EXHIBIT 10.8


 


HF FINANCIAL CORP.



EXCESS PENSION PLAN FOR EXECUTIVES

(as amended and restated effective January 1, 2009)


 





















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
  PAGE

  
	
  INTRODUCTION

  	
  1

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  2

  
	
  Section 1.1

  	
  “Active Participant”

  	
  2

  
	
  Section 1.2

  	
  “Administrator”

  	
  2

  
	
  Section 1.3

  	
  “Adjustment”

  	
  2

  
	
  Section 1.4

  	
  “Base Compensation”

  	
  2

  
	
  Section 1.5

  	
  “Beneficiary”

  	
  2

  
	
  Section 1.6

  	
  “Board”

  	
  2

  
	
  Section 1.7

  	
  “Change in Control”

  	
  2

  
	
  Section 1.8

  	
  “Code”

  	
  3

  
	
  Section 1.9

  	
  “Company”

  	
  3

  
	
  Section 1.10

  	
  “Company Credit”

  	
  3

  
	
  Section 1.11

  	
  “Effective Date”

  	
  3

  
	
  Section 1.12

  	
  “Employment”

  	
  3

  
	
  Section 1.13

  	
  “Entry Date”

  	
  3

  
	
  Section 1.14

  	
  “ERISA”

  	
  4

  
	
  Section 1.15

  	
  “Executive”

  	
  4

  
	
  Section 1.16

  	
  “Fiscal Year”

  	
  4

  
	
  Section 1.17

  	
  “Fiscal Year Incentive”

  	
  4

  
	
  Section 1.18

  	
  “Inactive Participant”

  	
  4

  
	
  Section 1.19

  	
  “Individual Account”

  	
  4

  
	
  Section 1.20

  	
  “Investment Fund(s)”

  	
  4

  
	
  Section 1.21

  	
  “Participant”

  	
  4

  
	
  Section 1.22

  	
  “Plan”

  	
  4

  
	
  Section 1.23

  	
  “Plan Year”

  	
  4

  
	
  Section 1.24

  	
  “Termination of Employment”

  	
  4

  
	
  Section 1.25

  	
  “Trust”

  	
  4

  
	
  Section 1.26

  	
  “Trust Agreement”

  	
  5

  
	
  Section 1.27

  	
  “Trustee”

  	
  5

  
	
  Section 1.28

  	
  “Valuation Date”

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II PLAN ELIGIBILITY AND PARTICIPATION

  	
  5

  
	
  Section 2.1

  	
  Eligibility

  	
  5

  
	
  Section 2.2

  	
  Participation

  	
  5

  
	
  Section 2.3

  	
  Limited Participation

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III CONTRIBUTION CREDITS

  	
  5

  
	
  Section 3.1

  	
  Company Credits: Defined Benefit Formula

  	
  5

  
	
  Section 3.2

  	
  Company Credits: Excess Compensation

  	
  6

  
	
  Section 3.3

  	
  Company Credits: Discretionary Contributions

  	
  6

  
	
  Section 3.4

  	
  Salary Deferral Election.

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV INDIVIDUAL ACCOUNTS

  	
  7

  
	
  Section 4.1

  	
  Individual Accounts

  	
  7

  
				



 


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TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  PAGE

  
	
  Section 4.2

  	
  Credit of Investment Fund Adjustment

  	
  7

  
	
  Section 4.3

  	
  Designation of Investment Funds

  	
  8

  
	
  Section 4.4

  	
  Equitable and Alternative Procedures

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE V BENEFITS

  	
  9

  
	
  Section 5.1

  	
  Entitlement to Benefits

  	
  9

  
	
  Section 5.2

  	
  Death Benefit

  	
  10

  
	
  Section 5.3

  	
  Change in Control

  	
  10

  
	
  Section 5.4

  	
  Unforeseen Emergencies

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI PAYMENT OF BENEFITS

  	
  10

  
	
  Section 6.1

  	
  Payment of Benefits.

  	
  10

  
	
  Section 6.2

  	
  Time of Payment

  	
  11

  
	
  Section 6.3

  	
  Form of Benefit Payment

  	
  11

  
	
  Section 6.4

  	
  Death Benefit

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII THE TRUST

  	
  11

  
	
  Section 7.1

  	
  Establishment of Trust

  	
  11

  
	
  Section 7.2

  	
  Payments by Trustee

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII PLAN ADMINISTRATION

  	
  12

  
	
  Section 8.1

  	
  Authority of Administrator

  	
  12

  
	
  Section 8.2

  	
  Delegation

  	
  12

  
	
  Section 8.3

  	
  Records and Rules

  	
  12

  
	
  Section 8.4

  	
  Claims Procedure.

  	
  13

  
	
  Section 8.5

  	
  Legal Incompetence

  	
  15

  
	
  Section 8.6

  	
  Correction of Errors

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX PLAN AMENDMENT, TERMINATION AND
  DISCONTINUANCE OF CONTRIBUTIONS

  	
  15

  
	
  Section 9.1

  	
  Amendment of Plan

  	
  15

  
	
  Section 9.2

  	
  Termination of Plan or Discontinuance of
  Contribution Credits

  	
  15

  
	
  Section 9.3

  	
  Distribution upon Complete Termination and
  Administration Following Discontinuance of All Contribution Credits

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS PROVISIONS

  	
  16

  
	
  Section 10.1

  	
  Employment and Other Rights

  	
  16

  
	
  Section 10.2

  	
  Nonalienation of Benefits

  	
  16

  
	
  Section 10.3

  	
  Withholding and Deductions

  	
  17

  
	
  Section 10.4

  	
  Construction

  	
  17

  
	
  Section 10.5

  	
  Controlling Law

  	
  17

  
	
  Section 10.6

  	
  Effect of Invalidity of Provision

  	
  17

  
	
  Section 10.7

  	
  Inurement

  	
  17

  
	
  Section 10.8

  	
  Nature of Participant and Beneficiary Rights

  	
  17

  
				



 


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TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  PAGE

  
	
  Section 10.9

  	
  Regulatory and Other Guidance

  	
  17

  
	
  Section 10.10

  	
  Discretion of Administrator

  	
  18

  
	
  Section 10.11

  	
  Liability

  	
  18

  
	
  Section 10.12

  	
  Section 409A of the Code

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI EXECUTION OF THE PLAN

  	
  18

  
	
  Section 11.1

  	
  Execution of the Plan

  	
  18

  
				



 


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INTRODUCTION


 


Effective July 1,
1999, HF Financial Corp. (“Company”) established the HF Financial Corp. Excess
Benefit Plan for Executives (“Plan”) as set forth herein. The purpose of the
Plan is to provide additional incentive and retirement security through
deferred compensation for the benefit of certain executive employees of the
Company.


 


It is intended
that the Plan constitute an unfunded plan of deferred compensation for a select
group of management or highly compensated employees of the Company such that it
is exempt from the provisions of Parts 2, 3 and 4 of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), as provided under Sections
201(2), 301(a)(3) and 401(a)(1) thereof.


 


The Plan was
amended and restated effective January 1, 2005 and further amended and
restated effective January 1, 2009, to comply with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended.


 


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ARTICLE
I

DEFINITIONS


 


As used
herein, the following words and phrases shall have the meaning indicated unless
otherwise defined or required by the context:


 


Section 1.1     “Active Participant”
shall mean, with respect to any Plan Year, a Participant who is not an Inactive
Participant.


 


Section 1.2     “Administrator” shall
mean the Company.


 


Section 1.3     “Adjustment” shall
mean an amount equal to the net increase or decrease in the fair market value
of an Investment Fund during a Plan Year or other period, exclusive of the
effect of any contribution or credit for such year or other period. Such
increases and decreases shall include such items as realized or unrealized
investment gains or losses, investment income, and may include expenses of
administering the Investment Funds, the Trust and the Plan.


 


Section 1.4     “Base Compensation”
shall mean the base salary paid and earned by a Participant with respect to
services performed as an employee of the Company or one of its affiliates and
paid during a calendar year, irrespective of compensation reduction made by
reason of the Participant’s participation in any employee benefit plan
maintained by the Company under Code Section 401(k), 125 or 132(f) or
under any nonqualified retirement plan maintained by the Company.


 


Section 1.5     “Beneficiary” shall
mean the recipient or recipients last designated by the Participant in writing,
on forms provided by the Administrator, who shall receive any benefit payable
under the Plan upon the death of such Participant. If no such designation of
Beneficiary has been received by the Administrator prior to the date of death
of the Participant or in the event all such designated Beneficiaries shall fail
to survive the Participant, any such benefit shall be payable in a lump sum to
the estate of the Participant which shall be deemed to be his Beneficiary
hereunder.


 


Section 1.6     “Board” shall mean the
Board of Directors of the Company.


 


Section 1.7     “Change in Control”
shall be deemed to have occurred if:


 


(i)        any
one person or more than one person acting as a group acquires ownership of
stock of the corporation that, together with the stock held by such person or
group, constitutes more than 50 percent of the total fair market value or total
voting power of the stock of such corporation. However, if any one person or
more than one person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same person or persons is
not considered to cause a change in 


 


2

















 


the ownership of the corporation or to cause a change
in the effective control of the corporation.


 


(ii)       any
one person, or more than one person acting as a group acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the corporation possessing 35
percent or more of the total voting power of the stock of such corporation; or


 


(iii)      any
one person, or more than one person acting as a group acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the corporation that have a total gross
fair market value equal to or more than 40 percent of the total gross fair
market value of all of the assets of the corporation immediately prior to such
acquisition or acquisitions; or


 


(iv)     A
majority of the members of the Company’s Board of Directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Company’s Board prior to the date of the
appointment or election.


 


(v)      This
definition shall be interpreted in a manner consistent with Section 409A
of the Code.


 


Section 1.8     “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.


 


Section 1.9     “Company”
shall mean HF Financial Corp., a Delaware corporation with principal offices
located at Sioux Falls, South Dakota, its successors and assigns.


 


Section 1.10   “Company
Credit” shall mean any amount of Company contribution credit made under Section 3.1
or 3.2.


 


Section 1.11   “Effective
Date” shall mean the effective date of the restated Plan, which shall be January 1,
2009.


 


Section 1.12   “Employment”
shall mean the employment relationship as a common law employee of the Company.


 


Section 1.13   “Entry
Date” shall mean the first day of the Plan Year or first day of the
calendar year in which Executive first meets the Eligibility requirements of Section 2.1.  Provided, however, that the Entry Date for a
newly eligible Executive who makes an election under Section 3.4(b) shall
be the date that the election becomes effective.


 


3

















 


Section 1.14   “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time.


 


Section 1.15   “Executive” shall mean
any common law employee of the Company who is a President or Senior or
Executive Vice President of the Company or one of its subsidiaries or any other
senior manager selected for participation in the Plan.


 


Section 1.16   “Fiscal Year” shall mean
the Company’s fiscal year, which is currently a 52 or 53-week period generally
including the period from each July through the next June.


 


Section 1.17   “Fiscal Year Incentive”
shall mean cash incentive awards and bonuses based on the financial performance
of the Company or one of its affiliates during one or more Fiscal Years earned
by a Participant with respect to services performed as an employee of the
Company or one of its affiliates and otherwise scheduled to be paid within two
and one-half (21⁄2) months after a Fiscal Year, irrespective of compensation
reduction made by reason of the Participant’s participation in any employee
benefit plan maintained by the Company under Code Section 401(k), 125, or
132(f) or under any nonqualified retirement plan maintained by the
Company.


 


Section 1.18   “Inactive Participant”
shall mean a Participant who has a balance remaining in his Individual Account
and who either (i) has incurred a Termination of Employment, or (ii) is
a limited Participant under Section 2.3.


 


Section 1.19   “Individual Account”
shall mean the total amount standing to the credit of a Participant under the
Plan.


 


Section 1.20   “Investment Fund(s)”
shall mean the investment fund(s) designated from time to time for the
deemed investment of an Individual Account under Article IV.


 


Section 1.21   “Participant” shall mean
an Executive who has become a Participant as provided under Article II.


 


Section 1.22   “Plan” shall mean the HF
Financial Corp. Excess Pension Plan for Executives as contained herein and as
amended from time to time.


 


Section 1.23   “Plan Year” shall mean
the twelve (12) month period commencing July 1 and ending June 30.


 


Section 1.24   “Termination of Employment”
means the Executive’s separation from service within the meaning of Section 409A
of the Code for any reason whatsoever, voluntary or involuntary, other than by
reason of an approved leave of absence, to the extent set forth in Section 409A
of the Code.


 


Section 1.25   “Trust” shall mean the
trust, if any, associated with this Plan and all of its assets that are held by
the Trustee thereunder.


 


4

















 


Section 1.26   “Trust Agreement” shall
mean the agreement, if any, entered into between the Company and the Trustee
pursuant to Article VII and called the Rabbi Trust Under the Excess
Pension Plan for Executives Sponsored by HF Financial Corp. and Deferred Compensation
Agreements Entered Into by Home Federal Bank.


 


Section 1.27   “Trustee” shall mean the
party or parties designated as such under the Trust Agreement.


 


Section 1.28   “Valuation Date” shall
mean the last day of each Plan Year (the “Annual Valuation Date”), the last day
of each calendar quarter, and such other date or dates during a Plan Year
selected by the Administrator.


 


ARTICLE
II

PLAN ELIGIBILITY AND PARTICIPATION


 


Section 2.1     Eligibility.
Executives of the Company or an affiliated organization selected by the Board
shall be eligible to participate in the Plan. An Executive shall remain
eligible to participate in the Plan with respect to each Plan Year following
his/her initial year of selection by the Board, unless removed as an eligible
Executive with respect to a Plan Year (or Plan Years) by action of the Board in
its sole discretion.


 


Section 2.2     Participation. An
Executive shall become a Participant on the Entry Date next following his/her
satisfaction of the Eligibility requirements under Section 2.1.


 


Section 2.3     Limited Participation.
A Participant who without a Termination of Employment ceases having
contribution credits made to his/her Individual Account by reason of his/her
removal from eligibility to participate in the Plan by the Board) shall become
a limited Participant hereunder until such time as such credits resume or s/he
incurs a Termination of Employment. The Individual Account of a limited
Participant shall continue to share in Adjustment credits under Article IV.


 


ARTICLE
III

CONTRIBUTION CREDITS


 


Section 3.1     Company Credits: Defined
Benefit Formula. A Participant’s Individual Account shall be credited with
the difference between the annual benefit accrual credited to such Participant
under the HF Financial Corp. Pension Plan (the “Pension Plan”) under its
current cash balance formula and the amount that would have been credited to
such Participant under the benefit formula in effect prior to July 1,
1999. However, if Participant is in the “Transition Group” as defined in the
Pension Plan and accrues a benefit equal to the greater of the benefits under
the pre-and post-July 1, 1999 formulas under the Pension Plan, the actual
accrual for any Plan Year under the Pension Plan shall offset and reduce the
amount of any contribution to be made under this Plan for the same Plan Year.
Only Participants who hold the title of President or Executive or Senior Vice
President of the Company or an affiliated organization as of June 30, 1999
and who were employed on July 1, 1999 are eligible for any contribution
credit under this Section 3.1.


 


5

















 


Section 3.2     Company Credits: Excess
Compensation. The Company shall annually allocate to each Participant’s
Individual Account under this Plan the amount of annual benefit accrual that
did not accrue to the Participant under the Pension Plan for the Plan Year by
reason of the limits imposed under Sections 401(a)(17) and 415 of the Code. The
amount credited to such Participant’s individual account shall be the current
lump sum cash value of the annual benefit accrual for the relevant Plan Year
when converted according to the actuarial assumptions set forth in the Pension
Plan.


 


Section 3.3     Company Credits:
Discretionary Contributions. The Company may, but is not required, to
allocate to any Participant’s Individual Account under the Plan any amount for
the Plan Year. The amount of the allocation shall be the amount determined by
the Board in its sole discretion. Such amount is not required to be uniform
among the Participants, and the Company is permitted to make such Company
allocations for some Participants and not for other Participants. Such Company
allocations can be expressed as a fixed dollar amount; a percentage of
compensation, Base Salary, or Fiscal Year Incentives; or as a matching
contribution based on the deferrals made by the Participant.


 


Section 3.4     Salary Deferral Election.


 


(a)       General Rules.
Except to the extent provided otherwise in subsection (c) below with
respect to Fiscal Year Incentives, if a Participant is eligible to participate
in this Plan for a Plan Year, the Participant may elect to defer payment up to
100% of his or her Base Salary to be earned for services to be performed during
a calendar year by timely filing an executed deferral agreement. To be
effective, a deferral agreement must be filed with the Company before the first
day of the calendar year in which the Participant will be paid for any of the
Compensation that is to be deferred; and the deferral agreement shall remain in
effect for that calendar year.


 


(b)      Newly
Eligible Participants. To the extent permissible under Section 409A of
the Code, an Executive who first becomes eligible to participate in the Plan
may make a deferral election with respect to Base Salary and Fiscal Year
Incentives within 30 days after the date the Executive becomes eligible to
participate in the Plan. Such election shall apply with respect to Base Salary
to be paid after the date of the election and to a Fiscal Year Incentive
accrued during and after the Plan Year in which the initial election is made,
determined by multiplying the Fiscal Year Incentive by a fraction, the
numerator of which is the number of days remaining in the performance period
after the election and the denominator of which is the total number of days in
the performance period. The election shall become irrevocable as of the date
that it is made.


 


(c)       Fiscal Year Incentives.
This subsection (c) is effective as of January 1, 2009. A Participant’s
deferral agreement may include an


 


6
















 


election to defer payment of up to 100% of a Fiscal
Year Incentive, by filing an executed deferral agreement with the Company
before the first day of the Fiscal Year in which the Participant will begin to
earn the Fiscal Year Incentive. The deferral agreement shall remain in effect
with respect to that Fiscal Year Incentive only until the Fiscal Year Incentive
is earned, forfeited or the performance period expires without the Fiscal Year
Incentive having been earned. Separate elections may be made with respect to
each Fiscal Year Incentive for which the Participant is eligible. Provided,
however, that for Fiscal Year Incentives earned during the fiscal year ending June 30,
2009, a Participant may also make a deferral election on or before December 31,
2008, but only to the extent that the Fiscal Year Incentive also meets the
definition of performance-based compensation otherwise permitted to be deferred
pursuant to an election made six months before the end of the performance
period under Section 409A of the Code.


 


ARTICLE
IV

INDIVIDUAL ACCOUNTS


 


Section 4.1     Individual
Accounts. The Administrator shall establish and maintain an Individual
Account in the name of each Participant, to which the Administrator shall make
the credits set forth in Article III and in the following Sections of this
Article IV. The Individual Accounts of Inactive Participants shall be
maintained in the same manner as those of Active Participants.


 


Section 4.2     Credit
of Investment Fund Adjustment. As of each Valuation Date, the Administrator
shall determine the Adjustment of each Investment Fund for the period elapsed
since the preceding Valuation Date by adding together all income received and
accrued, realized and unrealized profits, and deducting therefrom all taxes,
charges or expenses and any realized or unrealized losses which may have been
sustained. Such Adjustment shall be credited as of the Valuation Date to the
Individual Account of each Participant (including any Inactive Participant) for
whom a balance is maintained with reference to such Investment Fund for his
Individual Account. The Adjustment shall be allocated to the Individual Account
of each such Participant in the same proportion that (i) the value of the
Participant’s Individual Account as of the preceding Valuation Date (or current
Valuation Date in the case of the Participant’s first Valuation Date) with
reference to such Investment Fund, increased by Company contributions credited
since such Valuation Date and decreased by any distributions occurring since
such prior Valuation Date, bears to (ii) the total value of all Individual
Account balances as of such prior Valuation Date with reference to such
Investment Fund, increased by Company contributions credited and decreased by
all such distributions. Distributions made pursuant to Article V and Article VI
shall not share in the credit of Adjustment under this Section.


 


Any of the
foregoing to the contrary notwithstanding, if and to the extent that shares
and/or other assets are specifically allocated to an Individual Account, all 


 


7

















 


dividends and capital gain distributions with regard to such shares and
other assets, and any other income, gains and/or losses attributable thereto,
shall be directly allocated to such Individual Account.


 


Section 4.3     Designation
of Investment Funds. In its sole discretion, the Administrator may from
time to time designate multiple Investment Funds among which a Participant may
choose in accordance with this Section. Such Investment Funds shall be
designated without necessity of amendment to this Plan or the Trust and shall
have the investment objectives prescribed by the Administrator. In like manner,
the Administrator may add or delete a designated Investment Fund at any time.
Any such addition or deletion of a designated Investment Fund shall be
communicated to all Participants.


 


(a)       Participant Elections as
to Deemed Investment. To the extent that the Administrator designates
multiple Investment Funds for purposes of the Plan, each Participant shall be
allowed to choose the Investment Fund(s) in which his/her Individual
Account shall be deemed to be invested (“deemed Investment Fund(s)”), in
accordance with this Section.


 


(b)      Initial
Investment Election. A Participant’s choice of deemed Investment Fund(s) shall
be the sole responsibility of the Participant. At the time an Executive becomes
a Participant s/he may make an election of deemed Investment Fund(s) which
will apply to his/her Individual Account in its entirety. Such election and the
elections described in paragraphs (c) and (d) below shall be made in
such increments as are prescribed by the Administrator.


 


(c)       Revised Elections
Regarding Investment: In General. A Participant may elect to change his/her
election of deemed Investment Funds. Except as otherwise specifically provided
in this Section, such changes may not be made more frequently than may be
determined by the Administrator in its discretion from time to time and
communicated to Participants, nor effective as of dates other than may be
established by the Administrator for such purpose. Such changes shall be
limited to deemed investment directions involving the Investment Fund(s) described
or referred to in this Section which are available to Participants on and
after the effective date of such revised election. A Participant’s election to
change his or her election of deemed Investment Funds must be made at least
thirty (30) days prior to its effective date, or within such shorter notice
period as the Administrator may permit in its sole discretion. Any such revised
election shall direct the deemed investment of the entire existing Individual
Account balance of the electing Participant as of the effective date of such
election, except to the extent the Administrator may permit otherwise in
accordance 


 


8

















 


with paragraph (d) below. Any such elections
shall conform with the restrictions under federal securities laws against
insider trading.


 


(d)      Revised
Elections Regarding Deemed Investment of Existing Individual Account Balances.
If and to the extent the Administrator determines to so permit from time to
time, a Participant may elect to redirect the deemed investment of his or her
existing Individual Account balance independently of any deemed investment
election with respect to future credits to his Individual Account. Any such
election shall be made through such procedures as the Administrator may
establish from time to time for such purpose. Any such election must be made at
least thirty (30) days prior to its effective date, or within such shorter
notice period as the Administrator may permit in its sole discretion. Any such
election must direct the deemed investment of the Participant’s entire existing
Individual Account balance determined as of the effective date of such
election.


 


(e)       Default Provision.
In the event a Participant fails to properly direct or redirect the deemed
investment of his or her Individual Account in accordance with the foregoing,
the Participant’s directions shall be implemented to the extent consistent with
the foregoing and the remainder of his or her Individual Account or future
credits, as applicable, shall be deemed fully invested in such default fund as
may be established from time to time by the Administrator in its sole
discretion.


 


Section 4.4     Equitable
and Alternative Procedures. The Administrator shall establish regular
procedures for the purpose of making the credits, allocations, valuations and
adjustments to Individual Accounts provided for in this Article IV. Should
the Administrator determine that the strict application of its procedures will
not result in an equitable result among the Individual Accounts, it may modify
its procedures for the purpose of achieving an equitable result in accordance
with the principles of the Plan and the provisions of this Article.


 


In addition to
the foregoing and not by way of limitation, the Administrator may adopt such
alternative methods of determining and crediting Adjustment under Section 4.2
as may be appropriate to the characteristics (whether administrative,
investment or otherwise) of any or all of the deemed Investment Funds.


 


ARTICLE
V

BENEFITS


 


Section 5.1     Entitlement
to Benefits. Except as otherwise provided below, a Participant shall be
entitled to payment of a benefit equal to the value of his/her entire vested
Individual Account at such time as s/he elects under Section 6.2. A
Participant shall at all times be 100% vested in the portion of his/her
Individual Account attributable 


 


9

















 


to salary deferral
contributions pursuant to Section 3.3 hereof. With respect to
contributions made by the Company pursuant to Sections 3.1, 3.2 or 3.3, a
Participant shall be vested upon completion of five years of vesting service as
determined under the Pension Plan, with a Participant being credited with years
of service earned prior to the establishment of this Plan.


 


Section 5.2     Death Benefit. In the
event of the Termination of Employment of a Participant (or limited Participant
under Section 2.3) by reason of his/her death, his/her Beneficiary
thereupon shall be entitled to a benefit equal to the remaining value of
his/her entire Individual Account.


 


Section 5.3     Change in Control. In
the event of a Change in Control, each Participant thereupon shall become 100%
vested in his/her Account and shall be entitled to payment of a benefit equal
to the value of his/her entire Individual Account.


 


Section 5.4     Unforeseen Emergencies.
Notwithstanding any other provision of the Plan, in the event a Participant
suffers an Unforeseeable Emergency within the contemplation of this Section,
such Participant may apply to the Administrator for a distribution of any
vested portion of his/her Individual Account prior to the time it would otherwise
be payable under the Plan.


 


For purposes
of this Section 5.4, an Unforeseen Emergency shall mean the Executive’s
severe financial hardship resulting from an unforeseeable emergency such as (1) an
illness or accident of the Executive or the Executive’s spouse or dependent, (2) the
loss of the Executive’s property because of casualty, or (3) other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Executive, as determined by the Administrator. The
determination of whether a Participant has a qualifying Unforeseen Emergency
and the amount which qualifies for distribution, if any, shall be made by the
Administrator in its sole discretion. The Administrator’s determination shall
be final, binding and conclusive. The Administrator may require evidence of the
purpose and amount of the need, and may establish such application or other
procedures as it deems appropriate. If the Executive receives a distribution on
account of an Unforeseen Emergency or on account of any other hardship, the
Executive’s Salary Deferral Election shall be terminated. The Executive’s
salary deferral election cannot again be filed until the beginning of the
calendar year following the year in which the cessation of deferrals occur and
only if the Executive files a subsequent signed salary deferral election form
with the Company before the beginning of that calendar year.


 


ARTICLE
VI

PAYMENT OF BENEFITS


 


Section 6.1     Payment of Benefits.


 


(a)       Valuation
of Benefit. The determination as to the value of an Individual Account with
respect to any benefit hereunder to which a Participant or Beneficiary shall
have become entitled under Article II 


 


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shall be made as of the Valuation Date coincident with
or next preceding its date of distribution. The Administrator shall maintain
such accounting as shall be necessary to accommodate the independent elections
of time and form of benefit payment under this Article.


 


(b)      General
Conditions.


 


(i)      Any
payment made in accordance with the provisions of the Plan to a Participant or
Beneficiary, or to his/her legal representative, shall, to the extent of the
method of computation as well as the amount thereof, constitute full
satisfaction of claims hereunder against the Trustee, the Administrator and the
Company, any of whom may require such Participant, Beneficiary or legal
representative, as a condition precedent to such payment, to execute a receipt
and release therefor.


 


(ii)     Participants
and Beneficiaries shall only be entitled to receive payment of the vested
portion of an Individual Account. Vesting shall be determined in accordance
with Section 5.1 hereof and under the vesting terms and provisions of the
Pension Plan, which terms and provisions are incorporated herein by reference.


 


Section 6.2     Time
of Payment. Benefits under the Plan shall be paid on the first day of the
month following the sixth month anniversary of the Executive’s Termination of
Employment. Any of the foregoing to the contrary notwithstanding, benefits
payable by reason of a Change in Control under Section 5.3 shall be paid
on the thirtieth (30) day following the Change in Control.


 


Section 6.3     Form of
Benefit Payment. Benefits under the Plan shall be paid to the Participant
in a single lump sum payment.


 


Section 6.4     Death
Benefit. In the event a Participant’s benefit becomes payable by reason of
his death under Section 5.3, it shall be paid to his Beneficiary in cash
in a single lump sum on the sixtieth (60) day following the Participant’s
death.


 


ARTICLE
VII

THE TRUST


 


Section 7.1     Establishment
of Trust. In its sole discretion, the Company may establish the Trust as a
source of funds to assist it in the meeting of its liabilities under the Plan.
The Trust shall be intended to be a “grantor trust,” of which the Company is
the grantor, within the meaning of subpart E, part I, Subchapter I, Chapter 1,
subtitle A of the Code. The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of the Company and shall be
used exclusively for the uses and purposes of Participants and Beneficiaries
and general creditors of the


 


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Company. Participants and
Beneficiaries shall have no preferred claim on, or any beneficial ownership
interest in, any assets of the Trust. Any rights created under the Plan and the
Trust shall be mere unsecured contractual rights of Participants and Beneficiaries
against the Company. Any assets held by the Trust will be subject to the claims
of the Company’s general creditors under federal and state law in the event of “insolvency”
as defined under the Trust Agreement. It is intended that the Plan and Trust
not create taxable income to any Participant or Beneficiary prior to the actual
payment of benefits hereunder.


 


Section 7.2       Payments by Trustee. The Trustee
shall pay the benefit attributable to the Individual Account of each
Participant at such time and in such manner as provided under Articles V and
VI, at the direction of the Administrator and in accordance with the terms of
the Trust Agreement; provided, however, payments by the Trustee shall be made
only to the extent of amounts which are deposited to the Trust and Adjustments
with respect thereto. Payments by the Trustee hereunder shall apply to satisfy
the obligation of the Company to pay benefits under the Plan.


 


ARTICLE
VIII

PLAN ADMINISTRATION


 


Section 8.1       Authority of Administrator. The
Administrator shall administer, construe and interpret the Plan, in its sole
discretion. The construction and interpretation of any provision of the Plan by
the Administrator shall be final and binding upon all persons. The authority of
the Administrator shall specifically include, but not be limited to the
determination of the following, in accordance with the Plan:


 


(a)                    The amount of
contribution credits allocable to any one or all of the Individual Accounts;


 


(b)                   The time and
manner of Individual Account payment;


 


(c)                    The forfeiture
of a portion of an Individual Account;


 


(d)                   The Adjustment
credits allocable to an Individual Account; and


 


(e)                    The resolution
of any issue regarding the entitlement of any individual to the payment of any
benefit under the Plan.


 


Section 8.2       Delegation. The Administrator
and/or the Board may, in their sole discretion, delegate any of their duties
under the Plan to an officer or employee (or committee thereof) of the Company,
who shall serve in such capacity at their pleasure; provided, however, any
delegation hereunder shall be limited such that an individual may not exercise
any discretionary authority which may affect his interest as a Participant.


 


Section 8.3       Records and Rules. The
Administrator shall keep written records sufficient to reflect the identity of
Participants and Individual Account balances. It shall 


 


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adopt such rules as
it shall deem reasonable and appropriate to the administration of the Plan.


 


Section 8.4       Claims
Procedure.


 


(a)                    Initial
Claim for Benefits. The following shall apply with respect to claims of the
Executive for benefits. The Company shall give notice to the Executive within
90 days of the Executive’s written application for benefits of the Executive’s
eligibility or noneligibility for benefits under the Agreement. If the Company
determines that the Executive is not eligible for benefits or full benefits,
the notice shall set forth (i) the specific reasons for such denial, (ii) a
specific reference to the provision of the Agreement on which the denial is
based, (iii) a description of any additional information or material
necessary for the Executive to perfect the claim, and a description of why it
is needed, and (iv) an explanation of the Agreement’s claims review
procedure and other appropriate information as to the steps to be taken if the
Executive wishes to have the claim reviewed. If the Company determines that
there are special circumstances requiring additional time to make a decision,
the Company shall give notice to the Executive of the special circumstances and
the date by which a decision is expected to be made, and may extend the time
for up to an additional 90-day period.


 


(b)                   Appeal of
Claim Denial. If the Executive is determined by the Company under
subsection (a) above to be not eligible for benefits, or if the Executive
believes that the Executive is entitled to greater or different benefits, the
Executive shall have the opportunity to have the claim reviewed by filing a
petition for review within 60 days after the Executive has been given the
notice issued by the Company. The petition shall be filed with the Company. A
petition shall state the specific reasons the Executive believes that the
Executive is entitled to benefits or greater or different benefits. Within 60
days after the petition has been filed, the Company shall afford the Executive
an opportunity to present the Executive’s position to the Company, in writing,
and the Executive shall have the right to review pertinent documents. The
Company shall give notice to the Executive of its decision in writing within
said 60-day period, stating specifically the basis of the decision written in a
manner calculated to be understood by the Executive and the specific provisions
of the Agreement on which the decision is based. If because of special
circumstances, the 60-day period is not sufficient, the decision may be
deferred for up to another 60-day period at the election of the Company but
notice of this deferral shall be given to the Executive.


 


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(c)                    Deadline to
File Claim. To be considered timely under the claims procedures, a claim
must be filed under subsection (a) above within one year after the
claimant knew or reasonably should have known of the principal facts upon which
the claim is based. Knowledge of all facts that the Executive knew or
reasonably should have known shall be imputed to the claimant for the purpose
of applying this deadline.


 


(d)                   Exhaustion
of Administrative Remedies. The exhaustion of the claims procedures is
mandatory for resolving every claim and dispute arising under this Plan. As to
such claims and disputes: (i) No claimant shall be permitted to commence
any legal action to recover benefits or to enforce or clarify rights under the
Agreement under Section 502 or Section 510 of ERISA or under any
other provision of law, whether or not statutory, until the claims procedures
have been exhausted in their entirety; and (ii) In any such legal action
all explicit and all implicit determinations by the Company and Company
officials (including, but not limited to, determinations as to whether the
claim, or a request for a review of a denied claim, was timely filed) shall be
afforded the maximum deference permitted by law.


 


(e)                    Deadline to
File Legal Action. No legal action to recover benefits or to enforce or
clarify rights under the Plan under Section 502 or Section 510 of
ERISA or under any other provision of law, whether or not statutory, may be
brought by any claimant on any matter pertaining to this Plan unless the legal
action is commenced in the proper forum before the earlier of: (i) 30
months after the claimant knew or reasonably should have known of the principal
facts on which the claim is based, or (ii) six months after the claimant
has exhausted the claims procedure under this Plan. Knowledge of all facts that
the Executive knew or reasonably should have known shall be imputed to every
claimant who is or claims to be a beneficiary of the Executive or otherwise
claims to derive an entitlement by reference to the Executive for the purpose
of applying the previously specified periods.


 


(f)                      Company
Discretion; Court Review. The Company and all persons determining or
reviewing claims have full discretion to determine benefit claims under the
Plan. Any interpretation, determination or other action of such persons shall
be subject to review only if it is arbitrary or capricious or otherwise an
abuse of discretion. Any review of a final decision or action of the persons
reviewing a claim shall be based only on such evidence presented to or
considered by such persons at the time they made the decision that is the
subject of review.


 


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Section 8.5       Legal Incompetence. If any
Participant or Beneficiary is a minor, or is in the judgment of the
Administrator otherwise legally incapable of personally receiving and giving a
valid receipt for any payment due him or her hereunder, the Administrator may,
unless and until a claim shall have been made by a guardian or conservator of
such person duly appointed by a court of competent jurisdiction, direct the
Trustee that payment be made to such person’s spouse, child, parent, brother or
sister, or other person deemed by the Administrator to be a proper person to
receive such payment. Any payment so made shall be a complete discharge of any
liability under the Plan for such payment.


 


Section 8.6       Correction of Errors. If any
change in records or error results in any Participant or Beneficiary receiving
from the Plan more or less than he would have been entitled to receive had the
records been correct or had the error not been made, the Administrator, upon
discovery of such error, shall correct the error by adjusting, as far as is
practicable, the payments in such a manner that the benefits to which such
person was correctly entitled shall be paid.


 


ARTICLE
IX

PLAN AMENDMENT, TERMINATION AND

DISCONTINUANCE OF CONTRIBUTIONS


 


Section 9.1       Amendment of Plan. The Board shall
have the right at any time to modify, alter or amend the Plan in whole or in
part; provided, however, that no amendment shall have the effect of causing or
permitting any part of the Trust to be used for or diverted to purposes other
than for the exclusive benefit of Participants and Beneficiaries and general
creditors of the Company and no amendment shall have the effect of revesting in
the Company any portion of the Trust, except as may be otherwise provided under
the terms of the Trust Agreement. Similarly, no amendment shall have the effect
of reducing a Participant’s benefit accrued to the date of the amendment or the
nonforfeitable percentage thereof under Article V.


 


No amendment
shall operate to increase the duties and responsibilities of the Trustee except
by written instrument duly executed by and between the Employer and the
Trustee.


 


Section 9.2       Termination of Plan or Discontinuance
of Contribution Credits. Although the Company expects the Plan to be
continued indefinitely, it reserves the right to terminate the Plan at any time
by action of the Board at its sole discretion. In similar fashion, it may
discontinue some or all contribution credits from time to time as it shall deem
appropriate and necessary, but such suspension of contribution credits shall
not be considered to be a termination of the Plan. In the event of termination
of the Plan or a discontinuance of contribution credits, the Company shall
notify the Trustee and all Participants in writing of such action.


 


Section 9.3       Distribution upon Complete Termination
and Administration Following Discontinuance of All Contribution Credits.
Upon termination of the Plan, benefits equal to the current value of all
Individual Accounts shall become fully vested. 


 


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To the extent consistent
with Section 409A of the Code, distribution shall be payable in a lump sum
on the day following the one year anniversary of the Plan’s termination. The
Administrator shall cause a valuation of the deemed Investment Funds to be made
as of the date such assets are reduced to cash, at which time the balances of
Individual Accounts shall be brought up to date in accordance with Article IV.
Upon completion of such accounting and receipt from the Administrator of
directions as to the form of distributions, the Trustee shall distribute the
assets of the Trust to the Participants or Beneficiaries, as the case may be,
in accordance with such directions and the provisions of Article VI;
provided, however, such distributions shall not exceed the total value of all
benefits payable under this Section 9.3; provided further, however, to the
extent such assets shall exceed such benefits, that excess shall be returned by
the Trustee to the Company. If and to the extent such assets shall be less than
the total value of such benefits, the balance shall be paid directly by the
Company to the Participants or Beneficiaries.


 


In the event
of a discontinuance of all contribution credits, the Trust and Plan shall
continue to be held and administered in accordance with their terms until such
time as the Plan shall be terminated.


 


ARTICLE
X

MISCELLANEOUS PROVISIONS


 


Section 10.1     Employment and Other Rights. No
provision of the Plan shall be deemed to abridge or limit any managerial right
of the Company, or to give any employee or Participant the right to be retained
in Employment, or to interfere with the right of the Company to discharge any
such employee or Participant at any time with or without cause regardless of
the effect which such discharge may have on such Participant. By the act of
participation in the Plan, each Participant, as well as the Participant’s
heirs, assigns and Beneficiary, shall be deemed conclusively to have agreed to
and accepted the terms and conditions of the Plan. The Plan does not create any
rights of any Participant, Executive or Beneficiary or any obligations on the
part of the Company other than those set forth herein. The benefits payable
under the Plan shall be independent of, and in addition to, any other
agreements that may exist from time to time concerning any other compensation
or benefits payable by the Company; provided, however, all amounts paid or
payable to a Participant (or Beneficiary) under the Plan shall be excluded for
purposes of calculating the benefit or other entitlement of any person under
any other employee benefit or compensation plan, program, practice or policy
maintained by the Company.


 


Section 10.2     Nonalienation of Benefits. Except as
otherwise provided by law, no benefit, payment or distribution under the Plan shall
be subject either to the claim of any creditor of a Participant or Beneficiary,
or to attachment, garnishment, levy, execution or other legal or equitable
process, by any creditor of such person, and no such person shall have any
right to alienate, commute, anticipate or assign (either at law or equity) all
or any portion of any benefit, payment or distribution under the Plan. The Plan
shall not in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to benefits hereunder.


 


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In the event
that any Participant’s or Beneficiary’s benefits are garnished or attached by
order of any court, the Company may elect to bring an action for a declaratory
judgment in a court of competent jurisdiction to determine the proper recipient
of the benefits to be paid by the Plan. During the pendency of said action, any
benefits that become payable may be paid into the court as they become payable,
to be distributed by the court to the recipient as it deems proper at the close
of said action.


 


Section 10.3     Withholding and Deductions. All
payments made by the Company and/or Trustee under the Plan to any Participant
or Beneficiary shall be subject to applicable withholding and to such other
deductions as shall at the time of such payment be required under any income
tax or other law, whether of the United States or any other jurisdiction, and,
in the case of payments to a Beneficiary, the delivery to the Administrator
and/or Trustee of all necessary waivers, qualifications and other
documentation. Determinations by the Administrator and/or Trustee as to
withholding with respect thereto shall be binding on the Participant and any
Beneficiary(ies).


 


Section 10.4     Construction. In the construction of
the Plan, the masculine shall include the feminine and the singular the plural
in all cases where such meanings would be appropriate.


 


Section 10.5     Controlling Law. The law of the
State of South Dakota shall be the controlling state law in all matters
relating to the Plan and shall apply to the extent that it is not preempted by
the laws of the United States of America.


 


Section 10.6     Effect of Invalidity of Provision.
If any provision of the Plan is held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and the Plan
shall be construed and enforced as if such provision had not been included.


 


Section 10.7     Inurement. The Plan shall be binding
upon and inure to the benefit of the Company and its successors and assigns and
the Participant and any Beneficiary, their successors, heirs, executors,
administrators and beneficiaries.


 


Section 10.8     Nature of Participant and Beneficiary
Rights. The Plan and Trust shall at all times constitute an unsecured
promise of the Company to pay benefits under the Plan as they come due. The
right of a Participant or Beneficiary to receive benefits hereunder shall be
solely an unsecured claim against the general assets of the Company. Pursuant
to the terms of the Trust Agreement, a Participant or Beneficiary shall have no
claim against or rights in any specific assets of the Company and all assets of
the Trust shall be deemed general assets of the Company.


 


Section 10.9     Regulatory and Other Guidance.
Notwithstanding any other provision of the Plan, to the extent the Secretary of
Treasury and/or Labor issues Regulations or other guidance with respect to the
operation of plans such as the Plan, and such Regulations or other guidance
afford discretion to the Company not specifically addressed herein, then such
discretion shall be deemed to be implicit in the provisions of the Plan and the
Plan may be construed and operated accordingly.


 


17

















 


Section 10.10   Discretion of Administrator. The
Administrator shall have the sole and absolute discretion to take or forego
such actions as may be necessary or appropriate for the administration of the
Plan, including such actions as are described in Article VIII hereof. The
exercise of such discretion shall not be subject to question or review by any person,
unless such exercise was arbitrary and capricious on the part of the
Administrator.


 


Section 10.11   Liability. No member of the Board or
any committee thereof shall be liable for any act or action, whether of
commission or omission, taken by any other member, or by any officer, agent or
employee of the Company or of any such body, nor, except in circumstances
involving his/her bad faith, for anything done or omitted to be done by
himself/herself.


 


Section 10.12   Section 409A of the Code. This
Plan shall be construed to avoid the excise tax and penalties described in Section 409A
of the Code. This Plan shall be interpreted in a manner consistent with that
intent.


 


ARTICLE
XI

EXECUTION OF THE PLAN


 


Section 11.1     Execution of the Plan. This document
may be executed in any number of counterparts and each fully executed
counterpart shall be deemed an original.


 


IN WITNESS
WHEREOF, the Company has caused this Plan to be signed by its duly authorized
officer and adopted this 31st day of December, 2008, effective as of January 1,
2009.


 


	
   

  	
  HF FINANCIAL
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis
  L. Hage

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman,
  President & CEO

  
				



 


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