**Exhibit 3.2**

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**Exhibit “A”**

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**HF FINANCIAL CORP.**

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**ACTION OF A SOLE INCORPORATOR**

** **

The undersigned,Curtis L. Hage, being the sole incorporator of HF Financial Corp., a Delawarecorporation (the “Company”), hereby adopts the following resolutions in lieu ofa meeting, pursuant to Section 108(c) of the General Corporation Law of theState of Delaware:

 

RESOLVED,that the proposed form of Bylaws attached hereto is hereby adopted as and forthe Bylaws of the Company.

 

RESOLVED,that the number of directors constituting the Board of Directors is herebyinitially fixed at five (5) and that the following persons are hereby electedas directors of the Company to serve in the classes indicated until the firstAnnual Meeting of Stockholders and until their successors shall be elected andduly qualified:

 

 
| **Class I**  | ** ** | **Class II**                   | ** ** | **Class III**                     |
|--------------|------------|--------------------------------|------------|-----------------------------------|
|         |       |                           |       |                              |
| Lee E. Engen |       | Curtis L. Hage  John D. Parker |       | Paul J. Hallem  Douglas L. Hunter |

 

RESOLVED,that the Board of Directors of the Company is hereby authorized and directed toissue from time to time the shares of capital stock of the Company, now orhereafter authorized, wholly or partly for cash, for labor done, or servicesperformed, or for personal property, or real property or leases thereof,received for the use and lawful purposes of the company, or for anyconsideration, permitted by law, as in the discretion of the directors may seemfor the best interest of the Company.

 

IN WITNESSWHEREOF, the undersigned has duly executed this instrument as of this 27th dayof November, 1991.

 

 
|        |   |   | /s/ Curtis L. Hage |
|--------|--------|--------|--------------------|
|   |   |   | Curtis L. Hage     |
|   |   |   | Sole Incorporator  |

 

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**Exhibit “B”**

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**HF FINANCIAL CORP.**

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**BY-LAWS**

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**ARTICLE I**

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**STOCKHOLDERS**

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Section 1.                 Annual Meeting.

 

An annual meetingof the stockholders, for the election of directors to succeed those whose termsexpire and for the transaction of such other business as may properly comebefore the meeting, shall be held at such place, on such date, and at such timeas the Board of Directors shall each year fix, which date shall be withinthirteen (13) months subsequent to the later of the date of incorporation orthe last annual meeting of stockholders.

 

Section 2.                 SpecialMeetings.

 

Subject to therights of the holders of any class or series of preferred stock of theCorporation, special meetings of stockholders of the Corporation may be calledonly by the Board of Directors pursuant to a resolution adopted by a majorityof the total number of directors which the Corporation would have if there wereno vacancies on the Board of Directors (hereinafter the “Whole Board”).

 

Section 3.                 Notice ofMeetings.

 

Written notice ofthe place, date, and time of all meetings of the stockholders shall be given,not less than ten (10) nor more than sixty (60) days before the date on whichthe meeting is to be held, to each stockholder entitled to vote at suchmeeting, except as otherwise provided herein or required by law (meaning, hereand hereinafter, as required from time to time by the Delaware GeneralCorporation Law or the Certificate of Incorporation of the Corporation).

 

When a meeting isadjourned to another place, date or time, written notice need not be given ofthe adjourned meeting if the place, date and time thereof are announced at themeeting at which the adjournment is taken; provided, however, that if the date ofany adjourned meeting is more than thirty (30) days after the date for whichthe meeting was originally noticed, or if a new record date is fixed for theadjourned meeting, written notice of the place, date and time of the adjournedmeeting shall be given in conformity herewith. At any adjourned meeting, anybusiness may be transacted which might have been transacted at the originalmeeting.

 

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Section 4.                 Quorum.

 

At any meeting ofthe stockholders, the holders of at least one-third of all of the shares of thestock entitled to vote at the meeting, present in person or by proxy, shallconstitute a quorum for all purposes, unless or except to the extent that thepresence of a larger number may be required by law. Where a separate vote by aclass or classes is required, a majority of the shares of such class orclasses, present in person or represented by proxy, shall constitute a quorumentitled to take action with respect to that vote on that matter.

 

If a quorum shallfail to attend any meeting, the chairman of the meeting or the holders of amajority of the shares of stock entitled to vote who are present, in person orby proxy, may adjourn the meeting to another place, date or time.

 

If a notice of anyadjourned special meeting of stockholders is sent to all stockholders entitledto vote thereat, stating that it will be held with those present constituting aquorum, then except as otherwise required by law, those present at suchadjourned meeting shall constitute a quorum, and all matters shall be determinedby a majority of the votes cast at such meeting.

 

Section 5.                 Organization.

 

Such person as theBoard of Directors may have designated or, in the absence of such a person, theChairman of the Board of the Corporation or, in his or her absence, such personas may be chosen by the holders of a majority of the shares entitled to votewho are present, in person or by proxy, shall call to order any meeting of thestockholders and act as chairman of the meeting. In the absence of theSecretary of the Corporation, the secretary of the meeting shall be such personas the chairman appoints.

 

Section 6.                 Conduct ofBusiness.

 

(a)       The chairman of any meetingof stockholders shall determine the order of business and the procedure at themeeting, including such regulation of the manner of voting and the conduct ofdiscussion as seem to him or her in order. The polls for each matter upon whichthe stockholders will vote at the meeting will be opened and closed inaccordance with Delaware law.

 

(b)       At any annual meeting ofthe stockholders, only such business shall be conducted as shall have beenbrought before the meeting (i) by or at the direction of the Board of Directorsor (ii) by any stockholder of the Corporation who is entitled to vote withrespect thereto and who complies with the notice procedures set forth in thisSection 6(b). For business to be properly brought before an annual meeting by astockholder, the business must relate to a proper subject matter forstockholder action and

 

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the stockholder must havegiven timely notice thereof in writing to the Secretary of the Corporation. Tobe timely, a stockholder’s notice must be delivered or mailed to and receivedat the principal executive offices of the Corporation not less than thirty (30)days prior to the date of the annual meeting; provided, however, that in theevent that less than forty (40) days’ notice or prior public disclosure of thedate of the meeting is given or made to stockholders, notice by the stockholderto be timely must be received not later than the close of business on the 10thday following the day on which such notice of the date of the annual meetingwas mailed or such public disclosure was made. A stockholder’s notice to theSecretary shall set forth as to each matter such stockholder proposes to bringbefore the annual meeting (i) a brief description of the business desired to bebrought before the annual meeting and the reasons for conducting such businessat the annual meeting, (ii) the name and address, as they appear on theCorporation’s books, of the stockholder who proposed such business, (iii) theclass and number of shares of the Corporation’s capital stock that arebeneficially owned by such stockholder and (iv) any material interest of suchstockholder in such business. Notwithstanding anything in these By-laws to thecontrary, no business shall be brought before or conducted at an annual meetingexcept in accordance with the provisions of this Section 6(b). The officer ofthe Corporation or other person presiding over the annual meeting shall, if thefacts so warrant, determine and declare to the meeting that business was notproperly brought before the meeting in accordance with the provisions of thisSection 6(b) and, if he should so determine, he shall so declare to the meetingand any such business so determined to be not properly brought before themeeting shall not be transacted.

 

At any specialmeeting of the stockholders, only such business shall be conducted as shallhave been brought before the meeting by or at the direction of the Board ofDirectors or by or at the direction of the holders of not less than one-tenthof all the outstanding capital stock of the Corporation entitled to vote atwhose instance the special meeting is called.

 

(c)       Only persons who are nominated inaccordance with the procedures set forth in these By-laws shall be eligible forelection as directors. Nominations of persons for election to the Board ofDirectors of the Corporation may be made at a meeting of stockholders at whichdirectors are to be elected only (i) by or at the direction of the Board ofDirectors or (ii) by any stockholder of the Corporation entitled to vote forthe election of directors at the meeting who complies with the notice proceduresset forth in this Section 6(c). Such nominations, other than those made by orat the direction of the Board of Directors, shall be made by timely notice inwriting to the Secretary of the Corporation. To be timely, a stockholder’snotice shall be delivered or mailed to and received at the principal executiveoffices of the Corporation not less than 30 days prior to the date of themeeting; provided,

 

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however, that in theevent that less than 40 days’ notice or prior disclosure of the date of themeeting is given or made to stockholders, notice by the stockholder to betimely must be so received not later than the close of business on the 10th dayfollowing the day on which such notice of the date of the meeting was mailed orsuch public disclosure was made. Such stockholder’s notice shall set forth (i)as to each person whom such stockholder proposes to nominate for election orre-election as a director, all information relating to such person that isrequired to be disclosed in solicitations of proxies for election of directors,or is otherwise required, in each case pursuant to Regulation 14A under theSecurities Exchange Act of 1934, as amended (including such person’s writtenconsent to being named in the proxy statement as a nominee and to serving as adirector if elected); and (ii) as to the stockholder giving the notice (x) thename and address, as they appear on the Corporation’s books, of suchstockholder and (y) the class and number of shares of the Corporation’s capitalstock that are beneficially owned by such stockholder. At the request of theBoard of Directors, any person nominated by the Board of Directors for electionas a director shall furnish to the Secretary of the Corporation thatinformation required to be set forth in a stockholder’s notice of nominationwhich pertains to the nominee. No person shall be eligible for election as adirector of the Corporation unless nominated in accordance with the provisionsof this Section 6(c). The officer of the Corporation or other person presidingat the meeting shall, if the facts so warrant, determine that a nomination wasnot made in accordance with such provisions and, if he or she should sodetermine, he or she shall so declare to the meeting and the defectivenomination shall be disregarded.

 

Section 7.                 Proxies andVoting.

 

At all meetings ofstockholders, a stockholder may vote by proxy executed in writing (or asotherwise permitted under applicable law) by the stockholder or his duly authorizedattorney-in-fact in accordance with the procedures established for the meeting.Proxies solicited on behalf of the management shall be voted as directed bystockholder or, in the absence of such direction, as determined by a majorityof the board of directors. No proxy shall be valid after eleven months from thedate of its execution except for a proxy coupled with an interest.

 

Each stockholdershall have one (1) vote for every share of stock entitled to vote which isregistered in his or her name on the record date for the meeting, except asotherwise provided herein or in the Certificate of Incorporation of theCorporation or as required by law.

 

All voting,including on the election of directors but excepting where otherwise requiredby law, may be by a voice vote; provided, however, that the Board of Directors,in its discretion, or the officer of the Corporation presiding at the meetingof

 

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stockholders,in his discretion, may require that any votes cast at such meeting shall becast pursuant to a roll call. Every vote taken by ballot shall becounted by an inspector or inspectors appointed by the Board of Directors in advance of the meeting of stockholders andsuch inspector or inspectors shall act at the meeting or and adjournmentthereof and make a written report thereof in accordance with Delaware law.

 

All electionsshall be determined by a plurality of the votes cast, and except as otherwiserequired by law or as provided in the Certificate of Incorporation, all othermatters shall be determined by a majority of the votes cast.

 

Section 8.                 Stock List.

 

The officer whohas charge of the stock transfer books of the Corporation shall prepare andmake, in the time and manner required by applicable law, a list of stockholdersentitled to vote and shall make such list available for such purposes, at suchplaces, at such times and to such persons as required by applicable law. Thestock transfer books shall be the only evidence as to the identity of thestockholders entitled to examine the stock transfer books or to vote in personor by proxy at any meeting of stockholders.

 

Section 9.                 Consent ofStockholders in Lieu of Meeting.

 

Subject to therights of the holders of any class or series of preferred stock of theCorporation, any action required or permitted to be taken by the stockholdersof the Corporation must be effected at a duly called annual or special meetingof stockholders of the Corporation and may not be effected by any consent inwriting by such stockholders.

 

Section 10.               Inspectors ofElection.

 

The Board ofDirectors shall, in advance of any meeting of stockholders, appoint one or morepersons as inspectors of election, to act at the meeting or any adjournmentthereof and make a written report thereof, in accordance with applicable law.

 

**ARTICLE II**

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**BOARD OF DIRECTORS**

** **

Section 1.                 GeneralPowers, Number and Term of Office.

 

The business andaffairs of the Corporation shall be managed by or under the direction of theBoard of Directors. The number of directors shall be as provided for in theCertificate of Incorporation. The number of directors who shall constitute the

 

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Whole Board shall be suchnumbers as the Board of Directors shall from time to time have designatedexcept that in the absence of any such designation, such number shall be seven.The Board of Directors shall annually elect a Chairman of the Board and aPresident from among its members and shall designate, when present, either theChairman of the Board or the President to preside at its meetings.

 

The directors,other than those who may be elected by the holders of any class or series ofpreferred stock, shall be divided into three classes, as nearly equal in numberas reasonably possible, with the term of office of the first class to expire atthe conclusion of the first annual meeting of stockholders, the term of officeof the second class to expire at the conclusion of the annual meeting ofstockholders one year thereafter and the term of office of the third class toexpire at the conclusion of the annual meeting of stockholders two yearsthereafter, with each director to hold office until his or her successor shallhave been duly elected and qualified. At each annual meeting of stockholders,commencing with the first annual meeting, directors elected to succeed thosedirectors whose terms expire shall be elected for a term of office to expire atthe conclusion of the third succeeding annual meeting of stockholders after theirelection, with each director to hold office until his or her successor shallhave been duly elected and qualified.

 

Section 2.                 Vacancies andNewly Created Directorships.

 

Subject to therights of the holders of any class or series of preferred stock thenoutstanding, and unless the Board of Directors otherwise determines, newlycreated directorships resulting from any increase in the authorized number ofdirectors or any vacancies in the Board of Directors resulting from death,resignation, retirement, disqualification, removal from office or other causemay be filled only by a majority vote of the directors then in office, thoughless than a quorum, and directors so chosen shall hold office for a termexpiring at the annual meeting of stockholders at which the term of office ofthe class to which they have been elected expires, and until such director’ssuccessor shall have been duly elected and qualified. No decrease in the numberof authorized directors constituting the Board shall shorten the term of anyincumbent director.

 

Section 3.                 RegularMeetings.

 

Regular meetingsof the Board of Directors shall be held at such place or places, on such dateor dates, and at such time or times as shall have been established by the Boardof Directors and publicized among all directors. A notice of each regularmeeting shall not be required.

 

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Section 4.                 SpecialMeetings.

 

Special meetingsof the Board of Directors may be called by one-third (1/3) of the directorsthen in office (rounded up to the nearest whole number) or by the Chairman ofthe Board and shall be held at such place, on such date, and at such time asthey or he or she shall fix. Notice of the place, date, and time of each suchspecial meeting shall be given to each director by whom it is not waived bymailing written notice not less than five (5) days before the meeting or bytelegraphing or telexing or by facsimile transmission of the same not less thantwenty-four (24) hours before the meeting. Unless otherwise indicated in thenotice thereof, any and all business may be transacted at a special meeting.

 

Section 5.                 Quorum.

 

At any meeting ofthe Board of Directors, a majority of the authorized number of directors thenconstituting the Board shall constitute a quorum for all purposes. If a quorumshall fail to attend any meeting, a majority of those present may adjourn themeeting to another place, date, or time, without further notice or waiverthereof. Notwithstanding the above, at any adjourned meeting of the Board ofDirectors, at least one-third of the authorized number of directors thenconstituting the Board shall constitute a quorum for all purposes.

 

Section 6.                 Participationin Meetings By Conference Telephone.

 

Members of theBoard of Directors, or of any committee thereof, may participate in a meetingof such Board or committee by means of conference telephone or similarcommunications equipment by means of which all persons participating in themeeting can hear each other and such participation shall constitute presence inperson at such meeting.

 

Section 7.                 Conduct ofBusiness.

 

At any meeting ofthe Board of Directors, business shall be transacted in such order and manneras the Board may from time to time determine, and all matters shall be determinedby the vote of a majority of the directors present, except as otherwiseprovided herein or required by law. Action may be taken by the Board ofDirectors without a meeting if all members thereof consent thereto in writing,and the writing or writings are filed with the minutes of proceedings of theBoard of Directors.

 

Section 8.                 Powers.

 

The Board ofDirectors may, except as otherwise required by law, exercise all such powersand do all such acts and things as

 

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maybe exercised or done by the Corporation, including, without limiting thegenerality of the foregoing, the unqualified power:

 

(1)       To declare dividends from time to time inaccordance with law;

 

(2)       To purchase or otherwise acquire any property,rights or privileges on such terms as it shall determine;

 

(3)       To authorize the creation, making andissuance, in such form as it may determine, of written obligations of everykind, negotiable or non-negotiable, secured or unsecured, and to do all thingsnecessary in connection therewith;

 

(4)       To remove any officer of the Corporation withor without cause, and from time to time to devolve the powers and duties of anyofficer upon any other person for the time being;

 

(5)       To confer upon any officer of the Corporationthe power to appoint, remove and suspend subordinate officers, employees andagents;

 

(6)       To adopt from time to time such stock,option, stock purchase, bonus or other compensation plans for directors,officers, employees and agents of the Corporation and its subsidiaries as itmay determine;

 

(7)       To adopt from time to time such insurance,retirement, and other benefit plans for directors, officers, employees andagents of the Corporation and its subsidiaries as it may determine; and,

 

(8)       To adopt from time to time regulations, notinconsistent with these By-laws, for the management of the Corporation’sbusiness and affairs.

 

Section 9.                 Compensation of Directors.

 

Directors, as such, may receive, pursuant to resolution of the Board ofDirectors, fixed fees and other compensation for their services as directors,including, without limitation, their services as members of committees of theBoard of Directors.

 

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**ARTICLE III**

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**COMMITTEES**

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Section 1.                 Committees ofthe Board of Directors.

 

The Board ofDirectors, by a vote of a majority of the Whole Board of Directors, may fromtime to time designate committees of the Board, with such lawfully delegablepowers and duties as it thereby confers, to serve at the pleasure of the Boardand shall, for those committees and any others provided for herein, elect adirector or directors to serve as the member or members, designating, if itdesires, other directors as alternate members who may replace any absent ordisqualified member at any meeting of the committee. Any committee sodesignated may exercise the power and authority of the Board of Directors todeclare a dividend, to authorize the issuance of stock or to adopt acertificate of ownership and merger pursuant to Section 253 of the DelawareGeneral Corporation Law if the resolution which designated the committee or asupplemental resolution of the Board of Directors shall so provide. In theabsence or disqualification of any member of any committee and any alternatemember in his or her place, the member or members of the committee present atthe meeting and not disqualified from voting, whether or not he or she or theyconstitute a quorum, may by unanimous vote appoint another member of the Boardof Directors to act at the meeting in the place of the absent or disqualifiedmember.

 

Section 2.                 Conduct ofBusiness.

 

Each committee maydetermine the procedural rules for meeting and conducting its business andshall act in accordance therewith, except as otherwise provided herein orrequired by law. Adequate provision shall be made for notice to members of allmeetings; one-third (1/3) of the members shall constitute a quorum unless thecommittee shall consist of one (1) or two (2) members, in which event one (1)member shall constitute a quorum; and all matters shall be determined by amajority vote of the members present. Action may be taken by any committeewithout a meeting if all members thereof consent thereto in writing, and thewriting or writings are filed with the minutes of the proceedings of suchcommittee.

 

Section 3.                 NominatingCommittee.

 

The Board ofDirectors shall appoint a Nominating Committee of the Board, consisting of notless than three (3) members, one of which shall be the President if, and onlyso long as, the President remains in office as a member of the Board ofDirectors. The Nominating Committee shall have authority (a) to review anynominations for election to the Board of Directors made by a stockholder of theCorporation pursuant to Section 6(c) (ii) of

 

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Article I of these Bylawsin order to determine compliance with such By-law and (b) to recommend to theWhole Board nominees for election to the Board of Directors to replace thosedirectors whose terms expire at the annual meeting of stockholders nextensuing.

 

**ARTICLE IV**

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**OFFICERS**

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Section 1.                 Generally.

 

(a)       The Board of Directors assoon as may be practicable after the annual meeting of stockholders shallchoose a Chairman of the Board, a President, one or more Vice Presidents, aSecretary and a Chief Financial Officer and from time to time may choose suchother officers as it may deem proper. The Chairman of the Board and thePresident shall be chosen from among the directors. Any number of offices maybe held by the same person.

 

(b)       The term of office of allofficers shall be until the next annual election of officers and until theirrespective successors are chosen, but any officer may be removed from office atany time by the affirmative vote of a majority of the authorized number ofdirectors then constituting the Board of Directors.

 

(c)       All officers chosen by theBoard of Directors shall each have such powers and duties as generally pertainto their respective offices, subject to the specific provisions of this ArticleIV. Such officers shall also have such powers and duties as from time to timemay be conferred by the Board of Directors or by any committee thereof.

 

Section 2.                 Chairman ofthe Board of Directors.

 

The Chairman ofthe Board of Directors of the Corporation shall act in a general executivecapacity and, subject to the direction of the Board of Directors, shall havegeneral responsibility for the supervision of the policies and affairs of theCorporation and the effective administration of the Corporation’s business.

 

Section 3.                 President.

 

The Presidentshall be the chief executive officer and, subject to the control of the Boardof Directors, shall have general power over the management and oversight of theadministration and operation of the Corporation’s business and generalsupervisory power and authority over its policies and affairs. He shall seethat all orders and resolutions of the Board of Directors and of any committeethereof are carried into effect.

 

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Each meeting ofthe stockholders and of the Board of Directors shall be presided over by thePresident or, in his absence, the Chairman of the Board, or in his absence, bysuch officer as has been designated by the Board of Directors or, in hisabsence, by such officer or other person as is chosen at the meeting. TheSecretary or, in his absence, the General Counsel of the Corporation or suchofficer as has been designated by the Board of Directors or, in his absence,such officer or other person as is chosen by the person presiding, shall act assecretary of each such meeting.

 

Section 4.                 Vice President.

 

The Vice Presidentor Vice Presidents, if any, shall perform the duties of the President in hisabsence or during his disability to act. In addition, the Vice Presidents shallperform the duties and exercise the powers usually incident to their respectiveoffices and/or such other duties and powers as may be properly assigned to themfrom time to time by the Board of Directors, the Chairman of the Board or thePresident.

 

Section 5.                 Secretary.

 

The Secretary oran Assistant Secretary shall issue notices of meetings, shall keep theirminutes, shall have charge of the seal and the corporate books, shall performsuch other duties and exercise such other powers as are usually incident tosuch offices and/or such other duties and powers as are properly assignedthereto by the Board of Directors, the Chairman of the Board or the President.

 

Section 6.                 Chief FinancialOfficer.

 

The ChiefFinancial Officer shall have charge of all monies and securities of theCorporation, other than monies and securities of any division of theCorporation which has a treasurer or financial officer appointed by the Boardof Directors, and shall keep regular books of account. The funds of theCorporation shall be deposited in the name of the Corporation by the ChiefFinancial Officer with such banks or trust companies as the Board of Directorsfrom time to time shall designate. He shall sign or countersign suchinstruments as require his signature, shall perform all such duties and haveall such powers as are usually incident to such office and/or such other dutiesand powers as are properly assigned to him by the Board of Directors, theChairman of the Board or the President, and may be required to give bond forthe faithful performance of his duties in such sum and with such surety as maybe required by the Board of Directors.

 

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Section 7.                 AssistantSecretaries and Other Officers.

 

The Board ofDirectors may appoint one or more assistant secretaries and one or moreassistants to the Chief Financial Officer, or one appointee to both suchpositions, which officers shall have such powers and shall perform such dutiesas are provided in these By-laws or as may be assigned to them by the Board ofDirectors, the Chairman of the Board or the President.

 

Section 8.                 Action withRespect to Securities of Other Corporations

 

Unless otherwisedirected by the Board of Directors, the President or any officer of theCorporation authorized by the President shall have power to vote and otherwiseact on behalf of the Corporation, in person or by proxy, at any meeting ofstockholders of or with respect to any action of stockholders of any othercorporation in which this Corporation may hold securities and otherwise toexercise any and all rights and powers which this Corporation may possess byreason of its ownership of securities in such other corporation.

 

**ARTICLE V**

 

**STOCK**

 

Section 1.                 Certificatesof Stock.

 

Each stockholdershall be entitled to a certificate signed by, or in the name of the Corporationby, the President or a Vice President, and by the Secretary or an AssistantSecretary, or the Treasurer or an Assistant Treasurer, certifying the number ofshares owned by him or her. Any or all of the signatures on the certificate maybe by facsimile.

 

Section 2.                 Transfers ofStock.

 

Transfers of stockshall be made only upon the transfer books of the Corporation kept at an officeof the Corporation or by transfer agents designated to transfer shares of thestock of the Corporation. Except where a certificate is issued in accordancewith Section 4 of Article V of these By-laws, an outstanding certificate for thenumber of shares involved shall be surrendered for cancellation before a newcertificate is issued therefore.

 

Section 3.                 Record Date.

 

In order that theCorporation may determine the stockholders entitled to notice of or to vote atany meeting of stockholders, or to receive payment of any dividend or otherdistribution or allotment of any rights or to exercise any rights in respect ofany

 

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change, conversion orexchange of stock or for the purpose of any other lawful action, the Board ofDirectors may fix a record date, which record date shall not precede the dateon which the resolution fixing the record date is adopted and which record dateshall not be more than sixty (60) nor less than ten (10) days before the dateof any meeting of stockholders, nor more than sixty (60) days prior to the timefor such other action as hereinbefore described; provided, however, that if norecord date is fixed by the Board of Directors, the record date for determiningstockholders entitled to notice of or to vote at a meeting of stockholdersshall be at the close of business on the day next preceding the day on whichnotice is given or, if notice is waived, at the close of business on the daynext preceding the day on which the meeting is held, and, for determiningstockholders entitled to receive payment of any dividend or other distributionor allotment of rights or to exercise any rights of change, conversion orexchange of stock or for any other purpose, the record date shall be at theclose of business on the day on which the Board of Directors adopts aresolution relating thereto.

 

A determination ofstockholders of record entitled to notice of or to vote at a meeting ofstockholders shall apply to any adjournment of the meeting; provided, however,that the Board of Directors may fix a new record date for the adjournedmeeting.

 

Section 4.                 Lost, Stolenor Destroyed Certificates.

 

In the event ofthe loss, theft or destruction of any certificate of stock, another may beissued in its place pursuant to such regulations as the Board of Directors mayestablish concerning proof of such loss, theft or destruction and concerningthe giving of a satisfactory bond or bonds of indemnity.

 

Section 5.                 Regulations.

 

The issue, transfer,conversion and registration of certificates of stock shall be governed by suchother regulations as the Board of Directors may establish.

 

**ARTICLE VI**

 

**NOTICES**

 

Section 1.                 Notices.

 

Except asotherwise specifically provided herein or required by law, all notices requiredto be given to any stockholder, director, officer, employee or agent shall bein writing and may in every instance be effectively given by hand delivery tothe recipient thereof, by depositing such notice in the mail, postage paid, bysending such notice by prepaid telegram or mailgram or by

 

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sending such notice byfacsimile machine or other electronic transmission. Any such notice shall beaddressed to such stockholder, director, officer, employee or agent at his orher last known address as the same appears on the books of the Corporation. Thetime when such notice is received, if hand delivered, or dispatched, ifdelivered through the mail, by telegram or mailgram or by facsimile machine orother electronic transmission, shall be the time of the giving of the notice.

 

Section 2.                 Waivers.

 

A written waiverof any notice, signed by a stockholder, director, officer, employee or agent,whether before or after the time of the event for which notice is to be given,shall be deemed equivalent to the notice required to be given to suchstockholder, director, officer, employee or agent. Neither the business nor thepurpose of any meeting need be specified in such a waiver.

 

**ARTICLE VII**

 

**MISCELLANEOUS**

 

Section 1.                 FacsimileSignatures.

 

In addition to theprovisions for use of facsimile signatures elsewhere specifically authorized inthese By-laws, facsimile signatures of any officer or officers of theCorporation may be used whenever and as authorized by the Board of Directors ora committee thereof.

 

Section 2.                 Corporate Seal.

 

The Board ofDirectors may provide a suitable seal, containing the name of the Corporation,which seal shall be in the charge of the Secretary. If and when so directed bythe Board of Directors or a committee thereof, duplicates of the seal may bekept and used by the Treasurer or by an Assistant Secretary or AssistantTreasurer.

 

Section 3.                 Reliance uponBooks, Reports and Records.

 

Each director,each member of any committee designated by the Board of Directors, and eachofficer of the Corporation shall, in the performance of his or her duties, befully protected in relying in good faith upon the books of account or otherrecords of the Corporation and upon such information, opinions, reports orstatements presented to the Corporation by any of its officers or employees, orcommittees of the Board of Directors so designated, or by any other person asto matters which such director or committee member reasonably believes arewithin such other person’s

 

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professional or expertcompetence and who has been selected with reasonable care by or on behalf ofthe Corporation.

 

Section 4.                 Fiscal Year.

 

The fiscal year ofthe Corporation shall be as fixed by the Board of Directors.

 

Section 5.                 Time Periods.

 

In applying anyprovision of these By-laws which requires that an act be done or not be done aspecified number of days prior to an event or that an act be done during aperiod of a specified number of days prior to an event, calendar days shall beused, the day of the doing of the act shall be excluded and the day of theevent shall be included.

 

**ARTICLE VIII**

** **

**AMENDMENTS**

** **

The By-laws of theCorporation may be adopted, amended or repealed as provided in Article SEVENTHof the Certificate of Incorporation of the Corporation.

 

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**Exhibit “D”**

** **

**HOME FEDERAL SAVINGS AND LOAN ASSOCIATION OF SIOUXFALLSSIOUX FALLS, SOUTH DAKOTA**

** **

**PLAN OF CONVERSION**

** **

**FromMutual to Stock Form of Organization**

** **

**I.****           GENERAL**

 

On August 21,1991, the Board of Directors of Home Federal Savings and Loan Association ofSioux Falls, Main Avenue at 11th, Sioux Falls, South Dakota, 57102, adopted aPlan of Conversion whereby the Association would convert from a federal mutualsavings and loan association to a federal stock savings bank to be known asHome Federal Savings Bank pursuant to the Rules and Regulations of the OTS. ThePlan includes, as part of the conversion, the concurrent formation of a holdingcompany. The new holding company is proposed to be chartered as a Delawarecorporation under the name “HF Financial Corp”. The Plan provides thatnon-transferable subscription rights to purchase Holding Company ConversionStock will be offered first to the Association’s Tax-Qualified Employee Plans,then to Eligible Account Holders of record as of the Eligibility Record Date,then to Other Members, and then to directors, Officers and employees of theAssociation. Concurrently with, at any time during, or promptly after thesubscription offering, and on a lowest priority basis, an opportunity tosubscribe may also be offered to the general public in a direct communityoffering. The price of the Holding Company Conversion Stock will be based uponan independent appraisal of the Association and will reflect its estimated proforma market value, as converted. It is the desire of the Board of Directors ofthe Association to attract new capital to the Association in order to increaseits capital, support future savings growth and increase the amount of fundsavailable for residential and other mortgage lending. The Converted Bank isalso expected to benefit from its management and other personnel having a stockownership in its business, because stock ownership is viewed as an effectiveperformance incentive and a means of attracting, retaining and compensatingmanagement and other personnel. The Board of Directors believes that the Planprovides the Association with the best opportunity to raise the greatest amountof new capital.

 

**II.****         DEFINITIONS**

 

Acting in Concert:The term “acting in concert” shall have the same meaning given it in §574.2(c)of the Rules and Regulations of the OTS.

 

ActualSubscription Price: The price per share, determined asprovided in Section V of the Plan, at which Holding Company Conversion Stockwill be sold in the Subscription Offering.

 

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Affiliate:An “affiliate” of, or a Person “affiliated” with, a specified Person, is aPerson that directly, or indirectly through one or more intermediaries,controls, or is controlled by or is under common control with, the Personspecified.

 

Associate:The term “associate,” when used to indicate a relationship with any Person,means (i) any corporation or organization (other than the Holding Company, theAssociation or a majority-owned subsidiary of the Holding Company) of whichsuch Person is an officer or partner or is, directly or indirectly, thebeneficial owner of ten percent or more of any class of equity securities, (ii)any trust or other estate in which such Person has a substantial beneficialinterest or as to which such Person serves as trustee or in a similar fiduciarycapacity, and (iii) any relative or spouse of such Person, or any relative ofsuch spouse, who has the same home as such Person or who is a director orofficer of the Holding Company or the Association or any subsidiary of theHolding Company; provided, however, that any Tax-Qualified Employee Plan of theAssociation shall not be deemed to be an associate of any director or officerof the Holding Company or the Association, to the extent provided in Section Vhereof.

 

Association:Home Federal Savings and Loan Association of Sioux Falls.

 

Conversion:Change of the Association’s charter and bylaws to federal stock charter andbylaws; sale by the Holding Company of Holding Company Conversion Stock;issuance and sale by the Association of Association Common Stock to the HoldingCompany; all as provided for in the Plan.

 

Converted Bank:The federally chartered stock savings bank resulting from the Conversion of theAssociation in accordance with the Plan.

 

Deposit Account:Any withdrawable or repurchasable account or deposit in the Association.

 

Direct CommunityOffering: The offering to the general public of anyunsubscribed shares which may be effected as provided in Section V hereof.

 

Eligibility RecordDate: The close of business on March 31, 1991.

 

Eligible AccountHolder: Any Person holding a Deposit Account in theAssociation on the Eligibility Record Date.

 

Exchange Act:The Securities Exchange Act of 1934, as amended.

 

Holding Company:HF Financial Corp, a Delaware corporation, which, upon completion of theConversion, will own all of the outstanding common stock of the Association.

 

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Holding CompanyConversion Stock: Shares of common stock, par value $.01 pershare, to be issued and sold by the Holding Company as a part of theConversion; provided, however, that for purposes of calculating SubscriptionRights and maximum purchase limitations under the Plan, references to thenumber of shares of Holding Company Conversion Stock shall refer to the numberof shares offered in the Subscription Offering.

 

MaximumSubscription Price: The price per share of Holding CompanyConversion Stock to be paid initially by subscribers in the SubscriptionOffering.

 

Member:Any Person or entity that qualifies as a member of the Association pursuant toits certificate of incorporation and bylaws.

 

Non-Tax-QualifiedEmployee Plan: Any defined benefit plan or definedcontribution plan of the Association, such as an employee stock ownership plan,stock bonus plan, profit-sharing plan or other plan, which with its relatedtrust does not meet the requirements to be “qualified” under Section 401 of theInternal Revenue Code.

 

OTS:Office of Thrift Supervision.

 

Officer:An executive officer of the Holding Company or the Association, including theChairman of the Board, President, Executive Vice Presidents, Senior Vice Presidentsin charge of principal business functions, Secretary and Treasurer.

 

Order Forms:Forms to be used in the Subscription Offering to exercise Subscription Rights.

 

Other Members:Members of the Association, other than Tax-Qualified Employee Plans, EligibleAccount Holders or Supplemental Eligible Account Holders, as of the VotingRecord Date.

 

Person:An individual, a corporation, a partnership, an association, a joint-stockcompany, a trust, any unincorporated organization, or a government or politicalsubdivision thereof.

 

Plan:This Plan of Conversion of the Association, including any amendment approved asprovided in this Plan.

 

Qualifying Deposit:The aggregate balance of all Deposit Accounts of an Eligible Account Holder asof the Eligibility Record Date.

 

SAIF: SavingsAssociation Insurance Fund.

 

SEC:Securities and Exchange Commission.

 

Special Meeting:The Special Meeting of Members called for the purpose of considering and votingupon the Plan of Conversion.

 

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SubscriptionOffering: The offering of shares of Holding CompanyConversion Stock for subscription and purchase pursuant to Section V.B of thePlan.

 

SubscriptionRights: Non-transferable, non-negotiable, personal rights ofthe Association’s Tax-Qualified Employee Plans, Eligible Account Holders, OtherMembers and directors, Officers and employees to subscribe for shares ofHolding Company Conversion Stock in the Subscription Offering.

 

Tax-QualifiedEmployee Plan: Any defined benefit plan or definedcontribution plan of the Association, such as an employee stock ownership plan,stock bonus plan, profit-sharing plan or other plan, which with its relatedtrust meets the requirements to be “qualified” under Section 401 of theInternal Revenue Code.

 

Voting Record Date:The date set by the Board of Directors of the Association in accordance withfederal regulations for determining Members eligible to vote at the SpecialMeeting.

 

**III.****        STEPS PRIOR TOSUBMISSION OF PLAN OF CONVERSION TO THE MEMBERS FOR APPROVAL**

 

Prior tosubmission of the Plan of Conversion to its Members for approval, theAssociation must receive from the OTS approval of the Application for Approvalof Conversion to convert to the stock form of organization. The following stepsmust be taken prior to such regulatory approval:

 

A.        The Board of Directorsshall adopt the Plan by not less than a two-thirds vote.

 

B.        The Association shallnotify its Members of the adoption of the Plan by publishing a statement in anewspaper having a general circulation in each community in which theAssociation maintains an office.

 

C.        Copies of the Plan adoptedby the Board of Directors shall be made available for inspection at each officeof the Association.

 

D.        The Association willpromptly cause an Application for Approval of Conversion on Form AC to beprepared and filed with the OTS, an Application on Form H-(e)1 to be preparedand filed with the OTS and a Registration Statement on Form S-1 to be preparedand filed with the SEC.

 

E.         At the time and in themanner prescribed by regulations of the OTS, the Association shall notify itsMembers that it has filed the Application for Approval of Conversion with theOTS by posting notice in each of its offices and by publishing notice in anewspaper having general circulation in each community in which the Associationmaintains an office.

 

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**IV.****        CONVERSION PROCEDURE**

 

Following approvalof the application by the OTS, the Plan will be submitted to a vote of theMembers at the Special Meeting. If the Plan is approved by Members holding amajority of the total number of votes entitled to be cast at the SpecialMeeting, the Association will take all other necessary steps pursuant toapplicable laws and regulations to convert to a federally chartered stocksavings and loan association as part of a concurrent holding company formationpursuant to the terms of the Plan.

 

The HoldingCompany Conversion Stock will be offered for sale in the Subscription Offeringat the Maximum Subscription Price to Tax-Qualified Employee Plans, EligibleAccount Holders, Other Members and directors, Officers and employees of theAssociation, prior to or within 45 days after the date of the Special Meeting.The Association may, either concurrently with, at any time during, or promptlyafter the Subscription Offering, also offer the Holding Company ConversionStock to and accept subscriptions from other Persons in a Direct CommunityOffering; provided that the Association’s Tax-Qualified Employee Plans,Eligible Account Holders, Supplemental Eligible Account Holders, Other Membersand directors, Officers and employees shall have the priority rights tosubscribe for Holding Company Conversion Stock set forth in Section V of thisPlan. However, the Holding Company and the Association may delay commencing theSubscription Offering beyond such 45 day period in the event there existunforeseen material adverse market or financial conditions. If the SubscriptionOffering commences prior to the Special Meeting, subscriptions will be acceptedsubject to the approval of the Plan at the Special Meeting. The period for theSubscription Offering and Direct Community Offering will be not less than 20days nor more than 45 days unless extended by the Association. In connectionwith such extensions, subscribers and other purchasers will be permitted toincrease, decrease or rescind their subscriptions or purchase orders to theextent required by the OTS in approving the extensions. Completion of the saleof all shares of Holding Company Conversion Stock is required within 24 monthsafter the date of the Special Meeting.

 

**V.****         STOCK OFFERING**

 

A.       Total Number of Sharesand Purchase Price of Conversion Stock

 

The total numberof shares of Holding Company Conversion Stock to be issued and sold in theConversion will be determined jointly by the Boards of Directors of the HoldingCompany and the Association prior to the commencement of the SubscriptionOffering, subject to adjustment if necessitated by market or financialconditions prior to consummation of the Conversion. The total number of sharesof Holding Company Conversion Stock shall also be subject to increase inconnection with oversubscriptions in the Subscription Offering or DirectCommunity Offering.

 

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The aggregateprice for which all shares of Holding Company Conversion Stock will be soldwill be based on an independent appraisal of the estimated total pro formamarket value of the Holding Company and the Converted Bank. Such appraisalshall be performed in accordance with OTS guidelines and will be updated asappropriate under or required by federal regulations.

 

The appraisal willbe made by an independent investment banking or financial consulting firm experiencedin the area of thrift institution appraisals. The appraisal will include, amongother things, an analysis of the historical and pro forma operating results andnet worth of the Converted Bank and a comparison of the Holding Company, theConverted Bank and the Conversion Stock with comparable thrift institutions andholding companies and their respective outstanding capital stocks.

 

Based upon theindependent appraisal, the Boards of Directors of the Holding Company and theAssociation will jointly fix the Maximum Subscription Price. The ActualSubscription Price for each share of Holding Company Conversion Stock will bedetermined by dividing the estimated appraised aggregate pro forma value of theHolding Company and the Converted Bank, based on the independent appraisal asupdated upon completion of the Subscription Offering or other sale of all ofthe Holding Company Conversion Stock, by the total number of shares of HoldingCompany Conversion Stock to be issued and sold by the Holding Company and theConverted Bank upon Conversion. Such appraisal will then be expressed in termsof a specific aggregate dollar amount rather than as a range.

 

B.        Subscription Rights

 

Non-transferableSubscription Rights to purchase shares will be issued without payment thereforto Tax-Qualified Employee Plans, Eligible Account Holders, Other Members anddirectors, Officers and employees of the Association as set forth below.

 

1.         Preference CategoryNo. 1: Tax-Qualified Employee Plans

 

EachTax-Qualified Employee Plan shall be entitled to receive non-transferableSubscription Rights to purchase up to 10% of the shares of Holding CompanyConversion Stock, provided that singly or in the aggregate such plans shall notpurchase more than 10% of the shares of the Holding Company Conversion Stock.

 

2.         Preference CategoryNo. 2: Eligible Account Holders

 

EachEligible Account Holder shall receive non-transferable Subscription Rights tosubscribe for shares of Holding Company Conversion Stock in an amount equal to2.50% of the shares of Holding Company Conversion Stock. If sufficient sharesare not available, shares shall be allocated first to permit each subscribingEligible Account Holder to purchase

 

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100 shares, andthereafter among each subscribing Eligible Account Holder pro rata in the sameproportion that his Qualifying Deposit bears to the total Qualifying Depositsof all subscribing Eligible Account Holders whose subscriptions remainunsatisfied.

 

Non-transferableSubscription Rights to purchase Holding Company Conversion Stock received bydirectors and Officers of the Association and their Associates, based on theirincreased deposits in the Association in the one year period preceding theEligibility Record Date, shall be subordinated to all other subscriptionsinvolving the exercise of non-transferable Subscription Rights of EligibleAccount Holders.

 

3.         Preference CategoryNo. 3:   Other Members

 

EachOther Member shall receive non-transferable Subscription Rights to subscribefor shares of Holding Company Conversion Stock remaining after satisfying thesubscriptions provided for under Category Nos. 1 and 2 above, subject to thefollowing conditions:

 

a.         Each Other Member shall be entitled tosubscribe for 2.50% of the shares of Holding Company Conversion Stock to theextent that Holding Company Conversion Stock is available.

 

b.         In the event of an oversubscription forshares under the provisions of this subparagraph, the shares available shall beallocated among the subscribing Other Members pro rata in the same proportionthat the number of shares subscribed for by each Other Member bears to thetotal number of shares subscribed for by all Other Members.

 

4.         Preference CategoryNo. 4:   Directors, Officers and Employees

 

Eachdirector, Officer and employee of the Association as of the date of thecommencement of the Subscription Offering shall be entitled to receivenon-transferable Subscription Rights to purchase shares of the Holding CompanyConversion Stock to the extent that shares are available after satisfyingsubscriptions under Category Nos. 1 through 3 above. The shares which may bepurchased under this Category are subject to the following conditions:

 

a.         The total number of shares which may bepurchased under this Category may not exceed 16% of the number of shares ofHolding Company Conversion Stock.

 

b.         The maximum number of shares which maybe purchased under this Category by any Person is 2.50% of the number of sharesof Holding Company Conversion Stock. In the event of an oversubscription forshares under the

 

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provisions of thissubparagraph, the shares available shall be allocated pro rata among allsubscribers in this Category.

 

C.        Direct CommunityOffering

 

Anyshares of Holding Company Conversion Stock not subscribed for in theSubscription Offering may be offered for sale in a Direct Community Offering.This will involve an offering of all unsubscribed shares directly to thegeneral public, with a preference first to natural persons residing in countiesin South Dakota in which the Association maintains an office; then to Personswho reside in South Dakota; and finally to Persons who reside in the statesthat adjoin South Dakota to whom a prospectus has been delivered. The DirectCommunity Offering, if any, shall be for a period of not less than 20 days normore than 45 days unless extended by the Holding Company and the Association,and shall commence concurrently with, during or promptly after the SubscriptionOffering. The purchase price per share to the general public in a DirectCommunity Offering shall be the same as the Actual Subscription Price. TheHolding Company Conversion Stock will be offered and sold in the DirectCommunity Offering, in accordance with OTS regulations, so as to achieve thewidest distribution of the Holding Company Conversion Stock.

 

TheAssociation and the Holding Company, in their sole discretion, may rejectsubscriptions, in whole or in part, received from any Person under this SectionV.C.I.

 

In theevent that the number of shares subscribed for under this Section V.C. exceedsthe number of available shares, the available shares shall be allocated topermit each Person whose subscription was accepted to purchase up to 500 sharesin the following order: (1) first to each natural Person residing in any countyin which the Association has an office; (2) next to each Person who resides inSouth Dakota; and (3) third to each Person who resides in any state adjoiningSouth Dakota; and (4) thereafter, by allocating the remaining shares pro rataamong subscribing Persons in the same proportion that the number of sharessubject to accepted subscriptions from each such Person bears to the totalnumber of shares subject to accepted subscriptions from all such Persons.

 

D.        Additional LimitationsUpon Purchases of Shares of Holding Company Conversion Stock

 

The followingadditional limitations shall be imposed on all purchases of Holding CompanyConversion Stock in the Conversion:

 

1.         No Person, by himself or herself, orwith an Associate or group of Persons acting in concert, may subscribe for orpurchase a number of shares of Holding Company Conversion Stock which exceeds2.50% of the number of such

 

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shares offered in theSubscription Offering. For purposes of this paragraph, an Associate of a Persondoes not include a Tax-Qualified or Non-Tax Qualified Employee Plan in whichthe person has a substantial beneficial interest or serves as a trustee or in asimilar fiduciary capacity. Moreover, for purposes of this paragraph, sharesheld by one or more Tax-Qualified or Non-Tax Qualified Employee Plansattributed to a Person shall not be aggregated with shares purchased directlyby or otherwise attributable to that Person.

 

2.         Directors and Officers and theirAssociates may not purchase in all categories in the Conversion an aggregate ofmore than 26% of the Holding Company Conversion Stock. For purposes of thisparagraph, an Associate of a Person does not include any Tax-Qualified EmployeePlan. Moreover, any shares attributable to the Officers and directors and theirAssociates, but held by one or more Tax-Qualified Employee Plans shall not beincluded in calculating the number of shares which may be purchased under thelimitation in this paragraph.

 

3.         The minimum number of shares of HoldingCompany Conversion Stock that may be purchased by any Person in the Conversionis 25 shares, provided sufficient shares are available.

 

4.         The Boards of Directors of the HoldingCompany and the Association may, in their sole discretion, increase the maximumpurchase limitation referred to in subparagraph 1. herein up to 9.99%, providedthat orders for shares exceeding 5.0% of the shares being offered in the SubscriptionOffering shall not exceed, in the aggregate, 10% of the shares being offered inthe Subscription Offering. Requests to purchase additional shares of HoldingCompany Conversion Stock under this provision will be allocated by the Boardsof Directors on a pro rata basis giving priority in accordance with thepriority rights set forth in this Section V.

 

Depending uponmarket and financial conditions, the Boards of Directors of the Holding Companyand the Association, with the approval of the OTS and without further approvalof the Members, may increase or decrease any of the above purchase limitations.

 

For purposes ofthis Section V, the directors of the Holding Company and the Association shallnot be deemed to be Associates or a group acting in concert solely as a resultof their serving in such capacities.

 

Each Personpurchasing Conversion Stock in the Conversion shall be deemed to confirm thatsuch purchase does not conflict with the above purchase limitations.

 

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E.        Restrictions and Other Characteristics of Holding Company ConversionStock Being Sold

 

1.         Transferability. Holding Company Conversion Stock purchasedby Persons other than directors and Officers of the Holding Company or theAssociation will be transferable without restriction. Shares purchased bydirectors or Officers shall not be sold or otherwise disposed of for value for a period of oneyear from the date of Conversion, except for any disposition of such shares (i)following the death of the original purchaser, or (ii) resulting from anexchange of securities in a merger or acquisition approved by the applicableregulatory authorities. Any transfers that could result in a change of controlof the Association or the Holding Company or result in the ownership by anyPerson or group acting in concert of more than 10% of any class of theAssociation’s or the Holding Company’s equity securities are subject to theprior approval of the OTS.

 

The certificates representing shares of Holding CompanyConversion Stock issued to directors and Officers shall bear a legend givingappropriate notice of the one year holding period restriction. Appropriateinstructions shall be given to the transfer agent for such stock with respectto the applicable restrictions relating to the transfer of restricted stock.Any shares of common stock of the Holding Company subsequently issued as astock dividend, stock split, or otherwise, with respect to any such restrictedstock, shall be subject to the same holding period restrictions for HoldingCompany or Association directors and Officers as may be then applicable to suchrestricted stock.

 

No director or Officer of the Holding Company or ofthe Association, or Associate of such a director or Officer, shall purchase anyoutstanding shares of capital stock of the Holding Company for a period ofthree years following the Conversion without the prior written approval of theOTS, except through a broker or dealer registered with the SEC or in a “negotiatedtransaction” involving more than 1% of the then-outstanding shares of commonstock of the Holding Company. As used herein, the term “negotiated transaction”means a transaction in which the securities are offered and the terms andarrangements relating to any sale are arrived at through direct communicationsbetween the seller or any Person acting on its behalf and the purchaser or hisinvestment representative. The term “investment representative” shall mean aprofessional investment advisor acting as agent for the purchaser andindependent of the seller and not acting on behalf of the seller in connectionwith the transaction.

 

2.         Repurchase and Dividend Rights.   For a period of threeyears following Conversion, the Converted Bank shall not repurchase any sharesof its capital stock, except in the case of an offer to repurchase on a prorata basis made to all holders of capital stock of the Converted Bank. Any such

 

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offer shall be subject tothe prior approval of the OTS. A purchase of shares of Holding CompanyConversion Stock in the open market by a Tax-Qualified Employee Plan or aNon-Tax-Qualified Employee Plan, in an amount reasonable and appropriate tofund the plan, shall not be deemed to be a repurchase for purposes of thisSection V.E.2.

 

Presentregulations also provide that the Association may not declare or pay a cashdividend on or repurchase any of its stock if the result thereof would be toreduce the net worth of the Converted Bank below the amount required for theliquidation account to be established pursuant to Section XIII hereof.Furthermore, any dividend declared or paid on, or repurchase of, the ConvertedBank’s capital stock also shall be in compliance with OTS regulations.

 

Theabove limitations are subject to §563b.3 (g) (3) of the Rules andRegulations of the OTS, which generally provides that notwithstanding the abovelimitations, upon ten days written notification to the Association’s DistrictDirector and the Chief Counsel’s Office, Corporate and Securities Division ofthe OTS, if the District Director does not object, the Association may makeopen market repurchases of its outstanding capital stock, provided that (i) nomore than 5% of the Association’s outstanding capital stock is to berepurchased during any six-month period, (ii) the Association’s ratio ofregulatory capital to total liabilities would not be reduced below 6%, and(iii) the repurchases would not adversely affect the financial condition of theAssociation. In addition, the above limitations shall not preclude payments ofdividends or repurchases of capital stock by the Converted Bank in the eventapplicable federal regulatory limitations are liberalized subsequent to OTS approvalof the Plan.

 

3.         Voting Rights.         After Conversion, holders of depositaccounts will not have voting rights in the Association or the Holding Company.Exclusive voting rights as to the Converted Bank will be vested in the HoldingCompany, as the sole stockholder of the Association. Voting rights as to theHolding Company will be held exclusively by its stockholders.

 

F.        Exercise ofSubscription Rights; Order Forms

 

1.         If the SubscriptionOffering occurs concurrently with the solicitation of proxies for the SpecialMeeting, the subscription prospectus and Order Form may be sent to eachTax-Qualified Employee Plan, Eligible Account Holder, Other Member, anddirector, Officer and employee at their last known address as shown on therecords of the Association. However, the Association may, and if theSubscription Offering commences after the Special Meeting the Associationshall, furnish a subscription prospectus and Order Form only to Tax-QualifiedEmployee Plans, Eligible Account Holders, Other Members, and directors,Officers and employees who have returned

 

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to the Association by aspecified date prior to the commencement of the Subscription Offering a postcard or other written communication requesting a subscription prospectus andOrder Form. In such event, the Association shall provide a postage-paid postcard for this purpose and make appropriate disclosure in its proxy statementfor the solicitation of proxies to be voted at the Special Meeting and/orletter sent in lieu of the proxy statement to those Tax-Qualified EmployeePlans or Eligible Account Holders who are not Members on the Voting RecordDate.

 

2.         Each Order Form will bepreceded or accompanied by a subscription prospectus describing the HoldingCompany and the Converted Bank and the shares of Holding Company ConversionStock being offered for subscription and containing all other informationrequired by the OTS or the SEC or necessary to enable Persons to make informedinvestment decisions regarding the purchase of Holding Company ConversionStock.

 

3.         The Order Forms (oraccompanying instructions) used for the Subscription Offering will contain,among other things, the following:

 

(i)         A clear and intelligibleexplanation of the Subscription Rights granted under the Plan to Tax-QualifiedEmployee Plans, Eligible Account Holders, Other Members, and directors,Officers and employees;

 

(ii)        A specified expirationdate by which Order Forms must be returned to and actually received by theAssociation or its representative for purposes of exercising SubscriptionRights, which date will be not less than 20 days after the Order Forms aremailed by the Association;

 

(iii)       The Maximum SubscriptionPrice to be paid for each share subscribed for when the Order Form is returned;

 

(iv)      A statement that 25 sharesis the minimum number of shares of Holding Company Conversion Stock that may besubscribed for under the Plan;

 

(v)       A specifically designatedblank space for indicating the number of shares being subscribed for;

 

(vi)      A set of detailedinstructions as to how to complete the Order Form including a statement as tothe available alternative methods of payment for the shares being subscribedfor;

 

(vii)     Specifically designated blankspaces for dating and signing the Order Form;

 

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(viii)    An acknowledgement that thesubscriber has received the subscription prospectus;

 

  (ix)     A statement of theconsequences of failing to properly complete and return the Order Form,including a statement that the Subscription Rights will expire on theexpiration date specified on the Order Form unless such expiration date isextended by the Holding Company and the Association, and that the SubscriptionRights may be exercised only by delivering the Order Form, properly completedand executed, to the Association or its representative by the expiration date,together with required payment of the Maximum Subscription Price for all sharesof Holding Company Conversion Stock subscribed for;

 

   (x)     A statement that theSubscription Rights are non-transferable and that all shares of Holding CompanyConversion Stock subscribed for upon exercise of Subscription Rights must bepurchased on behalf of the Person exercising the Subscription Rights for hisown account; and

 

  (xi)     A statement that, afterreceipt by the Association or its representative, a subscription may not bemodified, withdrawn or canceled without the consent of the Association.

 

G.        Method of Payment

 

Payment for all sharesof Holding Company Conversion Stock subscribed for, computed on the basis ofthe Maximum Subscription Price, must accompany all completed Order Forms.Payment may be made in cash (if presented in Person), by check, or, if thesubscriber has a Deposit Account in the Association (including a certificate ofdeposit), the subscriber may authorize the Association to charge the subscriber’saccount.

 

If a subscriberauthorizes the Association to charge his or her account, the funds willcontinue to earn interest, but may not be used by the subscriber until allHolding Company Conversion Stock has been sold or the Plan of Conversion isterminated, whichever is earlier. The Association will allow subscribers topurchase shares by withdrawing funds from certificate accounts without theassessment of early withdrawal penalties with the exception of prepaid interestin the form of promotional gifts. In the case of early withdrawal of only aportion of such account, the certificate evidencing such account shall be canceledif the remaining balance of the account is less than the applicable minimumbalance requirement, in which event the remaining balance will earn interest atthe passbook rate. This waiver of the early withdrawal penalty is applicableonly to withdrawals made in connection with the purchase of Holding CompanyConversion Stock under the Plan of Conversion. Interest will also be paid, atnot less than the then-current passbook rate, on all orders paid in

 

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cash, by check or moneyorder, from the date payment is received until consummation of the Conversion.Payments made in cash, by check or money order will be placed by theAssociation in an escrow or other account established specifically for thispurpose.

 

In the event of anunfilled amount of any subscription order, the Converted Bank will make anappropriate refund or cancel an appropriate portion of the related withdrawalauthorization, after consummation of the Conversion, including any difference betweenthe Maximum Subscription Price and the Actual Subscription Price (unlesssubscribers are afforded the right to apply such difference to the purchase ofadditional whole shares). If for any reason the Conversion is not consummated,purchasers will have refunded to them all payments made and all withdrawalauthorizations will be canceled in the case of subscription payments authorizedfrom accounts at the Association.

 

H.        Undelivered, Defectiveor Late Order Forms; Insufficient Payment

 

The Boards of Directorsof the Holding Company and the Association shall have the absolute right, intheir sole discretion, to reject any Order Form, including but not limited to,any Order Forms which (i) are not delivered or are returned by the UnitedStates Postal Service (or the addressee cannot be located); (ii) are notreceived back by the Association or its representative, or are received afterthe termination date specified thereon; (iii) are defectively completed orexecuted; (iv) are not accompanied by the total required payment for the sharesof Holding Company Conversion Stock subscribed for (including cases in whichthe subscribers’ Deposit Accounts or certificate accounts are insufficient tocover the authorized withdrawal for the required payment); or (v) are submittedby or on behalf of a Person whose representations the Boards of Directors ofthe Holding Company and the Association believe to be false or who theyotherwise believe, either alone or acting in concert with others, is violating,evading or circumventing, or intends to violate, evade or circumvent, the termsand conditions of this Plan. In such event, the Subscription Rights of thePerson to whom such rights have been granted will not be honored and will betreated as though such Person failed to return the completed Order Form withinthe time period specified therein. The Association may, but will not berequired to, waive any irregularity relating to any Order Form or requiresubmission of corrected Order Forms or the remittance of full payment forsubscribed shares by such date as the Association may specify. Theinterpretation of the Holding Company and the Association of the terms andconditions of this Plan and of the proper completion of the Order Form will befinal, subject to the authority of the OTS.

 

I.         Member inNon-qualified States or in Foreign Countries

 

The HoldingCompany and the Association will make reasonable efforts to comply with thesecurities laws of all states in the United States in which Persons entitled tosubscribe for Holding

 

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Company Conversion Stockpursuant to the Plan reside. However, no shares will be offered or sold underthe Plan of Conversion to any such Person who (1) resides in a foreign countryor (2) resides in a state of the United States in which a small number ofPersons otherwise eligible to subscribe for shares under the Plan of Conversionreside or as to which the Holding Company and the Association determine thatcompliance with the securities laws of such state would be impracticable forreasons of cost or otherwise, including, but not limited to, a requirement thatthe Holding Company or the Association or any of their officers, directors oremployees register, under the securities laws of such state, as a broker,dealer, salesman or agent. No payments will be made in lieu of the granting ofSubscription Rights to any such Person.

 

**VI.****            FEDERAL STOCKCHARTER AND BYLAWS**

 

A.       As part of the Conversion,the Association will take all appropriate steps to amend its certificate ofincorporation to read in the form of a federal stock charter as prescribed bythe OTS for a federal stock savings bank. A copy of the proposed federal stockcharter is attached hereto as Exhibit A and made a part of the Plan. By theirapproval of the Plan, the Members of the Association will thereby approve andadopt such federal stock charter.

 

B.        The Association will alsotake appropriate steps to amend its bylaws to read in the form prescribed bythe OTS for a federal stock savings bank. A copy of the proposed federal stockbylaws is attached hereto as Exhibit B.

 

C.        The effective date of theadoption of the Association’s new federal stock charter and bylaws shall be thedate of the issuance and sale of the Holding Company Conversion Stock asspecified by the OTS.

 

**VII.****                HOLDING COMPANYCERTIFICATE OF INCORPORATION AND BYLAWS**

 

A copy of theproposed certificate of incorporation and bylaws of the Holding Company isattached hereto as Exhibits C and D, respectively, and made a part of the Plan.

 

**VIII.****              DIRECTORS OF THECONVERTED BANK**

 

Each Personserving as a member of the Board of Directors of the Association at the time ofthe Conversion will thereupon become a director of the Converted Bank.

 

**IX.****                 STOCK OPTIONAND INCENTIVE PLAN**

 

In order toprovide an incentive for directors, officers and employees of the HoldingCompany and its subsidiaries (including the Association), the Board ofDirectors of the Holding Company intends to adopt a stock option and incentiveplan. This plan will be subject to approval at an annual or special meeting ofstockholders following Conversion.

 

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**X.****                  CONTRIBUTIONSTO TAX-QUALIFIED EMPLOYEE PLANS**

 

The Converted Bankand the Holding Company may in their discretion make scheduled contributions toany Tax-Qualified Employee Plans, provided that such contributions do not causethe Converted Bank to fail to meet its regulatory capital requirements.

 

**XI.****                 SECURITIESREGISTRATION AND MARKET MAKING**

 

Promptly followingthe Conversion, the Holding Company will register its stock with the SECpursuant to the Exchange Act. In connection with the registration, the HoldingCompany will undertake not to deregister such stock, without the approval ofthe OTS, for a period of three years thereafter.

 

The HoldingCompany shall use its best efforts to encourage and assist two or more marketmakers to establish and maintain a market for its common stock promptlyfollowing Conversion. The Holding Company will also use its best efforts tocause its common stock to be quoted on the National Association of SecuritiesDealers Automated Quotations System or to be listed on a national or regionalsecurities exchange.

 

**XII.****                STATUS OFSAVINGS ACCOUNTS AND LOANS SUBSEQUENT TO CONVERSION**

 

Each DepositAccount holder shall retain, without payment, a withdrawable Deposit Account orAccounts in the Converted Bank, equal in amount to the withdrawable value ofsuch account holder’s Deposit Account or Accounts prior to Conversion. AllDeposit Accounts will continue to be insured by the SAIF up to the applicablelimits of insurance coverage, and shall be subject to the same terms andconditions (except as to voting and liquidation rights) as such Deposit Accountin the Association at the time of the Conversion. All loans shall retain thesame status after Conversion as these loans had prior to Conversion (except asto voting rights).

 

**XIII.****              LIQUIDATIONACCOUNT**

 

For purposes ofgranting to Eligible Account Holders who continue to maintain Deposit Accountsat the Converted Bank a priority in the event of a complete liquidation of theConverted Bank, the Converted Bank will, at the time of Conversion, establish aliquidation account in an amount equal to the regulatory capital of theAssociation as shown on its latest statement of financial condition containedin the final offering circular used in connection with the Conversion. Thecreation and maintenance of the liquidation account will not operate torestrict the use or application of any of the regulatory capital accounts ofthe Converted Bank; provided, however, that such regulatory capital accountswill not be voluntarily reduced below the required dollar amount of theliquidation account. Each Eligible Account Holder shall, with respect to eachDeposit Account held, have a related

 

16

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inchoate interest in aportion of the liquidation account balance (“subaccount balance”).

 

The initialsubaccount balance of a Deposit Account held by each Eligible Account Holdershall be determined by multiplying the opening balance in the liquidationaccount by a fraction of which the numerator is the amount of the QualifyingDeposit in the Deposit Account on the Eligibility Record Date and thedenominator is the total amount of the Qualifying Deposits of all EligibleAccount Holders on such record date in the Association. Such initial subaccountbalance shall not be increased, and it shall be subject to downward adjustmentas provided below.

 

If the depositbalance in any Deposit Account of an Eligible Account Holder at the close ofbusiness on any annual closing date subsequent to the Eligibility Record Dateis less than the lesser of (i) the deposit balance in such Deposit Account atthe close of business on any other annual closing date subsequent to theEligibility Record Date or (ii) the amount of the Qualifying Deposit in suchDeposit Account on the Eligibility Record Date, the subaccount balance shall bereduced in an amount proportionate to the reduction in such deposit balance. Inthe event of a downward adjustment, the subaccount balance shall not besubsequently increased, notwithstanding any increase in the deposit balance ofthe related Deposit Account. If all funds in such Deposit Account arewithdrawn, the related subaccount balance shall be reduced to zero.

 

In the event of acomplete liquidation of the Converted Bank (and only in such event), eachEligible Account Holder shall be entitled to receive a liquidation distributionfrom the liquidation account in the amount of the then-current adjustedsubaccount balances for Deposit Accounts then held before any liquidationdistribution may be made to stockholders. No merger, consolidation, bulkpurchase of assets with assumptions of Deposit Accounts and other liabilities,or similar transactions with a SAIF-insured institution in which the ConvertedBank is not the surviving institution, shall be considered to be a completeliquidation. In such transactions, the liquidation account shall be assumed bythe surviving institution.

 

**XIV.****              RESTRICTIONS ONACQUISITION OF CONVERTED BANK**

 

Regulations of theOTS limit acquisitions, and offers to acquire, direct or indirect beneficialownership of more than 10% of any class of an equity security of the ConvertedBank and the Holding Company. In addition, consistent with the regulations ofthe OTS, the certificate of incorporation of the Holding Company shall provide,among other things, that: (i) no Person (i.e., no individual, group acting inconcert, corporation, partnership, association, joint stock company, trust, orunincorporated organization or similar company, syndicate, or any other groupformed for the purpose of acquiring, holding or disposing of securities of aninsured institution) with beneficial ownership of more than 10% of any class ofthe Holding Company’s equity

 

17

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securities shall beentitled to vote any shares in excess of this 10% limit. Shares attempted to bevoted in violation of this certificate of incorporation provision shall not becounted as shares entitled to vote and shall not be voted by any Person orcounted as voting shares in connection with any matter submitted to theshareholders for a vote; (ii) shareholders shall not be permitted to cumulatetheir votes for elections of directors; and (iii) special meetings of theshareholders relating to changes in control or amendment of the charter mayonly be called by the President or the Board of Directors.

 

**XV.****               AMENDMENT ORTERMINATION OF PLAN**

 

If necessary ordesirable, the Plan may be amended at any time prior to submission of the Planand proxy materials to the Members by a two-thirds vote of the respectiveBoards of Directors of the Holding Company and the Association. Aftersubmission of the Plan and proxy materials to the Members, the Plan may beamended by a two-thirds vote of the respective Boards of Directors of theHolding Company and the Association only with the concurrence of the OTS. Inthe event that the Association determines that for tax purposes or otherwise itis in the best interest of the Association to convert from a federal mutual toa federal stock savings institution without the concurrent formation of aholding company, the Plan may be substantively amended, with OTS approval, insuch respects as the Board of Directors of the Association deems appropriate toreflect such change from a holding company conversion to a direct conversion.In the event the Plan is so amended, common stock of the Association will besubstituted for Holding Company Conversion Stock in the Subscription and DirectCommunity Offerings, and subscribers will be resolicited as described inSection V hereof. Any amendments to the Plan (including amendments to reflectthe elimination of the concurrent holding company formation) made afterapproval by the Members with the concurrence of the OTS shall not necessitatefurther approval by the Members unless otherwise required by the OTS.

 

The Plan may beterminated by a two-thirds vote of the Association’s Board of Directors at anytime prior to the Special Meeting of Members, and at any time following suchSpecial Meeting with the concurrence of the OTS. In its discretion, the Boardof Directors of the Association may modify or terminate the Plan upon the orderor with the approval of the OTS, and without further approval by Members. ThePlan shall terminate if the sale of all shares of Holding Company ConversionStock is not completed within 24 months of the date of the Special Meeting. Aspecific resolution approved by a majority of the Board of Directors of theAssociation is required in order for the Association to terminate the Planprior to the end of such 24 month period.

 

**XVI.****              EXPENSES OF THECONVERSION**

 

The HoldingCompany and the Association shall use their best efforts to assure thatexpenses incurred by them in connection with the Conversion shall bereasonable.

 

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**XVII.****             TAX RULING**

 

Consummation ofthe Conversion is expressly conditioned upon prior receipt of either a rulingof the United States Internal Revenue Service or an opinion of tax counsel withrespect to federal taxation, and either a ruling of the South Dakota taxationauthorities or an opinion of tax counsel with respect to South Dakota taxation,to the effect that consummation of the transactions contemplated herein willnot be taxable to the Holding Company or the Association.

 

**XVIII.****           EXTENSION OF CREDITFOR PURCHASE OF STOCK**

 

The Associationmay not knowingly loan funds or otherwise extend credit to any Person topurchase in the Conversion shares of Holding Company Conversion Stock.

 

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| AMERICAN BANK NOTE COMPANY  680 BLAIR MILL ROAD  HORSHAM. PA 19044215 657-3480                                                  |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|
| SALES PERSON – P. SHEERIN – 708-594-8330                                                                              |   |
|                                                                                                                            |   |
| PRODUCTION COORDINATOR – LAUREL MONAGHAN –  215-830-2156  PROOF OF MARCH 12, 1992  HF FINANCIAL   H 137431c Disk 2381 |   |
| Opr. JW                                                                                                                         | NEW    |   |
|                                                                                                                                 |        |  |

 
| COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                   | COMMON STOCK                                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|--------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| **[SEAL]**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **[GRAPHIC]**                          | **[SEAL]**                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| INCORPORATED  UNDER THE LAWS  OF THE STATE OF DELAWARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                   | SEE REVERSE FOR CERTAIN DEFINATIONS  CUSIP 404172 10 8 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| THIS  CERTIFIES that                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| is  the owner of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK,  PAR VALUE $.01 PER SHARE OF                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| **HF FINANCIAL CORP.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (the “Corporation”), a Deleware corporation. The  shares represented by this certificate are transferable only on the stock  transfer books of the Corporation by the holder of record hereof, or by his  duly authorized attorney or legal representative, upon the surrender of this  certificate property endorsed. This certificate is not valid until counter  signed and registered by the Corporation’s transfer agent and registrar.

 

IN WITNESS WHEREOF, the Corporation has caused this  certificate to be executed by the facsimile signatures of its duty authorized  officers and has caused a facsimile of its corporate seal to be hereunto  affixed. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| DATED                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | /s/  Illegible                         | **[SEAL]**                                             | /s/ Curtis L. Hage |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | SENIOR  VICE PRESIDENT                 |                                                   | PRESIDENT AND CHIEF EXECUTIVE OFFICER |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |
| Countersigned  and Registered:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                   |                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | MANUFACTURES  HANOVER TRUST COMPANY    |                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Transfer Agent                         |                                                   |   |
| By                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | And Registrar                          |                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Authorized Signature    |                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                        |                                                        |  |  |  |  |  |  |  |

 

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**[GRAPHIC]**

 

The sharesrepresented by this certificate are issued subject to all the provisions of thecertificate of incorporation and bylaws of HF Financial Corp. (the “Corporation”)as from time to time amended (copies of which are on file at the principalexecutive offices of the Corporation).

 

The Corporation’scertificate of incorporation provides that no “person” (as defined in thecertificate of incorporation) who “beneficially owns” (as defined in thecertificate of incorporation) in excess of 10% of the outstanding shares of theCorporation shall be entitled to vote any shares held in excess of such limit.This provision of the certificate of incorporation shall not apply to anacquisition of securities of the Corporation by an employee stock purchase planor other employee benefit plan of the Corporation or any of its subsidiaries.

 

The Corporation’scertificate of incorporation also includes a provision the general effect ofwhich is to require the affirmative vote of the holders of 662/3% of the outstanding voting shares of the Corporationto approve certain business combinations as defined in the certificate ofincorporation) between the Corporation and a 10% or more Stockholder. However,only the affirmative vote of a majority of the outstanding shares or such voteas is otherwise required by law (rather than the 662/3%voting requirement) is applicable to the particular transaction if it isapproved by a majority of the “disinterested directors” (as defined in thecertificate of incorporation) or, alternatively, the transaction satisfiescertain minimum price and procedural requirements.

 

The Corporationwill furnish to any stockholder upon request and without charge a fullstatement of the powers, designations, preferences and relative participating,optional or other special rights of each authorized class of stock or seriesthereof and the qualifications, limitations or restrictions of such preferencesand/or rights, to the extent that the same have been fixed, and of theauthority of the board of directors to designate the same with respect to otherseries. Such request may be made to the Corporation or to its transfer agentand registrar.

 

The followingabbreviations, when used in the inscription on the face of this certificate,shall be construed as though they were written out in full according toapplicable laws or regulations:

 
|   |                                                                     |   |                             | UNIF GIFT MIN ACT   |                               |    |  Custodian |   |
|--------|--------------------------------------------------------------------------|--------|----------------------------------|--------------------------|------------------------------------|---------|-----------------|--------|
|   |                                                                     |   |                             |                     | (Cust)                             |    | (Minor)         |
|   |                                                                     |   |                             |                     | Under Uniform Gift to  Minors      |
|   |                                                                     |   |                             |                     | Act —                         |    |
|   |                                                                     |   |                             |                     |                               | (State) |
|   |                                                                     |   |                             |                     |                               |    |            |
|   | TEN  COM                                                                 | — | as  tenants in common            | UNIF TRANS MIN ACT  |                               |    |  Custodian |   |
|   | TEN  ENT                                                                 | — | as  tenants by the entireties    |                     | (Cust)                             |    | (Minor)         |
|   | JT  TEN                                                                  | — | as  joint tenants with right of  |                     | Under  Uniform Transfers to Minors |
|   |                                                                     |   | survivorship  and not as tenants |                     | Act  —                        |    |            |
|   |                                                                     |   | in  common                       |                     |                               | (State) |            |
|   |                                                                     |   |                             |                     |                               |    |
|   | Additional abbreviations  may also be used though not in the above list. |
|   |                                                                     |
|   |                                                                     |
|        |                                                                          |        |                                  |                          |                                    |         |                 |        |  |  |  |

For Value Received,                  herebysell, assign and transfer unto

 
| PLEASE INSERT SOCIAL SECURITY OR OTHER  IDENTIFYING NUMBER OF ASSIGNEE                                                                                                                     |                                                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                       |                                                                                                                                                                                                |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
|                                                                                                                                                                                       |
| (PLEASE PRINT OR TYPEWRITE  NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)                                                                                                             |
|                                                                                                                                                                                       |
|                                                                                                                                                                                       |
|                                                                                                                                                                                       |
|                                                                                                                                                                                       |  Shares                                                                                                                                                                                        |
| of  Common Stock represented by the within certificate, and do hereby irrevocably  constitute and appoint                                                                                  |                                                                                                                                                                                                |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
|                                                                                                                                                                                       | Attorney                                                                                                                                                                                            |
| to transfer the  said shares on the books of the within named Corporation with full power of  substitution in the premises.                                                                |
|                                                                                                                                                                                       |                                                                                                                                                                                                |   |
| Dated:                                                                                                                                                                                     |                                                                                                                                                                                                |   |
|                                                                                                                                                                                       |
|                                                                                                                                                                                       |
|                                                                                                                                                                                       | NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME  AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT  ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
| AMERICAN BANK NOTE COMPANY680 BLAIR MILL ROAD  HORSHAM, PA 19044  215 657-3480                                                                                                             | Exhibit  “C”                                                                                                                                                                              |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
| SALES PERSON – P. SHEERIN –  708-594-8330                                                                                                                                        |                                                                                                                                                                                                |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
| PRODUCTION COORDINATOR –  LAUREL MONAGHAN – 215-830-2156  PROOF OF MARCH 12, 1992  HF FINANCIAL  H 13743bk          Disk  2381 |                                                                                                                                                                                                |
|                                                                                                                                                                                       |                                                                                                                                                                                                |
| Opr. JW                                                                                                                                                                                    | NEW                                                                                                                                                                                                 |   |
|                                                                                                                                                                                            |                                                                                                                                                                                                     |  |  |  |  |  |

 

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**EXHIBIT “E”**

 

**RESOLVED**, that it is desirable and in the best interest of this Company thatits securities be qualified or registered for sale in various states, that thePresident or any Vice President and the Secretary or an Assistant Secretaryhereby are authorized to determine the states in which appropriate action shallbe taken to qualify or register for sale all or such part of the securities ofthis Company, as said officers may deem advisable; that said officers arehereby authorized to perform on behalf of this Company any and all such acts asthey may deem necessary or advisable in order to comply with the applicablelaws of any such states, and in connection therewith to execute and file allrequisite papers and documents, including, but not limited to, applications,reports, surety bonds, irrevocable consents and appointments of attorney for serviceof process; and the execution by such officers of any such paper or document orthe doing by them of any act in connection with the foregoing matters shallconclusively establish their authority therefor from this Company and theapproval and ratification by this Company of the papers and documents soexecuted and the action so taken.

 

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**Exhibit “F”**

** **

**HF Financial Corp.**

** **

**1991 Stock Option and Incentive Plan**

** **

1.         Plan Purpose.   Thepurpose of the Plan is to promote the long-term interests of the Corporationand its stockholders by providing a means for attracting and retainingdirectors, officers and employees of the Corporation and its Affiliates. It isintended that designated Options granted pursuant to the provisions of thisPlan to persons employed on a full-time basis will qualify as Incentive StockOptions. Options granted to persons who are not full-time employees will beNon-Qualified Stock Options.

 

2.         Definitions.   Thefollowing definitions are applicable to the Plan:

 

“Affiliate” –means any “parent corporation” or “subsidiary corporation” of the Corporation,as such terms are defined in Section 424(e) and (f), respectively, of the Code.

 

“Association” –means Home Federal Savings and Loan Association of Sioux Falls, to be known asHome Federal Savings Bank.

 

“Award” – meansthe grant of an Incentive Stock Option, a Non-Qualified Stock Option, a StockAppreciation Right, a Limited Stock Appreciation Right, or of Restricted Stock,or any combination thereof, as provided in the Plan.

 

“Code” – means theInternal Revenue Code of 1986, as amended.

 

“Committee” –means the Committee referred to in Section 3 hereof.

 

“ContinuousService” – means the absence of any interruption or termination of service as adirector, officer or employee of the Corporation or an Affiliate, except thatwhen used with respect to persons granted an Incentive Option means the absenceof any interruption or termination of service as a full-time employee of theCorporation or an Affiliate. Service shall not be considered interrupted in thecase of sick leave, military leave or any other leave of absence approved bythe Corporation or in the case of transfers between payroll locations of theCorporation or between the Corporation, its parent, its subsidiaries or itssuccessor.

 

“Corporation” –means HF Financial Corp., a Delaware corporation.

 

“DisinterestedPerson” – means any member of the Board of Directors of the Corporation who, atthe time discretion under the Plan is exercised, has not at any time within oneyear prior thereto received grants or awards under the Plan or any other plan

 

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of the Corporation or anyof its affiliates (as that term is used in the Exchange Act) except as providedin Rule 16b-3(c)(2)(i) under the Exchange Act and is not selected as a Participantin the Plan or as a person to whom stock may be allocated or to whom stockoptions or stock appreciation rights may be granted pursuant to any other planof the Corporation or any of its affiliates (as the term is used in theExchange Act) entitling the participants therein to acquire stock, stockoptions or stock appreciation rights of the Corporation or of any suchaffiliates; except as provided in Rule 16b-3(c)(2)(i) under the Exchange Act;provided, however, that no recipient of a stock award granted pursuant toSection 21 hereof shall be deemed not to be a Disinterested Person solely byreason of such grant.

 

“Employee” – meansany person, including an officer or director, who is employed by theCorporation or any Affiliate.

 

“ERISA” – meansthe Employee Retirement Income Security Act.

 

“Exchange Act” –means the Securities Exchange Act of 1934, as amended.

 

“Exercise Price” –means (i) in the case of an Option, the price per Share at which the Sharessubject to such Option may be purchased upon exercise of such Option and (ii)in the case of a Right, the price per Share (other than the Market Value perShare on the date of exercise and the Offer Price per Share as defined inSection 10 hereof) which, upon grant, the Committee determines shall be utilizedin calculating the aggregate value which a Participant shall be entitled toreceive pursuant to Sections 9, 10 or 13 hereof upon exercise of such Right.

 

“Incentive StockOption” – means an option to purchase Shares granted by the Committee pursuantto Section 6 hereof which is subject to the limitations and restrictions ofSection 8 hereof and is intended to qualify under Section 422 of the Code.

 

“Limited StockAppreciation Right” – means a stock appreciation right with respect to Sharesgranted by the Committee pursuant to Sections 6 and 10 hereof.

 

“Market Value” –means the average of the high and low quoted sales price on the date inquestion (or, if there is no reported sale on such date, on the last precedingdate on which any reported sale occurred) of a Share on the Composite Tape forthe New York Stock Exchange-Listed Stocks, or, if on such date the Shares arenot quoted on the Composite Tape, on the New York Stock Exchange, or, if theShares are not listed or admitted to trading on such Exchange, on the principalUnited States securities exchange registered under the Exchange Act on whichthe Shares are listed or admitted to trading, or, if the Shares are not listedor

 

2

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admitted to trading onany such exchange, the mean between the closing high bid and low askedquotations with respect to a Share on such date on the National Association ofSecurities Dealers, Inc., Automated Quotations System, or any similar systemthen in use, or, if no such quotations are available, the fair market value onsuch date of a Share as the Committee shall determine.

 

“Non-QualifiedStock Option” – means an option to purchase Shares granted by the Committeepursuant to Section 6 hereof, which option is not intended to qualify underSection 422 of the Code.

 

“Option” – meansan Incentive Stock Option or a Non-Qualified Stock Option.

 

“Participant” –means any officer or employee of the Corporation or any Affiliate who isselected by the Committee to receive an Award and any director of theCorporation who is granted an Award pursuant to Section 21 hereof.

 

“Plan” – means the1991 Stock Option and Incentive Plan of the Corporation.

 

“Related” – means(i) in the case of a Right, a Right which is granted in connection with, and tothe extent exercisable, in whole or in part, in lieu of, an Option or anotherRight and (ii) in the case of an Option, an Option with respect to which and tothe extent a Right is exercisable, in whole or in part, in lieu thereof hasbeen granted.

 

“Restricted Period”– means the period of time selected by the Committee for the purpose ofdetermining when restrictions are in effect under Section 11 hereof withrespect to Restricted Stock awarded under the Plan.

 

“Restricted Stock”– means Shares which have been contingently awarded to a Participant by theCommittee subject to the restrictions referred to in Section 11 hereof, so longas such restrictions are in effect.

 

“Right” – means aLimited Stock Appreciation Right or a Stock Appreciation Right.

 

“Shares” – meansthe shares of common stock of the Corporation.

 

“Senior Officer” –means the Corporation’s president, principal financial officer, or principalaccounting officer, any vice president of the Corporation in charge of aprincipal business unit, division or function (such as sales, administration orfinance), any other officer who performs a policy-making function, or any otherperson who performs similar policy-making functions

 

3

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for the Corporation.Officers of the Corporation’s Affiliates shall be deemed senior officers of theCorporation if they perform such policy-making functions for the Corporation.

 

“StockAppreciation Right” – means a stock appreciation right with respect to Sharesgranted by the Committee pursuant to Sections 6 and 9 hereof.

 

“Ten PercentBeneficial Owner” – means the beneficial owner of more than ten percent of anyclass of the Corporation’s equity securities registered pursuant to Section 12of the Exchange Act.

 

3.         Administration.   ThePlan shall be administered by a Committee consisting of two or more members,each of whom shall be a Disinterested Person. The members of the Committeeshall be appointed by the Board of Directors of the Corporation. Except as limitedby the express provisions of the Plan, the Committee shall have sole andcomplete authority and discretion to (i) select Participants and grant Awards;(ii) determine the number of Shares to be subject to types of Awards generally,as well as to individual Awards granted under the Plan; (iii) determine theterms and conditions upon which Awards shall be granted under the Plan; (iv)prescribe the form and terms of instruments evidencing such grants; and (v)establish from time to time regulations for the administration of the Plan,interpret the Plan, and make all determinations deemed necessary or advisablefor the administration of the Plan. The Committee may maintain, and update fromtime to time as appropriate, a list designating selected directors asDisinterested Persons. The purpose of such list shall be to evidence the statusof such individuals as Disinterested Persons, and the Board of Directors mayappoint to the Committee any individual actually qualifying as a DisinterestedPerson, regardless of whether identified as such on said list.

 

A majority of theCommittee shall constitute a quorum, and the acts of a majority of the memberspresent at any meeting at which a quorum is present, or acts approved inwriting by a majority of the Committee without a meeting, shall be acts of theCommittee.

 

4.         Participation inCommittee Awards.   The Committee may select from time totime Participants in the Plan from those officers and employees (other thanDisinterested Persons), of the Corporation or its Affiliates who, in theopinion of the Committee, have the capacity for contributing to the successfulperformance of the Corporation or its Affiliates.

 

5.         Shares Subject to Plan.   Subjectto adjustment by the operation of Section 12 hereof, the maximum number ofShares with respect to which Awards may be made under the Plan is 10% of thetotal Shares issued in the Association’s conversion to the capital stock form.The Shares with respect to which Awards may be made

 

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under the Plan may beeither authorized and unissued shares or issued shares heretofore or hereafterreacquired and held as treasury shares. Shares which are subject to RelatedRights and Related Options shall be counted only once in determining whetherthe maximum number of Shares with respect to which Awards may be granted underthe Plan has been exceeded. An Award shall not be considered to have been madeunder the Plan with respect to any Option or Right which terminates or withrespect to Restricted Stock which is forfeited, and new Awards may be grantedunder the Plan with respect to the number of Shares as to which suchtermination or forfeiture has occurred.

 

6.         General Terms andConditions of Options and Rights. The Committee shall have full andcomplete authority and discretion, except as expressly limited by the Plan, togrant Options and/or Rights and to provide the terms and conditions (which neednot be identical among Participants) thereof. In particular, the Committeeshall prescribe the following terms and conditions: (i) the Exercise Price ofany Option or Right, which shall not be less than the Market Value per Share atthe date of grant of such Option or Right, (ii) the number of Shares subjectto, and the expiration date of, any Option or Right, which expiration dateshall not exceed ten years from the date of grant, (iii) the manner, time andrate (cumulative or otherwise) of exercise of such Option or Right, and (iv)the restrictions, if any, to be placed upon such Option or Right or upon Shareswhich may be issued upon exercise of such Option or Right. The Committee may,as a condition of granting any Option or Right, require that a Participantagree not to thereafter exercise one or more Options or Rights previouslygranted to such Participant.

 

7.         Exercise of Options orRights.

 

(a)       An Option or Right grantedunder the Plan shall be exercisable during the lifetime of the Participant towhom such Option or Right was granted only by such Participant and, except asprovided in paragraphs (c) and (d) of this Section 7, no such Option or Rightmay be exercised unless at the time such Participant exercises such Option orRight, such Participant has maintained Continuous Service since the date ofgrant of such Option or Right. Cash settlements of Rights may be made only inaccordance with any applicable restrictions pursuant to Rule 16b- 3 (e) underthe Exchange Act or any similar or successor provision.

 

(b)       To exercise an Option orRight under the Plan, the Participant to whom such Option or Right was grantedshall give written notice to the Corporation in form satisfactory to theCommittee (and, if partial exercises have been permitted by the Committee, byspecifying the number of Shares with respect to which such Participant electsto exercise such Option or Right) together with full payment of the ExercisePrice, if any and to the extent required. The date of exercise shall be thedate on which such

 

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notice is received by theCorporation. Payment, if any is required, shall be made either (i) in cash(including check, bank draft or money order) or (ii) if permitted by theCommittee, by delivering (A) Shares already owned by the Participant and havinga fair market value equal to the applicable exercise price, such fair marketvalue to be determined in such appropriate manner as may be provided by theCommittee or as may be required in order to comply with or to conform torequirements of any applicable laws or regulations, or (B) a combination ofcash and such Shares.

 

(c)       If a Participant to whom anOption or Right was granted shall cease to maintain Continuous Service for anyreason (including total or partial disability and normal or early retirement,but excluding death and termination of employment by the Corporation or anyAffiliate for cause), such Participant may, but only within the period of threemonths immediately succeeding such cessation of Continuous Service and in noevent after the expiration date of such Option or Right, exercise such Optionor Right to the extent that such Participant was entitled to exercise suchOption or Right at the date of such cessation, provided, however, that suchright of exercise after cessation of Continuous Service shall not be availableto a Participant if the Committee otherwise determines and so provides in theapplicable instrument or instruments evidencing the grant of such Option orRight. If the Continuous Service of a Participant to whom an Option or Rightwas granted by the Corporation is terminated for cause, all rights under anyOption or Right of such Participant shall expire immediately upon the giving tothe Participant of notice of such termination.

 

(d)       In the event of the deathof a Participant while in the Continuous Service of the Corporation or anAffiliate or within the three month period referred to in paragraph (c) of thisSection 7, the person to whom any Option or Right held by the Participant atthe time of his death is transferred by will or the laws of descent and distributionmay, but only to the extent such Participant was entitled to exercise suchOption or Right immediately prior to his death, exercise such Option or Rightat any time within a period of one year succeeding the date of death of suchParticipant, but in no event later than ten years from the date of grant ofsuch Option or Right. Following the death of any Participant to whom an Optionwas granted under the Plan, irrespective of whether any Related Right shallhave theretofore been granted to the Participant or whether the person entitledto exercise such Related Right desires to do so, the Committee may, as analternative means of settlement of such Option, elect to pay to the person towhom such Option is transferred by will or by the laws of descent anddistribution or pursuant to a qualified domestic relations order as defined inthe Code or Title I of the ERISA or the rules thereunder, the amount by whichthe Market Value per Share on the date of exercise of such Option shall exceedthe Exercise Price of such Option, multiplied by the number of Shares

 

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with respect to whichsuch Option is properly exercised. Any such settlement of an Option shall beconsidered an exercise of such Option for all purposes of the Plan.

 

8.         Incentive StockOptions. Incentive Stock Options may be granted only to Participants whoare Employees. Any provision of the Plan to the contrary notwithstanding, (i)no Incentive Stock Option shall be granted more than ten years from the datethe Plan is adopted by the Board of Directors of the Corporation and noIncentive Stock Option shall be exercisable more than ten years from the datesuch Incentive Stock Option is granted, (ii) the Exercise Price of anyIncentive Stock Option shall not be less than the Market Value per Share on thedate such Incentive Stock Option is granted, (iii) any Incentive Stock Optionshall not be transferable by the Participant to whom such Incentive StockOption is granted other than by will or the laws of descent and distributionand shall be exercisable during such Participant’s lifetime only by suchParticipant, (iv) no Incentive Stock Option shall be granted to any individualwho, at the time such Incentive Stock Option is granted, owns stock possessingmore than ten percent of the total combined voting power of all classes ofstock of the Corporation or any Affiliate unless the Exercise Price of suchIncentive Stock Option is at least 110 percent of the Market Value per Share atthe date of grant and such Incentive Stock Option is not exercisable after theexpiration of five years from the date such Incentive Stock Option is granted,and (v) the aggregate Market Value (determined as of the time any IncentiveStock Option is granted) of the Shares with respect to which Incentive StockOptions are exercisable for the first time by a Participant in any calendaryear shall not exceed $100,000.

 

9.         Stock AppreciationRights. A Stock Appreciation Right shall, upon its exercise, entitle theParticipant to whom such Stock Appreciation Right was granted to receive anumber of Shares or cash or combination thereof, as the Committee in itsdiscretion shall determine, the aggregate value of which (i.e., the sum of theamount of cash and/or Market Value of such Shares on date of exercise) shallequal (as nearly as possible, it being understood that the Corporation shallnot issue any fractional shares) the amount by which the Market Value per Shareon the date of such exercise shall exceed the Exercise Price of such StockAppreciation Right, multiplied by the number of Shares with respect of whichsuch Stock Appreciation Right shall have been exercised. A Stock AppreciationRight may be Related to an Option or may be granted independently of any Optionas the Committee shall from time to time in each case determine. At the time ofgrant of an Option the Committee shall determine whether and to what extent aRelated Stock Appreciation Right shall be granted with respect thereto;provided, however, and notwithstanding any other provision of the Plan, that ifthe Related Option is an Incentive Stock Option, the Related Stock AppreciationRight shall satisfy all the restrictions and limitations of Section 8 hereof asif such Related Stock

 

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Appreciation Right werean Incentive Stock Option and as if other rights which are Related to IncentiveStock Options were Incentive Stock Options. In the case of a Related Option,such Related Option shall cease to be exercisable to the extent of the Shareswith respect to which the Related Stock Appreciation Right was exercised. Uponthe exercise or termination of a Related Option, any Related Stock AppreciationRight shall terminate to the extent of the Shares with respect to which theRelated Option was exercised or terminated. Notwithstanding the foregoing, noStock Appreciation Right shall be exercisable by a Ten Percent BeneficialOwner, director or Senior Officer of the Corporation within six months of thedate of its grant.

 

10.       Limited StockAppreciation Rights. At the time of grant of an Option or StockAppreciation Right to any Participant, the Committee shall have full andcomplete authority and discretion to also grant to such Participant a LimitedStock Appreciation Right which is Related to such Option or Stock AppreciationRight; provided, however and notwithstanding any other provision of the Plan,that if the Related Option is an Incentive Stock Option, the Related LimitedStock Appreciation Right shall satisfy all the restrictions and limitations ofSection 8 hereof as if such Related Limited Stock Appreciation Right were anIncentive Stock Option and as if all other Rights which are Related toIncentive Stock Options were Incentive Stock Options. Notwithstanding any otherprovision of the Plan, a Limited Stock Appreciation Right shall be exercisableonly during the period beginning on the first day following the date ofexpiration of any “offer” (as such term is hereinafter defined) and ending onthe forty-fifth day following such date, provided, however, that no LimitedStock Appreciation Right shall be exercisable by a Ten Percent BeneficialOwner, director or Senior Officer of the Corporation within six months of thedate of its grant.

 

A Limited StockAppreciation Right shall, upon its exercise, entitle the Participant to whomsuch Limited Stock Appreciation Right was granted to receive an amount of cashequal to the amount by which the “Offer Price per Share” (as such term ishereinafter defined) or the Market Value on the date of such exercise, as shallhave been provided by the Committee in its discretion at the time of grant,shall exceed the Exercise Price of such Limited Stock Appreciation Right,multiplied by the number of Shares with respect to which such Limited StockAppreciation Right shall have been exercised. Upon the exercise of a LimitedStock Appreciation Right, any Related Option and/or Related Stock AppreciationRight shall cease to be exercisable to the extent of the Shares with respect towhich such Limited Stock Appreciation Right was exercised. Upon the exercise ortermination of a Related Option or Related Stock Appreciation Right, anyRelated Limited Stock Appreciation Right shall terminate to the extent of theShares with respect to which such Related Option or Related Stock AppreciationRight was exercised or terminated.

 

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For the purposesof this Section 10, the term “Offer” shall mean any tender offer or exchangeoffer for Shares other than one made by the Corporation, provided that thecorporation, person or other entity making the offer acquires pursuant to suchoffer either (i) 25% of the Shares outstanding immediately prior to thecommencement of such offer or (ii) a number of Shares which, together with allother Shares acquired in any tender offer or exchange offer (other than onemade by the Corporation) which expired within sixty days of the expiration dateof the offer in question, equals 25% of the Shares outstanding immediatelyprior to the commencement of the offer in question. The term “Offer Price perShare” as used in this Section 10 shall mean the highest price per Share paidin any Offer which Offer is in effect any time during the period beginning onthe sixtieth day prior to the date on which a Limited Stock Appreciation Rightis exercised and ending on the date on which such Limited Stock AppreciationRight is exercised. Any securities or property which are part or all of theconsideration paid for Shares in the Offer shall be valued in determining theOffer Price per Share at the higher of (A) the valuation placed on suchsecurities or property by the corporation, person or other entity making suchOffer or (B) the valuation placed on such securities or property by theCommittee.

 

11.       Terms and Conditions ofRestricted Stock. The Committee shall have full and complete authority,subject to the limitations of the Plan, to grant awards of Restricted Stockand, in addition to the terms and conditions contained in paragraphs (a)through (f) of this Section 11, to provide such other terms and conditions(which need not be identical among Participants) in respect of such Awards, andthe vesting thereof, as the Committee shall determine and provide in theagreement referred to in paragraph (d) of this Section 11.

 

(a)       At the time of an award ofRestricted Stock, the Committee shall establish for each Participant aRestricted Period of not less than six months during which or at the expirationof which, as the Committee shall determine and provide in the agreementreferred to in paragraph (d) of this Section 11, the Shares awarded asRestricted Stock shall vest, and subject to any such other terms and conditionsas the Committee shall provide, shares of Restricted Stock may not be sold,assigned, transferred, pledged or otherwise encumbered by the Participant,except as hereinafter provided, during the Restricted Period. Except for suchrestrictions, and subject to paragraphs (c), (d) and (e) of this Section 11 andSection 12 hereof, the Participant as owner of such shares shall have all therights of a stockholder, including but not limited to the right to receive alldividends paid on such shares and the right to vote such shares. The Committeeshall have the authority, in its discretion, to accelerate the time at whichany or all of the restrictions shall lapse with respect to any shares ofRestricted Stock prior to the expiration of the Restricted Period with respectthereto, or to remove any or all of

 

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such restrictions,whenever it may determine that such action is appropriate by reason of changesin applicable tax or other laws or other changes in circumstances occurringafter the commencement of such Restricted Period.

 

(b)       Except as provided inSection 14 hereof, if a Participant ceases to maintain Continuous Service forany reason (other than death, total or partial disability or normal or earlyretirement) unless the Committee shall otherwise determine and provide in theagreement referred to in paragraph (d) of this Section 11, all shares ofRestricted Stock theretofore awarded to such Participant and which at the timeof such termination of Continuous Service are subject to the restrictionsimposed by paragraph (a) of this Section 11 shall upon such termination ofContinuous Service be forfeited and returned to the Corporation. Unless theCommittee shall have provided in the agreement referred to in paragraph (d) ofthis Section 11 for a ratable lapse of restrictions with respect to an award ofshares of Restricted Stock during the Restricted Period, if a Participantceases to maintain Continuous Service by reason of death, total or partialdisability or normal or early retirement, such portion of such shares ofRestricted Stock awarded to such Participant which at the time of suchtermination of Continuous Service are subject to the restrictions imposed byparagraph (a) of this Section 11 as shall be equal to the portion of theRestricted Period with respect to such shares which shall have elapsed at thetime of such termination of Continuous Service shall be free of restrictionsand shall not be forfeited.

 

(c)       Each certificate in respectof shares of Restricted Stock awarded under the Plan shall be registered in thename of the Participant and deposited by the Participant, together with a stockpower endorsed in blank, with the Corporation and shall bear the following (ora similar) legend:

 

“Thetransferability of this certificate and the shares of stock represented herebyare subject to the terms and conditions (including forfeiture) contained in the1991 Stock Option and Incentive Plan of HF Financial Corp. and an Agreemententered into between the registered owner and HF Financial Corp. Copies of suchPlan and Agreement are on file in the offices of the Secretary of HF FinancialCorp., 225 South Main Avenue, Sioux Falls, South Dakota 57102.”

 

(d)       At the time of an award ofshares of Restricted Stock, the Participant shall enter into an Agreement withthe Corporation in a form specified by the Committee, agreeing to the terms andconditions of the award and such other matters as the Committee shall in itssole discretion determine.

 

(e)       At the time of an award ofshares of Restricted Stock, the Committee may, in its discretion, determine thatthe

 

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payment to theParticipant of dividends declared or paid on such shares, or specified portionthereof, by the Corporation shall be deferred until the earlier to occur of (i)the lapsing of the restrictions imposed under paragraph (a) of this Section 11or (ii) the forfeiture of such shares under paragraph (b) of this Section 11,and shall be held by the Corporation for the account of the Participant untilsuch time. In the event of such deferral, there shall be credited at the end ofeach year (or portion thereof) interest on the amount of the account at thebeginning of the year at a rate per annum as the Committee, in its discretion,may determine. Payment of deferred dividends, together with interest accruedthereon as aforesaid, shall be made upon the earlier to occur of the eventsspecified in (i) and (ii) of the immediately preceding sentence.

 

(f)        At the expiration of therestrictions imposed by paragraph (a) of this Section 11, the Corporation shallredeliver to the Participant (or where the relevant provision of paragraph (b)of this Section 11 applies in the case of a deceased Participant, to his legalrepresentative, beneficiary or heir) the certificate(s) and stock powerdeposited with it pursuant to paragraph (c) of this Section 11 and the Sharesrepresented by such certificate(s) shall be free of the restrictions referredto in paragraph (a) of this Section 11.

 

12.       Adjustments Upon Changesin Capitalization. In the event of any change in the outstanding Sharessubsequent to the effective date of the Plan by reason of any reorganization,recapitalization, stock split, stock dividend, combination or exchange ofshares, merger, consolidation or any change in the corporate structure or Sharesof the Corporation, the maximum aggregate number and class of shares as towhich Awards may be granted under the Plan and the number and class of shareswith respect to which Awards theretofore have been granted under the Plan shallbe appropriately adjusted by the Committee, whose determination shall beconclusive. Any shares of stock or other securities received, as a result ofany of the foregoing, by a Participant with respect to Restricted Stock shallbe subject to the same restrictions and the certificate(s) or other instrumentsrepresenting or evidencing such shares or securities shall be legended anddeposited with the Corporation in the manner provided in Section 11 hereof.

 

13.       Effect of Merger onOptions, Rights and Restricted Stock. In the event of any merger orconsolidation of the Corporation (other than a merger, combination orconsolidation in which the Corporation is the continuing entity and which doesnot result in the outstanding Shares being converted into or exchanged fordifferent securities, cash or other property, or any combination thereof)pursuant to a plan or agreement the terms of which are binding upon allstockholders of the Corporation (except to the extent that dissentingstockholders may be entitled, under statutory provisions or provisionscontained in the certificate of

 

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incorporation, to receivethe appraised or fair value of their holdings), any Participant to whom anOption or Right has been granted at least 6 months prior to such event shallhave the right (subject to the provisions of the Plan and any limitationapplicable to such Option or Right), thereafter and during the term of eachsuch Option or Right, to receive upon exercise of any such Option or Right anamount equal to the excess of the fair market value on the date of suchexercise of the securities, cash or other property, or combination thereof,receivable upon such merger, consolidation or combination in respect of a Shareover the Exercise Price of such Right or Option, multiplied by the number ofShares with respect to which such Option or Right shall have been exercised.Such amount may be payable fully in cash, fully in one or more of the kind orkinds of property payable in such merger, consolidation or combination, orpartly in cash and partly in one or more of such kind or kinds of property, allin the discretion of the Committee. Unless the Committee shall have providedotherwise in the agreement referred to in paragraph (d) of Section 11 hereof, inthe event of any such merger, consolidation or combination any RestrictedPeriod shall lapse with respect to Shares of Restricted Stock awarded at leastsix months prior to such event, all such Shares shall be fully vested in theParticipants to whom such Shares were awarded, and the holders of such Sharesshall be eligible to receive in respect thereof the full amount receivable perShare in such merger, consolidation or combination.

 

14.       Effect of Change inControl. Each of the events specified in the following clauses (i) through(iii) of this Section 14 shall be deemed a “change of control”: (i) any thirdperson, including a “group” as defined in Section 13(d) (3) of theExchange Act, shall become the beneficial owner of shares of the Corporationwith respect to which 25% or more of the total number of votes for the electionof the Board of Directors of the Corporation may be cast, (ii) as a result of,or in connection with, any cash tender offer, merger or other businesscombination, sale of assets or contested election, or combination of theforegoing, the persons who were directors of the Corporation shall cease toconstitute a majority of the Board of Directors of the Corporation or (iii) theshareholders of the Corporation shall approve an agreement providing either fora transaction in which the Corporation will cease to be an independent publiclyowned entity or for a sale or other disposition of all or substantially all theassets of the Corporation; provided, however, that the occurrence of any suchevents shall not be deemed a “change in control” if, prior to such occurrence,a resolution specifically approving such occurrence shall have been adopted byat least a majority of the Board of Directors of the Corporation. If theContinuous Service of any Participant of the Corporation or any Affiliate isinvoluntarily terminated for whatever reason, at any time within eighteenmonths after a change in control, unless the Committee shall have otherwiseprovided in the agreement referred to in paragraph (d) of Section 11 hereof,any Restricted Period

 

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with respect toRestricted Stock theretofore awarded to such Participant shall lapse upon suchtermination and all Shares awarded as Restricted Stock shall become fullyvested in the Participant to whom such Shares were awarded. If a tender offeror exchange offer for Shares (other than such an offer by the Corporation) iscommenced, or if the event specified in clause (iii) above shall occur, unlessthe Committee shall have otherwise provided in the instrument evidencing thegrant of an Option or Stock Appreciation Right, all Options and StockAppreciation Rights theretofore granted and not fully exercisable shall becomeexercisable in full upon the happening of such event and shall remain soexercisable for a period of sixty days following such date, after which theyshall revert to being exercisable in accordance with their terms; provided,however, that no Option or Stock Appreciation Right shall be exercisable by aTen Percent Beneficial Owner, director or Senior Officer of the Corporationwithin six months of the date of grant of such Option or Stock AppreciationRight and no Option or Stock Appreciation Right which has previously beenexercised or otherwise terminated shall become exercisable.

 

15.       Assignments andTransfers. No Award nor any right or interest of a Participant under thePlan in any instrument evidencing any Award under the Plan may be assigned,encumbered or transferred except, in the event of the death of a Participant,by will or the laws of descent and distribution or, in the case of an Awardother than an Incentive Stock Option, pursuant to a qualified domesticrelations order as defined in the Code or Title I of the ERISA or the rules thereunder.

 

16.       Employee Rights Underthe Plan. No director, officer or employee shall have a right to beselected as a Participant nor, having been so selected, to be selected again asa Participant and no director, officer, employee or other person shall have anyclaim or right to be granted an Award under the Plan or under any otherincentive or similar plan of the Corporation or any Affiliate. Neither the Plannor any action taken thereunder shall be construed as giving any employee anyright to be retained in the employ of the Corporation or any Affiliate.

 

17.       Delivery andRegistration of Stock. The Corporation’s obligation to deliver Shares withrespect to an Award shall, if the Committee so requests, be conditioned uponthe receipt of a representation as to the investment intention of theParticipant to whom such Shares are to be delivered, in such form as theCommittee shall determine to be necessary or advisable to comply with theprovisions of the Securities Act of 1933 or any other Federal, state or localsecurities legislation or regulation. It may be provided that anyrepresentation requirement shall become inoperative upon a registration of theShares or other action eliminating the necessity of such representation undersuch Securities Act or other securities legislation. The Corporation shall notbe required

 

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to deliver any Sharesunder the Plan prior to (i) the admission of such shares to listing on anystock exchange on which Shares may then be listed, and (ii) the completion ofsuch registration or other qualification of such Shares under any state orFederal law, rule or regulation, as the Committee shall determine to benecessary or advisable.

 

This Plan isintended to comply with Rule 16b-3 under the Exchange Act. Any provision of thePlan which is inconsistent with said Rule shall, to the extent of suchinconsistency, be inoperative and shall not affect the validity of theremaining provisions of the Plan.

 

18.       Withholding Tax.Upon the termination of the Restricted Period with respect to any shares ofRestricted Stock (or at any such earlier time, if any, that an election is madeby the Participant under Section 83(b) of the Code, or any successor provisionthereto, to include the value of such shares in taxable income), theCorporation shall have the right to require the Participant or other personreceiving such shares to pay the Corporation the amount of any taxes which theCorporation is required to withhold with respect to such shares, or, in lieuthereof, to retain or sell without notice, a sufficient number of shares heldby it to cover the amount required to be withheld. The Corporation shall havethe right to deduct from all dividends paid with respect to shares ofRestricted Stock the amount of any taxes which the Corporation is required towithhold with respect to such dividend payments.

 

The Corporationshall have the right to deduct from all amounts paid in cash with respect tothe exercise of a Right under the Plan any taxes required by law to be withheldwith respect to such cash payments. Where a Participant or other person isentitled to receive Shares pursuant to the exercise of an Option or Rightpursuant to the Plan, the Corporation shall have the right to require the Participantor such other person to pay the Corporation the amount of any taxes which theCorporation is required to withhold with respect to such Shares, or, in lieuthereof, to retain, or sell without notice, a number of such Shares sufficientto cover the amount required to be withheld.

 

19.       Amendment or Termination.The Board of Directors of the Corporation may amend, suspend or terminate thePlan or any portion thereof at any time, but (except as provided in Section 12hereof) no amendment shall be made without approval of the stockholders of theCorporation which shall materially (i) increase the aggregate number of Shareswith respect to which Awards may be made under the Plan, (ii) increase thebenefits accruing to Participants under the Plan or (iii) change the class ofpersons eligible to participate in the Plan; provided, however, that no suchamendment, suspension or termination shall impair the rights of anyParticipant, without his consent, in any Award theretofore made pursuant to thePlan.

 

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20.       Effective Date and Termof Plan. The Plan shall become effective upon its adoption by the Board ofDirectors of the Corporation, subject to the Association converting to a stockinstitution and approval of the Plan by vote of the holders of a majority ofthe outstanding shares of the Corporation entitled to vote on the adoption ofthe Plan. It shall continue in effect for a term of ten years unless soonerterminated under Section 19 hereof.

 

21.       Initial Grant. By,and simultaneously with, the adoption of this Plan, each member of the Board ofDirectors of the Corporation at the time of the Association’s conversion tostock form who is not a full-time Employee at June 30, 1991 is hereby granted aNon-Qualified Stock Option to purchase an amount of shares equal to 3.4% of theshares reserved for issuance under the Plan at an Exercise Price per shareequal to the per share price at which Shares are sold in the conversion. Eachsuch Option shall be evidenced by a Non-Qualified Stock Option Agreement in aform approved by the Board of Directors and shall be subject in all respects tothe terms and conditions of this Plan, which are controlling.

 

22.       Notwithstanding anythingelse in this Plan to the contrary, to the extent that the Plan provides forformula awards, as defined in Rule 16b-3 (c) (2) (ii) under the Exchange Act,such provisions may not be amended more than once every six months, other thanto comport with changes in the Code, ERISA or the rules thereunder.

 

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