Exhibit 10.3
QUAD CITY BANK AND TRUST COMPANY
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT ("Agreement") is made this 1st day of
January, 2004, by and
between QUAD CITY BANK AND TRUST
COMPANY, a state-chartered commercial bank
located in Bettendorf, Iowa (the "Bank"), and MICHAEL A. BAUER (the
"Executive").
INTRODUCTION
The Executive and the Bank previously entered into that certain Quad
City Bank
and Trust Company Executive Deferred
Compensation
Agreement,
to encourage the
Executive to remain an employee of the
Bank. The Bank is
willing to continue to
provide to the Executive a deferred compensation opportunity together with
matching contributions by the Bank under
the terms of this Agreement. The Bank
will pay the Executive's benefits from the
Bank's general assets.
AGREEMENT
The Executive and the Bank 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 Bank'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 Bank or a Bank
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
Bank. As a condition to any Disability benefits, the Bank may
require
the
Executive to submit to such physical or mental evaluations and tests
as
the Bank'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 June 28, 2000.
1.13 "Plan Year" means the
calendar year.
1.14 "Termination of Employment" means that the Executive ceases to be
employed by the Bank for any reason whatsoever other than by reason of
a
leave of absence which
is approved
by the Bank.
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
Bank
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 Bank 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 Bank.
2.2 Election Changes.
2.2.1 Generally.
Upon the Bank's approval, the Executive may modify the
amount of Compensation
to be deferred
annually by filing a
new
Election Form with the
Bank 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 Bank.
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 Bank, may
reduce future deferrals under this Agreement.
Article 3
Deferral Account
3.1 Establishing
and Crediting.
The Bank 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 $20,000
(Twenty Thousand Dollars)
annually.
3.1.3 Interest.
On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until
commencement of
the benefit payments under this Agreement,
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 8 percent
and shall not exceed 10
percent.
3.2 Statement of Accounts.
The Bank 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 Bank for the payment of benefits. The benefits represent
the
mere Bank 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 Bank
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 Bank 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 Bank 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 Bank
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 Bank 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 Bank
shall credit interest
pursuant to
Section
3.1.3 on the remaining
account balance during any applicable
installment period.
4.3 Disability
Benefit. If the Executive terminates employment due to
Disability prior to
Normal Retirement
Age, the Bank 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 Bank 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 Bank
shall credit interest
pursuant to
Section
3.1.3 on the remaining
account balance during any applicable
installment period.
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4.4 Change of Control
Benefit. Upon a Change
of Control, the Bank
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)
$898,399 (Eight
Hundred Ninety
Eight Thousand Three Hundred and Ninety-Nine
Dollars).
4.4.2 Payment
of Benefit. The Bank 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 Bank 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 Bank
shall distribute
to the Executive all or a portion of the Deferral
Account balance as
determined
by the Bank,
but in no event
shall the
distribution be
greater than is necessary to relieve the financial
hardship.
Article 5
Death Bene
