EMPLOYMENT AGREEMENT BETWEEN QCR HOLDINGS, INC. AND TODD A. GIPPLE

 

Exhibit 10.11

 

                          EMPLOYMENT AGREEMENT BETWEEN

                               QCR HOLDINGS, INC.

                               AND TODD A. GIPPLE

 

THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of the 1st day of January,

2004, is between QCR Holdings,   Inc.   (the   "Employer")   and TODD A. GIPPLE (the

"Employee").

 

                                    RECITALS

 

WHEREAS,   Employee is currently serving as an executive of the Employer pursuant

to   that   certain   Employment   Agreement   dated   January   5,   2000   (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 Executive Vice President and Chief Financial Officer

of the Employer,   and such similar duties for the Employer's   subsidiaries   as a

dual employee of the Employer's   subsidiaries.   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 three (3) 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   three (3) year   extension 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.   As compensation for the services to be provided by the

Employee hereunder:

 

(a)   Base Salary.   The Employer   shall pay Employee an annual base salary of one

     hundred and forty thousand five hundred dollars ($140,500) ("Base Salary").

     Base Salary shall be payable bi-weekly, in equal installments in accordance

     with the Employer's   payroll practice.   The Employee's Base Salary shall be

     subject   to review   annually,   commencing   January   1,   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)   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.

 

(d)   Benefits.   The Employer shall provide the following   additional benefits to

     the Employee:

 

     (i)     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.

 

     (ii)    Reimbursements. Reimbursement of reasonable expenses advanced by the

            Employee in connection   with   performance   of his duties   hereunder,

            including,   but not   limited   to, two (2) paid   weeks of   continuing

            education, a monthly automobile allowance of $500, fuel, maintenance

            and    insurance    expense   of   such    automobile,    and   the   annual

            reimbursement of club dues for the Davenport Country Club.

 

     (iii)   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.

 

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     (iv)    Disability   Coverage.   Long-term and short-term   disability coverage

            equal to   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.

 

     (v)     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.

 

     (vi)    Life Insurance. Term life insurance of two (2) times 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 two (2) times that same amount

             through such plan.

 

     (vii)   Stock   Options.    Non-qualified    options   in   accordance   with   the

            Employer's   current   stock   incentive   plan enabling the Employee to

            acquire 1,500 shares of the   Employer's   stock on each of January 5,

            2004 and   January   5,   2005,   with an   exercise   price   for all such

            options equal to the market price of the Employer's   stock as of the

            close   of   business   on the day   prior   to the   date of   grant   and,

            concurrently   with each   grant of such   options,   1,500 tax   benefit

            rights.

 

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 the   Employer   shall   determine   whether and when the Employee has

incurred a Disability under this Agreement.

 

Section 7. Payment 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 has produced and will produce and have access to

material,   records,   data, trade secrets and information not generally available

to the public (collectively,   "Confidential Information") regarding the Employer

and any   subsidiaries   and   affiliates.   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 Employer's   business 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.

 

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<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

     areas of the Employer's lending and deposit taking functions extends to the

     areas   encompassing   the sixty (60) mile radii from each of the   offices of

     the Employer. Therefore, as an essential ingredient of and in consideration

     of this   Agreement   and the payment of the amounts   described in Sections 4

     and 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, a

     bank,   savings   and loan   association,   credit   union or similar   financial

     institution (a "Financial Institution") within the sixty (60) mile radii of

     each   of   the   Employer's   offices   (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 National   Association   of

     Securities   Dealers Automated   Quotation System which do not represent more

     than one percent (1%) of the   outstanding   capital   stock of any   Financial

     Institution. Notwithstanding anything contained herein to the contrary, the

     Employee   shall be permitted to remain as a director and a   shareholder   of

     Buffalo Savings Bank, Buffalo, Iowa.

 

(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,   th