AMENDED AND RESTATED
NON-QUALIFIED SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
QCR HOLDINGS, INC.
(As Amended and Restated July 24, 2008)
NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AMENDED AND RESTATED JULY 24, 2008)
QCR HOLDINGS, INC. and its affiliates maintain
individual non-qualified supplemental executive retirement plans
and various Non-qualified Supplemental Retirement Joinder
Agreements, which are applicable to certain key employees (the
“ Executives ”) set forth in Appendix A
(the “ Joinder Agreements ”). As of July
_____, 2008 (the “ Restatement Date ”),
the plan is hereby amended and restated in its entirety as the QCR
HOLDINGS, INC. NON-QUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated July 24, 2008) (the “
Plan ”). All obligations under the Plan will be solely
borne by the Company or the affiliate that employs the Executive
(the “ Employer ”). QCR HOLDINGS, INC. (the
“ Company ”) is a party to this Plan for the
sole purpose of guaranteeing the Employer’s performance
hereunder.
The Company and the Employers intend this
amendment and restatement of the Plan to be a material modification
of the Plan such that all amounts accrued under the Plan, including
amounts accrued prior to December 31, 2004, shall be subject
to the provisions of Section 409A of the Internal Revenue Code
of 1986, as amended.
The purpose of this Plan is to provide
supplemental retirement benefits to selected Executives, each of
whom is a member of a select group of management or highly
compensated employees who contribute materially to the continued
growth, development and future business success of the Employer.
This Plan shall be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as
amended.
When used herein, the following words and
phrases shall have the meanings below unless the context clearly
indicates otherwise:
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1.1
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“Accrued Benefit” means
as of any date, that portion of the Supplemental Retirement Benefit
which is required to be expensed and accrued under generally
accepted accounting principles (GAAP) where such benefit is
computed with all current census data as of the date of the
relevant determination.
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1.2
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“Act” means the
Employee Retirement Income Security Act of 1974, as amended from
time to time.
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1.3
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“Administrator” means
the Board of the Employer, or a designated committee
thereof.
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1.4
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“Beneficiary” means the
person or persons (and their heirs) designated as Beneficiary by
the Executive to whom the deceased Executive’s benefits are
payable. If no Beneficiary is so designated, then the
Executive’s Spouse, if living, will be deemed the
Beneficiary. If the Executive’s Spouse is not living, then
the Children of the Executive will be deemed the Beneficiaries and
will take on a per stirpes basis. If there are no living Children,
then the Estate of the Executive will be deemed the
Beneficiary.
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1.5
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“Benefit Age” shall be
the birthday on which the Executive attains the age of 65, unless
otherwise set forth in such Executive’s Joinder
Agreement.
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1.6
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“Benefit Eligibility
Date” shall be the later of (1) the 1
st
day of the month
following the month in which the Executive attains the Benefit Age,
or (ii) the 1 st day of the month following the
month in which the Executive actually Retires.
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1.7
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“Benefit Commencement
Date” shall mean the date set forth in
Section 4.1.
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1.8
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“Board” shall mean the
Board of Directors of the Company, unless specifically noted
otherwise.
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1.9
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“Cause” shall
mean:
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(A)
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as such term is defined in an
employment agreement between the Executive and an Employer, or if
no such agreement or definition exists, then as provided below in
this Section 1.9;
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(B)
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a material violation by the
Executive of any applicable material law or regulation respecting
the business of the Employer;
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(C)
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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 Employer, or an act or acts
which disqualify the Executive from serving as an officer or
director of the Employer; or
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(D)
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the willful or negligent failure of
the Executive to perform his duties in any material
respect.
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1.10
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A “Change in Control”
shall mean and include the following with respect to the Company,
or as provided below, the Employer and shall be deemed to have
occurred on the earliest of the following dates:
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(A)
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The date of 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 1934 Act) of
thirty-three percent (33%) or more of the combined voting power of
the then outstanding voting securities of the Company or the
Employer; or
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(B)
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The date that individuals who, as
of the date hereof, are members of the Board of Directors of the
Company (the “Company Board”) cease for any reason
during any 12 month period, to constitute a majority of the 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 Company Board, and such new director shall, for
purposes of this Plan, be considered as a member of the Company
Board; or
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2
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(C)
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The date of the consummation by the
Company, or the Employer, of (i) a merger or consolidation if
the stockholders of the Company, immediately before such merger or
consolidation, do not, as a result of such merger or consolidation,
own, directly or indirectly, more than fifty percent (50%) 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 of the Company
outstanding immediately before such merger or consolidation or
(ii) 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 or the Employer.
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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 the Company or the Employer is
acquired by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for
employees of the entity or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or
indirectly by the stockholders of the Company or the Employer in
substantially the same proportion as their ownership of stock of
the Company or the Employer immediately prior to such
acquisition.
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In the event that any benefit under
the Plan constitutes Deferred Compensation (as defined in
Section 409A) and the settlement of or distribution of
benefits under this Plan is to be triggered by a Change in Control,
then such settlement or distribution shall be subject to the event
constituting the Change in Control also constituting a
“change in control event” permitted under
Section 409A.
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1.11
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“Change in Control
Termination” means the Executive’s Termination of
Employment either voluntary or involuntary which occurs within
thirty-six (36) months of a Change in Control.
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1.12
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“Children” means the
Executive’s children, or the issue of any deceased Children,
then living at the time payments are due the Children under this
Plan. The term “Children” shall include both natural
and adopted Children.
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1.13
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“Code” means the
Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder from time to time.
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1.14
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“Company” means QCR
Holdings, Inc., or its successor.
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1.15
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“Disabled” means that
the Executive: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than
twelve (12) months; or (ii) is, by reason of any mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and
health plan covering the Employer’s employees.
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3
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1.16
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“Disability Benefit”
means the monthly benefit payable to the Executive following a
determination, in accordance with Section 4.10, that he is
Disabled.
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1.17
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“Early Retirement”
means the Executive’s Termination of Employment following the
Executive’s attainment of age 55 and completion of ten
(10) Years of Service with the Employer or affiliated entity
provided the Original Effective Date of the Executive’s
Joinder Agreement is at least two (2) years prior to his
Termination of Employment.
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1.18
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“Early Retirement Eligibility
Date” means the date on which the Executive is first eligible
for Early Retirement.
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1.19
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“Employer” means the
Company or the affiliated entity which employs the Executive, as
reflected in the applicable Joinder Agreement, or any successor
thereto.
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1.20
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“Executive” means a key
employee of the Employer selected by the Company to participate in
the Plan.
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1.21
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“Estate” means the
estate of the Executive.
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1.22
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“Full-Time” means
employment during a Plan Year in which the Executive works at least
1,600 hours.
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1.23
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“Interest Factor”
unless specifically designated otherwise in this Section or in
another place in this Plan, means annual compounding or
discounting, as applicable, at six percent (6%). In the event a
lump sum benefit is paid to Executive upon a Change in Control, for
purposes of determining the value of an Executive’s lump sum
benefit, the Interest Factor shall mean 120% of the semiannual
applicable federal rate (AFR) as determined under Code
Section 1274(d).
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1.24
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“Joinder Agreement”
means the Non-Qualified Supplemental Executive Retirement Joinder
Agreement between the Executive and Employer.
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1.25
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“Original Effective
Date” is the date of a prior Joinder Agreement, if any, and
set forth in the current Joinder Agreement, and if no such prior
Joinder existed, then the date of execution of the Joinder
Agreement.
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1.26
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“Part-Time” means
employment on less than a Full-Time basis.
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1.27
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“Payout Period” means
the time frame during which benefits payable hereunder shall be
distributed pursuant to the applicable distribution provisions set
forth in this Plan.
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1.28
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“Plan Year” shall mean
the calendar year.
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4
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1.29
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“Retire(s)” or
“Retirement” means the Executive’s Termination of
Employment following Executive’s attainment of Benefit
Age.
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1.30
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“Section 409A”
means Code Section 409A and any U.S. Treasury regulations and
guidance promulgated thereunder, including such regulations and
guidance promulgated after the Restatement Date of the Plan as
deemed appropriate by the Administrator.
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1.31
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“Separation from
Service” shall mean an Executive’s “separation
from service” as determined under Treas. Reg.
Section 1.409A-1(h).
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1.32
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“Specified Employee”
means any Executive who is a “key employee” (as defined
in Code Section 416(i) without regard to paragraph
(5) thereof), as determined by the Administrator based upon
the 12-month period ending on each December 31
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(such 12-month period
is referred to below as the “ identification period
”). All Executives who are determined to be key employees
under Code Section 416(i) (without regard to paragraph
(5) thereof) during the identification period shall be treated
as Specified Employees for purposes of the Plan during the 12-month
period that begins on the April 1 following the close of such
identification period. For purposes of determining whether an
individual is a key employee under Code Section 416(i),
“compensation” shall mean such individual’s W-2
compensation as reported by the Employer for a particular calendar
year.
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1.33
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“Spouse” means the
individual to whom the Executive is legally married at the time of
the Executive’s death, provided, however, that the term
“Spouse” shall not refer to an individual to whom the
Executive is legally married at the time of death if the Executive
and such individual have entered into a formal separation agreement
(provided that such separation agreement does not provide otherwise
or state that such individual is entitled to a portion of the
benefit hereunder) or formally initiated divorce proceedings
through the courts.
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1.34
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“Supplemental Retirement
Benefit” means an annual amount ( before taking into
account federal and state income taxes), equal to two and one-half
percent (2 1 / 2 %) (or a pro-rata percentage of
2 1 / 2 % for each Year of Service in which
the Executive is employed Part-Time) for each Year of Service until
the Executive attains his Benefit Age (not to exceed 40 Years of
Service) with a maximum of seventy percent (70%), multiplied by the
average annual base salary plus cash bonus (excluding insurance
bonus compensation) for the three (3) most recently completed
Plan Years in which Executive is a Full-Time Employee. Such
Supplemental Retirement Benefit shall be reduced by the annual
benefit derived from any Employer contributions plus earnings
thereon to the credit of Executive in the Company’s or the
Employer’s 401(k) or other deferred compensation plans in
which Executive is also a participant calculated in accordance with
the projections conducted at the time the Plan is adopted. The
Supplemental Retirement Benefit shall be payable in monthly
installments throughout the Payout Period.
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1.35
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“Supplemental Early
Retirement Benefit” means an annual amount (before taking
into account federal and state income taxes) payable under
Section 4.7 of the Plan in the event of the Executive’s
Early Retirement.
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1.36
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“Survivor’s
Benefit” means, if the Employer has obtained insurance on the
life of the Executive, an amount payable to the Beneficiary in a
single lump sum (unless otherwise provided in the Joinder
Agreement) equal to the amount designated in the Executive’s
Joinder Agreement as the “Survivor’s Benefit.” If
the Employer has not obtained insurance on the life of the
Executive, the Survivor’s Benefit shall be equal to the
Accrued Benefit of the Executive as of Executive’s date of
death, and payable in a single lump sum (unless otherwise provided
in the Joinder Agreement).
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1.37
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“Termination of
Employment” means the Executive ceases to be employed by the
Employer for any reason whatsoever, other than by reason of a leave
of absence which is approved by the Employer, provided such
termination constitutes a Separation from Service.
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1.38
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“Year of Service” means
a 12 month period during which Executive is employed on a
Full-Time or Part-Time basis. A year of service can be measured on
the basis of anniversary dates from the Executive’s date of
hire in the discretion of the Board.
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SECTION II
ESTABLISHMENT OF RABBI TRUST
The Employer may establish a rabbi trust into
which the Employer intends to contribute assets which shall be held
therein, subject to the claims of the Employer’s creditors in
the event of the Employer’s “Insolvency” as
defined in the agreement which establishes such rabbi trust, until
the contributed assets are paid to the Executives and their
Beneficiaries in such manner and at such times as specified in this
Plan. It is the intention of the Employer to make contributions to
the rabbi trust to provide the Employer with a source of funds to
assist it in meeting the liabilities of this Plan. The rabbi trust
and any assets held therein shall conform to the terms of the rabbi
trust agreement which has been established in conjunction with this
Plan. To the extent the language in this Plan is modified by the
language in the rabbi trust agreement, the rabbi trust agreement
shall supersede this Plan. Any contributions to the rabbi trust
shall be made during each Plan Year in accordance with the rabbi
trust agreement. The amount of such contribution(s) shall be equal
to the full present value of all benefit accruals under this Plan,
if any, less: (i) previous contributions made on behalf of the
Executive to the rabbi trust, and (ii) earnings to date on all
such previous contributions, as may be applicable. In the event of
a Change in Control, the Employer shall transfer to the rabbi trust
within thirty (30) days prior to such Change in Control, the
present value of an amount sufficient to fully fund the
Supplemental Early Retirement Benefit for each Executive covered by
this Plan.
SECTION III
SELECTION & ELIGIBILITY
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3.1
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Selection by Company
. Participation in the
Plan shall be limited to a select group of management and highly
compensated employees of an Employer and/or the Company. From that
group, the Company shall select, in its sole discretion, employees
of an Employer to participate in the Plan.
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3.2
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Enrollment Requirements
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As a condition to
participation, each selected employee shall complete, sign and
return to the Administrator a Joinder Agreement and a Beneficiary
Designation Form. In addition, the Administrator, in its sole
discretion, shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are
necessary.
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3.3
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Eligibility; Commencement of
Participation . Provided an employee selected to
participate in the Plan has met all enrollment requirements set
forth in this Plan and required by the Administrator, that employee
shall commence participation in the Plan on the date specified by
the Administrator. If a selected employee fails to meet all such
requirements prior to that date, the employee shall not be eligible
to participate in the Plan until the completion of those
requirements.
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3.4
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Termination of
Participation . If the Administrator determines
in good faith that an Executive no longer qualifies as a member of
a select group of management or highly compensated employees, as
membership in such group is determined in accordance with Section
201(2) of ERISA, the Administrator may, to the extent permitted by
Section 409A, preclude the Executive from further
participation in the Plan.
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4.1
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Benefit Commencement
Date . An
Executive’s Benefit Commencement Date shall be the earliest
to occur of the following dates:
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(A)
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The date the Executive reaches his
Benefit Eligibility Date;
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(B)
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The date the Executive
dies;
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(C)
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The date of the Executive’s
Early Retirement;
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(D)
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The date of the Executive’s
Change in Control Termination; or
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(E)
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The Early Termination Eligibility
Date in the event of a termination under
Section 4.6.
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4.2
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Time of Distribution
. Distributions
pursuant to the Plan shall be paid in accordance with
Section 4.4, 4.5, 4.6, 4.7, 4.8 and 4.10 provided
that:
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(A)
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Any distribution to be made in a
lump sum shall be paid no later than sixty (60) days following
the Executive’s Benefit Commencement Date.
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(B)
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Any distributions to be paid in the
form of monthly installments shall commence no later than sixty
(60) days following the Executive’s Benefit Commencement
Date and thereafter shall be made no later than fifteen
(15) days after the last business day of the preceding month
and continue for One Hundred Eighty (180) months.
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(C)
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If, as of the effective date of an
Executive’s Termination of Employment, the Company is
publicly traded and the Executive is a Specified Employee, then, to
the extent required pursuant to Section 409A, payment of any
portion of his Supplemental Retirement Benefit that would otherwise
have been paid to the Executive during the six-month period
following his Termination of Employment and which would constitute
deferred compensation under Section 409A (the “
Delayed Payments ”) shall be delayed until the date
that is six (6) months and one day following Executive’s
Termination of Employment or, if earlier, the date of the
Executive’s death (The “ Delayed Payment Date
”). As of the Delayed Payment Date, the Delayed Payments plus
interest at a rate equal to the Interest Factor, for the period of
delay, shall be paid to the Executive in a single lump sum. Any
portion of the Supplemental Retirement Benefit that was not
otherwise due to be paid during the six-month period following the
Executive’s Termination of Employment shall be paid to the
Executive in accordance with the payment schedule set forth under
the applicable distribution provision of this Plan.
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(D)
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Notwithstanding any provisions of
the Plan or any Joinder Agreement to the contrary, if
Executive’s Accrued Benefit, along with any other
nonqualified deferred compensation that must be aggregated with
this Plan
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