SPLIT-DOLLAR AGREEMENT

This SPLIT-DOLLAR AGREEMENT (this “Agreement”) made and entered into effective as of the 1 ^st day of November 2008, by and among Heartland Financial USA, Inc. and its subsidiary, _______________________, (collectively the “Employer”) and ________________________, (the “Insured”).

A.   Insured is currently an employee and officer of the Employer and Employer desires to retain the  services of the Insured for a considerable period.

B.   Employer is a grantor with respect to the Heartland Financial USA, Inc. Bank Owned Life Insurance Trust (the “Trust”).

C.   Employer desires to provide Insured with certain death benefits under a life insurance policy that the Employer has caused the Trust to purchase on the life of Insured.

                      NOW, THEREFORE, the parties hereto, for and in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, do hereby agree as follows:

1.   This Agreement pertains to the life insurance policies (the “Policy”) listed on Exhibit C , attached and made a part hereof.

2.   Ownership of Policy .  The Trust shall own all of the right, title and interest in the Policy and shall control all rights of ownership with respect thereto.  The Trustee of the Trust, in its sole discretion, may exercise its right to borrow against or withdraw the cash value of the Policy.  In the event coverage under the Policy is increased, such increased coverage shall be subject to all of the rights, duties and obligations set forth in this Agreement.

3.   Designation of Beneficiary .  Insured may designate one or more beneficiaries (on the Beneficiary Designation Form attached hereto as Exhibit A ) to receive a portion of the death proceeds of the Policy payable pursuant hereto upon the death of the Insured subject to any right, title or interest the Trust may have in such proceeds as provided herein.  In the event Insured fails to designate a beneficiary, any benefits payable pursuant hereto shall be paid to the estate of Insured.

4.   Maintenance of Policy .  The Employer intends to maintain a policy for purposes of this agreement.  The Employer shall cause the Trust to make any required premium payments and to take all other actions within the Employer’s reasonable control in order to keep the Policy in full force and effect; provided, however, that the Employer may cause the Trust to replace the Policy with a comparable policy or policies so long as Insured’s beneficiaries will be entitled to receive an amount of death proceeds under Section 6 at least equal to those that the beneficiaries would be entitled to if the original Policy were to remain in effect.  If any such replacement is made, all references herein to the “Policy” shall thereafter be references to such replacement policy or policies.  If the Policy contains any premium waiver provision, any such waived premiums shall be considered for the purposes of this Agreement as having been paid by the Trust.  The Employer shall be under no obligation to set aside, earmark or otherwise segregate any funds with which to pay its obligations under this Agreement, including, but not limited to, payment of Policy premiums.

5.   Reporting Requirements .  The Employer will report on an annual basis to Insured the economic benefit attributable to this Agreement on IRS Form W-2 or its equivalent so that Insured can properly include said amount in his or her taxable income.  Insured agrees to accurately report and pay all applicable taxes on such amounts of income reportable hereunder to Insured.  Insured acknowledges and understands that no “group term life” or similar income tax exclusion applies to benefits provided hereunder.

6.   Policy Proceeds .  Subject to Section 8, upon the death of Insured, the death proceeds of the Policy shall be divided in the following manner:

(a)   The Insured’s beneficiary(ies) designated in accordance with Section 3 shall be entitled to an amount equal to the Death Benefit (as defined in Exhibit B hereto).

(b)   The Employer shall be entitled to any death proceeds payable under the Policy remaining after payment to the Insured’s beneficiary(ies) under Section 6(a) above.

(c)   The Employer and Insured shall share in any interest due on the death proceeds of the Policy on a pro rata basis based upon the amount of proceeds due each party divided by the total amount of proceeds, excluding any such interest.

7.   Cash Surrender Value of the Policy .  The “Cash Surrender Value of the Policy” shall be equal to the cash value of the Policy at the time of the Insured's death or upon surrender of the Policy, as applicable, less (i) any policy or premium loans or withdrawals or any other indebtedness secured by the Policy, and any unpaid interest thereon, previously incurred or made by the Employer, and (ii) any applicable surrender charges, as determined by the Insurer or agent servicing the Policy.

8.   Termination of Agreement .

(a)   This Agreement shall terminate upon the first to occur of the following:

(b)   Insured acknowledges and agrees that the termination of this Agreement pursuant to subsection (a)(ii) above prior to the death of Insured shall terminate any right of Insured to receive any death proceeds of the Policy under this Agreement, and such termination shall be without any liability of any nature to Employer.

(c)   Notwithstanding the foregoing, this Agreement shall not terminate in the event of the Insured’s termination of employment on account of Disability or the Insured’s involuntary termination of employment following a Change of Control other than an involuntary termination for Cause.  In the event of a termination of employment on account of Disability or on account of the Insured’s involuntary termination of employment following a Change of Control other than an involuntary termination for Cause, the Agreement shall remain in effect until the earlier of (i) the date the Insured attains normal retirement age as defined by the Social Security Administration, (ii) the date of the Insured’s death or (iii) the date of the Insured’s voluntary termination of employment or involuntary termination of employment for Cause.  In the event the Agreement shall remain in effect pursuant to this paragraph (c), the Insured’s Total Compensation for purposes of the Death Benefit (as defined on Exhibit B hereto) shall be frozen as of the date of the Insured’s Disability or the date of the Insured’s involuntary termination of employment other than for Cause following a Change of Control.

(d)   For purposes of paragraph (c) above, the following definitions shall apply:

9.   Assignment .  Insured shall not make any assignment of Insured’s rights, title or interest in or to the death proceeds of the Policy whatsoever without the prior written consent of the Employer and the Trust (which may be withheld for any reason or no reason in its sole and absolute discretion) and acknowledgment by the Insurer.

10.   Administration .

                                (a)           This Agreement shall be administered by the Board of Directors of the Employer (the “Board”).

                                (b)           As the administrator, the Board shall have the powers, duties and discretion to:

                                (c)           The Employer shall serve as the Named Fiduciary with respect to this Agreement.  The Named Fiduciary shall be responsible for the management, control and administration of the Policy’s death proceeds.  The Named Fiduciary may, in its reasonable discretion, delegate certain aspects of its management and administrative responsibilities.  If the Named Fiduciary has a claim which it believes may be covered under the Policy, it will contact the Insurer in order to complete a claim form and determine what other steps need to be taken.  The Insurer will evaluate and make a decision as to payment.  If the claim is eligible for payment under the Policy, a check will be issued to the Named Fiduciary.  If the Insurer determines that a claim is not eligible for payment under the Policy, the Named Fiduciary may, in its sole discretion, contest such claim denial by contacting the Insurer in writing.

11.   Claims Procedures .

(a)   For purposes of these claims procedures, the Board shall serve as the “Claims Administrator.”

(b)   If the Executive or any beneficiary of the executive should have a claim for benefits hereunder, he or she shall file such claim by notifying the Claims Administrator in writing.  The Claims Administrator shall make all determinations as to the right of any person or persons to a benefit hereunder.  Benefit claims shall be made by the Executive, his beneficiary or beneficiaries or a duly authorized representative thereof (the “claimant”).

                                           If the claim is wholly or partially denied, the Claims Administrator shall provide written or electronic notice thereof to the claimant within a reasonable period of time, but not later than ninety (90) days after receipt of the claim.  An extension of time for processing the claim for benefits is allowable if special circumstances require an extension, but such an extension shall not extend beyond one hundred eighty (180) days from the date the claim for benefits is received by the Claims Administrator.  Written notice of any extension of time shall be delivered or mailed within ninety (90) days after receipt of the claim and shall include an explanation of the special circumstances requiring the extension and the date by which the Claims Administrator expects to render the final decision.

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