QUAD CITY BANK AND TRUST COMPANY
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made this 28th day of June, 2000, by and between QUAD CITY
BANK AND TRUST COMPANY, a state-chartered commercial bank located in Bettendorf,
Iowa (the "Bank"), and XXXXXXX X. XXXXX (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Bank, the Bank is
willing to provide to the Executive a deferred compensation opportunity together
with matching contributions by the Bank. The Bank will pay the Executive's
benefits from the Bank's general assets.
AGREEMENT
The Executive and the Bank agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:
1.1 "Anniversary Date" means June 30 of each year.
1.2 "Change of Control" means:
a) 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 33
percent or more of the combined voting power of the then outstanding
voting securities of the Company; or
b) The individuals who, as of the date hereof, are members of the Board
of Directors of the Company (the "Board") cease for any reason to
constitute a majority of the 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 Board, and such new director
shall, for purposes of this Agreement, be considered a member of the
Board; or
c) Approval by stockholders of the Company of (1) a merger or
consolidation if the stockholders, immediately before such a merger
or consolidation, do not, as a result of such merger or
consolidation, own, directly or indirectly, more than 67 percent 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 (2) a complete liquidation or
dissolution or an agreement for the sale or other disposition of
two-thirds or more of the consolidated assets of the Company.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to occur solely because 33 percent or more of the combined
voting power of the then outstanding securities of the Company are
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.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Company" means Quad City Holdings, Inc.
1.5 "Compensation" means the total salary and bonus paid to the Executive
during a Plan Year.
1.6 "Deferral Account" means the Bank's accounting of the Executive's
accumulated Deferrals plus accrued interest.
1.7 "Deferrals" means the amount of the Executive's Compensation which the
Executive elects to defer according to this Agreement.
1.8 "Disability" means, if the Executive is covered by a Bank sponsored
disability policy, total disability as defined in such policy without
regard to any waiting period. If the Executive is not covered by such a
policy, Disability means the Executive suffering a sickness, accident or
injury which, in the judgment of a physician satisfactory to the Bank,
prevents the Executive from performing substantially all of the
Executive's normal duties for the Bank. As a condition to any Disability
benefits, the Bank may require the Executive to submit to such physical
or mental evaluations and tests as the Bank's Board of Directors deems
appropriate.
1.9 "Effective Date" means June 28, 2000.
1.10 "Election Form" means the Form attached as Exhibit 1.
1.11 "Fiscal Year" means a twelve-month period commencing on July 1 of one
year and ending June 30 of the following year.
1.12 "Normal Retirement Age" means the Executive's 65th birthday.
1.13 "Normal Retirement Date" means the later of the Normal Retirement Age or
Termination of Employment.
1.14 "Plan Year" means Fiscal Year.
1.15 "Termination of Employment" means that the Executive ceases to be
employed by the Bank for any reason whatsoever other than by reason of a
leave of absence which is approved by the Bank. For purposes of this
Agreement, if there is a dispute over the employment status of the
Executive or the date of the Executive's Termination of Employment, the
Bank shall have the sole and absolute right to decide the dispute.
Article 2
Deferral Election
2.1 Initial Election. The Executive shall make an initial deferral election
under this Agreement by filing with the Bank a signed Election Form
within thirty (30) days after the Effective Date of this Agreement. The
Election Form shall set forth the amount of Compensation to be deferred
and shall be effective to defer only Compensation earned after the date
the Election Form is received by the Bank.
2.2 Election Changes
2.2.1 Generally. Upon the Bank's approval, the Executive may modify the
amount of Compensation to be deferred annually by filing a new
Election Form with the Bank prior to the beginning of the Plan
Year in which the Compensation is to be deferred. The modified
deferral election shall not be effective until the Fiscal Year
following the year in which the subsequent Election Form is
received and approved by the Bank.
2.2.2 Hardship. If an unforeseeable financial emergency arising from the
death of a family member, divorce, sickness, injury, catastrophe
or similar event outside the control of the Executive occurs, the
Executive, by written instructions to the Bank, may reduce future
deferrals under this Agreement.
Article 3
Deferral Account
3.1 Establishing and Crediting. The Bank shall establish a Deferral Account
on its books for the Executive and shall credit to the Deferral Account
the following amounts:
3.1.1 One-Time Award. The Bank shall make a One-Time Award payment to
the Executive in the amount of $35,000 (Thirty-Five Thousand
Dollars). The payment shall be effective as of June 30, 2000. One
full Plan Year of interest shall be credited on this amount
pursuant to Section 3.1.4.
3.1.2 Deferrals. The Compensation deferred by the Executive as of the
time the Compensation would have otherwise been paid to the
Executive.
3.1.3 Matching Contribution. A matching contribution equal to (and
credited to the Deferral Account at the same time as) the amounts
credited to the Deferral Account under Section 3.1.2, subject to
an annual maximum matching contribution of 100 percent of the
Compensation deferred by the Executive, said matching contribution
not to exceed $20,000 (Twenty Thousand Dollars) annually.
3.1.4 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until
commencement of the benefit payments under this Agreement,
interest is to be accrued on the account balance and compounded at
an annual rate equal to the Wall Street Journal Prime Rate on the
first business day of the Plan Year. This interest rate shall have
a minimum or floor of 8 percent and shall not exceed 10 percent.
3.2 Statement of Accounts. The Bank shall provide to the Executive, within
one hundred twenty (120) days after each Anniversary Date, a statement
setting forth the Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account
is not a trust fund of any kind. The Executive is a general unsecured
creditor of the Bank for the payment of benefits. The benefits represent
the mere Bank promise to pay such benefits. The Executive's rights are
not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by the
Executive's creditors.
Article 4
Lifetime Benefits
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Bank
shall pay to the Executive the benefit described in this Section 4.1 in
lieu of any other benefit under this Agreement.
4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Executive's Normal Retirement
Date.
4.1.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the
first day of the month following the Executive's Normal Retirement
Date. The Bank shall credit interest pursuant to Section 3.1.2 on
the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Employment prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Bank shall pay to the Executive the benefit described in
this Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Executive's Termination of
Employment.
4.2.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the
first day of the month following the Executive's Termination of
Employment. The Bank shall credit interest pursuant to Section
3.1.2 on the remaining account balance during any applicable
installment period.
4.3 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Bank shall pay to the
Executive the benefit described in this Section 4.3 in lieu of any other
benefit under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Executive's Termination of
Employment.
4.3.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the
first day of the month following the Executive's Termination of
Employment. The Bank shall credit interest pursuant to Section
3.1.2 on the remaining account balance during any applicable
installment period.
4.4 Change of Control Benefit. Upon a Change of Control, the Bank shall pay
to the Executive the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 shall be the
greater of: (a) the Deferral Account balance at the Executive's
Termination of Employment; or (b) $898,399 (Eight Hundred Ninety
Eight Thousand Three Hundred and Ninety-Nine Dollars).
4.4.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive in a lump sum within 60 days following the Executive's
Termination of Employment.
4.4.3 Obligation to Fund. Notwithstanding any provision to the contrary
contained herein, no later than the date of a Change of Control,
the Bank shall fund a "Rabbi Trust" (as such term is described in
Revenue Procedure 92-64) in the amount of the payment required
under Section 4.4.2, with the trustee of such trust being
designated by the Board in its sole and absolute discretion.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Executive) that the Executive has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Bank
shall distribute to the Executive all or a portion of the Deferral
Account balance as determined by the Bank, but in no event shall the
distribution be greater than is necessary to relieve the financial
hardship.
Article 5
Death Benefits
5.1 Death During Active Service. If the Executive dies while in the
employment of the Bank, the Bank shall pay to the Executive's beneficiary
the benefit described in this Section 5.1 in lieu of any other benefit
under this Agreement.
5.1.1 Amount of Benefit. The benefit under Section 5.1 is the greater
of: (a) the Deferral Account balance; or (b) $898,399 (Eight
Hundred Ninety Eight Thousand Three Hundred and Ninety-Nine
Dollars).
5.1.2 Payment of Benefit. The Bank shall pay the benefit to the
beneficiary in the manner elected by the Executive on the attached
Beneficiary Designation form, or as such form may have been
amended by the Executive prior to his death. In the event that the
death benefit hereunder is paid in installments, the Bank shall
credit interest pursuant to Section 3.1.2 on the remaining account
balance during any applicable installment period.
5.2 Death During Payment of a Lifetime Benefit. If the Executive dies after
any Lifetime Benefit payments have commenced under this Agreement but
before receiving all such payments, the Bank shall pay the remaining
benefits to the Executive's beneficiary at the same time and in the same
amounts they would have been paid to the Executive had the Executive
survived.
5.3 Death After Termination of Employment But Before Payment of a Lifetime
Benefit Commences. If the Executive is entitled to a Lifetime Benefit
under this Agreement, but dies prior to the commencement of said benefit
payments, the Bank shall pay the Lifetime Benefit to the Executive's
beneficiary that the Executive was entitled to prior to death except that
the benefit payments shall commence on the first day of the month
following the date of the Executive's death.
Article 6
Beneficiaries
6.1 Beneficiary Designations. The Executive shall designate a beneficiary by
filing a written designation with the Bank. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and
accepted by the Bank during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the
beneficiary predeceases the Executive or if the Executive names a spouse
as beneficiary and the marriage is subsequently dissolved. If the
Executive dies without a valid beneficiary designation, all payments
shall be made to the Executive's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Bank may pay such benefit to the
guardian, legal representative or person having the care or custody of
such minor, incompetent person or incapable person. The Bank may require
proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Bank from all liability with respect to such
benefit.
Article 7
General Limitations
7.1 Termination for Cause. Notwithstanding any provision of this Agreement to
the contrary, the Bank shall not pay any benefit under this Agreement
that is attributable to the Bank match credited under Section 3.1.2 of
this Agreement and the interest earned on the Deferral Account if the
Bank terminates the Executive's employment for:
(a) A material violation by the Executive of any applicable material law
or regulation respecting the business of the Bank;
(b) The Executive being found guilty of a felony, an act of dishonesty
in connection with the performance of his duties as an officer of
the Bank, or which disqualifies the Executive from serving as an
officer or director of the Bank or the Company; or
(c) The willful or negligent failure of the Executive to perform his
duties for the Bank or the Company in any material respect.
7.2 Suicide or Misstatement. The Bank shall not pay any death benefit under
this Agreement exceeding the Deferral Account if the Executive commits
suicide within two years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application
for life insurance purchased by the Bank.
7.3 Excess Parachute Payment. If it is determined, in the opinion of the
Bank's independent accountants, in consultation, if necessary, with the
Bank's independent legal counsel, that any amount paid under this
Agreement due to a Change of Control, either separately or in conjunction
with any other payments, benefits and entitlements received by the
Executive in respect of a Change of Control under any other plan or
agreement under which the Executive 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 Bank shall pay to the Executive 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 Executive for the Excise Tax which is greater than that which
was determined at the time such amounts were paid, then the Bank shall
pay to the Executive the amount of such unreimbursed Excise Tax plus any
interest, penalties and reasonable professional fees or expenses incurred
by the Executive 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 Bank 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 Bank's independent accountants, in
consultation, if necessary, with the Bank's independent legal counsel.
If, after the Executive receives any gross-up payments or other amount
pursuant to this Section 7.3, the Executive receives any refund with
respect to the Excise Tax, the Executive shall promptly pay the Bank the
amount of such refund within ten (10) days of receipt by the Executive.
Article 8
Claims and Review Procedures
8.1 Claims Procedure. The Bank shall notify any person or entity that makes a
claim against the Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility
or non-eligibility for benefits under the Agreement. If the Bank
determines that the Claimant is not eligible for benefits or full
benefits, the notice shall set forth (1) the specific reasons for such
denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional
information or material necessary for the Claimant to perfect his or her
claim, and a description of why it is needed, and (4) an explanation of
the Agreement's claims review procedure and other appropriate information
as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Bank determines that there are special circumstances
requiring additional time to make a decision, the Bank shall notify the
Claimant 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
days.
8.2 Review Procedure. If the Claimant is determined by the Bank not to be
eligible for benefits, or if the Claimant believes that he or she is
entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Bank by filing a petition
for review with the Bank within 60 days after receipt of the notice
issued by the Bank. Said petition shall state the specific reasons which
the Claimant believes entitle him or her to benefits or to greater or
different benefits. Within 60 days after receipt by the Bank of the
petition, the Bank shall afford the Claimant (and counsel, if any) an
opportunity to present his or her position to the Bank verbally or in
writing, and the Claimant (or counsel) shall have the right to review the
pertinent documents. The Bank shall notify the Claimant of its decision
in writing within the 60-day period, stating specifically the basis of
its decision, written in a manner calculated to be understood by the
Claimant and the specific provisions of the Agreement on which the
decision is based. If, because of the need for a hearing, the 60-day
period is not sufficient, the decision may be deferred for up to another
60 days at the election of the Bank, but notice of this deferral shall be
given to the Claimant.
Article 9
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Executive.
Notwithstanding the previous paragraph, the Bank may amend or terminate
this Agreement at any time if, pursuant to legislative, judicial or regulatory
action, continuation of the Agreement would (i) cause benefits to be taxable to
the Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Bank (other
than the financial impact of paying the benefits). In no event shall this
Agreement be terminated under this section without payment to the Executive of
the Deferral Account balance attributable to the Executive's Deferrals and
interest credited on such amounts.
Article 10
Miscellaneous
10.1 Binding Effect. This Agreement shall bind the Executive and the Bank, and
their beneficiaries, survivors, executors, administrators and
transferees.
10.2 No Guarantee of Employment. This Agreement is not a contract for
employment. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the shareholders' rights
to replace the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
10.4 Tax Withholding. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be governed
by the laws of the State of Iowa, except to the extent preempted by the
laws of the United States of America.
10.6 Unfunded Arrangement. The Executive and the Executive's beneficiary are
general unsecured creditors of the Bank for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Bank to
pay such benefits. The rights to benefits are not subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors. Any insurance on
the Executive's life is a general asset of the Bank to which the
Executive and the Executive's beneficiary have no preferred or secured
claim.
10.7 Reorganization. The Bank shall not merge or consolidate into or with
another Bank, or reorganize, or sell substantially all of 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 Bank under this Agreement.
10.8 Entire Agreement. This Agreement constitutes the entire agreement between
the Bank and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
10.9 Administration. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting for the
Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms necessary or desirable
to administer the Agreement.
10.10 Named Fiduciary. For purposes of the Employee Retirement Income Security
Act of 1974, if applicable, the Bank shall be the named fiduciary and
plan administrator under the Agreement. The named fiduciary may delegate
to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.
IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
signed this Agreement.
BANK:
QUAD CITY BANK AND TRUST COMPANY
By:
Title:
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
EXHIBIT 1
TO
QUAD CITY BANK AND TRUST COMPANY
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
Deferral Election
I elect to defer my Compensation received under the Executive Deferred
Compensation Agreement with the Bank, as follows:
Amount of Deferral Duration
--------------------------------------------------------------------------------
[Initial and Complete one] [Initial One]
I elect to defer ____% of my One Year only
----- Compensation. -----
For ______ [Insert
I elect to defer $______ of all ----- Number] Years
----- Compensation.
Until ___________,
-----
I elect not to defer any of my ------------- (date)
----- Compensation.
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Upon the Bank's approval, I understand that I may change the amount and duration
of my deferrals by filing a new election form with the Bank; provided, however,
that any subsequent election will not be effective until the Fiscal Year
following the year in which the new election is received by the Bank.
Signature
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Date
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Accepted by the Bank this _____ day of ______________, 2000.
By
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Title
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Beneficiary Designation
QUAD CITY BANK AND TRUST COMPANY
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
I designate the following as beneficiary of benefits under the Executive
Deferred Compensation Agreement payable following my death:
Primary:
Contingent:
Note: To name a trust as beneficiary, please provide the name of the trustee(s)
and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by filing a new
written designation with the Bank. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.
FORM OF PRE-RETIREMENT DEATH BENEFIT, Article 5, Section 5.1.2
I elect to have my beneficiary receive benefits under the Agreement in the
following form: [Initial One]
Lump Sum Equal monthly installments for 180 months
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Signature
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Date
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Accepted by the Bank this ____ day of ___________, 2000.
By
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Title
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