Exhibit 10.1
QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made this 1st day of January, 2002, by and between
QCR Holdings, Inc., a Delaware corporation (the "Company"), and XXXX X. XXXXXX
(the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide to the Executive a deferred compensation
opportunity together with matching contributions by the Company. The Company
will pay the Executive's benefits from the Company's general assets.
AGREEMENT
The Executive and the Company 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 QCR 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 Company'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 Company
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 Company, prevents the
Executive from performing substantially all of the Executive's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Executive to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate.
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1.9 "Effective Date" means January 1, 2002.
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 Company for any reason whatsoever other than by reason of a
leave of absence which is approved by the Company. 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 Company 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 Company 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 Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Executive
may modify the amount of Compensation to be deferred annually by filing
a new Election Form with the Company 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 Company.
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 Company, may
reduce future deferrals under this Agreement.
Article 3
Deferral Account
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Executive and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Compensation deferred by the Executive as
of the time the Compensation would have otherwise been paid to the
Executive.
3.1.2 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 3.1.1, subject to an
annual maximum matching contribution of 100 percent of the Compensation
deferred by the Executive, said matching contribution not to exceed
$10,000 (Ten Thousand Dollars) annually; provided however, that with
respect to the short fiscal year beginning January 1, 2002 and ending
June 30, 2002, the matching contribution shall not exceed $5,000 (Five
Thousand Dollars).
3.1.3 Interest. On each Anniversary Date of this Agreement and
continuing until all benefit payments under this Agreement have been
made, 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 6% and shall not exceed 12%.
3.2 Statement of Accounts. The Company shall provide to the Executive,
within one hundred twenty (120) days after each Anniversary Date, a statement
setting forth the Deferral Account balance.
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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
Company for the payment of benefits. The benefits represent the mere Company
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
Company 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 Company 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
Company shall credit interest pursuant to Section 3.1.3 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 Company 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 Company 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 Company shall credit interest pursuant to Section 3.1.3 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 Company 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 Company 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 Company shall credit interest pursuant to Section 3.1.3 on the
remaining account balance during any applicable installment period.
4.4 Change of Control Benefit. Upon a Change of Control, the Company
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) $1,288,000 (One Million
Two Hundred Eighty-Eight Thousand Dollars).
4.4.2 Payment of Benefit. The Company 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 Company shall fund a "Rabbi Trust" (as such term is
described in Revenue Procedure 92-64) in the amount of the payment
required under Section 4.4.1, 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 Company
shall distribute to the Executive all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
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Article 5
Death Benefits
5.1 Death During Active Service. If the Executive dies while in the
employment of the Company, the Company 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) $1,288,000 (One
Million Two Hundred Eighty-Eight Thousand Dollars).
5.1.2 Payment of Benefit. The Company 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 Company shall credit interest
pursuant to Section 3.1.3 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 Company 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 Company 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 Company. 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 Company 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 Company 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 Company 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
Company 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 Company shall not pay any benefit under this
Agreement that is attributable to the Company match credited under Section 3.1.2
of this Agreement and the interest earned on the Deferral Account if the Company
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 Company;
(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 Company, or which disqualifies the Executive from
serving as an officer or director of the Company or the Company; or
(c) The willful or negligent failure of the Executive to
perform his duties for the Company or the Company in any material
respect.
7.2 Suicide or Misstatement. The Company 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 Company.
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7.3 Excess Parachute Payment. If it is determined, in the opinion of
the Company's independent accountants, in consultation, if necessary, with the
Company'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 Company 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 Company 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 Company 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 Company's independent accountants, in consultation, if necessary,
with the Company'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 Company 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 Company 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 Company 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 Company determines that there are special circumstances
requiring additional time to make a decision, the Company 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 Company 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 Company by filing a petition for
review with the Company within 60 days after receipt of the notice issued by the
Company. 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 Company of the petition, the Company shall
afford the Claimant (and counsel, if any) an opportunity to present his or her
position to the Company verbally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents. The Company 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 Company, but notice of this deferral shall be given to the
Claimant.
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Article 9
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive.
Notwithstanding the previous paragraph, the Company 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
Company (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
Company, 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 Company, 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 Company 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 Company for the payment of
benefits under this Agreement. The benefits represent the mere promise by the
Company 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 Company to which the Executive and
the Executive's beneficiary have no preferred or secured claim.
10.7 Reorganization. The Company shall not merge or consolidate into or
with another Company, 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 Company
under this Agreement.
10.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Company 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 Company 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.
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10.10 Named Fiduciary. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company 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 Company officer
have signed this Agreement.
COMPANY:
QCR HOLDINGS, INC.
By:
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Title:
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EXECUTIVE:
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XXXX X. XXXXXX
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EXHIBIT 1
TO
QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
Deferral Election
I elect to defer my Compensation received under the Executive Deferred
Compensation Agreement with the Company, as follows:
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Amount of Deferral Duration
============================================= ==================================
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[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
Termination
____ I elect not to defer any of my of Employment
Compensation.
____ Until ___________,
___________ (date)
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Upon the Company's approval, I understand that I may change the amount and
duration of my deferrals by filing a new election form with the Company;
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
Company.
Signature
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Date
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Accepted by the Company this _____ day of ______________, 2002.
By
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Title
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Beneficiary Designation
QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
I designate the following as beneficiary of benefits under the Executive
Deferred Compensation Agreement payable following my death:
Primary:
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Contingent:
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Note: To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of trust agreement.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. 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 Company this ____ day of ___________, 2002.
By
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Title
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