NON QUALIFIED STOCK OPTION AGREEMENT
                  QUAD CITY HOLDINGS, INC. STOCK INCENTIVE PLAN


A.   A STOCK OPTION for a total of ___ shares of Common Stock,  par value $1.00,
     of Quad City Holdings, Inc., a Delaware corporation, (herein the "Company")
     is hereby granted to ________ ________, (herein the "Optionee"), subject in
     all respects to the terms and  provisions of the Quad City  Holdings,  Inc.
     1997 Stock  Incentive  Plan (herein the "Plan"),  dated  November 20, 1996,
     which has been adopted by the Company and which is  incorporated  herein by
     reference.

B.   The option price as  determined by the Board of Directors of the Company is
     __________ dollars and __ cents ($__.__) per share.

C.   This Option may not be  exercised if the issuance of shares of Common Stock
     of the Company  upon such  exercise  would  constitute  a violation  of any
     applicable  Federal or State  securities or other law or valid  regulation.
     The  Optionee,  as a condition to his/her  exercise of this  Option,  shall
     represent  to the  Company  that the shares of Common  Stock of the Company
     that he/she  acquires  under this Option are being  acquired by him/her for
     investment and not with a present view to  distribution  or resale,  unless
     counsel for the Company is then of the opinion  that such a  representation
     is not required under the  Securities  Act of 1933 or any other  applicable
     law, regulation, or rule of any governmental agency.

D.   This Option may not be transferred in any manner  otherwise than by will or
     the laws of  descent  and  distribution,  and may be  exercised  during the
     lifetime of the Optionee only by him/her. The terms of this Option shall be
     binding upon the executors, administrators,  heirs, successors, and assigns
     of the Optionee.

E.   This Option may not be exercised  more than ten (10) years from the date of
     its grant,  and may be exercised  during such term only in accordance  with
     the terms of the Plan.

F.   This Option shall vest at a rate of 20% per year,  with the first 20% being
     vested on ____ __, ____.

Dated _____________________, ____

                                            QUAD CITY HOLDINGS, INC.



                                            By
                                               ---------------------------------
                                               President

ATTEST:

- -----------------------------

The  Optionee  acknowledges  receipt  of a copy of the Plan,  a copy of which is
annexed  hereto,  and  represents  that  he/she is  familiar  with the terms and
provisions  thereof.  The Optionee hereby accepts this Option subject to all the
terms  and  provisions  of the Plan.  The  Optionee  hereby  agrees to accept as
binding, conclusive, and final all decisions and interpretations of the Board of
Directors and, where applicable,  the Compensation and Benefits Committee,  upon
any  questions  arising under the Plan. As a condition to the issuance of shares
of Common Stock of the Company under this Option,  the Optionee  agrees to remit
to the Company at the time of any  exercise of the Option any taxes  required to
be withheld by the Company under Federal, State, or Local law as a result of the
exercise of this Option.

Dated _____________________ , ____


                                            ------------------------------------
                                            Optionee