Exhibit 10.1
HEARTLAND FINANCIAL USA, INC.
2001 DIRECTOR SHORT TERM
STOCK INCENTIVE PLAN
HEARTLAND FINANCIAL USA, INC.
2001 DIRECTOR SHORT TERM
STOCK INCENTIVE PLAN
Section 1. Purpose of the Plan.
The HEARTLAND FINANCIAL USA, INC. 2001 DIRECTOR SHORT TERM
STOCK INCENTIVE PLAN (the "Plan") is intended to provide a means
whereby directors of HEARTLAND FINANCIAL USA, INC., a Delaware
corporation (the "Company"), the Related Corporations and its and
their affiliates may sustain a sense of proprietorship and
personal involvement in the continued development and financial
success of the Company and the Related Corporations, and to
encourage them to remain with and devote their best efforts to
the business of the Company, the Related Corporations and its and
their affiliates, thereby advancing the interests of the Company
and its stockholders. Accordingly, the Company may permit
certain directors to acquire Shares on the terms and conditions
established herein.
Section 2. Definitions.
The following terms, when used herein and unless the context
clearly requires otherwise, shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
(a) "Board" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations
promulgated thereunder.
(c) "Committee" means a committee appointed by the Board to
administer the Plan, or if no Committee is appointed, the Board.
(d) "Effective Date" means October 16, 2001, which was the
date that the Plan was adopted by the Board.
(e) "Fair Market Value" means as of any date, the value of
a share of the Company's common stock determined as follows:
(i) if such common stock is then quoted on the NASDAQ
National Market, its last reported sale price on the NASDAQ
National Market on such date or, if no such reported sale
takes place on such date, the average of the closing bid and
asked prices;
(ii) if such common stock is Publicly Traded and is
then listed on a national securities exchange, the last
reported sale price on such date or, if no such reported
sale takes place on such date, the average of the closing
bid and asked prices on the principal national securities
exchange on which the common stock is listed or admitted to
trading;
(iii) if such common stock is Publicly Traded but is not
quoted on the NASDAQ National Market nor listed or admitted
to trading on a national securities exchange, the average of
the closing bid and asked prices on such date, as reported
by The Wall Street Journal, for the over-the-counter market;
or
(iv) if none of the foregoing is applicable, by the
Board in good faith.
(f) "Nonqualified Option" means an option award under the
Plan that is not an Incentive Stock Option within the meaning of
Section 422 of the Code.
(g) "Publicly Traded" means that the common stock of the
Company is (i) registered under Section 12(b) or Section 12(g) of
the Exchange Act, and (ii) listed or authorized for trading on
the NASDAQ Stock Market, a national securities exchange, or the
NASDAQ Small Cap Market or another over-the-counter market.
(h) "Related Corporation" means any corporation, bank or
other entity which would be a parent or subsidiary corporation
with respect to the Company as defined in Section 424(e) or (f),
respectively, of the Code.
(i) "Shares" means shares of the common stock, $1.00 par
value per share, of the Company.
(j) "Securities Act" means the Securities Act of 1933, as
amended from time to time, and the rules and regulations
promulgated thereunder.
(k) "Termination of Service" means the termination of a
person's status as a director of the Company, a Related
Corporation or an affiliate of the Company or a Related
Corporation.
Section 3. Administration of the Plan.
The Plan shall be administered by the Board, or a committee
appointed by the Board. The Board, or the Committee, as the case
may be, shall have sole authority to:
(a) select the directors to whom awards shall be granted
under the Plan;
(b) establish the amount and conditions of each such award;
(c) prescribe any legend to be affixed to certificates
representing such awards;
(d) interpret the Plan;
(e) correct any defect, supply any omission, or reconcile
any inconsistency in the Plan, any award or any agreement related
thereto; and
(f) 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 Board, or the Committee, as the case
may be, in administering the Plan shall be final.
Section 4. Shares Subject to the Plan.
The aggregate number of Shares that may be obtained by
directors under the Plan shall be 150,000 Shares. Each director
shall receive an option to acquire a stated number of Shares (the
"Original Grant"), and shall be eligible to direct the exercise
of an additional number of options (the "Conditional Grant")
based on the Board's allocation to such director of that number
of additional options not exercised by other directors pursuant
to the Original Grant. 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. Each director is eligible to receive options to acquire up
to no more than 7,500 Shares under the Original and the
Conditional Grants in the aggregate.
Section 5. Stock Options.
(a) Type of Options. The Board may issue Nonqualified
Options to directors of the Company, the Related Corporations and
its and their affiliates. The grant of each option shall be
confirmed by a stock option agreement that shall be executed by
the Company and the optionee as soon as practicable after such
grant. The stock option agreement shall expressly state or
incorporate by reference the provisions of the Plan.
(b) Terms of Options. Each option shall be subject to the
following terms and conditions:
(i) Written Notice. An option may be exercised only
by giving written notice to the Company specifying the
number of Shares to be purchased. The Committee may specify
a reasonable minimum number of Shares that may be purchased
on any exercise of an option; provided that the minimum
number will not prevent the option holder from exercising an
option for the full number of Shares for which it is then
exercisable.
(ii) Method of Exercise. Except as otherwise provided
in any written option agreement, the exercise price of an
option shall be paid in full (i) in cash; (ii) in Common
Stock valued at its Fair Market Value on the date of
exercise, provided it has been owned by the optionee for at
least six (6) months prior to the exercise; (iii) in cash by
an unaffiliated broker-dealer to whom the holder of the
option has submitted an exercise notice consisting of a
fully endorsed option; (iv) by such other medium of payment
as the Committee, in its discretion, shall authorize; or (v)
by any combination of clauses (i) through (iv) above, as the
optionee shall elect. In the case of payment pursuant to
clauses (ii) through (iv) above, the optionee's election
must be made on or prior to the date of exercise of the
option and must be irrevocable. In lieu of a separate
election governing each exercise of an option, an optionee
may file a blanket election that shall govern all future
exercises of options until revoked by the optionee.
(iii) Term of Option. An option shall be exercisable as
of the date of grant and shall expire and no longer be
exercisable after the end of the 15th calendar day following
the date of grant.
(iv) Death of Optionee. If an optionee dies prior to
exercise in full of any options, he or she, or his or her
beneficiary, executor, administrator or personal
representative, shall have the right to exercise the options
within a period of twelve (12) months after the date of
death.
(v.) Transferability. No option may be transferred,
assigned or encumbered by an optionee, except by will or the
laws of descent and distribution.
Section 6. Amendment or Termination of the Plan
The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, but no amendment, suspension or
termination shall impair the rights of any individual, without
his or her consent, in any award theretofore made pursuant to the
Plan.
Section 7. Term of Plan.
The Plan shall be effective upon the date of its adoption by
the Board and shall terminate upon the earlier of (a) six (6)
months from the date adopted or (b) the date on which the last of
any rights under Subsection 5(iv) are exercised or expire.
Section 8. Rights as Stockholder.
Upon delivery of any Share to a director such person shall
have all of the rights of a stockholder of the Company with
respect to such Share, including the right to vote such Share and
to receive all dividends or other distributions paid with respect
to such Share.
Section 9. Service.
An individual shall be considered to be in the service of
the Company, a Related Corporation or an affiliate of the Company
or a Related Corporation as long as he or she remains a director
of the Company, such Related Corporation or affiliate. Nothing
herein shall confer on any individual the right to continued
service with the Company, a Related Corporation or an affiliate
or affect the right of the Company, such Related Corporation or
affiliate to terminate such service.
Section 10. Withholding of Tax.
(a) Generally. To the extent the award, issuance, vesting
or exercise of an option results in the receipt of compensation
by a director, the Company may require the director to pay to the
Company or the grantee may authorize the Company to withhold a
portion of any cash compensation then or thereafter payable to
such person, an amount, sufficient to satisfy federal, state and
local withholding tax requirements prior to the delivery of any
certificate for the Shares.
(b) Stock Withholding. To the extent a grantee incurs tax
liability in connection with the exercise of an option that is
subject to tax withholding and the grantee is obligated to pay
the Company the amount required to be withheld, the Board may, in
its sole discretion, allow the grantee to satisfy the minimum
withholding tax obligation by electing to have the Company
withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required
to be withheld, determined on the date that the amount of tax to
be withheld is to be determined. All elections by a grantee to
have Shares withheld for this purpose shall be made in writing in
a form acceptable to the Board.
Section 11. Delivery and Registration of Stock.
The Company's obligation to deliver Shares with respect to
an award shall, if the Board 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 Board shall determine to be necessary or advisable to
comply with the provisions of the Securities 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.