HEARTLAND
FINANCIAL USA, INC.
CONSOLIDATED
BALANCE SHEETS
(Dollars
in thousands, except per share data)
|
||||||||
March
31, 2008
|
December
31, 2007
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$
|
33,572
|
$
|
46,468
|
||||
Federal
funds sold and other short-term investments
|
16,569
|
364
|
||||||
Cash
and cash equivalents
|
50,141
|
46,832
|
||||||
Securities:
|
||||||||
Trading, at fair
value
|
1,786
|
1,888
|
||||||
Available for sale, at fair
value (cost of $713,493 at March 31, 2008, and $672,499 at December 31,
2007)
|
727,239
|
682,383
|
||||||
Held to maturity, at cost (fair
value of $5,567 at March 31, 2008, and $5,754 at December 31,
2007)
|
5,665
|
5,678
|
||||||
Loans
held for sale
|
11,222
|
12,679
|
||||||
Gross
loans and leases:
|
||||||||
Held to maturity
|
2,271,663
|
2,280,167
|
||||||
Allowance for loan and lease
losses
|
(33,695
|
)
|
(32,993
|
)
|
||||
Loans
and leases, net
|
2,237,968
|
2,247,174
|
||||||
Premises,
furniture and equipment, net
|
119,542
|
120,285
|
||||||
Other
real estate, net
|
2,714
|
2,195
|
||||||
Goodwill
|
40,207
|
40,207
|
||||||
Other
intangible assets, net
|
8,416
|
8,369
|
||||||
Cash
surrender value on life insurance
|
56,018
|
55,532
|
||||||
Other
assets
|
39,562
|
40,904
|
||||||
TOTAL
ASSETS
|
$
|
3,300,480
|
$
|
3,264,126
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
LIABILITIES:
|
||||||||
Deposits:
|
||||||||
Demand
|
$
|
377,709
|
$
|
381,499
|
||||
Savings
|
863,067
|
855,036
|
||||||
Time
|
1,180,163
|
1,139,764
|
||||||
Total
deposits
|
2,420,939
|
2,376,299
|
||||||
Short-term
borrowings
|
226,106
|
354,146
|
||||||
Other
borrowings
|
380,479
|
263,607
|
||||||
Accrued
expenses and other liabilities
|
37,103
|
39,474
|
||||||
TOTAL
LIABILITIES
|
3,064,627
|
3,033,526
|
||||||
STOCKHOLDERS’
EQUITY:
|
||||||||
Preferred
stock (par value $1 per share; authorized, 184,000 shares; none issued or
outstanding)
|
-
|
-
|
||||||
Series
A Junior participating preferred stock (par value $1 per share;
authorized, 16,000 shares; none issued or outstanding)
|
-
|
-
|
||||||
Common
stock (par value $1 per share; authorized, 20,000,000 shares; issued
16,611,671 shares at March 31, 2008, and December 31,
2007)
|
16,612
|
16,612
|
||||||
Capital
surplus
|
37,480
|
37,269
|
||||||
Retained
earnings
|
177,750
|
173,891
|
||||||
Accumulated
other comprehensive income
|
9,763
|
6,506
|
||||||
Treasury
stock at cost (299,287 shares at March 31, 2008, and 184,655 shares at
December 31, 2007)
|
(5,752
|
)
|
(3,678
|
)
|
||||
TOTAL
STOCKHOLDERS’ EQUITY
|
235,853
|
230,600
|
||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
3,300,480
|
$
|
3,264,126
|
||||
See
accompanying notes to consolidated financial
statements.
|
HEARTLAND
FINANCIAL USA, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
AND
COMPREHENSIVE INCOME (Unaudited)
(Dollars
in thousands, except per share data)
|
||||||||||||||||||||||||||||||||||||||||
Common
Stock
|
Capital
Surplus
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
|
Treasury
Stock
|
Total
|
|||||||||||||||||||||||||||||||||||
Balance
at January 1, 2007
|
$
|
16,572
|
$
|
37,963
|
$
|
154,308
|
$
|
868
|
$
|
-
|
$
|
209,711
|
||||||||||||||||||||||||||||
Net
income
|
5,771
|
5,771
|
||||||||||||||||||||||||||||||||||||||
Unrealized
gain on securities available for sale arising during the
period
|
1,263
|
1,263
|
||||||||||||||||||||||||||||||||||||||
Reclassification
adjustment for net security gains realized in net income
|
(125
|
)
|
(125
|
)
|
||||||||||||||||||||||||||||||||||||
Unrealized
gain on derivatives arising during the period
|
53
|
53
|
||||||||||||||||||||||||||||||||||||||
Income
taxes
|
(451
|
)
|
(451
|
)
|
||||||||||||||||||||||||||||||||||||
Comprehensive
income
|
6,511
|
|||||||||||||||||||||||||||||||||||||||
Cash
dividends declared:
|
||||||||||||||||||||||||||||||||||||||||
Common, $0.09 per
share
|
(1,472
|
)
|
(1,472
|
)
|
||||||||||||||||||||||||||||||||||||
Purchase
of 176,251 shares of common stock
|
(4,959
|
)
|
(4,959
|
)
|
||||||||||||||||||||||||||||||||||||
Issuance
of 88,712 shares of common stock
|
40
|
(8
|
)
|
1,386
|
1,418
|
|||||||||||||||||||||||||||||||||||
Commitments
to issue common stock
|
641
|
641
|
||||||||||||||||||||||||||||||||||||||
Balance
at March 31, 2007
|
$
|
16,612
|
$
|
38,596
|
$
|
158,607
|
$
|
1,608
|
$
|
(3,573
|
)
|
$
|
211,850
|
|||||||||||||||||||||||||||
Balance
at December 31, 2007
|
$
|
16,612
|
$
|
37,269
|
$
|
173,891
|
$
|
6,506
|
$
|
(3,678
|
)
|
$
|
230,600
|
|||||||||||||||||||||||||||
Cumulative
effect from adoption of EITF 06-4
|
(791
|
)
|
(791
|
)
|
||||||||||||||||||||||||||||||||||||
Balance
at January 1, 2008
|
16,612
|
37,269
|
173,100
|
6,506
|
(3,678
|
)
|
229,809
|
|||||||||||||||||||||||||||||||||
Net
income
|
6,267
|
6,267
|
||||||||||||||||||||||||||||||||||||||
Unrealized
gain on securities available for sale arising during the
period
|
4,138
|
4,138
|
||||||||||||||||||||||||||||||||||||||
Reclassification
adjustment for net security gains realized in net income
|
(276
|
)
|
(276
|
)
|
||||||||||||||||||||||||||||||||||||
Unrealized
gain on derivatives arising during the period
|
1,450
|
1,450
|
||||||||||||||||||||||||||||||||||||||
Income
taxes
|
(2,055
|
)
|
(2,055
|
)
|
||||||||||||||||||||||||||||||||||||
Comprehensive
income
|
9,524
|
|||||||||||||||||||||||||||||||||||||||
Cash
dividends declared:
|
||||||||||||||||||||||||||||||||||||||||
Common, $0.10 per
share
|
(1,617
|
)
|
(1,617
|
)
|
||||||||||||||||||||||||||||||||||||
Purchase
of 129,069 shares of common stock
|
(2,412
|
)
|
(2,412
|
)
|
||||||||||||||||||||||||||||||||||||
Issuance
of 14,437 shares of common stock
|
(77
|
)
|
338
|
261
|
||||||||||||||||||||||||||||||||||||
Commitments
to issue common stock
|
288
|
288
|
||||||||||||||||||||||||||||||||||||||
Balance
at March 31, 2008
|
$
|
16,612
|
$
|
37,480
|
$
|
177,750
|
$
|
9,763
|
$
|
(5,752
|
)
|
$
|
235,853
|
Three
Months Ended
|
||||||||
(Dollars
and numbers in thousands, except per share data)
|
March
31, 2008
|
March
31, 2007
|
||||||
Income
from continuing operations
|
$
|
6,267
|
$
|
5,648
|
||||
Income
from discontinued operations
|
-
|
123
|
||||||
Net
income
|
$
|
6,267
|
$
|
5,771
|
||||
Weighted
average common shares outstanding for basic earnings per
share
|
16,378
|
16,543
|
||||||
Assumed
incremental common shares issued upon exercise of stock
options
|
88
|
218
|
||||||
Weighted
average common shares for diluted earnings per share
|
16,466
|
16,761
|
||||||
Earnings
per common share – basic
|
$
|
0.38
|
$
|
0.35
|
||||
Earnings
per common share – diluted
|
$
|
0.38
|
$
|
0.34
|
||||
Earnings
per common share from continuing operations – basic
|
$
|
0.38
|
$
|
0.34
|
||||
Earnings
per common share from continuing operations – diluted
|
$
|
0.38
|
$
|
0.34
|
||||
Earnings
per common share from discontinued operations – basic
|
$
|
-
|
$
|
0.01
|
||||
Earnings
per common share from discontinued operations – diluted
|
$
|
-
|
$
|
0.01
|
2008
|
2007
|
|||||||||||||||
Shares
|
Weighted-Average
Exercise Price
|
Shares
|
Weighted-Average
Exercise Price
|
|||||||||||||
Outstanding
at January 1
|
733,012
|
$
|
18.61
|
815,300
|
$
|
14.46
|
||||||||||
Granted
|
164,400
|
18.60
|
146,750
|
29.65
|
||||||||||||
Exercised
|
(3,050
|
)
|
11.72
|
(80,447
|
)
|
9.93
|
||||||||||
Forfeited
|
(3,750
|
)
|
24.99
|
(4,000
|
)
|
22.78
|
||||||||||
Outstanding
at March 31
|
890,612
|
$
|
18.60
|
877,603
|
$
|
17.38
|
||||||||||
Options
exercisable at March 31
|
370,462
|
$
|
13.04
|
411,978
|
$
|
11.06
|
||||||||||
Weighted-average
fair value of options granted during the three-month periods ended March
31
|
$
|
4.81
|
$
|
7.69
|
2008
|
2007
|
||||
Risk-free
interest rate
|
3.10%
|
4.74%
|
|||
Expected
option life
|
6.4
years
|
6.2
years
|
|||
Expected
volatility
|
26.96%
|
24.20%
|
|||
Expected
dividends
|
1.99%
|
1.25%
|
March
31, 2008
|
December
31, 2007
|
|||||||||||||||
Gross
Carrying Amount
|
Accumulated
Amortization
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
|||||||||||||
Amortized
intangible assets:
|
||||||||||||||||
Core deposit
intangibles
|
$
|
9,757
|
$
|
6,462
|
$
|
9,757
|
$
|
6,252
|
||||||||
Mortgage servicing
rights
|
6,908
|
2,713
|
6,505
|
2,592
|
||||||||||||
Customer relationship
intangible
|
1,177
|
251
|
1,177
|
226
|
||||||||||||
Total
|
$
|
17,842
|
$
|
9,426
|
$
|
17,439
|
$
|
9,070
|
||||||||
Unamortized
intangible assets
|
$
|
8,416
|
$
|
8,369
|
Core
Deposit
Intangibles
|
Mortgage
Servicing
Rights
|
Customer
Relationship
Intangible
|
Total
|
|||||||||||||
Nine
months ending December 31, 2008
|
$
|
635
|
$
|
1,570
|
$
|
77
|
$
|
2,282
|
||||||||
Year
ending December 31,
|
||||||||||||||||
2009
|
748
|
750
|
102
|
1,600
|
||||||||||||
2010
|
465
|
625
|
101
|
1,191
|
||||||||||||
2011
|
450
|
500
|
99
|
1,049
|
||||||||||||
2012
|
422
|
375
|
55
|
852
|
||||||||||||
2013
|
405
|
250
|
45
|
700
|
||||||||||||
Thereafter
|
170
|
125
|
447
|
742
|
Total
Fair Value
Mar.
31, 2008
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Trading
securities
|
$
|
1,786
|
$
|
1,786
|
$
|
-
|
$
|
-
|
||||||||
Available-for-sale
securities
|
727,239
|
229,378
|
486,961
|
10,900
|
||||||||||||
Derivative
assets
|
2,254
|
-
|
2,254
|
-
|
||||||||||||
Total
assets at fair value
|
$
|
731,279
|
$
|
231,164
|
$
|
489,215
|
$
|
10,900
|
Fair
Value
|
|||
Balance
at January 1, 2008
|
$
|
200
|
|
Purchases
|
10,700
|
||
Balance
at March 31, 2008
|
$
|
10,900
|
Carrying
Value
at
March 31, 2008
|
Quarter
Ended March 31, 2008
|
||||||||||||||||||
Total
|
Level
1
|
Level
2
|
Level
3
|
Total
Losses
|
|||||||||||||||
Impaired
loans
|
$
|
3,704
|
$
|
-
|
$
|
-
|
$
|
3,704
|
$
|
651
|
*
|
The
economic impact of past and any future terrorist attacks, acts of war or
threats thereof, and the response of the United States to any such threats
and attacks.
|
*
|
The
costs, effects and outcomes of existing or future
litigation.
|
*
|
Changes
in accounting policies and practices, as may be adopted by state and
federal regulatory agencies, the Financial Accounting Standards Board, the
Securities and Exchange Commission and the Public Company Accounting
Oversight Board.
|
*
|
The
ability of Heartland to manage the risks associated with the foregoing as
well as anticipated.
|
*
|
Heartland
has continued to experience growth in more complex commercial loans as
compared to relatively lower-risk residential real estate
loans.
|
*
|
During
the last several years, Heartland has entered new geographical markets in
which it had little or no previous lending experience.
|
*
|
Heartland
has experienced an increase in net charge-offs and nonperforming loans
during the most recent quarters.
|
Three
Months Ended
|
||||||||||||||||
March
31, 2008
|
March
31, 2007
|
Change
|
%
Change
|
|||||||||||||
NONINTEREST
INCOME:
|
||||||||||||||||
Service
charges and fees, net
|
$
|
2,615
|
$
|
2,571
|
$
|
44
|
2
|
%
|
||||||||
Loan
servicing income
|
1,296
|
995
|
301
|
30
|
||||||||||||
Trust
fees
|
2,021
|
2,121
|
(100
|
)
|
(5
|
)
|
||||||||||
Brokerage
and insurance commissions
|
892
|
493
|
399
|
81
|
||||||||||||
Securities
gains, net
|
362
|
125
|
237
|
190
|
||||||||||||
Gain
(loss) on trading account securities, net
|
(207
|
)
|
41
|
(248
|
)
|
(605
|
)
|
|||||||||
Impairment
loss on equity securities
|
(86
|
)
|
-
|
(86
|
)
|
(100
|
)
|
|||||||||
Gains
on sale of loans
|
504
|
591
|
(87
|
)
|
(15
|
)
|
||||||||||
Income
on bank owned life insurance
|
463
|
300
|
163
|
54
|
||||||||||||
Other
noninterest income
|
614
|
374
|
240
|
64
|
||||||||||||
TOTAL
NONINTEREST INCOME
|
$
|
8,474
|
$
|
7,611
|
$
|
863
|
11
|
%
|
Three
Months Ended
|
||||||||||||||||
March
31, 2008
|
March
31, 2007
|
Change
|
%
Change
|
|||||||||||||
NONINTEREST
EXPENSES:
|
||||||||||||||||
Salaries
and employee benefits
|
$
|
14,793
|
$
|
14,169
|
$
|
624
|
4
|
%
|
||||||||
Occupancy
|
2,344
|
1,927
|
417
|
22
|
||||||||||||
Furniture
and equipment
|
1,768
|
1,676
|
92
|
5
|
||||||||||||
Outside
services
|
2,510
|
2,269
|
241
|
11
|
||||||||||||
Advertising
|
795
|
769
|
26
|
3
|
||||||||||||
Intangible
assets amortization
|
236
|
219
|
17
|
8
|
||||||||||||
Other
noninterest expenses
|
3,318
|
3,367
|
(49
|
)
|
(1
|
)
|
||||||||||
TOTAL
NONINTEREST EXPENSES
|
$
|
25,764
|
$
|
24,396
|
$
|
1,368
|
6
|
%
|
LOAN
PORTFOLIO
(Dollars
in thousands)
|
||||||||||||||
March
31, 2008
|
December
31, 2007
|
|||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||
Commercial
and commercial real estate
|
$
|
1,616,190
|
71.03
|
%
|
$
|
1,632,597
|
71.48
|
%
|
||||||
Residential
mortgage
|
210,147
|
9.24
|
217,044
|
9.50
|
||||||||||
Agricultural
and agricultural real estate
|
238,178
|
10.47
|
225,663
|
9.88
|
||||||||||
Consumer
|
202,348
|
8.89
|
199,518
|
8.74
|
||||||||||
Lease
financing, net
|
8,386
|
0.37
|
9,158
|
0.40
|
||||||||||
Gross
loans and leases
|
2,275,249
|
100.00
|
%
|
2,283,980
|
100.00
|
%
|
||||||||
Unearned
discount
|
(2,137
|
)
|
(2,107
|
)
|
||||||||||
Deferred
loan fees
|
(1,449
|
)
|
(1,706
|
)
|
||||||||||
Total
loans and leases
|
2,271,663
|
2,280,167
|
||||||||||||
Allowance
for loan and lease losses
|
(33,695
|
)
|
(32,993
|
)
|
||||||||||
Loans
and leases, net
|
$
|
2,237,968
|
$
|
2,247,174
|
ANALYSIS
OF ALLOWANCE FOR LOAN AND LEASE LOSSES
(Dollars
in thousands)
|
||||||||
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Balance
at beginning of period
|
$
|
32,993
|
$
|
29,981
|
||||
Provision
for loan and lease losses from continuing operations
|
1,761
|
1,926
|
||||||
Recoveries
on loans and leases previously charged off
|
256
|
364
|
||||||
Loans
and leases charged off
|
(1,315
|
)
|
(726
|
)
|
||||
Balance
at end of period
|
$
|
33,695
|
$
|
31,545
|
||||
Net
charge offs to average loans and leases
|
0.05
|
%
|
0.02
|
%
|
NONPERFORMING
ASSETS
(Dollars
in thousands)
|
||||||||||||||||
As
of March 31,
|
As
of December 31,
|
|||||||||||||||
2008
|
2007
|
2007
|
2006
|
|||||||||||||
Nonaccrual
loans and leases
|
$
|
38,748
|
$
|
9,436
|
$
|
30,694
|
$
|
8,104
|
||||||||
Loan
and leases contractually past due 90 days or more
|
378
|
494
|
1,134
|
315
|
||||||||||||
Total
nonperforming loans and leases
|
39,126
|
9,930
|
31,828
|
8,419
|
||||||||||||
Other
real estate
|
2,714
|
1,689
|
2,195
|
1,575
|
||||||||||||
Other
repossessed assets, net
|
494
|
359
|
438
|
349
|
||||||||||||
Total
nonperforming assets
|
$
|
42,334
|
$
|
11,978
|
$
|
34,461
|
$
|
10,343
|
||||||||
Nonperforming
loans and leases to total loans and leases
|
1.72
|
%
|
0.45
|
%
|
1.40
|
%
|
0.39
|
%
|
SECURITIES
PORTFOLIO COMPOSITION
(Dollars
in thousands)
|
||||||||||||||
March
31, 2008
|
December
31, 2007
|
|||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||
U.S.
government corporations and agencies
|
$
|
229,378
|
31.22
|
%
|
$
|
255,257
|
37.00
|
%
|
||||||
Mortgage-backed
securities
|
302,957
|
41.24
|
244,934
|
35.50
|
||||||||||
Obligation
of states and political subdivisions
|
158,684
|
21.60
|
147,398
|
21.36
|
||||||||||
Other
securities
|
43,671
|
5.94
|
42,360
|
6.14
|
||||||||||
Total
securities
|
$
|
734,690
|
100.00
|
%
|
$
|
689,949
|
100.00
|
%
|
Amount
Issued
|
Issuance
Date
|
Interest
Rate
|
Interest Rate as of
3/31
/0
8
|
Maturity
Date
|
Callable
Date
|
|
$
|
5,000
|
08/07/00
|
10.60%
|
10.60%
|
09/07/2030
|
09/07/2010
|
20,000
|
10/10/03
|
8.25%
|
8.25%
|
10/10/2033
|
10/10/2008
|
|
25,000
|
03/17/04
|
2.75%
over Libor
|
5.55%
|
03/17/2034
|
03/17/2009
|
|
20,000
|
01/31/06
|
1.33%
over Libor
|
5.59%
|
04/07/2036
|
04/07/2011
|
|
20,000
|
06/21/07
|
6.75%
|
6.75%
|
09/15/2037
|
06/15/2012
|
|
20,000
|
06/26/07
|
1.48%
over Libor
|
4.56%
|
09/01/2037
|
09/01/2012
|
|
$
|
110,000
|
CAPITAL
RATIOS
(Dollars
in thousands)
|
||||||||||||||
March
31, 2008
|
December
31, 2007
|
|||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||
Risk-Based
Capital Ratios
1
|
||||||||||||||
Tier 1 capital
|
$
|
256,605
|
9.92
|
%
|
$
|
253,675
|
9.74
|
%
|
||||||
Tier 1 capital minimum
requirement
|
103,444
|
4.00
|
%
|
104,191
|
4.00
|
%
|
||||||||
Excess
|
$
|
153,161
|
5.92
|
%
|
$
|
149,484
|
5.74
|
%
|
||||||
Total
capital
|
$
|
327,031
|
12.65
|
%
|
$
|
325,016
|
12.48
|
%
|
||||||
Total
capital minimum requirement
|
206,888
|
8.00
|
%
|
208,382
|
8.00
|
%
|
||||||||
Excess
|
$
|
120,143
|
4.65
|
%
|
$
|
116,634
|
4.48
|
%
|
||||||
Total
risk-adjusted assets
|
$
|
2,586,099
|
$
|
2,604,771
|
||||||||||
Leverage
Capital Ratios
2
|
||||||||||||||
Tier 1 capital
|
$
|
256,605
|
7.96
|
%
|
$
|
253,675
|
8.01
|
%
|
||||||
Tier 1 capital minimum
requirement
3
|
128,987
|
4.00
|
%
|
126,644
|
4.00
|
%
|
||||||||
Excess
|
$
|
127,618
|
3.96
|
%
|
$
|
127,031
|
4.01
|
%
|
||||||
Average
adjusted assets (less goodwill and other intangible
assets)
|
$
|
3,224,686
|
$
|
3,166,102
|
(1)
|
Based
on the risk-based capital guidelines of the Federal Reserve, a bank
holding company is required to maintain a Tier 1 capital to risk-adjusted
assets ratio of 4.00% and total capital to risk-adjusted assets ratio of
8.00%.
|
(2)
|
The
leverage ratio is defined as the ratio of Tier 1 capital to average
adjusted assets.
|
(3)
|
Management
of Heartland has established a minimum target leverage ratio of
4.00%. Based on Federal Reserve guidelines, a bank holding
company generally is required to maintain a leverage ratio of 3.00% plus
additional capital of at least 100 basis
points.
|
Period
|
(a)
Total
Number of
Shares Purchased |
(b)
Average
Price
Paid per Share |
(c)
Total
Number of Shares
Purchased as Part of Publicly Announced Plans or Programs (1) |
(d)
Approximate
Dollar Value of Shares
that May Yet Be Purchased Under the Plans or Programs (1) |
01/01/08-
01/31/08
|
20,211
|
$17.52
|
20,211
|
$5,697,618
|
02/01/08-
02/29/08
|
41,472
|
$19.16
|
41,472
|
$4,531,002
|
03/01/08-
03/31/08
|
67,386
|
$18.75
|
67,386
|
$4,247,087
|
Total:
|
129,069
|
$18.69
|
129,069
|
N/A
|
(1)
|
Effective
April 17, 2007, Heartland’s board of directors authorized management to
acquire and hold up to 250,000 shares of common stock as treasury shares
at any one time. Effective January 24, 2008, Heartland’s board of
directors authorized an expansion of the number of treasury shares at any
one time to 500,000.
|
10.1
|
Form
of Split-Dollar Life Insurance Plan effective November 13, 2001, between
the subsidiaries of Heartland Financial USA, Inc. and their selected
officers, including four subsequent amendments effective January 1, 2002,
May 1, 2002, September 16, 2003 and December 31, 2007. These plans are in
place at Dubuque Bank and Trust Company, Galena State Bank & Trust
Co., First Community Bank, Riverside Community Bank, Wisconsin Community
Bank and New Mexico Bank & Trust.
|
10.2
|
Form
of Executive Supplemental Life Insurance Plan effective January 20, 2004,
between the subsidiaries of Heartland Financial USA, Inc. and their
selected officers, including a subsequent amendment effective December 31,
2007. These plans are in place at Dubuque Bank and Trust Company, Galena
State Bank & Trust Co., First Community Bank, Riverside Community
Bank, Wisconsin Community Bank and New Mexico Bank &
Trust.
|
10.3
|
Form
of Executive Life Insurance Bonus Plan effective December 31, 2007,
between Heartland Financial USA, Inc. and selected officers of Heartland
Financial USA, Inc. and its subsidiaries.
|
10.4
|
Second
Amendment to Amended and Restated Credit Agreement among Heartland
Financial USA, Inc. and The Northern Trust Company and U.S. Bank National
Association, dated as of April 28, 2008.
|
31.1
|
Certification
of Chief Executive Officer pursuant to Rule
13a-14(a)/15d-14(a).
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule
13a-14(a)/15d-14(a).
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
Article
9
|
|
Non-Compete
|
|
Article
10
|
|
Miscellaneous
|
10.8.1
|
Interpreting
the provisions of the Plan;
|
10.8.2
|
Establishing
and revising the method of accounting for the
Plan;
|
10.8.3
|
Maintaining
a record of benefit payments; and
|
10.8.4
|
Establishing
rules and prescribing any forms necessary or desirable to administer the
Plan.
|
|
1.5
|
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 Corporation.
|
|
3.1
|
Participant’s
Interest. With respect to each Policy, the Participant, or the
Participant’s assignee, shall have the right to designate the beneficiary
of an amount of death proceeds equal to the Indexed Baseline
Benefit. The Participant shall also have the right to elect and
change settlement options with the consent of the Corporation and the
Insurer. The Participant’s Interest shall cease upon the
Participant’s ninetieth (90th)
birthday.
|
8.3
|
Automatic
Termination. Subject to Sections 8.2 and 8.4, participation in
this Plan shall automatically terminate upon the occurrence of any of the
following events:
|
8.3.1
|
The
bankruptcy, receivership, or dissolution of the
Corporation;
|
8.3.2
|
The
Participant’s termination of employment with the Corporation (for reasons
other than death, Early Retirement, Normal Retirement, Disability or
Change of Control).
|
8.3.3
|
The
Participant’s cessation of full-time employee status with the Corporation
prior to age 55; or
|
8.3.4
|
The
Participant’s violation of the terms of Article
9.
|
|
Primary
Beneficiary: _________________________________________________________
|
|
Dated:_____________
|
|
Dated:__________________
|
|
EXHIBIT
D
|
|
CHANGE
OF CONTROL
|
|
Change
of Control shall mean:
|
Participant
|
MassMutual
Policy Number
|
1.1
|
“
Beneficiary
”
means each designated person, or the estate of a deceased Participant,
entitled to benefits, if any, upon the death of a
Participant.
|
1.2
|
“
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.
|
1.3
|
“
Board
” means
the Board of Directors of the Company as from time to time
constituted.
|
1.4
|
“
Change of
Control
” means:
|
(i)
|
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
|
(ii)
|
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
|
(iii)
|
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.
|
1.5
|
“
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.
|
1.6
|
“
Company’s
Interest
” means the benefit set forth in Section
3.2.
|
1.7
|
“
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.
|
1.8
|
“
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.
|
1.9
|
“
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.
|
1.10
|
“
Election to
Participate
” means the form required by the Plan Administrator of
an eligible Employee to indicate acceptance of participation in this
Plan.
|
1.11
|
“
Employee
” means
an active employee of the Company.
|
1.12
|
“
Insured
” means
the individual Participant whose life is
insured.
|
1.13
|
“
Insurer
” means
the insurance company issuing the life insurance policy on the life of the
Insured.
|
1.14
|
“
Net Death
Proceeds
” means the total death proceeds of the Policy minus the
cash surrender value.
|
1.15
|
“
Normal Retirement
Age
” means the Participant attaining age
65.
|
1.16
|
“
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.
|
1.17
|
“
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.
|
1.18
|
“
Participant’s
Interest
” means the benefit set forth in Section
3.1.
|
1.19
|
“
Policy
” means
the individual insurance policy or policies adopted by the Plan
Administrator for purposes of insuring a Participant’s life under this
Plan.
|
1.20
|
“
Plan
Administrator
” means the plan administrator described in Article
10.
|
1.21
|
“
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.
|
1.22
|
“
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:
|
(a)
|
Gross
negligence or gross neglect of duties;
or
|
(b)
|
Commission
of a felony or of a gross misdemeanor involving moral turpitude;
or
|
(c)
|
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
|
(d)
|
Issuance
by the Company’s banking regulators of an order for removal of the
Participant.
|
2.1
|
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.
|
|
2.2
|
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.
|
2.3
|
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.
|
2.4
|
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.
|
2.5
|
Disability
.
|
|
(a)
|
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.
|
|
(b)
|
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.
|
2.6
|
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.
|
3.1
|
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:
|
(a)
|
Forfeiture
of Participant’s rights upon Termination of
Employment;
|
(b)
|
Forfeiture
of Participant’s rights upon Termination for
Cause;
|
(c)
|
Forfeiture
of Participant’s rights upon gainful employment following
Disability;
|
(d)
|
Forfeiture
of Participant’s rights upon attaining age ninety
(90);
|
(e)
|
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
|
(f)
|
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).
|
3.2
|
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.
|
4.1
|
Premium
Payment
. The Company shall pay all premiums due on all
Policies.
|
4.2
|
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.
|
4.3
|
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.
|
|
ARTICLE
5
|
|
BENEFICIARIES
|
5.1
|
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.
|
5.2
|
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 cancelled. The Plan Administrator shall be
entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Plan Administrator prior to the
Participant’s death.
|
5.3
|
Acknowledgment
. No
designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan
Administrator or its designated
agent.
|
5.4
|
No Beneficiary
Designation
. If the Participant dies without a valid
designation of beneficiary, or if all designated Beneficiaries predecease
the Participant, then the Participant’s surviving spouse shall be the
designated Beneficiary. If the Participant has no surviving
spouse, the benefits shall be made payable to the personal representative
of the Participant's estate.
|
5.5
|
Facility of
Payment
. If the Plan Administrator determines, in its
discretion, that a benefit is to be paid to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of that
person’s property, the Plan Administrator may direct payment of such
benefit to the guardian, legal representative or person having the care or
custody of such minor, incompetent person or incapable
person. The Plan Administrator may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Any payment of a benefit shall be
a payment for the account of the Participant and the Participant’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment
amount.
|
8.1
|
Claims
Procedure
. A Participant or Beneficiary (“claimant”) who
has not received benefits under the Plan that he or she believes should be
paid shall make a claim for such benefits as
follows:
|
8.1.1
|
Initiation – Written
Claim
. The claimant initiates a claim by submitting to
the Plan Administrator a written claim for the
benefits.
|
8.1.2
|
Timing of Plan
Administrator Response
. The Plan Administrator shall
respond to such claimant within 90 days after receiving the
claim. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional 90 days by
notifying the claimant in writing, prior to the end of the initial 90-day
period, that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which
the Plan Administrator expects to render its
decision.
|
8.1.3
|
Notice of
Decision
. If the Plan Administrator denies part or all
of the claim, the Plan Administrator shall notify the claimant in writing
of such denial. The Plan Administrator shall write the
notification in a manner calculated to be understood by the
claimant. The notification shall set
forth:
|
(a)
|
The
specific reasons for the denial;
|
(b)
|
A
reference to the specific provisions of the Plan on which the denial is
based;
|
(c)
|
A
description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is
needed;
|
(d)
|
An
explanation of the Plan’s review procedures and the time limits applicable
to such procedures; and
|
(e)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
|
8.2
|
Review
Procedure
. If the Plan Administrator denies part or all
of the claim, the claimant shall have the opportunity for a full and fair
review by the Plan Administrator of the denial, as
follows:
|
8.2.1
|
Initiation – Written
Request
. To initiate the review, the claimant, within 60
days after receiving the Plan Administrator’s notice of denial, must file
with the Plan Administrator a written request for
review.
|
8.2.2
|
Additional Submissions
– Information Access
. The claimant shall then have the
opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall
also provide the claimant, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the claimant’s
claim for benefits.
|
8.2.3
|
Considerations on
Review
. In considering the review, the Plan
Administrator shall take into account all materials and information the
claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
|
8.2.4
|
Timing of Plan
Administrator’s Response
. The Plan Administrator shall
respond in writing to such claimant within 60 days after receiving the
request for review. If the Plan Administrator determines that
special circumstances require additional time for processing the claim,
the Plan Administrator can extend the response period by an additional 60
days by notifying the claimant in writing, prior to the end of the initial
60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date
by which the Plan Administrator expects to render its
decision.
|
8.2.5
|
Notice of
Decision
. The Plan Administrator shall notify the
claimant in writing of its decision on review. The Plan
Administrator shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set
forth:
|
(a)
|
The
specific reasons for the denial;
|
(b)
|
A
reference to the specific provisions of the Plan on which the denial is
based;
|
(c)
|
A
statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits;
and
|
(d)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
|
9.1
|
Amendment or
Termination of Plan
. Except as otherwise provided in
Sections 2.5, 2.6, 9.2 and 9.4, the Company has the unilateral right at
any time (i) to amend or terminate the Plan, except this Plan shall not be
amended or terminated within twelve (12) months prior to a Change of
Control without the Participant’s written consent or (ii) to exercise its
right to surrender the Policy.
|
9.2
|
Amendment or
Termination of Plan Upon Change of
Control
. Notwithstanding anything herein to the
contrary, if there should be a Change of Control in the Company, then the
Participant’s Interest under this Plan shall be frozen as of the date the
Change of Control occurs. Further, the Company shall pay or
create a vehicle to pay, or cause the successor in interest to repay any
outstanding loans and to pay to Insurer the amount of premium necessary to
acquire in full (endow) enough insurance coverage to pay the Participant’s
Interest as then frozen and the Company’s premium payments under the
Policy. Further, as of the date of the Change of Control, all
amounts due to Participant under this Plan shall be fully vested and shall
not be subject to subsequent events including, but not limited to, the
termination of employment of the
Participant.
|
9.3
|
Automatic
Termination
. Subject to Sections 3.1, 9.2 and 9.4,
participation in this Plan shall automatically terminate upon the
occurrence of any of the following
events:
|
9.3.1
|
The
bankruptcy, receivership or dissolution of the
Company;
|
9.3.2
|
The
Participant’s violation of the terms of Article
11.
|
9.4
|
Disposition of the
Policy on Termination of the Plan During the Participant’s
Lifetime
. If the Plan is terminated, the Company shall
give notice as set forth below.
|
9.4.1
|
Unless
the Participant’s interest in the Plan is terminated under Section 3.1 or
9.3 above, for sixty (60) days after the date the Participant receives
notice from the Company of the termination of this Plan during the
Participant’s lifetime, the Participant shall have the assignable option
to purchase the Policy from the Company. The purchase price for
the Policy shall be the greater of the total amount of the premium
payments made by the Company hereunder or the cash value of the Policy,
less any indebtedness secured by the Policy which remains outstanding as
of the date of such termination, including interest on such
indebtedness. Upon receipt of such amount, the Company shall
transfer all of its rights, title and interest in and to the Policy to the
Participant or his or her assignee, by the execution and delivery of an
appropriate instrument of transfer.
|
9.4.2
|
If
the Participant or his or her assignee fails to exercise such option
within such sixty (60) day period, then the Company may enforce any of its
ownership rights under the policy. Thereafter, neither the
Participant, the Participant’s assignee nor the assignee’s heirs, assigns
or beneficiaries shall have any further interest in and to the Policy,
either under the terms thereof or under this
Plan.
|
10.1
|
Plan Administrator
Duties
. This Plan shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or
persons as the Board may choose. Members of the Plan
Administrator may be Participants under this Plan. The Plan
Administrator shall also have the discretion and authority to (i) make,
amend, interpret and enforce all appropriate rules and regulations for the
administration of this Plan and (ii) decide or resolve any and all
questions including interpretations of this Plan, as may arise in
connection with the Plan.
|
10.2
|
Agents
. In
the administration of this Plan, the Plan Administrator may employ agents
and delegate to them such administrative duties as it sees fit, (including
acting through a duly appointed representative), and may from time to time
consult with counsel who may be counsel to the
Company.
|
10.3
|
Binding Effect of
Decisions
. The decision or action of the Plan
Administrator with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and
the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
|
10.4
|
Indemnity of Plan
Administrator
. The Company shall indemnify and hold
harmless the members of the Plan Administrator against any and all claims,
losses, damages, expenses or liabilities arising from any action or
failure to act with respect to this Plan, except in the case of willful
misconduct by the Plan Administrator or any of its
members.
|
10.5
|
Information
. To
enable the Plan Administrator to perform its functions, the Company shall
supply full and timely information to the Plan Administrator on all
matters relating to the Compensation of its Participants, the date and
circumstances of the retirement, Disability, death or Termination of
Employment of its Participants, and such other pertinent information as
the Plan Administrator may reasonably
require.
|
10.6
|
Suicide, Misstatement
or Fraud
. The Company shall not pay any benefit under
this Plan if the Participant:
|
10.6.1
|
Commits
suicide within two years (i) after the date of this Plan or (ii) issuance
of the Policy, whichever occurs
later;
|
10.6.2
|
Has
made any material misstatement of fact or committed fraud (as determined
by the Insurer) on any application for life insurance benefits provided by
the Company under this Plan; or
|
10.6.3
|
Should
die while engaged in any activity or under circumstances that are listed
as exclusions in the Policy.
|
11.1
|
Non-Compete
. For
purposes of this Plan, a Participant may not engage in any competitive
practices or activity prior to or after Early Retirement or Normal
Retirement for a period of two years, in an area within a 50-mile radius
of any branch or location of the Company or Heartland now or hereafter
existing, without the express written consent of the Company or
Heartland. A Participant shall not divulge to any person, firm
or corporation, or use on Participant’s own behalf, any information,
acquired by Participant during Participant’s employment with the Company
or Heartland, concerning the Company or Heartland’s accounts, clients,
customers, policyholders, expiration lists or business or information of
any kind whatsoever owned by the Company or
Heartland. Furthermore, for purposes of this Plan, the
Participant shall be deemed to compete with the Company or Heartland, if
as hereinafter provided, the Participant (i) competes directly with the
Company or Heartland; (ii) is or becomes financially or beneficially
interested in any person and/or business who or which competes with the
Company; however, ownership of not more than five percent (5%) of any
class of securities traded actively over-the-counter or through a stock
exchange shall not violate this condition (ii); or (iii) acts directly or
indirectly, as broker, consultant, agent, lender, guarantor or salesman
for or on behalf of any person or business who or which competes with the
Company or Heartland.
|
12.1
|
Binding
Effect
. This Plan shall bind each Participant and the
Company, their beneficiaries, survivors, executors, administrators and
transferees and any Beneficiary.
|
12.2
|
No Guarantee of
Employment
. This Plan is not an employment policy or
contract. It does not give a Participant the right to remain an Employee
of the Company, nor does it interfere with the Company's right to
discharge a Participant. It also does not require a Participant
to remain an Employee nor interfere with a Participant's right to
terminate employment at any time.
|
12.3
|
Applicable
Law
. The Plan and all rights hereunder shall be governed
by and construed according to the laws of the State of Iowa, except to the
extent preempted by the laws of the United States of
America.
|
12.4
|
Reorganization
. The
Company shall not merge or consolidate into or with another company, or
reorganize, or sell substantially all of its assets to another company,
firm or person unless such succeeding or continuing company, firm or
person agrees to assume and discharge the obligations of the Company under
this Plan. Upon the occurrence of such event, the term
“Company” as used in this Plan shall be deemed to refer to the successor
or survivor company.
|
12.5
|
Notice
. Any
notice or filing required or permitted to be given to the Plan
Administrator under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
|
Director
of Human Resources
|
Heartland
Financial USA, Inc.
|
1398
Central Avenue
|
Dubuque,
IA 52001
|
12.6
|
Entire
Agreement
. This Plan, along with a Participant’s
Election to Participate, Beneficiary Designation Form and any agreement in
writing between the Company and any Participant, constitute the entire
agreement between the Company and the Participant as to the subject matter
hereof. No rights are granted to the Participant under this
Plan other than those specifically set forth
herein.
|
Participant
|
MassMutual
Policy Number
|
|
Primary: ____________________________________________________________________
|
|
___________________________________________________________________________
|
|
Contingent: __________________________________________________________________
|
|
___________________________________________________________________________
|
|
Note: To
name a trust as Beneficiary, please provide the name of the trustee(s) and
the
exact
name and date of the trust
agreement.
|
(i)
|
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 Employer of a Participant or the Company;
or
|
(ii)
|
The
individuals who, as of the date hereof, are members of the Board of
Directors of the Company (the “Board”) cease for any reason to constitute
a majority of the Board, unless the election, or nomination for election
by the stockholders, of any new director, was approved by a majority vote
of the Board and such new director shall, for purposes of this Plan, be
considered as a member of the Board;
or
|
(iii)
|
Approval
by the stockholders of the Employer of a Participant or the Company 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 such Employer or the Company
outstanding immediately before such merger or consolidation; 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 such Employer or
the Company.
|
Name of Bank
|
Commitment
|
Applicable
Lending Offices
|
The
Northern Trust Company
|
$20,000,000
|
For
all Loans:
50
South LaSalle Street
Chicago,
Illinois 60675
|
U.S.
Bank National Association
|
$20,000,000
|
For
all Loans:
222nd
Avenue
Cedar
Rapids, Iowa 52401
|
Total
Commitments
|
$40,000,000
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purpose
in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures as of the end of the period covered
by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting, and;
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
function):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize, and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purpose
in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures as of the end of the period covered
by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting, and;
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
function):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize, and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|