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Exhibit 10.2
DUBUQUE BANK AND TRUST COMPANY
EXECUTIVE SUPPLEMENTAL LIFE INSURANCE PLAN
Pursuant
to due authorization by its Board of Directors, the
undersigned, DUBUQUE BANK AND TRUST COMPANY, a corporation
located in DUBUQUE, IOWA, did constitute, establish and adopt
the following Executive Supplemental Life Insurance Plan (the
“Plan”), effective January 1, 2005.
The
purpose of this Plan is to attract, retain, and reward
Employees, by dividing the death proceeds of certain life
insurance policies, which are owned by the Company on the
lives of the participating Employees, with the designated
beneficiary of each insured participating Employee. The
Company will pay the life insurance premiums from its general
assets.
ARTICLE 1
DEFINITIONS
Whenever used in this Plan,
the following terms shall have the meanings
specified:
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1.1
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“
Beneficiary
” means each designated person, or the estate of a deceased
Participant, entitled to benefits, if any, upon the death of a
Participant.
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1.2
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“
Beneficiary
Designation Form ” means the most recent form accepted
by the Plan Administrator of the Dubuque Bank and Trust Company
Split-Dollar Life Insurance Plan, dated November 13, 2001, unless a
Participant completes, signs and returns to the Plan Administrator
of the Plan a separate form to designate one or more
Beneficiaries.
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1.3
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“
Board ”
means the Board of Directors of the Company as from time to time
constituted.
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1.4
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“
Change of
Control ” means:
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(i)
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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 Company or
Heartland Financial USA, Inc. (“Heartland”),
Company’s Parent; or
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(ii)
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The
individuals who, as of the date hereof, are members of the Board of
Directors of the Company or Heartland (the “Board”)
cease for any reason to constitute a majority of the Boards, unless
the election, or nomination for election by the stockholders, of
any new director was approved by a vote of a majority of either
Board and such new director shall, for purposes of this Plan, be
considered as a member of either Board; or
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(iii)
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Approval
by stockholders of the Company or Heartland 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
the Company or Heartland outstanding immediately before such merger
or Company; 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 the Company or Heartland.
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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 Company or Heartland 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.
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1.5
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“
Company
” means DUBUQUE BANK AND TRUST COMPANY and any of its
subsidiaries (now in existence or hereafter formed or acquired)
that have been selected by the Board to participate in the Plan and
have adopted the Plan as a sponsor.
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1.6
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“
Company’s
Interest ” means the benefit set forth in Section
3.2.
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1.7
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“
Compensation
” means the Participant’s total base annual salary,
bonus and commissions for the previous twelve (12) months, at the
earliest of: (i) the date of the Participant’s death; (ii)
the date of the Participant’s Disability; (iii) the
Participant’s Normal Retirement Date; (iv) the date of the
Participant’s Early Retirement; (v) upon Change of
Control.
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1.8
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“
Disability
” means the Participant’s suffering a sickness,
accident or injury which has been determined by the insurance
carrier of any individual or group disability insurance policy
covering the Participant, or by the Social Security Administration,
to be a disability rendering the Participant totally and
permanently disabled. Upon the request of the Plan
Administrator, the Participant must submit proof to the Plan
Administrator of the insurance carrier’s or Social Security
Administration’s determination.
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1.9
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“
Early
Retirement ” means the Participant’s retirement
between the ages of fifty-five (55) and sixty-five (65) provided
there are ten (10) years of continuous service, as defined by the
Heartland Financial Retirement Plan, provided to the
Company.
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1.10
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“
Election
to Participate ” means the form required by the Plan
Administrator of an eligible Employee to indicate acceptance of
participation in this Plan.
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1.11
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“
Employee
” means an active employee of the Company.
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1.12
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“
Insured
” means the individual Participant whose life is
insured.
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1.13
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“
Insurer
” means the insurance company issuing the life insurance
policy on the life of the Insured.
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1.14
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“
Net Death
Proceeds ” means the total death proceeds of the
Policy minus the cash surrender value.
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1.15
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“
Normal
Retirement Age ” means the Participant attaining age
65.
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1.16
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“
Normal
Retirement Date ” means the later of the Normal
Retirement Age or the date of Termination of Employment for any
reason other than Termination for Cause.
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1.17
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“
Participant
” means an Employee (i) who has been employed by the
Company for at least three years; (ii) who is selected to
participate in the Plan, (iii) who elects to participate in
the Plan, (iv) who signs an Election to Participate and a
Beneficiary Designation Form, (v) whose signed Election to
Participant and Beneficiary Designation Form are accepted by the
Plan Administrator, (vi) who commences participation in the
Plan, and (vii) whose Participation has not
terminated.
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1.18
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“
Participant’s
Interest ” means the benefit set forth in Section
3.1.
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1.19
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“
Policy ”
means the individual insurance policy or policies adopted by the
Plan Administrator for purposes of insuring a Participant’s
life under this Plan.
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1.20
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“
Plan
Administrator ” means the plan administrator described
in Article 10.
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1.21
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“
Termination of
Employment ” means the termination of
Participant’s full-time service to the Company before Normal
Retirement Age for reasons other than (i) death; (ii) Disability;
(iii) Early Retirement; or (iv) a leave of absence approved by the
Company.
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1.22
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“
Termination for
Cause ” means that the Participant's employment with
the Company has been or is terminated by the Board for any of the
following reasons:
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(a)
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Gross
negligence or gross neglect of duties; or
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(b)
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Commission
of a felony or of a gross misdemeanor involving moral turpitude;
or
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(c)
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Fraud,
disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the
Participant's employment and resulting in an adverse effect on the
Company; or
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(d)
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Issuance
by the Company’s banking regulators of an order for removal
of the Participant.
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ARTICLE 2
PARTICIPATION
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2.1
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Selection by Plan Administrator . Participation
in the Plan shall be limited to those Employees of the Company
selected by the Plan Administrator, in its sole discretion, to
participate in the Plan.
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2.2
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Enrollment Requirements . As a condition to
participation, each selected Employee shall complete, execute and
return to the Plan Administrator (i) an Election to Participate,
and (ii) a Beneficiary Designation Form. In addition,
the Plan Administrator shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are
necessary.
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2.3
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Eligibility; Commencement of Participation
. Provided an Employee selected to participate in the
Plan has met all enrollment requirements set forth in this Plan and
required by the Plan Administrator, that Employee will become a
Participant, be covered by the Plan and will be eligible to receive
benefits at the time and in the manner provided hereunder, subject
to the provisions of the Plan.
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2.4
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Termination of Participation . A
Participant’s rights under this Plan shall automatically
cease and his or her participation in this Plan shall automatically
terminate, if any of the following events occur: (i) if
there is a Termination for Cause; (ii) if the Participant’s
employment with the Company is terminated prior to Normal
Retirement Age for reasons other than Early Retirement, Disability
(except as set forth in Section 2.5(b)) or a leave of absence
approved by the Company; or (iii) upon the Participant’s
ninetieth (90 th
) birthday. In the event that the Company decides to
maintain the Policy after the Participant’s termination of
participation in the Plan, the Company shall be the direct
beneficiary of the entire death proceeds of the
Policy.
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(a)
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Except
as otherwise provided in paragraph (b) of this Section 2.5, if the
Participant’s employment with the Company is terminated
because of the Participant’s Disability, the Company shall
maintain the Policy in full force and effect and, in no event,
shall the Company amend, terminate or otherwise abrogate the
Participant’s Interest in the
Policy. Notwithstanding, the Company may replace the
Policy with a comparable insurance policy to cover the benefit
provided under this Plan.
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(b)
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Notwithstanding
the provisions of paragraph (a) of this Section 2.5, upon the
disabled Participant’s gainful employment with an entity
other than the Company, the Company shall have no further
obligation to the disabled Participant, and the disabled
Participant’s rights pursuant to the Plan shall
cease. In the event the disabled Participant’s
rights are terminated hereunder and the Company decides to maintain
the Policy, the Company shall be the direct beneficiary of the
entire death proceeds of the Policy.
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2.6
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Retirement . If the Participant remains in the
continuous employ of the Company, upon the Participant’s
Early Retirement or Normal Retirement Date, the Company shall
maintain the Policy in full force and effect and in no event shall
the Company amend, terminate or otherwise abrogate the
Participant’s Interest in the
Policy. Notwithstanding, the Company may replace the
Policy with a comparable insurance policy to cover the benefit
under this Plan.
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ARTICLE 3
POLICY OWNERSHIP/INTERESTS
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3.1
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Participant’s Interest . The Participant,
or the Participant’s assignee, shall have the right to
designate the Beneficiary of an amount of death proceeds equal to
the lesser of (i) one million dollars ($1,000,000) or (ii) two (2)
times Compensation less any death proceeds provided to the
Participant’s beneficiary or beneficiaries under the Dubuque
Bank and Trust Company Split-Dollar Life Insurance Plan, dated
November 13, 2001, not to exceed the Net Death Proceeds, subject
to:
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(a)
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Forfeiture
of Participant’s rights upon Termination of
Employment;
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(b)
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Forfeiture
of Participant’s rights upon Termination for
Cause;
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(c)
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Forfeiture
of Participant’s rights upon gainful employment following
Disability;
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(d)
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Forfeiture
of Participant’s rights upon attaining age ninety
(90);
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(e)
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Termination
of the Plan and the corresponding forfeiture of rights for all
Participants or any one Participant in accordance with Section 9.1
hereof; and
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(f)
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Forfeiture
of the Participant’s rights and interest hereunder that the
Company may reasonably consider necessary to conform with
applicable law (including the Sarbanes-Oxley Act of
2002).
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3.2
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Company's Interest . The Company shall own the
Policy and shall have the right to exercise all incidents of
ownership except that the Company shall not sell, surrender or
transfer ownership of a Policy so long as a Participant has an
interest in the Policy as described in Section 3.1. This
provision shall not impair the right of the Company, subject to
Article 9, to terminate this Plan nor shall it impair the right of
the Company to replace the Policy with a comparable insurance
policy to cover the benefit under this Plan. With
respect to each Policy, the Company shall be the beneficiary of the
remaining death proceeds of the Policy after the
Participant’s Interest is determined according to Section
3.1.
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ARTICLE 4
PREMIUMS
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4.1
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Premium Payment . The Company shall pay all
premiums due on all Policies.
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4.2
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Economic Benefit . The Plan Administrator shall
determine the economic benefit attributable to any Participant
based on the amount of the current term rate for the Participant's
age multiplied by the aggregate death benefit payable to the
Participant's Beneficiary. The "current term rate" is
the minimum amount required to be imputed under Internal Revenue
Notice 2002-8, or any subsequent applicable authority.
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4.3
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Imputed Income . The Company shall impute the
economic benefit to the Participant on an annual basis, by adding
the economic benefit to the Participant’s W-2, or if
applicable, Form 1099.
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5.1
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Beneficiary . Each Participant shall have the right, at any
time, to designate a Beneficiary(ies) to receive any benefits
payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan
may be the same as or different from the Beneficiary designation
under any other plan of the Company in which the Participant
participates.
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5.2
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Beneficiary Designation; Change . A Participant
shall designate a Beneficiary by completing and signing the
Beneficiary Designation Form, and delivering it to the Plan
Administrator or its designated agent. The Participant's
beneficiary designation shall be deemed automatically revoked if
the Beneficiary predeceases the Participant or if the Participant
names a spouse as Beneficiary and the marriage is subsequently
dissolved. A Participant shall have the right to change
a Beneficiary by completing, signing and otherwise complying with
the terms of the Beneficiary Designation Form and the Plan
Administrator’s rules and procedures, as in effect from time
to time. Upon the acceptance by the Plan Administrator
of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be cance
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