Exhibit 10.8
QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT ("Agreement") is made this 1st day of
January, 2004, by and
between QCR Holdings, Inc., a Delaware
corporation (the "Company"), and TODD A.
GIPPLE (the "Executive").
INTRODUCTION
The Executive and the Company previously entered into that
certain QCR Holding,
Inc. Executive Deferred Compensation Agreement dated January 1, 2002, to
encourage the Executive to remain an employee of
the Company.
The Company is
willing to continue to provide to the Executive a deferred compensation
opportunity together with matching
contributions by the
Company under the terms
of this Agreement. 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 December 31 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 1934 Act) 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.
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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 or a Company
affiliate's 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 or injury which, in the judgment of the Executive
Committee of
the
Board of Directors of the Company limits the Executive from
performing the material and substantial duties of his position(s) with
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.
1.9 "Election Form" means
the Form attached as Exhibit 1.
1.10 "Normal Retirement Age"
means the Executive's 65th birthday.
1.11 "Normal Retirement Date" means the later
of the Normal Retirement Age or
Termination of Employment.
1.12 "Original Effective Date"
means January 1, 2002.
1.13 "Plan Year" means the
calendar year.
1.14 "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 Original 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 Plan
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.
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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.
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.
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.
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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
4.4.2, 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.
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
ben
