EXHIBIT 10.1
EMPLOYMENT AGREEMENT BETWEEN
QCR HOLDINGS, INC.
AND XXXXXX XXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of the __day of
_________, 2004, is between QCR HOLDINGS, INC. (the "Employer") and XXXXXX XXXX
(the "Employee").
AGREEMENTS
Section 1. Employment. The Employer hereby employs the Employee, and
the Employee hereby accepts employment, upon the terms and conditions
hereinafter set forth. Employee agrees that if and when the necessary approvals
and charters are obtained, the Employer shall become Rockford Bank and Trust
Company and all references to Employer herein shall mean Rockford Bank and Trust
Company.
Section 2. Duties. The Employee agrees to provide all services
necessary, incidental or convenient as an Executive Vice President Rockford
office of the Employer; provided that, if and when the necessary approvals and
charters are obtained and the Employer becomes Rockford Bank and Trust Company
under Section 1 hereof, Employee agrees to provide all services necessary,
incidental or convenient as President of Rockford Bank and Trust Company. The
Employer shall designate the location or locations for the performance of the
Employee's services. The Employer shall furnish or make available to the
Employee such equipment, office space and other facilities and services as shall
be adequate and necessary for the performance of his duties.
Section 3. Term. The term of this Agreement shall commence on June 1,
2004 (the "Effective Date"), and shall continue for a period of two (2) years.
This Agreement shall automatically extend for one (1) year on each anniversary
of the Effective Date, unless terminated by either party effective as of the
last day of the then current two (2) year term by written notice to that effect
delivered to the other not less than ninety (90) days prior to the anniversary
of such Effective Date.
Section 4. Compensation.
(a) Base Salary. The annual base salary ("Base Salary") of the
Employee shall be One Hundred Thirty Thousand Dollars ($130,000.00). Base Salary
shall be payable bi-weekly, in equal installments. The Employee's Base Salary
shall be subject to review annually, with the first such review period to
commence during the first quarter of 2005, and shall be adjusted during the term
hereof in accordance with the Employer's established management compensation
policies and plan.
(b) Bonuses. The Employee shall be entitled to receive cash
bonuses ("Cash Bonus" or "Cash Bonuses"), based upon performance, which may be
granted in the future in the discretion of the Employer, consistent with
Employer's incentive bonus formula for executive management, as modified from
time to time. Maximum bonus shall be as follows; 2004-5%, 2005-10%, 2006-20%,
2007-30%. In addition, the Employee may receive such additional bonuses or
awards in the form of stock options, restricted stock or other equity
compensation, as determined in the discretion of the Employer.
(c) Rockford Incentive Programs. The Employee shall be
eligible to participate in the following: "Rockford Short-term Cash Incentive
Compensation Program" and "Rockford Long-term Deferred Incentive Compensation
Program" (collectively referred to as the "Incentive Programs"). All references
to goals, thresholds, assets, losses, earnings and similar terms under the
Incentive Programs shall be based solely upon application of such terms to the
Rockford office of the Employer. The Incentive Programs shall be administered by
the Executive Committee of the Board of Directors of QCR Holdings, Inc. (the
"Executive Committee") and the Executive Committee shall have the authority to
make all determinations in the interpretation and administration of the
Incentive Programs and all decisions of the Executive Committee shall be binding
on the Employee; provided however, that the amounts paid pursuant to the
Incentive Programs shall be allocated among the following eligible employees in
the percentages set forth: Xxxxxx Xxxx 60% percent and Xxxxx Way 40% percent
(the "Eligible Employees"). If an Eligible Employee is no longer employed by the
Employer at the time any amount would otherwise be allocated and paid to such
employee, then the amount allocable to such employee shall be forfeited and will
not be paid to any other Eligible Employee.
(i) Under the Short-Term Cash Incentive Compensation Program, with respect to
the years ending December 31, 2005 through December 31, 2008, the Employer shall
pay the Eligible Employees, as allocated as provided above, the aggregate amount
set forth in the schedule below with respect to each year if the following
Assets Target and Losses/Earnings Target for such year are met; provided
however, that fifty percent (50%) of the aggregate amount shall be allocated to
the Assets Target and fifty percent (50%) shall be allocated to the
Losses/Earnings Target. The incentive amount payable hereunder shall be paid
within ninety (90) days after the end of such year.
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Losses/
Year Ending Incentive Amount Assets Target Earnings Target
--------------------------------------------------------------------------------
December 31, 2005 $20,000 $ 45 million losses no more than
$1,153,000
December 31, 2006 $25,000 $ 81 million losses no more than
$ 433,000
December 31, 2007 $30,000 $118 million earnings at least
$ 227,000
December 31, 2008 $35,000 $151 million earnings at least
$1,106,000
In the event either the Assets Target or the Losses/Earnings Target is
not met, then a prorata portion of the incentive amount payable with
respect to that Target shall be payable according to the following
schedule:
Result Incentive Amount Paid
------------------------------------------------------------
Reach or exceed Target 100%
Within 5% of Target 90%
Within 10% of Target 80%
Within 15% of Target 65%
Within 20% of Target 50%
Less than 20% of Target None
By way of example, if as of December 31, 2006, 100% of the Asset Target
was met but only 90% of the Losses/Earning Target was met, then 95% of
the aggregate incentive amount ($28,500) would be payable (100% of
$15,000 plus 90% of $15,000). It is the agreement of the parties that
the Incentive Targets above do not include the impact of changes in the
Employer business model that are not reflected in the initial
underlying projections prepared in May, 2004.
(ii) Under the Long-term Deferred Incentive Compensation Program, with respect
to years ending December 31, 2009 through December 31, 2013, the Employer shall
contribute to a deferred compensation plan for the benefit of the Eligible
Employees, as allocated as provided above, the aggregate amount of the "Long
Term Incentive Award" for the attained level of Return on Equity Result and
Ending Total Assets set forth in Exhibit A hereto. In the event of a Change in
Control (as defined below), the Employer agrees to contribute the amount set
forth below with respect to the year in which the Change in Control occurs and
each and all subsequent years remaining, such amounts to be discounted to their
present values using the prime rate of interest as of the date five (5) business
days prior to the date of the Change in Control:
Year Ending Amount
-------------------------------------------------
December 31, 2009 $35,000
December 31, 2010 $40,000
December 31, 2011 $50,000
December 31, 2012 $60,000
December 31, 2013 $70,000
December 31, 2014 $90,000
(d) Benefits. The Employer shall provide the following
additional benefits to the Employee:
(1) Medical Insurance. Family medical insurance, provided that Employee
shall be responsible for paying any portion of the premium in accordance with
the Employer's policy applied to similarly situated employees.
(2) Reimbursements. Reimbursement of reasonable expenses advanced by the
Employee in connection with the performance of his duties hereunder, including,
but not limited to, two (2) paid weeks of continuing education, a monthly
automobile allowance of $500, fuel, maintenance and insurance expense of such
automobile, and the annual reimbursement of club dues for the following clubs:
Forest Hills Country Club and a full membership at Rockford Country Club. In
addition one-half of the initiation fee at Rockford Country Club will be
reimbursed up to a maximum reimbursement of $2,500.
(3) Personal Days. The Employee will initially be entitled to
twenty-five (25) personal days which may be increased in accordance with the
Employer's established policies and practices.
(4) Disability Coverage. Long-term and short-term disability coverage
equal to approximately 66-2/3% of Base Salary and Average Annual Bonus. For
purposes of this Agreement, "Average Annual Bonus" shall mean the average of the
three (3) most recent annual Cash Bonuses paid to the Employee immediately
preceding the determination date.
(5) Employee Benefits. Participation in a 401(k)/profit sharing plan,
deferred compensation program and such other benefits as are specifically
granted to Employee or in which he participates as an employee of the Employer.
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(6) Life Insurance. Term life insurance of two (2) times Employee's Base
Salary and Average Annual Bonus as of the date of this Agreement; which
insurance may be provided through a group term carve-out plan at the Employer's
election. The Employee will be allowed to purchase additional life insurance of
at least that same amount through such plan.
(7) Deferred Compensation. Participation under a deferred compensation
agreement under which the Employee will be permitted to annually contribute and
defer up to eight thousand dollars ($8,000) and the Employer shall make a
matching contribution equal to the contribution made by the Employee up to a
maximum contribution of eight thousand dollars ($8,000).
(8) Non-Qualified Stock Options. Non-qualified stock options in
accordance with QCR Holdings, Inc.'s current stock incentive plan, including
without limitation such vesting requirements as are typically imposed on
executives of QCR Holdings, Inc., enabling the Employee to acquire ten
thousand (10,000) shares of QCR Holdings, Inc. stock as of the Effective Date,
with an exercise price for such options equal to the market price of such stock
as of the close of business on the last business day prior to the
Effective Date and, concurrently with the grant and vesting of such options,
ten thousand (10,000) tax benefit rights.
(9) Employee Stock Purchase Plan. Participation in QCR Holdings, Inc
Employee Stock Purchase Plan.
(e) Signing Bonus. Employer shall pay a signing bonus to
employee as follows: seven thousand five hundred dollars ($7,500) upon execution
of this agreement, seven thousand five hundred dollars ($7,500) upon receiving
charter approval, five thousand ($5,000) upon release of solicitation covenants
by letter agreement; in no case longer than 18 months, and five thousand
($5,000) upon release of non compete covenants by letter agreement; in no case
longer than 18 months.
Section 5. Time Requirement. The Employee shall devote his
best efforts and full business time to his duties under this Agreement. The
Employee shall be allowed to serve on outside boards subject to the consent of
the Employer.
Section 6. Termination upon Disability. In the event of the Employee's
Disability (as defined below) during the employment term, payments based upon
the Employee's then current annual Base Salary and Average Annual Bonus shall
continue thereafter through the last day of the one (1) year period beginning on
the date of such Disability, after which time Employee's employment shall
terminate. Payments made in the event of the Employee's Disability shall be
equal to 66-2/3% of Employee's Base Salary and Average Annual Bonus, less any
amounts received under the Employer's short or long-term disability programs, as
applicable. Disability for purposes of this Agreement shall mean that the
Employee is limited from performing the material and substantial duties of the
positions set forth in Section 2 due to the Employee's sickness or injury for a
period of six (6) consecutive months. The Executive Committee of the Board of
Directors of QCR Holdings, Inc. shall determine whether and when the Employee
has incurred a Disability under this Agreement.
Section 7. Termination upon Death. In the event of the Employee's death
during the term of this Agreement, the Employee shall be paid his accrued and
unpaid Base Salary, and his earned Cash Bonus for the year in which he died
prorated on a per diem basis through the date of death. The earned Base Salary
shall be paid in accordance with the Employer's regular payroll on the next
regular payroll date following the Employee's death. The earned Cash Bonus for
the year shall be paid when Cash Bonuses are paid to other executive officers of
the Employer with respect to such year. Such amounts shall be payable to the
persons designated in writing by the Employee, or if none, to his estate.
Section 8. Confidentiality and Loyalty. The Employee acknowledges that
during the course of his employment he will produce and have access to material,
records, data, trade secrets and information not generally available to the
public regarding the Employer and its subsidiaries and affiliates (collectively,
"Confidential Information"). Accordingly, during and subsequent to termination
of this Agreement, the Employee shall hold in confidence and not directly or
indirectly disclose, use, copy or make lists of any such Confidential
Information, except to the extent that such information is or thereafter becomes
lawfully available from public sources, or such disclosure is authorized in
writing by the Employer, required by a law or any competent administrative
agency or judicial authority, or otherwise as reasonably necessary or
appropriate in connection with performance by the Employee of his duties
hereunder. All records, files, documents and other materials or copies thereof
relating to the business of Employer and its subsidiaries and affiliates which
the Employee shall prepare or use, shall be and remain the sole property of the
Employer, shall not be removed from the Employer's premises without its written
consent, and shall be promptly returned to the Employer upon termination of the
Employee's employment hereunder. The Employee agrees to abide by the Employer's
reasonable policies, as in effect from time to time, respecting avoidance of
interests conflicting with those of the Employer and its subsidiaries and
affiliates.
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Section 9. Non-Competition.
(a) Restrictive Covenant. The Employer and the Employee have
jointly reviewed the operations of the Employer and have agreed that the primary
service area of the Employer's lending and deposit-taking functions extends to
an area encompassing a sixty (60) mile radii from each of the offices of QCR
Holdings, Inc. and its subsidiaries. Therefore, as an essential ingredient of
and in consideration of this Agreement and the payment of the amounts described
in Section 4 and Section 10, the Employee hereby agrees that, except with the
express prior written consent of the Employer, for a period of one (1) year
after the termination of the Employee's employment with the Employer (the
"Restrictive Period"), he will not directly or indirectly compete with the
business of the Employer, including, but not by way of limitation, by directly
or indirectly owning, managing, operating, controlling, financing, or by
directly or indirectly serving as an employee, officer or director of, or
consultant to, or by soliciting or inducing, or attempting to solicit or induce,
any employee or agent of the Employer to terminate employment with the Employer
and become employed by any person, firm, partnership, corporation, trust or
other entity which owns or operates an office or other business location of: (i)
a bank, savings and loan association, credit union or similar financial
institution, or (ii) an insurance company or agency, investment brokerage firm
or other entity or organization involved in the retail sale of investment
products or the making of retail or commercial loans (any of the foregoing
referred to in clauses (i) or (ii) collectively referred to as a "Financial
Institution") within a sixty (60) mile radii from each of the offices of QCR
Holdings, Inc. and its subsidiaries (the "Restrictive Covenant"). If the
Employee violates the Restrictive Covenant and the Employer brings legal action
for injunctive or other relief, the Employer shall not, as a result of the time
involved in obtaining such relief, be deprived of the benefit of the full period
of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be
deemed to have the duration specified in this Section computed from the date the
relief is granted, but reduced by the time between the period when the
Restrictive Period began to run and the date of the first violation of the
Restrictive Covenant by the Employee. The foregoing Restrictive Covenant shall
not prohibit the Employee from owning directly or indirectly capital stock or
similar securities which are listed on a securities exchange or quoted on the
Nasdaq which do not represent more than one percent (1%) of the outstanding
capital stock of any Financial Institution.
(b) Remedies for Breach of Restrictive Covenant. The Employee
acknowledges that the restrictions contained in this Section 9 and Section 8 are
reasonable and necessary for the protection of the legitimate business interests
of the Employer, that any violation of these restrictions would cause
substantial injury to the Employer and such interests, that the Employer would
not have entered into this Agreement with the Employee without receiving the
additional consideration offered by the Employee in binding himself to these
restrictions and that such restrictions were a material inducement to the
Employer to enter into this Agreement. In the event of any violation or
threatened violation of these restrictions, the Employer, in addition to and not
in limitation of, any other rights, remedies or damages available to the
Employer under this Agreement or otherwise at law or in equity, shall be
entitled to preliminary and permanent injunctive relief to prevent or restrain
any such violation by the Employee and any and all persons directly or
indirectly acting for or with him, as the case may be.
Section 10. Severance.
(a) Termination Without Cause. If the Employee is
involuntarily terminated without Cause (as defined below), a severance payment
will be made equal to six (6) months of Base Salary. Such payment shall be made
in a lump sum within fifteen (15) days of termination or in equal installments
over the six (6) month period, at the Employer's option. In addition, the
Employer shall provide reasonable out-placement services for up to three (3)
months following termination.
(b) Termination for Cause or Voluntary Termination. If the
Employee is terminated for Cause (as defined below) or voluntarily terminates
his employment, then the Employer shall pay Employee any accrued and unpaid Base
Salary, and any accrued and unpaid personal days and shall have no further
obligations to the Employee under this Agreement. For purposes of this
Agreement, "Cause" shall mean:
(1) a material violation by the Employee of any applicable material law or
regulation respecting the business of the Employer;
(2) the Employee being found guilty of a felony, an act of dishonesty in
connection with the performance of his duties as an officer of the Employer, or
which disqualifies the Employee from serving as an officer or director of the
Employer; or
(3) the willful or negligent failure of the Employee to perform his duties
hereunder in any material respect.
The Employee shall be entitled to at least thirty (30) days' prior written
notice of the Employer's intention to terminate his employment for any Cause
specifying the grounds for such termination, a reasonable opportunity to cure
any conduct or act, if curable, alleged as grounds for such termination, and a
reasonable opportunity to present to the Board of Directors of QCR Holdings,
Inc. his position regarding any dispute relating to the existence of such Cause.
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(c) Termination Upon Change in Control. If a Change in Control
(as defined below) occurs and the Employee is terminated within one (1) year
following the Change in Control or the Employee elects within six (6) months
following the Change in Control to terminate his employment, a severance payment
will be made within fifteen (15) days of termination equal to two (2) years of
Base Salary plus the amount set forth in Section 4(c)(ii) related to a Change in
Control. In addition, the Employer shall continue, or cause to be continued,
Employee's health insurance as in effect on the date of termination (including,
if applicable, family coverage) for three (3) years.
For purposes of this Section, the term "Change in Control" shall mean the
following:
(1) The consummation of the acquisition by any person (as such term is
defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the 0000 Xxx) of thirty-three percent (33%) or more of
the combined voting power of the then outstanding voting securities of QCR
Holdings, Inc.; or
(2) The individuals who, as of the date hereof, are members of the board of
directors of QCR Holdings, Inc. (the "Holding Company Board") cease for any
reason to constitute a majority of the Holding Company Board, unless the
election, or nomination for election by the stockholders, of any new director
was approved by a vote of a majority of the Holding Company Board, and such new
director shall, for purposes of this Agreement, be considered as a member of the
Holding Company Board; or
(3) consummation of: (A) a merger or consolidation of QCR Holdings, Inc.
if the stockholders, immediately before such merger or consolidation, do not, as
a result of such merger or consolidation, own, directly or indirectly, more than
sixty-seven percent (67%) of the combined voting power of the then outstanding
voting securities of the entity resulting from such merger or consolidation, in
substantially the same proportion as their ownership of the combined voting
power of the voting securities outstanding immediately before such merger or
consolidation; or (B) a complete liquidation or dissolution or the sale or other
disposition of all or substantially all of the assets or stock of the Employer
or QCR Holdings, Inc.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because thirty-three percent (33%) or more of the combined voting power
of the then outstanding securities of either the Employer or QCR Holdings, Inc.
is acquired by: (1) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained for employees of the entity; or (2) any
corporation which, immediately prior to such acquisition, is owned directly or
indirectly by the stockholders in the same proportion as their ownership of
stock immediately prior to such acquisition.
(4) If it is determined, in the opinion of the Employer's independent
accountants, in consultation, if necessary, with the Employer's independent
legal counsel, that any amount paid under this Agreement due to a Change in
Control, either separately or in conjunction with any other payments, benefits
and entitlements received by the Employee in respect of a Change in Control
under any other plan or agreement under which the Employee participates or to
which he is a party, would constitute an "Excess Parachute Payment" within the
meaning of Section 280G of the Code, and thereby be subject to the excise tax
imposed by Section 4999 of the Code (the "Excise Tax"), then in such event the
Employer shall pay to the Employee a "grossing-up" amount equal to the amount of
such Excise Tax, plus all federal and state income or other taxes with respect
to the payment of the amount of such Excise Tax, including all such taxes with
respect to any such grossing-up amount. If, at a later date, the Internal
Revenue Service assesses a deficiency against the Employee for the Excise Tax
which is greater than that which was determined at the time such amounts were
paid, then the Employer shall pay to the Employee the amount of such
unreimbursed Excise Tax plus any interest, penalties and reasonable professional
fees or expenses incurred by the Employee as a result of such assessment,
including all such taxes with respect to any such additional amount. The highest
marginal tax rate applicable to individuals at the time of the payment of such
amounts will be used for purposes of determining the federal and state income
and other taxes with respect thereto. The Employer shall withhold from any
amounts paid under this Agreement the amount of any Excise Tax or other federal,
state or local taxes then required to be withheld with respect to the amount
paid hereunder. Computations of the amount of any grossing-up supplemental
compensation paid under this subparagraph shall be conclusively made by the
Employer's independent accountants, in consultation, if necessary, with the
Employer's independent legal counsel. If, after the Employee receives any
gross-up payments or other amount pursuant to this Section 10, the Employee
receives any refund with respect to the Excise Tax, the Employee shall promptly
pay the Employer the amount of such refund within ten (10) days of receipt by
the Employee.
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(5) If the Employer is not in compliance with any minimum capital
requirements applicable to it or if the payments required under this Section
would cause the Employer's capital to be reduced below any such minimum capital
requirements, such payments shall be deferred until such time as the Employer is
in capital compliance. At the election of the Employee, which election is to
made within thirty (30) days of the Employee's termination, such payments shall
be made in a lump sum or paid monthly during the remaining term of this
Agreement following the Employee's termination. In the event that no election is
made, payment to the Employee will be made on a monthly basis during the
remaining term of this Agreement. Such payments shall not be reduced in the
event the Employee obtains other employment following the termination of
employment by the Employer.
Section 11. Indemnification.
(a) The Employer, at its expense, shall provide the Employee
(including his heirs, personal representatives, executors and administrators)
for the term of this Agreement with coverage under a standard directors' and
officers' liability insurance policy.
(b) In addition to the insurance coverage provided for in this
Section, the Employer shall hold harmless and indemnify the Employee (and his
heirs, executors and administrators) to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably incurred by him
in connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his having been an officer of the Employer (whether
or not he continues to be an officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements, such indemnification to include any action, suit or proceeding
related to the Employee leaving a prior employer and becoming employed by the
Employer unless, and in which case the Employer does not agree to hold harmless
and indemnify the Employee, liability, either equitable or legal, is imposed on
the Employer or the Employee and such liability is imposed in material part as a
result of the Employee's failure to disclose, as of the Effective Date, any fact
or action related thereto or the Employee's material malfeasance or misfeasance
in connection with or related to his leaving his prior employer.
(c) In the event the Employee becomes a party, or is
threatened to be made a party, to any action, suit or proceeding for which the
Employer has agreed to provide insurance coverage or indemnification under this
Section, the Employer shall, to the full extent permitted under applicable law,
advance all expenses (including reasonable attorneys' fees, judgments, fines and
amounts paid in settlement (collectively "Expenses") incurred by the Employee in
connection with the investigation, defense, settlement or appeal of any
threatened, pending or completed action, suit or proceeding, subject to receipt
by the Employer of a written undertaking from the Employee: (1) to reimburse the
Employer for all Expenses actually paid by the Employer to or on behalf of the
Employee in the event it shall be ultimately determined that the Employee is not
entitled to indemnification by the Employer for such Expenses; and (2) to assign
to the Employer all rights of the Employee to indemnification, under any policy
of directors' and officers' liability insurance or otherwise, to the extent of
the amount of Expenses actually paid by the Employer to or on behalf of the
Employee.
Section 12. Payment of Legal Fees. The Employer is aware that after a
Change in Control, management of the Employer or its successor could cause or
attempt to cause the Employer to refuse to comply with its obligations under
this Agreement, including the possible pursuit of litigation to avoid its
obligations under this Agreement. In these circumstances, the purpose of this
Agreement would be frustrated. It is the Employer's intention that the Employee
not be required to incur the expenses associated with the enforcement of his
rights under this Agreement, whether by litigation or other legal action,
because the cost and expense thereof would substantially detract from the
benefits intended to be granted to the Employee hereunder. It is the Employer's
intention that the Employee not be forced to negotiate settlement of his rights
under this Agreement under threat of incurring expenses. Accordingly, if after a
Change in Control occurs it appears to the Employee that (a) the Employer has
failed to comply with any of its obligations under this Agreement, or (b) the
Employer or any other person has taken any action to avoid its obligations under
this Agreement, the Employer irrevocably authorizes the Employee from time to
time to retain counsel of his choice, at the expense of the Employer as provided
in this Section 12, to represent the Employee in connection with the initiation
or defense of any litigation or other legal action, whether by or against the
Employer or any director, officer, stockholder, or other person affiliated with
the Employer, in any jurisdiction. Notwithstanding any existing or previous
attorney-client relationship between the Employer and any counsel chosen by the
Employee under this Section 12, the Employer irrevocably consents to the
Employee entering into an attorney-client relationship with that counsel, and
the Employer and the Employee agree that a confidential relationship shall exist
between the Employee and that counsel.
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The fees and expenses of counsel selected from time to time by the Employee as
provided in this Section 12 shall be paid or reimbursed to the Employee by the
Employer on a regular, periodic basis upon presentation by the Employee of a
statement or statements prepared by such counsel in accordance with such
counsel's customary practices. The Employer's obligation to reimburse
Employee for legal fees as provided under this Section 12 and any separate
employment, deferred compensation, severance or other agreement between the
Employee and the Employer shall not exceed $200,000 in the aggregate.
Accordingly, the Employer's obligation to pay the Employee's legal fees
provided by this Section 12 shall be offset by any legal fee reimbursement
obligation the Employer may have with the Employee under any separate
employment, deferred compensation, severance or other agreement between the
Employee and the Employer.
Section 13. Regulatory Suspension and Termination.
(a) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Employer's
affairs by a notice served under Section 8(e)(3) (12 U.S.C. ss. 1818(e)(3)) or
8(g) (12 U.S.C. ss. 1818(g)) of the Federal Deposit Insurance Act, as amended,
the Employer's obligations under this contract shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Employer shall (A) pay the Employee all of the
compensation withheld while their contract obligations were suspended and (B)
reinstate any of the obligations, which were suspended.
(b) If the Employee is removed and/or permanently prohibited
from participating in the conduct of the Employer's affairs by an order issued
under Section 8(e) (12 U.S.C. ss. 1818(e)) or 8(g) (12 U.S.C. ss. 1818(g)) of
the Federal Deposit Insurance Act, as amended, all obligations of the Employer
under this contract shall terminate as of the effective date of the order, but
vested rights of the contracting parties shall not be affected.
(c) If the Employer is in default as defined in Section 3(x)
(12 U.S.C. ss. 1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all
obligations of the Employer under this contract shall terminate as of the date
of default, but this paragraph shall not affect any vested rights of the
contracting parties.
(d) All obligations of the Employer under this contract shall
be terminated, except to the extent determined that continuation of the contract
is necessary for the continued operation of the institution by the Federal
Deposit Insurance Corporation (the "FDIC"), at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Employer under the
authority contained in Section 13(c) (12 U.S.C. ss. 1823(c)) of the Federal
Deposit Insurance Act, as amended, or when the Employer is determined by the
FDIC to be in an unsafe or unsound condition. Any rights of the parties that
have already vested, however, shall not be affected by such action.
(e) Any payments made to the Employee pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) (12 U.S.C. ss. 1828(k)) of the Federal Deposit Insurance Act
as amended, and any regulations promulgated thereunder.
Section 14. General Provisions and Representations.
(a) The Company agrees that it shall not merge or consolidate
into or with another company, or reorganize, or sell substantially all its
assets to another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of the
Company under this Agreement.
(b) This Agreement supersedes all prior agreements and
understandings between the parties relating to the subject matter of this
Agreement. It binds and benefits the parties and their successors in interest,
heirs, beneficiaries, legal representatives and assigns.
(c) This Agreement is governed by and construed in
accordance with the laws of the State of Illinois.
(d) The provisions of Sections 8 and 9 shall survive
the termination of this Agreement.
(e) No amendment or modification of this Agreement is
effective unless made in writing and signed by each party.
(f) This Agreement may be signed in several counterparts, each
of which will be an original and all of which will constitute one agreement.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above set forth.
QCR HOLDINGS, INC.
/s/ Xxxxx X. Xxxxxxxx
By: ------------------------------------ ----------------------------
Xxxxx X. Xxxxxxxx, XXXXXX XXXX
Chairman, Executive Committee of the
Board of Directors of QCR Holdings, Inc.
/s/ Xxxxxxx X. Xxxxxxxxx
By: -----------------------------
Xxxxxxx X. Xxxxxxxxx,
President, QCR Holdings, Inc.
8
EXHIBIT A
Rockford Bank & Trust Company
Rockford Long-Term Incentive Compensation Program
Deferred Incentive Years ending December 31, 2009 through December 31, 2014
Return on Equity (See Note # ) Ending Total Assets Ending Total Assets Ending Total Assets
Result $175,000,000 $250,000,000 $325,000,000
---------------------------------------------------------------------------------------------------------------------
12.00% Long-Term Incentive
Award $35,000 $40,000 $ 50,000
13.00% Long-Term Incentive
Award $40,000 $50,000 $ 60,000
14.00% Long-Term Incentive
Award $45,000 $55,000 $ 70,000
15.00% Long-Term Incentive
Award $50,000 $65,000 $ 80,000
16.00% Long-Term Incentive
Award $55,000 $75,000 $ 90,000
17.00% Long-Term Incentive
Award $60,000 $85,000 $ 110,000
18.00% Long-Term Incentive
Award $65,000 $95,000 $ 120,000
Note #: Assumes Equity of 7.00% of Assets
9
