiscal 2009 for awards made in 2009 and prior years and being
earned by the director ratably over the five-year period from the date of
the award. Amounts are calculated pursuant to the provisions of Accounting
Standards Codification Topic (“ASC”) 718, “Compensation -
Stock
|
(Footnotes
continue on following page)
|
|
Compensation.” For
a discussion of valuation assumptions, see Note 11 of the Notes to
Consolidated Financial Statements in Home Federal’s Annual Report on Form
10-K for the year ended September 30, 2009.
|
(2) |
|
For
Directors Hedemark, Stamey and Tinstman, represents awards of 16,546
shares of restricted stock with an aggregate grant date fair value of
$179,605. For Director Little, represents an award of 3,000 shares of
restricted stock with a grant date fair value of $28,170. For Director
Navarro, represents awards of 5,272 shares of restricted stock with an
aggregate grant date fair value of $53,870. For Director Stevens,
represents awards of 87,658 shares of restricted stock with an aggregate
grant date fair value of $974,612. As of September 30, 2009, the directors
had the following number of shares of restricted stock outstanding:
Directors Hedemark, Stamey and Tinstman, 8,418 shares; Director Little,
3,000 shares; Director Navarro, 3,909 shares; and Director Stevens, 36,863
shares.
|
(3) |
|
For
Directors Hedemark, Stamey and Tinstman, represents grants of options to
purchase 32,731 shares of common stock with an aggregate grant date fair
value of $68,428. For Director Little, represents a grant of options to
purchase 7,333 shares of common stock with a grant date fair value of
$21,926. For Director Navarro, represents grants of options to purchase
30,053 shares of common stock with an aggregate grant date fair value of
$79,126. For Director Stevens, represents grants of options to purchase
81,832 shares of common stock with an aggregate grant date fair value of
$256,702. As of September 30, 2009, Directors Hedemark, Stamey and
Tinstman each had 20,318 vested and 12,413 unvested options outstanding,
Director Little had no vested and 7,333 unvested options outstanding,
Director Navarro had 13,632 vested and 16,421 unvested options outstanding
and Director Stevens had 37,249 vested and 44,582 unvested options
outstanding.
|
(4) |
|
Represents
the expense to accrue the estimated present value of future benefits for
the director deferred incentive plan.
|
(5) |
|
Represents
the aggregate change in actuarial present value of each director’s
accumulated benefit under the director retirement
plan.
|
(6) |
|
Represents
dividends received on unvested restricted
stock.
|
Fees. Directors of
Home Federal are currently not compensated, but serve and are compensated by
Home Federal Bank. Mr. Williams, however, receives no fees or other
remuneration for his service as an employee director. For the year
ended September 30, 2009, Board members received an annual retainer of $15,000
and $1,500 for each Board meeting attended and $250 for each committee meeting
attended ($300 for the chair of each committee). It is not
anticipated that separate directors’ fees will be paid to directors of Home
Federal until such time as these persons devote significant time to the separate
management of the affairs of Home Federal, which is not expected to occur until
we become actively engaged in additional businesses other than holding the stock
of Home Federal Bank. We may determine that such compensation is
appropriate in the future.
Director Deferred Incentive
Plan. Home Federal Bank maintains a nonqualified deferred
incentive plan for directors, which was last amended effective September 14,
2007. All members of the Board of Directors participate in the plan,
except for Mr. Williams, who declined participation, and Mr. Little, who became
a director after the plan was frozen. Until October 1, 2006, the plan
provided an incentive award percentage determined by reference to Home Federal’s
return on assets and return on equity for the year. Each year, the
percentage was determined and multiplied by the participant’s directors’ fees
for the year. The resulting amount was set aside in an unfunded
deferral account for that participant. Although the incentive award
has been discontinued, participants may still elect to defer all or a part of
their directors’ fees into the deferral account under the plan. The
deferral accounts are credited annually with an interest credit that is based on
the growth rate of Home Federal Bank’s net worth in Home Federal, subject to a
maximum of 12% per year. Upon the participant’s termination of
service, the value of the participant’s combined deferral accounts will begin to
be paid. Hardship distributions are permitted, as well as certain
limited in-service distributions as permitted by law. The plan also
provides a death benefit equal to the director deferrals and interest credit on
such amounts plus the greater of the value of the participant’s deferral
accounts, or a fixed death benefit. All benefits are paid over 120
months, and during that period, the deferral account is adjusted for
interest. The director may elect to change the form of benefit,
subject to the approval of Home Federal Bank and compliance with legal
restrictions. The present value of benefits accrued under this plan
was $829,128 at September 30, 2009.
Director Retirement
Plan. Home Federal adopted a director retirement plan,
effective January 1, 2005, that replaced prior plans. The plan is an
unfunded nonqualified retirement plan for directors. All members of
the Board of Directors participate in the plan, except for Mr. Williams, who
declined participation. Upon the later of attaining age 72 or
termination of service, the director will receive an annual benefit equal to 50
percent of the fees paid to the director for the preceding year, payable in
monthly installments over 15 years. If the director retires before
attaining age 72, his vested accrual benefit will be paid in monthly
installments, with interest at a rate of 7.5 percent per year, over 180
months. The accrued benefit vests at a rate of 10 percent per year,
except in the event of disability, in which case the vested percentage is 100
percent. If the director terminates service within 24 months
following a change in control, he
will
receive 100 percent of his accrued benefit, plus a change in control benefit
equal to 2.99 times his prior years directors fees. Change in control
payments are subject to reduction to avoid excise taxes under Section 280G of
the Internal Revenue Code. In the event a director dies before
termination of service, his beneficiary would receive his projected benefit,
which is the final benefit the director would have received had he attained age
72, assuming a 4% annual increase in the directors’ fees. In the
event the director dies after separation from service, but before receiving the
full 15 years of annual benefits, the remaining payments shall be paid to his or
her beneficiaries. In-service distributions are permitted in limited
circumstances. The present value of benefits accrued under this plan
was $588,117 at September 30, 2009.
Compensation
Discussion and Analysis
This Compensation Discussion and
Analysis describes the compensation philosophy and policies for the year ended
September 30, 2009, that applied to the executives named in the summary
compensation table below (known as the “named executive
officers”). It explains the structure and rationale associated with
each material element of each named executive officer’s total compensation, and
it provides important context for the more detailed disclosure tables and
specific compensation amounts provided following the discussion and
analysis.
Role of the Compensation
Committee. The Compensation Committee is composed entirely of
independent directors. The Committee sets and administers the
policies that govern our executive compensation programs, and various incentive
and stock option programs. All decisions relating to the compensation
of the named executive officers are shared with and approved by the full Board
of Directors.
Compensation Philosophy and
Objectives. The Compensation Committee believes that a
compensation program for executive officers should take into account management
skills, long-term performance results, and stockholder returns. The
principles underlying our compensation policies are:
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• |
to
attract and retain key executives who are highly qualified and are vital
to our long-term success;
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|
• |
to
provide levels of compensation commensurate with those offered in our
market areas as measured by local, regional, and national financial
industry compensation surveys;
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|
• |
to
align the interests of executives with stockholders by having a
significant portion of total compensation based on meeting or exceeding
defined performance measures without encouraging management to undertake
excessive risks that could undermine Home Federal’s safety and
soundness;
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|
• |
to
motivate executives to enhance long-term stockholder value and thereby
helping them build their own personal ownership in Home Federal;
and
|
|
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|
|
• |
to
integrate the compensation program with our long-term strategic planning
and management process.
|
We target executive compensation at
levels that we believe to be consistent with others in the banking
industry. The named executive officers’ compensation is weighted
toward programs contingent upon our level of annual and long-term
performance. In general, for senior management positions, including
the named executive officers, we will pay base salaries that target the market
median and above of other banks of similar asset size, growth strategy and
complexity, and with similar products and markets. Goals for specific
components include:
|
• |
Base
salaries for executives generally are targeted between the 50th
and 75th
percentiles.
|
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|
• |
The
Annual Incentive Plan will provide cash compensation at the 50th
percentile when target performance- based goals are achieved
and between the 50th
and 75th
percentiles if annual goals are
exceeded.
|
|
• |
An
equity-based Recognition and Retention Plan designed to align management’s
long-term goals with the interest of
stockholders.
|
Elements of
Compensation. We use the pay components listed below to
balance various objectives. The compensation framework helps
encourage achievement of strategic objectives and creation of stockholder value,
recognize and reward individual initiative and achievements, maintain an
appropriate balance between base salary and annual and long-term incentive
opportunity, and allows us to compete for, retain and motivate talented
executives critical to our success.
Salary. We pay our
executives cash salaries intended to be competitive and to take into account the
individual’s experience, performance, responsibilities, and past and potential
contribution to Home Federal and Home Federal Bank. There is no
specific weighting applied to the factors considered, and the Committee uses its
own judgment and expertise in determining appropriate salaries within the
parameters of the compensation philosophy. This is described in
greater detail below, under “Benchmarking.”
Salary decisions also take into account
the positioning of projected total compensation with target-level performance
incentives. Because incentive opportunities are defined as a
percentage of salary, changes in salary have an effect on total
compensation. Prior to recommending salary increases to the Board of
Directors, the Compensation Committee reviews the projected total compensation
based on the proposed salaries.
Annual Cash
Incentive. We use an annual incentive to focus attention on
current strategic priorities and drive achievement of short-term corporate
objectives. Awards are provided under the terms of the annual cash
incentive plan. Our named executive officers are eligible to receive annual cash
incentive compensation at the end of each year if performance targets are
achieved, as well as all eligible employees who are not remunerated under other
departmental sales-driven commission plans. The Compensation
Committee possesses the ability to award discretionary incentive amounts under
the cash incentive plan in recognition of other achievements, such as merger and
acquisition activities, which are not part of the established performance
objectives.
For the fiscal year ended September 30,
2009, the performance metrics for the annual cash incentive plan were (1) total
revenue (defined as net interest income plus noninterest income) and (2) income
before income taxes and incentive compensation expense, allocated as
follows:
Performance
Metrics
|
|
Weight
|
|
Target
|
|
Target
Plus
|
|
|
|
|
|
|
|
Total
revenue
|
|
25%
|
|
$35,391,000
|
|
$37,161,000
|
Income
before income taxes and incentive compensation
|
|
75
|
|
7,145,000
|
|
8,915,000
|
Actual results during fiscal year 2009
did not meet the plan’s performance metrics identified above as actual revenue
totaled $33.1 million and loss before income taxes and incentive compensation
totaled ($11.1) million. However, management was able to identify and execute a
strategic acquisition through an FDIC-assisted purchase and assumption of
certain assets and liabilities of Community First Bank, a failed bank based in
Prineville, Oregon. This acquisition resulted in a pretax gain of $25.0 million,
increasing Home Federal’s fiscal year 2009 net income to $8.1
million.
In recognition of the significant
efforts of the named executive officers to execute the acquisition and the
additional work undertaken by all other employees eligible under the incentive
plan to integrate the operations of the acquired bank, the Compensation
Committee recommended, and the Board of Directors approved, a discretionary
award to all eligible employees, including the named executive officers.
Payments under the discretionary award were generally based on 75% of the
“Target Plus” award opportunity detailed below with departmental managers
permitted further discretion to reallocate their department’s total award among
individual employees in their department. The discretionary award totaled
$759,000 and was disbursed in November 2009.
The table below shows the award
opportunities at target and target plus as a percentage of salary as well as
each named executive officer’s actual award for fiscal 2009:
|
|
Performance
Metrics
|
|
|
|
|
Name
|
|
Target
|
|
|
Target
Plus
|
|
|
Cash
Award
($)
|
|
|
Discretionary
Cash
Amount
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
|
50% |
|
|
|
100%
|
|
|
|
-- |
|
|
|
183,750 |
|
Eric
S. Nadeau
|
|
|
40% |
|
|
|
80% |
|
|
|
-- |
|
|
|
96,000 |
|
Steven
D. Emerson
|
|
|
40% |
|
|
|
80% |
|
|
|
-- |
|
|
|
67,500 |
|
Steven
K. Eyre
|
|
|
40% |
|
|
|
80% |
|
|
|
-- |
|
|
|
90,000 |
|
Cindy
L. Bateman
|
|
|
30% |
|
|
|
60% |
|
|
|
-- |
|
|
|
55,665 |
|
In November 2009, the Compensation
Committee recommended to the Board of Directors the following cash incentive
award opportunities for the named executive officers for fiscal year
2010:
Name
|
|
Target
|
|
|
Target
Plus
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
|
50% |
|
|
|
100%
|
|
Eric
S. Nadeau
|
|
|
40% |
|
|
|
80% |
|
Steven
K. Eyre
|
|
|
40% |
|
|
|
80% |
|
Steven
D. Emerson
|
|
|
30% |
|
|
|
60% |
|
Cindy
L. Bateman
|
|
|
30% |
|
|
|
60% |
|
The performance metrics for the fiscal
year 2010 annual cash incentive plan are allocated as follows:
Performance
Metrics
|
|
Weight
|
|
|
|
|
|
Total
revenue
|
|
|
25% |
|
Income
before income taxes and incentive compensation
|
|
|
50% |
|
Nonperforming
assets as a percent of assets
|
|
|
25% |
|
The annual cash incentive plan for
fiscal year 2010 includes two new components that are designed to discourage
employees from taking excessive risks that could undermine Home Federal’s safety
and soundness. One of those components is the requirement that Home Federal and
Home Federal Bank be in good standing with their primary regulator during fiscal
year 2010. If they are not in good standing, no performance metric-based
incentive will be made. The other component introduces a time-based earnout to
ensure continued strong performance under the incentive plan’s metrics. If an
incentive award is approved by the Board of Directors, 75% of the award will be
paid in the then-current calendar year. The remaining 25% will be held in
accrual, subject to management’s performance in fiscal year 2011 meeting or
exceeding the metrics identified for fiscal year 2010. If the performance
metrics met in fiscal year 2010 are met again in fiscal year 2011, the remainder
of the fiscal 2010 award will be paid to eligible employees.
Recognition and Retention
Plan. Equity-based compensation is intended to attract and
retain qualified executives, to provide these persons with a proprietary
interest in Home Federal as an incentive to contribute to our success, and to
reward executives for outstanding performance. Equity-based
compensation functions as a long-term incentive because awards are generally
made with a five-year gradual vesting schedule or a three-year cliff vesting
schedule. Awards are made either in the form of stock options, stock
appreciation rights or restricted stock. Currently, we have in place
the 2005 Recognition and Retention Plan, the 2005 Stock Option and Incentive
Plan and the 2008 Equity Incentive Plan, all of which were approved by our Board
of Directors and stockholders. Awards remain available for grant
under each of these plans.
The equity-based plans are administered
and interpreted by the Compensation Committee of the Board of
Directors. Under the plans, the Committee receives recommendations
from Mr. Williams and approves which officers and key employees will receive
awards, the number of shares subject to each option or shares of restricted
stock awarded,
and the
vesting of the awards. The per share exercise price of an option will
equal at least 100% of the fair market value of a share of common stock on the
date the option is granted. In addition, newly hired executives may
receive awards at the time of their employment. In determining
whether to make option or restricted stock awards, the Compensation Committee
may take into account historical awards and then-current competitive
conditions.
The Compensation Committee recommended,
and the Board of Directors approved long-term equity-based awards to several
members of senior management, including the named executive officers, during
fiscal year 2009. These awards are detailed in this Proxy Statement under the
section “Grants of Plan Based Awards.”
401(k) and Employee Stock Ownership
Plan. Home Federal Bank sponsors both a 401(k) plan and an
employee stock ownership plan. The purpose of these plans is to
provide participating employees with an opportunity to obtain beneficial
interests in the stock of Home Federal and to accumulate capital for their
future economic security. Ms. Bateman and Messrs. Nadeau and Emerson
are trustees of the 401(k) plan, in addition to two other members of
management.
Executive Retirement
Benefits. We have entered into salary continuation agreements
with each of the named executive officers, except Ms. Bateman. These
agreements help support the objective of maintaining a stable, committed and
qualified team of key executives through the inclusion of retention
and non-competition provisions. Under the agreement, an
executive will be entitled to a stated annual benefit for a period of 15 years
upon retirement from Home Federal after attaining age 65, or upon attaining age
65, if his or her employment had been previously terminated due to
disability. There are also benefits for early retirement and
termination after a change in control.
Other
Compensation. The named executive officers participate in our
broad-based employee benefit plans, such as medical, vision, dental, long-term
and short-term disability, and term life insurance programs. For
certain of the named executive officers, we also provide the following
perquisites: auto allowance for business and personal use for transportation for
the executive, customers and employees; social and civic club dues for
networking and entertaining; and business and personal use of a cell phone for
accessibility to the executive.
Benchmarking. As noted
earlier, our compensation structure is designed to position an executive’s
compensation between the 50th and
75th
percentiles of a competitive practice. In 2008, the Compensation
Committee worked with Amalfi Consulting, LLC (“Amalfi”), previously known as the
Compensation Group of Clark Consulting, to review total compensation levels for
the named executive officers. This review included base salary,
annual cash incentives, all forms of equity compensation and all other forms of
compensation. The primary data source used in setting competitive
market levels for the executives is the information publicly disclosed by a
“2008 Peer Group” of the 20 companies listed below, which include banks of
similar size and geographic location.
2008
Peer Group
|
|
|
PremierWest
Bancorp (PRWT)
Horizon
Financial Corp. (HRZB)
First
Financial Northwest, Inc. (FFNW)
HF
Financial Corp. (HFFC)
Columbia
Bancorp (CBBO)
Intermountain
Community Bancorp (IMCB)
Pacific
Continental Corporation (PCBK)
Washington
Banking Company (WBCO)
Heritage
Financial Corporation (HFWA)
Riverview
Bancorp, Inc. (RVSB)
|
Rainier
Pacific Financial Group, Inc. (RPFG)
Team
Financial, Inc. (TFIN)
Blue
Valley Ban Corp. (BVBC)
BNCCORP,
Inc. (BNCC)
Timberland
Bancorp, Inc. (TSBK)
The
Bank Holdings (TBHS)
Idaho
Independent Bank (IIBK)
Landmark
Bancorp, Inc. (LARK)
Pacific
Financial Corporation (PFLC)
Cowlitz
Bancorporation (CWLZ)
|
The Compensation Committee did not
perform a benchmarking study in fiscal year 2009. The Compensation Committee
determined in 2008 that Mr. Williams’s salary was competitive and appropriate
based on the results of the study. Mr. Williams’s salary will
increase to $255,000 for fiscal year 2010.
Review of Prior Amounts Granted and
Realized. We desire to motivate and reward executives relative
to driving superior future performance, so we do not currently consider prior
stock compensation gains as a factor in determining future compensation
levels.
Adjustment or Recovery of
Awards. We have not adopted a formal policy or any employment
agreement provisions that enable recovery, or “clawback,” of incentive awards in
the event of misstated or restated financial results. However,
Section 304 of the Sarbanes-Oxley Act does provide some ability to recover
incentive awards in certain circumstances. If we are required to
restate our financials due to noncompliance with any financial reporting
requirements as a result of misconduct, the Chief Executive Officer and Chief
Financial Officer must reimburse us for (1) any bonus or other incentive- or
equity-based compensation received during the 12 months following the first
public issuance of the non-complying document, and (2) any profits realized from
the sale of securities of Home Federal during those 12 months.
Timing of Equity
Grants. The Compensation Committee does not have a formal
written policy guiding the timing of equity grants. All equity grants
were made after formal Compensation Committee approval and subject to full Board
approval. We have reviewed our equity grant practices and have
confirmed that all past equity grants have been consistent with Securities and
Exchange Commission guidelines.
Tax and Accounting
Considerations. We take into account tax and accounting
implications in the design of our compensation programs. For example,
in the selection of long-term incentive instruments, the Compensation Committee
reviews the projected expense amounts and expense timing associated with
alternative types of awards. Under current accounting rules, Home
Federal must expense the grant-date fair value of share-based grants such as
restricted stock and stock options. The grant-date value is amortized
and expensed over the service period or vesting period of the
grant. In selecting appropriate incentive devices, the Compensation
Committee reviews extensive modeling analyses and considers the related tax and
accounting issues.
Compensation
Consultants. Over the past five years, the Compensation
Committee has engaged Clark Consulting to assist in several executive
compensation initiatives, including salary data, equity plan designs and
deferred compensation plans. Because Clark Consulting is
knowledgeable in our executive compensation plans, it is an ongoing working
relationship. Periodically, the Committee may engage Clark Consulting
on an “as needed” basis.
Role of Executives in Compensation
Committee Deliberations. The Compensation Committee frequently
requests the Chief Executive Officer and the Chief Financial Officer to be
present at Committee meetings to discuss executive compensation and evaluate
Company and individual performance. Occasionally other executives may
attend a Committee meeting to provide pertinent human resources, financial
and/or legal information. Executives in attendance may provide their
insights and suggestions, but only Compensation Committee members may vote on
decisions regarding changes in executive compensation to recommend to the full
Board. The Chief Executive Officer does not provide the
recommendations for changes in his own compensation. The Compensation
Committee discusses the compensation of the Chief Executive Officer with him,
but final deliberations and all votes regarding his compensation for
recommendation to the full Board are made in executive session, without the
Chief Executive Officer present. The Committee initiates any changes
in his compensation based on periodic market reviews and recommendations from
outside consultants. Relative to executives other than the Chief
Executive Officer, the Committee uses input from Amalfi Consulting in making its
recommendations to the full Board.
Compensation of the Chief Executive
Officer. Mr. Williams is the President and Chief Executive
Officer of Home Federal Bank and Home Federal. As the Chief Executive
Officer of the Bank and the Company, a role he assumed in January 2008, he is
responsible for the overall supervision of these entities. He
oversees management and has responsibility for all policy development and
implementation, he coordinates investor relations with stockholders, he has
ultimate responsibility for the overall consolidated performance of the related
corporate entities, and has final responsibility for the change and the growth
of Home Federal Bank and expansion of the business model of Home Federal
Bank. Mr. Williams will receive a salary increase to $255,000 for
fiscal year 2010, reflecting the increase in responsibilities
associated with acquisition-related growth. While Mr. Williams’ compensation
exceeds that of all of the other named executive officers, the Compensation
Committee believes it is commensurate with his experience and level of
responsibility.
Conclusion. We
believe our compensation program is reasonable and competitive with compensation
paid by other financial institutions of similar size. The program is
designed to reward managers for strong personal, Company and share-value
performance. The Compensation Committee monitors the various
guidelines that constitute the program and reserves the right to adjust them as
necessary to continue to meet Company and stockholder objectives.
Compensation
Committee Report
The Compensation Committee of the Board
of Directors of Home Federal has submitted the following report for inclusion in
this proxy statement:
We have reviewed and discussed the
Compensation Discussion and Analysis contained in this proxy statement with
management. Based on the Committee’s review of and the discussion
with management with respect to the Compensation Discussion and Analysis, we
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this proxy statement.
The foregoing report is provided by the
following directors, who constitute the Compensation Committee:
|
N.
Charles Hedemark, Chairman
|
|
Robert
A. Tinstman
|
|
Richard
J. Navarro |
|
James
R. Stamey |
This
report shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not
otherwise be deemed filed under such acts.
Summary
Compensation Table
The following table shows information
regarding compensation earned during the fiscal years ended September 30,
2009, 2008 and 2007, by our named executive officers: (1) Len E. Williams, our
principal executive officer; (2) Eric S. Nadeau, our principal financial
officer; and (3) our three other most highly compensated officers, who are
Steven D. Emerson, Steven K. Eyre and Cindy L. Bateman.
Name
and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Option
Awards
($)(1)
|
|
|
Change
in Pension Value and Non-qualified Deferred Compen-sation
Earnings
($)(2)
|
|
|
All
Other
Compen-
sation
($)(3)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
2009
|
|
|
245,000 |
|
|
|
183,750 |
|
|
|
105,952 |
|
|
|
92,109 |
|
|
|
66,826 |
|
|
|
68,659 |
|
|
|
762,296 |
|
President
and Chief Executive
|
|
2008
|
|
|
228,750 |
|
|
|
-- |
|
|
|
62,931 |
|
|
|
58,564 |
|
|
|
54,889 |
|
|
|
23,267 |
|
|
|
458,401 |
|
Officer
of Home Federal and
|
|
2007
|
|
|
204,583 |
|
|
|
-- |
|
|
|
45,900 |
|
|
|
54,099 |
|
|
|
50,434 |
|
|
|
34,375 |
|
|
|
389,391 |
|
Home
Federal Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
S. Nadeau (4)
|
|
2009
|
|
|
160,000 |
|
|
|
96,000 |
|
|
|
32,068 |
|
|
|
33,145 |
|
|
|
23,361 |
|
|
|
40,121 |
|
|
|
384,695 |
|
Executive
Vice President, Treasurer,
|
|
2008
|
|
|
50,974 |
|
|
|
-- |
|
|
|
2,735 |
|
|
|
4,175 |
|
|
|
-- |
|
|
|
42,006 |
|
|
|
99,890 |
|
Secretary
and Chief Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
of Home Federal and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
Federal Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
D. Emerson (5)
|
|
2009
|
|
|
150,000 |
|
|
|
67,500 |
|
|
|
49,346 |
|
|
|
39,838 |
|
|
|
23,239 |
|
|
|
54,621 |
|
|
|
384,544 |
|
Executive
Vice President and Commercial
|
|
2008
|
|
|
144,583 |
|
|
|
-- |
|
|
|
27,319 |
|
|
|
23,135 |
|
|
|
20,919 |
|
|
|
29,356 |
|
|
|
245,312 |
|
Banking
Team Lead - Idaho Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Table
continues on following page)
|
|
Name
and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Option
Awards
($)(1)
|
|
|
Change
in Pension Value and Non-qualified Deferred Compen-sation
Earnings
($)(2)
|
|
|
All
Other
Compen-
sation
($)(3)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
K. Eyre (6)
|
|
2009
|
|
|
150,000 |
|
|
|
90,000 |
|
|
|
32,588 |
|
|
|
31,095 |
|
|
|
36,156 |
|
|
|
52,856 |
|
|
|
392,695 |
|
President
- Central Oregon Region
|
|
2008
|
|
|
115,625 |
|
|
|
-- |
|
|
|
8,595 |
|
|
|
10,988 |
|
|
|
21,095 |
|
|
|
43,980 |
|
|
|
200,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cindy
L. Bateman (5)
|
|
2009
|
|
|
123,700 |
|
|
|
55,665 |
|
|
|
15,350 |
|
|
|
8,583 |
|
|
|
-- |
|
|
|
28,158 |
|
|
|
231,456 |
|
Senior
Vice President and
|
|
2008
|
|
|
115,763 |
|
|
|
8,682 |
|
|
|
6,181 |
|
|
|
1,701 |
|
|
|
-- |
|
|
|
5,446 |
|
|
|
145,350 |
|
Chief
Credit Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________
|
|
(1)
|
Represents
the dollar amount of expense recognized for financial statement reporting
purposes in fiscal 2009 for awards made in 2009 and prior years and being
earned by the officer ratably over the vesting period of the award.
Amounts are calculated pursuant to the provisions of ASC 718. For a
discussion of valuation assumptions, see Note 11 of the Notes to
Consolidated Financial Statements in Home Federal’s Annual Report on Form
10-K for the year ended September 30, 2009.
|
(2)
|
Represents
the aggregate change in actuarial present value of each named executive
officer’s accumulated benefit under his or her salary continuation
agreement.
|
(3)
|
Please
see the table below for more information on the other compensation paid to
our named executive officers in the year ended September 30,
2009.
|
(4)
|
Mr.
Nadeau was hired effective as of June 5, 2008.
|
(5)
|
Mr.
Emerson and Ms. Bateman were not named executive officers prior to 2008;
therefore, 2007 is not included.
|
(6)
|
Mr.
Eyre was hired in December 2007.
|
All Other
Compensation. The following table sets forth details of “All
Other Compensation,” as presented above in the Summary Compensation Table for
fiscal year 2009.
Name
|
|
401(k)
Matching
Contribu-
tion
($)
|
|
|
ESOP
Contribu-
tion
($)(1)
|
|
|
Company
Car/Car
Allowance
($)
|
|
|
Restricted
Stock
Dividends
($)
|
|
|
Club
Dues
($)
|
|
|
Welfare
Benefits
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
|
7,656 |
|
|
|
34,163 |
|
|
|
3,627 |
|
|
|
9,040 |
|
|
|
6,180 |
|
|
|
7,993 |
|
Eric
S. Nadeau
|
|
|
5,000 |
|
|
|
23,269 |
|
|
|
-- |
|
|
|
4,015 |
|
|
|
-- |
|
|
|
7,837 |
|
Steven
D. Emerson
|
|
|
7,500 |
|
|
|
22,273 |
|
|
|
5,609 |
|
|
|
4,340 |
|
|
|
7,234 |
|
|
|
7,665 |
|
Steven
K. Eyre
|
|
|
4,500 |
|
|
|
22,049 |
|
|
|
8,100 |
|
|
|
3,970 |
|
|
|
7,123 |
|
|
|
7,114 |
|
Cindy
L. Bateman
|
|
|
5,831 |
|
|
|
19,620 |
|
|
|
-- |
|
|
|
1,559 |
|
|
|
-- |
|
|
|
1,148 |
|
_____________
|
(1) |
Based
on the closing price of Home Federal’s stock on September 30, 2009
multiplied by the number of shares allocated to the named executive
officers.
|
Employment
Agreements. Home Federal Bank has entered into an employment
agreement with Len E. Williams. A three-year term under the agreement
commenced on September 11, 2009. On each anniversary beginning on
September 11, 2012, the term of the agreement will be extended for an additional
year unless notice is given by the Board to Mr. Williams, or vice versa, at
least 90 days prior to the anniversary date. The agreement provides
that compensation may be paid in the event of disability, death, involuntary
termination or a change in control, as described below under “Potential Payments
Upon Termination.”
Severance
Agreements. Home Federal Bank has entered into change in
control severance agreements with Messrs. Nadeau, Emerson and
Eyre. On each anniversary of the initial date of the severance
agreements, the term of each agreement may be extended for an additional year at
the discretion of the Board or an authorized committee of the
Board. The severance agreements also provide for a severance payment
and other benefits if the executive is involuntarily
terminated
within 12 months after a change in control of Home Federal as described below
under “Potential Payments Upon Termination.”
Grants
of Plan-Based Awards
The following table shows information
regarding grants of plan-based awards made to our named executive officers for
the fiscal year ended September 30, 2009. The named executive
officers did not receive any equity incentive plan awards.
|
|
|
|
|
Estimated
Possible
|
|
|
All
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
Under Non-Equity
|
|
|
Other
|
|
|
Other
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
|
Incentive
Plan Awards (1)
|
|
|
Stock
Awards:
Number
of
Shares
of
Stock
or
Units
(#)(2)
|
|
|
Awards:
Number
of
Securities
Under-
lying
Options
(#)(2)
|
|
|
Exercise
or
Base
Price
of
Option
Awards
($/Sh)
|
|
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
($)
|
|
|
Target
($)
|
|
|
Target
Plus
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
--
|
|
|
|
122,500 |
|
|
|
245,000 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
04/28/09
|
|
|
|
-- |
|
|
|
-- |
|
|
|
53,000 |
|
|
|
133,000 |
|
|
|
9.39 |
|
|
|
895,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
S. Nadeau
|
|
--
|
|
|
|
64,000 |
|
|
|
128,000 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
04/28/09
|
|
|
|
-- |
|
|
|
-- |
|
|
|
27,000 |
|
|
|
66,000 |
|
|
|
9.39 |
|
|
|
450,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
D. Emerson
|
|
--
|
|
|
|
60,000 |
|
|
|
120,000 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
04/28/09
|
|
|
|
-- |
|
|
|
-- |
|
|
|
27,000 |
|
|
|
66,000 |
|
|
|
9.39 |
|
|
|
450,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
K. Eyre
|
|
--
|
|
|
|
60,000 |
|
|
|
120,000 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
04/28/09
|
|
|
|
-- |
|
|
|
-- |
|
|
|
27,000 |
|
|
|
66,000 |
|
|
|
9.39 |
|
|
|
450,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cindy
L. Bateman
|
|
--
|
|
|
|
37,110 |
|
|
|
74,220 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
04/28/09
|
|
|
|
-- |
|
|
|
-- |
|
|
|
11,000 |
|
|
|
27,000 |
|
|
|
9.39 |
|
|
|
184,020 |
|
___________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents
the incentives that could have been earned under the annual cash incentive
plan. See “Annual Cash Incentive” for additional discussion on the plan
and related awards.
|
|
(2)
|
|
Equity
awards vest ratably over the five-year period from the grant date, with
the first 20% vesting one year after the grant date.
|
|
Outstanding Equity
Awards
The following information with respect
to outstanding equity awards as of September 30, 2009 is presented for the named
executive officers. The named executive officers do not have any
outstanding equity incentive plan awards.
|
|
|
|
Option
Awards (1)(2)
|
|
Stock
Awards (1)(2)
|
|
Name
|
|
Grant
Date
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexer-
cisable
|
|
|
Option
Exercise
Price
($)(2)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
09/18/06
|
|
|
51,072 |
|
|
|
34,048 |
|
|
|
13.47 |
|
09/18/16
|
|
|
6,816 |
|
|
|
77,839 |
|
|
|
10/19/07
|
|
|
1,422 |
|
|
|
5,689 |
|
|
|
12.76 |
|
10/19/17
|
|
|
4,367 |
|
|
|
49,871 |
|
|
|
04/28/09
|
|
|
-- |
|
|
|
133,000 |
|
|
|
9.39 |
|
04/28/19
|
|
|
53,000 |
|
|
|
605,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
S. Nadeau
|
|
06/16/08
|
|
|
5,000 |
|
|
|
20,000 |
|
|
|
11.05 |
|
06/16/18
|
|
|
4,000 |
|
|
|
45,680 |
|
|
|
04/28/09
|
|
|
-- |
|
|
|
66,000 |
|
|
|
9.39 |
|
04/28/19
|
|
|
27,000 |
|
|
|
308,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Table
continues on following page)
|
|
|
|
Option
Awards (1)(2)
|
|
Stock
Awards (1)(2)
|
|
Name
|
|
Grant
Date
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexer-
cisable
|
|
|
Option
Exercise
Price
($)(2)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
D. Emerson
|
|
12/18/06
|
|
|
11,360 |
|
|
|
17,040 |
|
|
|
15.34 |
|
12/18/16
|
|
|
3,408 |
|
|
|
38,919 |
|
|
|
10/19/07
|
|
|
903 |
|
|
|
3,613 |
|
|
|
12.76 |
|
10/19/17
|
|
|
2,536 |
|
|
|
28,961 |
|
|
|
04/28/09
|
|
|
-- |
|
|
|
66,000 |
|
|
|
9.39 |
|
04/28/19
|
|
|
27,000 |
|
|
|
308,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
K. Eyre
|
|
12/03/07
|
|
|
5,680 |
|
|
|
22,720 |
|
|
|
10.09 |
|
12/03/17
|
|
|
4,544 |
|
|
|
51,892 |
|
|
|
04/28/09
|
|
|
-- |
|
|
|
66,000 |
|
|
|
9.39 |
|
04/28/19
|
|
|
27,000 |
|
|
|
308,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cindy
L. Bateman
|
|
10/19/07
|
|
|
542 |
|
|
|
2,169 |
|
|
|
12.76 |
|
10/19/17
|
|
|
1,585 |
|
|
|
18,100 |
|
|
|
04/28/09
|
|
|
-- |
|
|
|
27,000 |
|
|
|
9.39 |
|
04/28/19
|
|
|
11,000 |
|
|
|
125,620 |
|
_____________
|
|
|
|
|
|
|
|
(1)
|
All
option awards vest ratably over a five year period with the first 20%
vesting one year after the grant date. Stock awards granted on 10/19/07
vest on 10/19/10. All other stock awards vest ratably over a five year
period with the first 20% vesting one year after the grant
date.
|
(2)
|
In
December 2007, Home Federal completed its second-step conversion. As a
result, each outstanding share was exchanged for 1.1360 shares in the new
public company. Accordingly, all outstanding shares of restricted stock
and stock options (and the related exercise prices) were adjusted based on
the exchange ratio.
|
Options Exercised and Stock
Vested
The following table shows the value
realized upon exercise of stock options and vesting of stock awards for our
named executive officers in the year ended September 30, 2009.
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number
of Shares
Acquired
on Exercise (#)
|
|
|
Value
Realized
on
Exercise ($)
|
|
|
Number
of Shares
Acquired
on Vesting (#)
|
|
|
Value
Realized
on
Vesting ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
|
-- |
|
|
|
-- |
|
|
|
3,408 |
|
|
|
40,896 |
|
Eric
S. Nadeau
|
|
|
-- |
|
|
|
-- |
|
|
|
1,000 |
|
|
|
10,560 |
|
Steven
D. Emerson
|
|
|
-- |
|
|
|
-- |
|
|
|
1,136 |
|
|
|
11,076 |
|
Steven
K. Eyre
|
|
|
-- |
|
|
|
-- |
|
|
|
1,136 |
|
|
|
11,190 |
|
Cindy
L. Bateman
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Pension
Benefits
The following information is presented
with respect to the nature and value of pension benefits, as defined by the SEC,
for our named executive officers at September 30, 2009.
Name
|
|
Plan
Name
|
|
Number
of
Years
Credited
Service
(#)
|
|
|
Present
Value
of
Accumulated
Benefit
($)
|
|
|
Payments
During
Last
Fiscal
Year ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len
E. Williams
|
|
Salary
Continuation Agreement
|
|
|
3 |
|
|
|
172,149 |
|
|
|
-- |
|
Eric
S. Nadeau
|
|
Salary
Continuation Agreement
|
|
|
1 |
|
|
|
23,361 |
|
|
|
-- |
|
Steven
D. Emerson
|
|
Salary
Continuation Agreement
|
|
|
2 |
|
|
|
60,435 |
|
|
|
-- |
|
Steven
K. Eyre
|
|
Salary
Continuation Agreement
|
|
|
1 |
|
|
|
57,251 |
|
|
|
-- |
|
Cindy
L. Bateman (1)
|
|
--
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
__________
(1)
|
Ms.
Bateman does not have a salary continuation
agreement.
|
We have entered into salary
continuation agreements with each of the named executive officers, with the
exception of Ms. Bateman. Under these agreements, if the participant
makes the required contributions, then upon the participant’s normal retirement
date (age 65), Home Federal Bank will pay a monthly benefit equal to 50% of the
average of the participant’s final 36 months of base salary (the final salary
benefit), plus the participant’s deferral account balance. The
participant’s deferral account balance is the sum of the participant’s elective
deferrals plus interest credited. The final benefit paid in
connection with a participant’s normal retirement will be paid in monthly
payments over 180 months and other payments based on accrual balances will be
paid over 180 months, with interest credited on unpaid amounts at 7.5% per
year. In addition, the agreements provide for benefits upon early
retirement, disability, death or change in control, as described below under
“Potential Payments Upon Termination.”
Potential Payments Upon
Termination
We have entered into agreements with
the named executive officers that provide for potential payments upon
disability, termination and death. In addition, our equity plans also
provide for potential payments upon termination. The following table
shows, as of September 30, 2009, the value of potential payments and benefits
following a termination of employment under a variety of scenarios.
Compensation
and/or Benefits
Payable
Upon Termination
|
|
Early
Retirement/
Voluntary
Termination
($)
|
|
|
Involuntary
Termination
Without
Cause($)
|
|
|
Qualifying
Termination
in
Connection
With
a
Change in
Control
($)
|
|
|
Termination
in
the Event
of
Disability
($)
|
|
|
Termination
in
the Event
of
Death ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Len E.
Williams
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
|
-- |
|
|
|
732,550 |
|
|
|
973,788 |
|
|
|
125,000 |
|
|
|
-- |
|
Health
and Welfare Benefits
|
|
|
-- |
|
|
|
23,979 |
|
|
|
3,256 |
|
|
|
-- |
|
|
|
-- |
|
Intrinsic
Value of Unvested Equity (1)
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
1,002,960 |
|
|
|
1,002,960 |
|
Salary
Continuation Agreement (2)(3)
|
|
|
51,654 |
|
|
|
51,654 |
|
|
|
51,654 |
|
|
|
172,149 |
|
|
|
1,845,998 |
|
Total
|
|
|
51,654 |
|
|
|
808,183 |
|
|
|
1,028,698 |
|
|
|
1,300,109 |
|
|
|
2,848,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric S.
Nadeau
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
|
-- |
|
|
|
-- |
|
|
|
320,000 |
|
|
|
-- |
|
|
|
-- |
|
Health
and Welfare Benefits
|
|
|
-- |
|
|
|
-- |
|
|
|
15,674 |
|
|
|
-- |
|
|
|
-- |
|
Intrinsic
Value of Unvested Equity (1)
|
|
|
-- |
|
|
|
-- |
|
|
|
228,212 |
|
|
|
842,020 |
|
|
|
842,020 |
|
Salary
Continuation Agreement
|
|
|
2,336
|
|
|
|
2,336
|
|
|
|
2,336
|
|
|
|
23,361
|
|
|
|
1,930,124
|
|
Total
|
|
|
2,336
|
|
|
|
2,336
|
|
|
|
566,222
|
|
|
|
865,381
|
|
|
|
2,772,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven D.
Emerson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
|
-- |
|
|
|
-- |
|
|
|
300,000 |
|
|
|
-- |
|
|
|
-- |
|
Health
and Welfare Benefits
|
|
|
-- |
|
|
|
-- |
|
|
|
15,310 |
|
|
|
-- |
|
|
|
-- |
|
Intrinsic
Value of Unvested Equity (1)
|
|
|
-- |
|
|
|
-- |
|
|
|
109,536 |
|
|
|
886,421 |
|
|
|
886,421 |
|
Salary
Continuation Agreement (2)(3)
|
|
|
18,131
|
|
|
|
18,131
|
|
|
|
18,131
|
|
|
|
60,435
|
|
|
|
1,809,491
|
|
Total
|
|
|
18,131
|
|
|
|
18,131
|
|
|
|
442,976
|
|
|
|
946,856
|
|
|
|
2,695,912
|
|
|
|
Steven K.
Eyre
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
|
-- |
|
|
|
-- |
|
|
|
300,000 |
|
|
|
-- |
|
|
|
-- |
|
Health
and Welfare Benefits
|
|
|
-- |
|
|
|
-- |
|
|
|
14,228 |
|
|
|
-- |
|
|
|
-- |
|
Intrinsic
Value of Unvested Equity (1)
|
|
|
-- |
|
|
|
-- |
|
|
|
127,505 |
|
|
|
854,445 |
|
|
|
854,445 |
|
Salary
Continuation Agreement (2)(3)
|
|
|
11,450
|
|
|
|
11,450
|
|
|
|
11,450
|
|
|
|
57,251
|
|
|
|
1,271,325
|
|
Total
|
|
|
11,450
|
|
|
|
11,450
|
|
|
|
453,183
|
|
|
|
911,696
|
|
|
|
2,125,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cindy L.
Bateman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
|
-- |
|
|
|
-- |
|
|
|
123,700 |
|
|
|
-- |
|
|
|
-- |
|
Intrinsic
Value of Unvested Equity
|
|
|
--
|
|
|
|
--
|
|
|
|
236,311
|
|
|
|
342,251
|
|
|
|
342,251
|
|
Total
|
|
|
--
|
|
|
|
--
|
|
|
|
360,011
|
|
|
|
342,251
|
|
|
|
342,251
|
|
(Footnotes
on following page)
_______________
|
(1)
|
Under
the terms of Home Federal’s 2005 Stock Option and Incentive Plan, 2005
Recognition and Retention Plan, 2008 Equity Plan, and each employee’s
Salary Continuation Plan (“SCP”), the unvested options restricted stock,
and SCP benefits would accelerate upon a termination associated with a
change in control (“CIC”). For all five named executive
officers, Home Federal places a limit on CIC payouts restricting such
payments to the amounts below those defined as golden parachute payments
under 280G of the Internal Revenue Code. The terms specified
under Mr. William’s employment agreements set the cash severance payout
amounts at slightly below the 280G limit. Due to the 280G
limitation on payouts, the remaining severance balance was placed in the
health and welfare benefits category with zero values reported for the
intrinsic value of unvested equity for Mr. Williams. For
Messrs. Nadeau, Emerson, and Eyre, the CIC agreements set the cash
severance payouts at two times base salary and the continuation of health
and wellness benefits for two years. Due to the 280G limitation
on payouts, the remaining severance balance was placed in the intrinsic
value of equity category. For Ms. Bateman, the Employee
Severance Compensation plan sets the cash severance at one times annual
compensation. Due to the 280G limitation on payouts for Ms.
Bateman, the remaining severance balance was placed in the intrinsic value
of equity category. In the absence of the 280G limitation
amounts under all categories, with the exception of cash severance, would
exceed the levels reported here. Under the terms of the
agreements for Messrs. Williams, Nadeau, Emerson, and Eyre, each employee
may select to receive the severance payment in the relevant form of their
choosing (equity or health/welfare benefits) with a commensurate reduction
in the cash severance to remain in compliance with the 280G
limitation.
|
(2)
|
Present
value of payout is presented in the table and is based upon a discount
rate of 7.5% per the terms of the agreement.
|
(3)
|
The
amount reported would be attributed to the vested amount of the SCP upon
the date of termination. Vesting in the SCP benefit would accelerate under
a CIC, due to the 280G limitations specified under the contract no
additional payment amount would be
made.
|
Employment
Agreement. Home Federal Bank has entered into an employment
agreement with Mr Williams. The agreement provides for potential
payments upon his termination in a variety of scenarios. The
agreement may be terminated by Home Federal Bank at any time, by Mr. Williams if
he is assigned duties inconsistent with his position, duties and
responsibilities, or upon the occurrence of certain events. If Mr.
Williams’ employment is terminated without cause or upon voluntary termination
following the occurrence of an event described in the preceding sentence, Home
Federal Bank would be required to honor the terms of the agreement, including
payment of 2.99 times his salary at the rate in effect immediately prior to the
termination and provision of substantially the same group life insurance,
hospitalization, medical, dental, prescription drug and other health benefits,
and long-term disability insurance (if any) for the benefit of Mr. Williams and
his dependents and beneficiaries who would have been eligible for such benefits
if he had not been terminated for a period of three years.
The employment agreement also provides
for a severance payment and other benefits if Mr .Williams is involuntarily
terminated within 12 months following a change in control of Home
Federal. The agreement authorizes severance payments on a similar
basis if Mr. Williams voluntarily terminates his employment following a change
in control because he is assigned duties inconsistent with his position, duties
and responsibilities immediately prior to the change in control. In
the event of Mr. Williams’ involuntary termination within 12 months after a
change in control, Home Federal Bank must (1) pay to him in a lump sum an amount
equal to 299% of his base amount, which is his average annual compensation
during the five-year period prior to the effective date of the change in
control; and (2) provide to Mr. Williams for three years after termination
substantially the same group life insurance, hospitalization, medical, dental,
prescription drug and other health benefits, and long-term disability insurance
(if any) for the benefit of Mr. Williams and his dependents and beneficiaries
who would have been eligible for such benefits if he had not been
terminated.
Section 280G of the Internal Revenue
Code provides that severance payments (either separately or in conjunction with
other payments made on account of a change in control) that equal or exceed
three times an individual’s base amount will result in the individual receiving
“excess parachute payments” if the payments are conditioned upon a change in
control. Individuals receiving parachute payments in excess of 2.99
times of their base amount are subject to a 20% excise tax on the amount by
which the value of the individual’s change in control benefits exceed one times
the individual’s base amount (the excess parachute payment). If
excess parachute payments are made, we would not be entitled to deduct the
amount of these excess payments. The employment agreement provides
that severance and other payments that are subject to a change in control will
be reduced as much as necessary to ensure that no amounts payable to Mr.
Williams will be considered excess parachute payments.
In the event of the death of Mr.
Williams while employed under his employment agreement and prior to any
termination of employment, Home Federal Bank shall pay to his estate, or such
person as he may have previously designated, the salary which was not previously
paid to him and which he would have earned if he had continued to be employed
under the agreement through the last day of the calendar month in which he died,
together with the benefits provided under the employment agreement through that
date.
If Mr. Williams becomes entitled to
benefits under the terms of the then-current disability plan, if any, of Home
Federal or Home Federal Bank or becomes otherwise unable to fulfill his duties
under his employment agreement, he shall be entitled to receive such group and
other disability benefits, if any, as are then provided by us for executive
employees. In the event of such disability, the employment agreement
shall not be suspended, except that (1) the obligation to pay salary will be
reduced in accordance with the amount of disability income benefits received by
the executive, if any, such that, on an after-tax basis, Mr. Williams shall
realize from the sum of disability income benefits and the salary the same
amount as he would realize on an after-tax basis from the salary if the
obligation to pay the salary were not reduced; and (2) upon a resolution adopted
by a majority of the disinterested members of the Board of Directors or the
committee of the Board, we may discontinue payment of the salary beginning six
months following a determination that the executive has become entitled to
benefits under the disability plan or otherwise unable to fulfill his duties
under the employment agreement.
Severance
Agreements. Home Federal Bank entered into change in control
severance agreements with each of Messrs. Nadeau, Emerson and
Eyre. On each anniversary of the initial date of the severance
agreements, the term of each agreement may be extended for an additional year at
the discretion of the Board or an authorized committee of the
Board. The severance agreements provide for a severance payment and
other benefits if the executive is involuntarily terminated within 12 months
after a change in control of Home Federal. Each agreement also
authorizes severance payments if the executive voluntarily terminates employment
within 12 months following a change in control because of being assigned duties
inconsistent with the executive’s position, duties, responsibilities and status
immediately prior to the change in control. The severance benefit is
equal to the executive’s salary immediately prior to the effective date of the
change in control at a rate of 1.00 times salary during the first year of
employment, 2.00 times salary during the second year of employment and 2.99
times salary during the third year of employment and each successive year
thereafter. This amount will be paid to the executive by Home Federal
Bank in a cash lump sum within 25 days after the later of the date of the change
in control or the date of the executive’s termination. Home Federal
Bank also will continue to pay, at the same rate described above, the life,
health and disability coverage of the executive and his eligible
dependents. Plan benefits are reduced to the extent necessary to
avoid the payment of an excise tax under Section 280G of the Internal Revenue
Code.
Salary Continuation
Agreements. As described above, we have entered into salary
continuation agreements with each of the named executive officers, with the
exception of Ms. Bateman. Under these agreements, upon the
participant’s normal retirement date (age 65), Home Federal Bank will pay a
monthly benefit equal to 50% of the average of the participant’s final 36 months
of base salary (the final salary benefit).
The salary continuation agreements
provide a reduced monthly benefit if the participant terminates employment as a
result of early retirement (before age 65). The early retirement
benefit is the participant’s vested accrual balance. Vesting occurs
at a rate of ten percent per plan year. The agreements also provide a
disability benefit, which is the same as the early retirement benefit except
that the accrual balance is fully vested. In the event of a
qualifying change in control, participants receive one hundred percent of the
accrual balance as of the end of the month prior to the change in control,
payable in 180 monthly installments commencing the month after the participant
reaches normal retirement age. Interest is credited at a rate of 7.50%
compounded monthly on the unpaid Accrual Balance. Plan benefits are
reduced to the extent necessary to avoid the payment of an excise tax under
Section 280G of the Internal Revenue Code. In the event of the
participant’s death, the participant’s beneficiary would receive the
participant’s projected benefit. The participant’s projected account
is the final benefit the participant would have received had the participant
attained age 65, assuming a 4% annual increase in the participant’s base
salary. The final benefit paid in connection with a participant’s
normal retirement will be paid in monthly payments over 180 months and other
payments based on accrual balances will be paid over 180 months, with interest
credited on unpaid amounts at 7.50% per year. Final benefits begin
upon the participant’s termination of service after the participant’s death or
disability. Final salary benefits paid on
account of early retirement begin
upon the participant’s attainment of age 65. The participant’s
deferral account balance will be paid in a lump sum within 60 days of the
participant’s termination of employment.
Equity Plans. The
Home Federal Bancorp, Inc. 2005 Stock Option and Incentive Plan, 2005
Recognition and Retention Plan and 2008 Equity Incentive Plan provide for
accelerated vesting of awards in the event of a change in control. If
a tender offer or exchange offer (other than such an offer by Home Federal) is
commenced, or if a change in control has occurred, unless the award agreement
provides otherwise, all awards granted and not fully exercisable shall become
exercisable in full upon the happening of such event. The plans also
provide for accelerated vesting of awards in the event of a participant’s death
or disability. If the employment of any of our named executive
officers had been terminated as of September 30, 2009, by reason of either death
or disability, the value of accelerated vesting of restricted stock awards would
be as shown in the table above.
Compensation
Committee Interlocks and Insider Participation
The members of the Compensation
Committee are Directors Hedemark, Navarro, Tinstman and Stamey. No
members of this Committee were officers or employees of Home Federal or any of
its subsidiaries during the year ended September 30, 2009, nor were they
formerly officers or had any relationships otherwise requiring
disclosure.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit
Committee of the Board of Directors shall not be deemed to be soliciting
material or to be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act, except to the extent Home
Federal specifically incorporates this report therein, and shall not otherwise
be deemed filed under these Acts.
Management is responsible for (1)
preparing Home Federal’s financial statements so that they comply with generally
accepted accounting principles and fairly present the financial condition,
results of operations and cash flows; (2) issuing financial reports that comply
with the requirements of the SEC; and (3) establishing and maintaining adequate
internal control structures and procedures for financial
reporting. The Audit Committee’s responsibility is to monitor and
oversee these processes. In furtherance of its role, the Audit
Committee has periodic reviews of Home Federal’s internal controls and areas of
potential exposure, such as litigation matters. The Committee meets
at least quarterly and reviews the interim financial results and earnings
releases prior to their publication.
The Audit Committee reports as follows
with respect to Home Federal’s audited financial statements for the fiscal year
ended September 30, 2009:
|
• |
The
Audit Committee has reviewed and discussed the audited financial
statements with management;
|
|
|
|
|
• |
The
Audit Committee has discussed with the independent registered public
accounting firm, Moss Adams LLP, the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, as adopted by the Public Company Accounting
Oversight Board in Rule 3200T;
|
|
|
|
|
• |
The
Audit Committee has received the written disclosures and the letter from
the independent registered public accounting firm required by applicable
requirements of the Public Company Accounting Oversight Board regarding
the independent registered public accounting firm’s communications with
the Audit Committee concerning independence, and has discussed with the
independent registered public accounting firm the independent registered
public accounting firm’s independence;
and
|
|
• |
The
Audit Committee has, based on its review and discussions with management
of the 2009 audited financial statements and discussions with the
independent registered public accounting firm, recommended to the Board of
Directors that Home Federal’s audited financial statements for the year
ended September 30, 2009 be included in its Annual Report on Form
10-K.
|
The foregoing report is provided by the
following directors, who constitute the Audit Committee:
|
Robert
A. Tinstman (Chairman)
|
|
N.
Charles Hedemark
|
|
Richard
J. Navarro
|
|
James
R. Stamey
|
PROPOSAL 2 – RATIFICATION OF THE
APPOINTMENT
OF
REGISTERED PUBLIC ACCOUNTING FIRM
Appointment
of Independent Registered Public Accounting Firm
The Audit Committee of the Board of
Directors has appointed Crowe Horwath LLP as the independent registered public
accounting firm to audit Home Federal’s financial statements for the fiscal year
ending September 30, 2010. Moss Adams LLP served as Home Federal’s
independent auditor for the fiscal year ended September 30, 2009. Home Federal
terminated its engagement of Moss Adams LLP as its independent registered public
accounting firm effective December 15, 2009. In connection with the audit as of
for the fiscal years ended September 30, 2009 and 2008, and the subsequent
interim period through December 15, 2009, (1) there were no disagreements with
Moss Adams LLP on any matter of accounting principle or practice, financial
statement disclosure, auditing scope or procedure, whereby such disagreements,
if not resolved to the satisfaction of Moss Adams LLP, would have caused them to
make reference thereto in their report on the financial statements for such
years; and (2) there have been no reportable events (as defined in Item
304(a)(1)(v) of Regulation S-K). You are asked to ratify the
appointment of Crowe Horwath LLP at the annual meeting. If the
appointment of Crowe Horwath LLP is not ratified by our stockholders, the Audit
Committee may appoint another independent registered public accounting firm or
may decide to maintain its appointment of Crowe Horwath LLP.
The Audit Committee operates under a
written charter adopted by the Board of Directors. In fulfilling its
oversight responsibility of reviewing the services performed by Home Federal’s
independent registered public accounting firm, the Committee carefully reviews
the policies and procedures for the engagement of the independent registered
public accounting firm. The Audit Committee discussed with Moss Adams
LLP the overall scope and plans for the audit, and the results of the audit for
fiscal year 2009. The Committee also reviewed and discussed with Moss
Adams LLP the fees paid, as described below, and determined the fees billed for
services was compatible with Moss Adams LLP maintaining their
independence.
A representative of Crowe Horwath LLP
is expected to attend the meeting to respond to appropriate questions and will
have an opportunity to make a statement if he or she so desires. A
member of Moss Adams LLP, Home Federal’s independent registered public
accounting firm during the fiscal year ended September 30, 2009, will also be
present at the meeting.
The Board of Directors unanimously
recommends that you vote “FOR” the ratification of the appointment of
Crowe Horwath LLP as the independent registered public accounting firm for Home
Federal for the fiscal year ending September 30, 2010.
Audit
Fees
The following table sets forth the
aggregate fees billed to Home Federal and Home Federal Bank by Moss Adams LLP
for professional services rendered for the fiscal years ended September 30, 2009
and 2008.
|
|
Years
Ended
|
|
|
|
September
30,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Audit
Fees
|
|
$ |
222,500 |
|
|
$ |
212,000 |
|
Audit-Related
Fees (1)
|
|
|
116,244 |
(2) |
|
|
32,000 |
|
Tax
Fees
|
|
|
-- |
|
|
|
7,000 |
|
All
Other Fees
|
|
|
-- |
|
|
|
-- |
|
____________ |
(1)
|
|
Includes
costs incurred in relation to the audit of employee benefit
plans.
|
(2)
|
|
Includes
audit costs associated with the acquisition of Community First Bank
completed on August 7, 2009.
|
Pre-approval
Policy
It is the policy of the Audit Committee
to pre-approve all audit and permissible non-audit services to be provided by
the registered public accounting firm and the estimated fees for these
services. Pre-approval is typically granted by the full Audit
Committee. In considering non-audit services, the Audit Committee
will consider various factors, including but not limited to, whether it would be
beneficial to have the service provided by the independent registered public
accounting firm and whether the service could compromise the independence of the
independent registered public accounting firm. For the year ended
September 30, 2009, the Audit Committee approved all, or 100%, of the services
provided by Moss Adams LLP that were designated as audit fees, audit-related
fees, tax fees and all other fees as set forth in the table above.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities
Exchange Act requires our directors and executive officers, and persons who own
more than 10% of Home Federal’s common stock to report their initial ownership
of the common stock and any subsequent changes in that ownership to the
SEC. Specific due dates for these reports have been established by
the SEC and we are required to disclose in this proxy statement any late filings
or failures to file. Based solely on our review of the copies of such
forms we have received and written representations provided to us by the above
referenced persons, we believe that, during the fiscal year ended September 30,
2009, all filing requirements applicable to our reporting officers, directors
and greater than 10% stockholders were properly and timely complied
with.
In order to be eligible for inclusion
in the proxy materials for next year’s annual meeting of stockholders, any
stockholder proposal to take action at such meeting must be received at the
executive office at 500 12th Avenue
South, Nampa, Idaho 83651, no later than August 20, 2010. Any such
proposals shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act, and as with any stockholder proposal (regardless of
whether included in our proxy materials), our Articles of Incorporation and
Bylaws.
To be considered for presentation at
next year’s annual meeting, although not included in the proxy materials for
that meeting, any stockholder proposal must be stated in writing and received at
our executive office by not later than the close of business on the 90th day
prior to the first anniversary of the date of the preceding year’s annual
meeting and not earlier than the close of business on the 120th day prior to the
first anniversary of the date of the preceding year’s annual
meeting. As specified in the Articles of Incorporation, the notice
with respect to nominations for election of directors must set forth certain
information regarding each nominee for election as a director, including the
person’s
name,
age, business address and number of shares of common stock held, a written
consent to being named in the proxy statement as a nominee and to serving as a
director, if elected, and certain other information regarding the stockholder
giving such notice. The notice with respect to business proposals to
be brought before the annual meeting must state the stockholder’s name, address
and number of shares of common stock held, a brief discussion of the business to
be brought before the annual meeting, the reasons for conducting such business
at the meeting, and any interest of the stockholder in the
proposal.
The Board of Directors is not aware of
any business to come before the annual meeting other than those matters
described in this Proxy Statement. However, if any other matters
should properly come before the meeting, it is intended that proxies in the
accompanying form will be voted in respect thereof in accordance with the
judgment of the person or persons voting the proxies.
We will pay the cost of soliciting
proxies. In addition to this mailing, our directors, officers and
employees may also solicit proxies personally, electronically or by telephone
without additional compensation. We will also reimburse brokers and
other nominees for their expenses in sending these materials to you and
obtaining your voting instructions.
Our 2009 Annual Report to Stockholders,
including financial statements, on Form 10-K has been mailed to all stockholders
of record as of the close of business on the record date. Any
stockholder who has not received a copy of the Form 10-K may obtain a copy by
writing to the Secretary, Home Federal Bancorp, Inc., 500 12th Avenue
South, Nampa, Idaho 83651. The Form 10-K is not to be treated as part
of the proxy solicitation material or as having been incorporated herein by
reference.
|
BY ORDER OF THE
BOARD OF DIRECTORS |
|
|
|
/s/ Eric
S. Nadeau |
|
|
|
Eric
S. Nadeau
|
|
Secretary
|
Nampa,
Idaho
December
18, 2009
REVOCABLE
PROXY
HOME
FEDERAL BANCORP, INC.
ANNUAL
MEETING OF STOCKHOLDERS
JANUARY
19, 2010
The undersigned hereby appoints the
Board of Directors of Home Federal Bancorp, Inc. (the “Company”) with full
powers of substitution to act as attorneys and proxies for the undersigned, to
vote all shares of common stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Stockholders, to be held at the Silverstone
Corporate Plaza, located at 3405 East Overland Road, Meridian, Idaho, on
Tuesday, January 19, 2010, at 3:00 p.m., local time, and at any and all
adjournments thereof, as follows:
|
|
|
|
FOR
ALL
|
|
|
FOR
|
WITHHELD
|
EXCEPT
|
|
|
|
|
|
1.
|
The
election as director of the nominees listed below for
|
[ ]
|
[ ]
|
[ ]
|
|
a
three-year term (except as marked to the contrary below).
|
|
|
|
|
|
|
|
|
|
|
James
R. Stamey
|
|
|
|
|
|
Robert
A. Tinstman
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INSTRUCTION: To
withhold authority to vote
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for
any individual nominee, mark “For All Except” and
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write
that nominee’s name in the space provided below.
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__________________________________
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__________________________________
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FOR
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AGAINST
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ABSTAIN
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2.
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The
ratification of the appointment of Crowe Horwath LLP as
independent registered public accounting firm for the fiscal year ending
September 30, 2010.
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[ ]
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3.
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In
their discretion, upon such other matters as may properly
come before the meeting.
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The
Board of Directors recommends a vote “FOR” the listed propositions.
This
proxy also provides voting instructions to the trustees of the Home Federal
Bancorp, Inc. 401(k) Savings Plan and Trust and the Employee Stock Ownership
Plan for participants with shares allocated to their accounts.
This proxy will be voted as directed, but
if no instructions are specified, this proxy will be voted for the propositions
stated. If any other business is presented at such meeting, this
proxy will be voted by the Board of Directors in its best
judgment. At the present time, the Board of Directors knows of no
other business to be presented at the annual meeting. This proxy also
confers discretionary authority on the Board of Directors to vote with respect
to the election of any person as director where the nominees are unable to serve
or for good cause will not serve and matters incident to the conduct of the
annual meeting.
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and
elect to vote at the annual meeting or at any adjournment thereof and after
notification to the Secretary of the Company at the annual meeting of the
stockholder’s decision to terminate this proxy, then the power of said attorneys
and proxies shall be deemed terminated and of no further force and
effect.
The undersigned acknowledges receipt
from the Company prior to the execution of this proxy of the Notice of Annual
Meeting of Stockholders, a Proxy Statement dated December 18, 2009, and the 2009
Annual Report to Stockholders on Form 10-K.
Dated:
______________________, 200__
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____________________________________
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PRINT
NAME OF STOCKHOLDER
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PRINT
NAME OF STOCKHOLDER
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____________________________________
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____________________________________
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SIGNATURE
OF STOCKHOLDER
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SIGNATURE
OF STOCKHOLDER
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Please
sign exactly as your name appears on the enclosed card. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should
sign.
PLEASE
COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.