Exhibit 10.6
EMPLOYMENT AGREEMENT BETWEEN
CEDAR RAPIDS BANK AND TRUST COMPANY
AND LARRY HELLING
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 LARRY
HELLING (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: Larry
Helling forty
percent (40%),
Mitch McElree
twenty percent (20%), Dana
Nichols twenty
percent (20%) and John
Rodriguez 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.
1
<PAGE>
(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.
<TABLE>
Year Ending
Incentive Amount
Assets Target
Losses/Earnings Target
----------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
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
</TABLE>
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.
2
<PAGE>
(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.
3
<PAGE>
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,
of
