EXHIBIT 10.1
QCR HOLDINGS, INC.
2005 DEFERRED INCOME PLAN
Section 1. Purpose
The purpose of the QCR HOLDINGS, INC. 2005 DEFERRED INCOME PLAN ("Plan") is to
enable directors and selected key officers of QCR HOLDINGS, INC. ("Company"),
and any related company, to elect to defer all or a portion of the fees and cash
compensation payable by the Company, or the related company, on account of
service as a director or employee. The Plan is intended as a means of maximizing
the effectiveness and flexibility of the compensation arrangements to directors
and a select group of management or highly compensated employees of the Company
and related companies, and as an aid in attracting and retaining individuals of
outstanding abilities and specialized skills for service.
Section 2. Effective Date
The Plan is effective as of July 1, 2005.
Section 3. Plan Administration
The Plan shall be administered by a committee ("Committee"), as may be
designated by the Board of Directors of the Company ("Board") from time to time.
The Committee shall have sole authority to select the individuals, from among
those eligible, who may participate under the Plan and to establish all other
participation requirements. The Committee is authorized, subject to Board
approval, to interpret the Plan and may from time to time adopt such rules,
regulations, forms and agreements, not inconsistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan. All decisions made by the
Committee in administering the Plan shall be subject to Board review.
Section 4. Eligibility
Any director or key officer of the Company or any related company may be
designated by the Board to participate in the Plan; provided, however, that
officers eligible for designation shall be limited to a select group of
management or highly compensated employees within the meaning of Section 201(2)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Any such director or key officer shall be a "Participant" as of the date
designated by the Board, and his or her status as a Participant shall continue
until the date on which all payments due under the terms of the Plan have been
made.
Section 5. Shares Subject to the Plan
The aggregate number of shares of common stock of the Company ("Shares") which
may be distributed to directors and employees under the Plan shall be One
Hundred Thousand (100,000) Shares. Any Shares that remain unissued at the
termination of the Plan shall cease to be subject to the Plan, but until
termination of the Plan, the Company shall at all times make available
sufficient Shares to meet the requirements of the Plan. The aggregate number of
Shares which may be sold under the Plan shall be automatically adjusted to
reflect a change in capitalization of the Company, such as a stock dividend or
stock split, unless the Board determines in its sole discretion that, based on
the facts and circumstances, a formulaic adjustment is not appropriate, and that
a differing adjustment, or no adjustment, is more equitable.
Section 6. Election to Defer Income
(a) In General. Each Participant shall be entitled to make an irrevocable
election ("Election") to defer receipt of all or a portion of the fees or
compensation otherwise payable to him or her in cash ("Income"). Income
with respect to which a Election has been made (and shall not have been
revoked) shall be referred to hereinafter as "Deferred Income."
(b) Timing of Elections. An Election to defer Income under the Plan must be
properly filed with the Company not later than the following:
(i) the last business day of the tax year preceding the year in which the
Income is earned, or such earlier time as established by the
Committee;
(ii) thirty (30) days after first becoming eligible to participate in the
Plan; provided such Income relates to services performed after the
date of the Election; or
(iii) six (6) months prior to the end of an applicable performance period;
provided such Election is with respect to incentive compensation
which qualifies as "bonus compensation" as defined under Section 409A
of the Internal Revenue Code of 1986, as amended ("Code").
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All such Elections shall continue in effect until the Participant delivers
to the Board a written revocation or modification of such Election pursuant
to paragraph (d) below.
(c) Manner of Election. Elections to defer receipt of Income shall be made in
writing in accordance with such rules and procedures as the Committee may
prescribe; provided, however, that each such Election to defer shall
include:
(i) the amount to be deferred, expressed either as a fixed dollar amount
or a percentage of Income;
(ii) the date on which the Deferred Income shall be paid; and
(iii) the number of annual installments for the payment of Deferred Income
(maximum ten (10)).
(d) Changes to Elections. Modifications to existing Elections which change the
timing or method of payment shall be subject to the following:
(i) A revised Election must be made not later than twelve (12) months
prior to the scheduled payment date reflected in the most recent
Election; and
(ii) To the extent required under Code Section 409A, the revised payment
date must be not sooner than the five (5) year anniversary of the
previously scheduled payment date.
Section 7. Record and Crediting of Deferred Amounts
(a) Deferred Income. The Company shall credit the amount of any Deferred Income
to a memorandum account for the benefit of the Participant ("Deferred
Income Account") no later than the last day of the calendar quarter in
which such Income would otherwise have been paid to the Participant.
(b) Investment Direction. The Committee will allow a Participant to direct the
investment of his or her Deferred Income Account in accordance with such
rules and procedures as the Committee may prescribe, in its sole
discretion, which may include a single investment selection, including
shares of the Company's common stock. The Company will be relieved of all
investment responsibility and liability for such investment direction. A
direction to purchase Shares may not be made within six (6) months of a
direction to sell Shares, and a direction to sell Shares may not be made
within six (6) months of a direction to purchase Shares, under the Plan or
any other plan or program maintained by the Company.
(c) Value and Statement of Account. The Committee shall provide each
Participant with a statement of the value of his or her Deferred Income
Account, including the amount of Deferred Income and income thereon,
determined as of each December 31 (the "Valuation Date").
Section 8. Payment of Deferred Account
(a) In General. No withdrawals or payment shall be made from the Participant's
Deferred Income Account except as provided in this Section 8.
(b) Payment Event. The value of a Participant's Deferred Income Account shall
be payable in either a single payment or up to ten (10) annual installments
commencing on the March 15 following the occurrence of a "payment event,"
as shall be reflected in the most recently applicable Election. A "Payment
Event" shall be the date specified in the Participant's Election, which may
be any one of the following:
(i) the date of the Participant's separation from service with the Company
or related company (six (6) months from such date if the Participant
is a "Key Employee" as defined under Code Section 409A);
(ii) the date the Participant attains an age specified in the Election; or
(iii) the first or later to occur of either of such dates, as may be
specified in the Election.
(c) Manner of Payment.
(i) If a Participant elects a single installment, the value of
Participant's entire Deferred Income Account as of the Valuation Date
preceding payment shall be paid to him or her in one lump sum.
(ii) If a Participant elects two (2) or more installment payments, the
amount of an installment payment shall be a fraction of the value of
the Participant's Deferred Income Account on the Valuation Date
preceding such installment payment date, the numerator of which is
one (1) and the denominator which is the total number of installments
elected minus the number of installments previously paid.
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(d) Hardship Distributions. The Committee, in its sole discretion, and whether
or not a Payment Event shall have occurred, may accelerate payment of
amounts credited to a Participant's Deferred Income Account if requested to
do so and if the requirements of this paragraph (d) are met. Such
acceleration may occur only in the event of an unforeseeable financial
emergency and the amount of any distribution is limited to the amount
deemed reasonably necessary to satisfy such unforeseeable financial
emergency. For purposes of this paragraph (d), an "Unforeseeable Financial
Emergency" is an unanticipated emergency that is caused by an event beyond
the control of the Participant that would result in severe financial
hardship to the participant resulting from (i) a sudden and unexpected
illness or accident of the Participant or a dependent of the Participant,
(ii) a loss of the Participant's property due to casualty, or (iii) such
other extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined in the sole
discretion of the Committee.
(e) Death of Participant. In the event that a Participant shall die at any time
prior to complete distribution of all amounts payable to him or her under
the provisions of the Plan, the unpaid balance of the Participant's
Deferred Income Account shall be paid to the Participant's beneficiary or
beneficiaries in a lump sum, unless another form is provided in the
Participant's most recent Election.
Section 9. Designation of Beneficiary
Participants shall designate in writing, in accordance with such rules and
procedures as the Committee may prescribe, the beneficiary or beneficiaries who
are to receive the Participant's Deferred Income Account in the event of the
Participant's death.
Section 10. Unsecured Obligations
The obligation of the Company to make payments under the Plan shall be a general
obligation of the Company, and such payments shall be made from general assets
and property of the Company. The Participant's relationship to the Company under
the Plan shall be only that of a general unsecured creditor and neither this
Plan nor any agreement entered into hereunder or action taken pursuant hereto
shall create or be construed to create a trust or fiduciary relationship of any
kind. The Company may establish an irrevocable grantor trust for purposes of
holding and investing the Deferred Income Account balances but such
establishment shall not create any rights in or against any amount so held,
except that the trustee of such trust may vote any Shares thereunder in
accordance with the direction of the Participants.
Section 11. Amendment and Termination
(a) The Board may amend, suspend or terminate the Plan or any portion thereof
at any time; provided, however, that no such amendment, suspension or
termination shall impair the rights of any Participant in such
Participant's Deferred Income Account under the Plan, without such
Participant's consent.
(b) Notwithstanding the foregoing, the Board shall retain the right to amend
the Plan or any portion thereof at any time, or from time to time, without
the consent of the Participants, to the extent deemed necessary by the
Board, in its sole discretion, in order for the Plan and Deferred Income to
be compliant with the requirements of Code Section 409A.
Section 12. Effect of Transfer
(a) In the event of a Change in Control of the Company, the entire unpaid
balance of each Deferred Income Account shall be paid in a single lump sum
to the Participant as of the effective date thereof.
(b) For purposes of this Plan, the term Change in Control shall be as defined
in Code Section 409A and Internal Revenue Service Notice 2005-1 and any
subsequent guidance provided with respect to Code Section 409A.
Section 13. Non-Assignability
No right to receive payments under the provisions of this Plan shall be
transferable or assignable by a Participant, except by will or the laws of
descent and distribution or by gifting for the benefit of descendants in estate
planning situations, and during his or her lifetime payment may only be received
by the Participant or his or her legal representative or guardian.
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Section 14. Delivery and Registration of Stock
The Company's obligation to deliver Shares shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment
intention of the individual to whom such Shares are to be delivered, in such
form as the Committee shall determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933 ("Act") or any other federal,
state or local securities legislation or regulation. It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such representation under
securities legislation. The Company shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such Shares to listing on any stock
exchange on which Shares may then be listed, and (ii) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation, as the Committee shall determine to be necessary or
advisable.
This Plan is intended to comply with Rule 16b-3 under the Act. Any provision of
the Plan which is inconsistent with said rule shall, to the extent of such
inconsistency, be inoperative and shall not affect the validity of the remaining
provisions of the Plan.
Section 15. Binding Provisions
All of the provisions of this Plan shall be binding upon all persons who shall
be entitled to any benefits hereunder and their heirs and personal
representatives.
Section 16. Claims Procedure
If any benefits become payable under this Plan, the Participant (or designated
beneficiary in the case of the Participant's death) shall file a claim for
benefits by notifying the Committee in writing. If the claim is wholly or
partially denied, the Committee shall provide a written notice of the denial.
This written notice must be provided within a reasonable period of time
(generally 90 days) after the receipt of the claim by the Committee. The written
notice must contain the following information:
(a) the specific reason or reasons for the denial;
(b) specific reference to those Plan provisions on which the denial is based;
(c) a description of any additional information or material necessary to
correct the claim and an explanation of why such material or information is
necessary; and
(d) appropriate information as to the steps to be taken if the Particiapnt or
beneficiary wants to submit the claim for review.
If notice of the denial of a claim is not furnished within a reasonable period
of time, the claim will be deemed denied.
Upon the denial of a claim for benefits, the Participant (or designated
beneficiary in the case of the Participant's death) may file a claim for review,
in writing, with the Committee within sixty (60) days after receipt of a written
notice of a denial of a claim. In requesting a review, the Participant or
beneficiary may review Plan documents and submit any written issues and comments
he or she feels are appropriate. The Committee shall then give a full and fair
review to the claim. If the claim is denied, the Committee shall provide the
Participant or beneficiary with written notice of this denial within sixty (60)
days after the Committee's receipt of the request for review. This decision
shall state the specific reasons for the decision and shall include references
to specific Plan provisions on which the decision is based.
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