Exhibit 10.6
EMPLOYMENT AGREEMENT BETWEEN
CEDAR RAPIDS BANK AND TRUST COMPANY
AND XXXXX XXXXXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of the 1st day of January,
2004, is between CEDAR RAPIDS BANK AND TRUST COMPANY (the "Employer") and XXXXX
XXXXXXX (the "Employee").
RECITALS
WHEREAS, Employee is currently serving as an executive of the Employer pursuant
to that certain Employment Agreement dated April 11, 2001 (the "Prior Employment
Agreement"); and
WHEREAS, the parties desire to amend and restate the Prior Employment Agreement
on the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and among
the parties hereto as follows:
AGREEMENTS
Section 1. Employment. The Employer hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and conditions hereinafter
set forth.
Section 2. Duties. The Employee agrees to provide all services necessary,
incidental or convenient as a President and Chief Executive Officer of the
Employer. 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 January 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 and Sixty Seven Thousand Dollars ($167,000). 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
maintained or increased 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. 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) Cedar Rapids Incentive Programs. The Employee shall be eligible to
participate in the following: "Cedar Rapids Short-term Cash Incentive
Compensation Program" and "Cedar Rapids 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 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: Xxxxx
Xxxxxxx forty percent (40%), Xxxxx XxXxxxx twenty percent (20%), Xxxx
Xxxxxxx twenty percent (20%) and Xxxx Xxxxxxxxx twenty percent (20%) (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.
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(i) Under the Short-Term Cash Incentive Compensation Program, with
respect to the years ending June 30, 2002 through December 31, 2005,
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.
Year Ending Incentive Amount Assets Target Losses/Earnings Target
----------------------------------------------------------------------------------------------------
June 30, 2002 $40,000* $50 million losses no more than $629,000
December 31, 2002 $25,000* $85 million losses no more than $389,000
December 31, 2003 $55,000 $150 million earnings at least $58,000
December 31, 2004 $65,000 $214 million earnings at least $994,000
December 31, 2005 $75,000 $271 million earnings at least $1,929,000
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, 2004, 100% of the Asset
Target was met but only 90% of the Losses/Earning Target was met,
then 95% of the aggregate incentive amount ($61,750) would be
payable (100% of $32,500 plus 90% of $32,500). 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 August,
2001.
(ii) Under the Long-term Deferred Incentive Compensation Program, with
respect to years ending December 31, 2006 through December 31, 2011,
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, 2006 $ 60,000
December 31, 2007 $ 80,000
December 31, 2008 $100,000
December 31, 2009 $155,000
December 31, 2010 $185,000
December 31, 2011 $215,000
(d) Non-Qualified Supplemental Executive Retirement Agreement. Employee shall
participate in the Non-Qualified Supplemental Executive Retirement
Agreement, as amended from time to time in accordance with its terms.
(e) 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.
(3) Club Dues. Payment of membership dues at each of Elmcrest County Club
and Cedar Rapids Country Club.
(4) Car Allowance. Payment of car allowance of $500 per month.
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(5) 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.
(6) 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.
(7) 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.
(8) 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.
(9) Deferred Compensation. Participation under a deferred compensation
agreement under which the Employee will be permitted to annually
contribute and defer up to twelve thousand dollars ($12,000) and the
Employer shall make a matching contribution equal to the contribution
made by the Employee up to a maximum contribution of twelve thousand
dollars ($12,000).
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 two (2) years 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.
(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
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(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.
(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.
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.
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(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.
(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.
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(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. 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.
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(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 Employee represents and warrants that he is not subject to a binding
non-competition agreement that would prevent him, for any period of time,
from providing the services contemplated by this Agreement. 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 Iowa.
(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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above set forth.
CEDAR RAPIDS BANK AND TRUST COMPANY
By: /s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxxx
------------------------------------------ -------------------------
Xxxxx X. Xxxxxxxx, XXXXX XXXXXXX
Chairman, Executive Committee of the
Board of Directors of QCR Holdings, Inc.,
the parent company of the Employer
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxxx,
President, QCR Holdings, Inc., the
parent company of the Employer
8
EXHIBIT A
Cedar Rapids Bank & Trust Company
Cedar Rapids Long-Term Incentive Compensation Program
Deferred Incentive Years ending December 31, 2006 through December 31, 2011
Return on Equity (See Note # ) Ending Total Ending Total Assets Ending Total Assets
Result Assets $300,000,000 $400,000,000 $500,000,000
-----------------------------------------------------------------------------------------------------------------
12.00% Long-Term Incentive Award $ 40,000 $ 60,000 $ 80,000
13.00% Long-Term Incentive Award $ 60,000 $ 80,000 $100,000
14.00% Long-Term Incentive Award $ 80,000 $105,000 $130,000
15.00% Long-Term Incentive Award $100,000 $130,000 $160,000
16.00% Long-Term Incentive Award $120,000 $155,000 $200,000
17.00% Long-Term Incentive Award $140,000 $185,000 $240,000
18.00% Long-Term Incentive Award $160,000 $215,000 $300,000
* Amounts have been paid to Employee prior to the Effective Date of this
Agreement.
Note #: Assumes Equity of 7.00% of Assets
9
