HMN FINANCIAL INC
EX-10.1
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<DESCRIPTION>EX-10.1
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<P align="right" style="font-size: 10pt"><FONT style="font-size: 10pt"><B>EXHIBIT 10.1</B></FONT>



<P align="center" style="font-size: 10pt">DESCRIPTION OF MICHAEL MCNEIL 2004 BONUS PLAN



<P align="left" style="font-size: 10pt; text-indent: 4%">The Michael McNeil 2004 Bonus Plan is designed to link Mr.&nbsp;McNeil&#146;s compensation more directly
to the Company&#146;s corporate goals and performance. Under the 2004 Bonus Plan, the compensation
committee sets (a)&nbsp;goals for the Company&#146;s earnings, known as the financial goals, and (b)&nbsp;certain
non-quantitative strategic goals. At the end of the year, the compensation committee determines
the bonus amount for Mr.&nbsp;McNeil based on the Company&#146;s attainment of the goals. Mr.&nbsp;McNeil is
eligible to receive up to $100,000 based on the Company&#146;s actual earnings relative to the financial
goals and up to $25,000 for the satisfaction of the non-quantitative strategic goals. The
compensation committee may adjust the earnings goals at the end of the year to address the
&#147;quality&#148; of the earnings and other environmental factors that may have contributed positively or
negatively to the Company&#146;s actual earnings.



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