Exhibit
10.8
HEARTLAND FINANCIAL USA,
INC.
EXECUTIVE LIFE INSURANCE BONUS
PLAN
This Plan, made
and entered into effective as of December 31, 2007 by Heartland
Financial USA, Inc. (the “Company”).
W I T N E S S E T
H
WHEREAS, the
Company desires to establish the Heartland Financial USA, Inc.
Executive Life Insurance Bonus Plan (the “Plan”) to
provide certain Employees with bonus compensation in recognition of
such Employees’ contributions to the financial success of the
Company; and
WHEREAS, the
Company and such Employee who is a participant in the Plan will
enter into an Agreement to reflect the terms and conditions of the
bonus arrangement;
NOW, THEREFORE,
in consideration of the premises and the material covenants and
agreements contained herein, the Company does hereby establish the
Plan as follows:
SECTION 1
DEFINITIONS
“Agreement” shall mean an Executive
Life Insurance Bonus Plan Agreement between an Employer and a
Participant. The form of each such Agreement is set
forth in Exhibit A hereto.
“Change
of Control” shall mean:
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The
consummation of the acquisition by a 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 fifty-one percent (51%) or more of the combined voting
power of the then outstanding voting securities of the Employer of
a Participant or the Company; or
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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 majority vote of the Board and such new director
shall, for purposes of this Plan, be considered as a member of the
Board; or
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Approval by the
stockholders of the Employer of a Participant or the Company of (1)
a merger or consolidation 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 fifty-one
percent (51%) 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
such Employer or the Company outstanding immediately before such
merger or consolidation; or (2) a complete liquidation or
dissolution or a plan for the sale or other disposition of all or
substantially all of the assets of such Employer or the
Company.
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Notwithstanding
the foregoing, a Change of Control shall not be deemed to occur
solely because fifty-one percent (51%) or more of the combined
voting power of the then outstanding securities of the Employer or
the Company are acquired by a trustee or other fiduciary holding
securities under one or more 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.
“Employer” shall mean the Company or
any subsidiary of the Company.
“Participant” shall mean an employee
of an Employer who has become a participant in this Plan as
provided in Section 2 hereof.
“Plan” shall mean the Heartland
Financial USA, Inc. Executive Life Insurance Bonus Plan.
“Policy” shall mean the flexible
premium policy of insurance on the life of a Participant as
specified in the Agreement.
SECTION 2
PARTICIPATION
An employee of
an Employer shall become a Participant in this Plan as of the
effective date of the Agreement entered into between such employee
and the employee’s Employer. A Participant shall
remain a Participant in the Plan until termination of such
Agreement.
SECTION 3
BONUS COMPENSATION
An Employer shall pay to each Participant, as
provided in Section 4 below, for services rendered to the Employer
an amount equal to the annual premium on the Policy insuring the
life of such Participant as provided in the Agreement with such
Participant. Each annual premium shall be determined by
the Employer to be an amount that is sufficient such that, if the
Agreement remains in effect until the Participant attains age 65,
the Policy will remain in force until the Participant attains age
80 under Policy interest crediting rates and Policy charges in
effect as of the Effective Date of the Agreement. Each Policy shall
have an initial face amount as set forth in the
Agreement. As of each January 1 beginning January
1, 2009 and prior to termination of this Agreement, the face amount
of the Policy shall be increased by five percent (5%) over the face
amount of the Policy immediately prior to such increase; provided,
that in no event shall the face amount at any time exceed
$1,000,000.
In the event a Participant shall cease to be a
full-time employee of an Employer and becomes a part-time employee
on or after age 55 and after the completion of 10 years of service,
the Employer shall continue bonus payments hereunder as if such
Participant had continued as a full-time
employee. However, the face amount of the Policy shall
not be increased by 5% over the previous face amount after the
Participant elects part-time status. Premium payments
will be adjusted to maintain the face amount of the Policy at the
date the Participant elects part-time status until the Participant
attains age 80 under Policy interest crediting rates and Policy
charges in effect at the date the Participant begins part-time
status.
In the event of any other change to part-time
status, the bonus payments otherwise payable hereunder shall be
prorated based upon the ratio of the hours to be worked by the
Participant per year under the part-time arrangement with the
Employer to 2,080 hours. As a condition of continuing
bonus payments, a Participant who has become a part-time employee
shall sign an acknowledgement of the effect of changing to such
status.
As additional bonus compensation, the Employer
shall pay to the Participant an amount equal to forty percent (40%)
of the annual premium paid hereunder.
SECTION 4
PAYMENT OF BONUS
COMPENSATION
The bonus compensation payable to a Participant
pursuant to Section 3 above representing the annual premium
shall be paid by the Company directly to the insurance company that
issued the Policy. Each premium payment shall be made on
or prior to the due date for such premium
payment. The additional bonus compensation
provided for in the last sentence of Section 3 above shall be paid
in cash to the Participant within the same calendar year but not
later than sixty (60) days following each premium
payment.
SECTION 5
POLICY OWNERSHIP
The Policy with respect to a Participant shall
be purchased and owned by the Participant. All incidents
of ownership of the Policy shall belong to the Participant,
including, without limitation, the right to name a beneficiary of
the Policy. Notwithstanding the foregoing, the
Participant may not surrender the Policy or obtain Policy loans
prior to termination of this Agreement.
SECTION 6
TERMINATION
Subject to Section 7 below, each Agreement shall
terminate as of the earlier of (i) the date of the
Participant’s termination from employment with the Employer,
including, without limitation, termination of employment on account
of disability or retirement, or (ii) the Participant’s
attainment of age 65. Additionally, each Agreement may
be terminated by mutual written agreement of the Employer and the
Participant.
SECTION 7
CHANGE OF CONTROL
In the event of
a Change of Control, the Employer, the Company or any successor to
this Plan shall pay, as provided in Section 4 above, bonus
compensation in a lump sum in an amount necessary to provide the
death benefit listed on Schedule 2 to the Participant’s
Agreement based upon the date of the Change of Control until the
date the Participant would attain age
80. Notwithstanding the foregoing, the payment hereunder
shall not exceed an amount that would cause the Policy to cease to
be a “life insurance” contract under
Section 7702(a) of the Internal Revenue Code using the
guideline premium requirements of Section 7702(c) of the
Internal Revenue Code. Additionally, the Employer, the
Company or any successor to this Plan shall pay to the Participant
an amount equal to forty percent (40%) of such lump sum
payment. If the Participant incurs legal fees or other
expenses on or after the date of a Change of Control in an effort
to enforce or obtain the benefits of this Plan, the Company, shall,
regardless of the outcome of such effort, reimburse the Participant
for such legal fees and other expenses in an amount not to exceed
$500,000.
SECTION 8
AMENDMENT
With respect to a current (as of 12/31/07)
Participant, this Plan shall not be modified or amended without the
consent of the Participant. With respect to
