exhibit108.htm


    Exhibit
10.8

    


    HEARTLAND
FINANCIAL USA, INC.

    EXECUTIVE
LIFE INSURANCE BONUS PLAN

    


    


    This Plan, made and entered into
effective as of December 31, 2007 by Heartland Financial USA, Inc. (the
“Company”).

    


    W I T N E S S E T
H

    


    WHEREAS, the Company desires to
establish the Heartland Financial USA, Inc. Executive Life Insurance Bonus Plan
(the “Plan”) to provide certain Employees with bonus compensation in recognition
of such Employees’ contributions to the financial success of the Company;
and

    


    WHEREAS, the Company and such Employee
who is a participant in the Plan will enter into an Agreement to reflect the
terms and conditions of the bonus arrangement;

    


    NOW, THEREFORE, in consideration of the
premises and the material covenants and agreements contained herein, the Company
does hereby establish the Plan as follows:

    


    


    SECTION
1

    DEFINITIONS

    


    “Agreement” shall mean an Executive
Life Insurance Bonus Plan Agreement between an Employer and a
Participant.  The form of each such Agreement is set forth in Exhibit
A hereto.

    


    “Change of Control” shall
mean:

    


    
      	
              (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.

            


    

    


    Notwithstanding
the foregoing, a Change of Control shall not be deemed to occur solely because
fifty-one percent (51%) or more of the combined voting power of the then
outstanding securities of the Employer or the Company are acquired by a trustee
or other fiduciary holding securities under one or more benefit plans maintained
for employees of the entity; or (2) any corporation which, immediately prior to
such acquisition, is owned directly or indirectly by the stockholders in the
same proportion as their ownership of stock immediately prior to such
acquisition.

    


    “Employer” shall mean the Company or
any subsidiary of the Company.

    


    “Participant” shall mean an employee of
an Employer who has become a participant in this Plan as provided in Section 2
hereof.

    


    “Plan” shall mean the Heartland
Financial USA, Inc. Executive Life Insurance Bonus Plan.

    


    “Policy” shall mean the flexible
premium policy of insurance on the life of a Participant as specified in the
Agreement.

    


    SECTION
2

    PARTICIPATION

    


    An employee of an Employer shall become
a Participant in this Plan as of the effective date of the Agreement entered
into between such employee and the employee’s Employer.  A Participant
shall remain a Participant in the Plan until termination of such
Agreement.

    


    SECTION
3

    BONUS
COMPENSATION

     

    An
Employer shall pay to each Participant, as provided in Section 4 below, for
services rendered to the Employer an amount equal to the annual premium on the
Policy insuring the life of such Participant as provided in the Agreement with
such Participant.  Each annual premium shall be determined by the
Employer to be an amount that is sufficient such that, if the Agreement remains
in effect until the Participant attains age 65, the Policy will remain in force
until the Participant attains age 80 under Policy interest crediting rates and
Policy charges in effect as of the Effective Date of the Agreement. Each Policy
shall have an initial face amount as set forth in the Agreement.  As
of each January 1 beginning January 1, 2009 and prior to termination of
this Agreement, the face amount of the Policy shall be increased by five percent
(5%) over the face amount of the Policy immediately prior to such increase;
provided, that in no event shall the face amount at any time exceed
$1,000,000.

    


    In the
event a Participant shall cease to be a full-time employee of an Employer and
becomes a part-time employee on or after age 55 and after the completion of 10
years of service, the Employer shall continue bonus payments hereunder as if
such Participant had continued as a full-time employee.  However, the
face amount of the Policy shall not be increased by 5% over the previous face
amount after the Participant elects part-time status.  Premium
payments will be adjusted to maintain the face amount of the Policy at the date
the Participant elects part-time status until the Participant attains age 80
under Policy interest crediting rates and Policy charges in effect at the date
the Participant begins part-time status.

    


    In the
event of any other change to part-time status, the bonus payments otherwise
payable hereunder shall be prorated based upon the ratio of the hours to be
worked by the Participant per year under the part-time arrangement with the
Employer to 2,080 hours.  As a condition of continuing bonus payments,
a Participant who has become a part-time employee shall sign an acknowledgement
of the effect of changing to such status.

    


    As
additional bonus compensation, the Employer shall pay to the Participant an
amount equal to forty percent (40%) of the annual premium paid
hereunder.

    


    SECTION
4

    PAYMENT
OF BONUS COMPENSATION

     

    The bonus
compensation payable to a Participant pursuant to Section 3 above
representing the annual premium shall be paid by the Company directly to the
insurance company that issued the Policy.  Each premium payment shall
be made on or prior to the due date for such premium
payment.   The additional bonus compensation provided for in the
last sentence of Section 3 above shall be paid in cash to the Participant within
the same calendar year but not later than sixty (60) days following each premium
payment.

    


    SECTION
5

    POLICY
OWNERSHIP

     

    The
Policy with respect to a Participant shall be purchased and owned by the
Participant.  All incidents of ownership of the Policy shall belong to
the Participant, including, without limitation, the right to name a beneficiary
of the Policy.  Notwithstanding the foregoing, the Participant may not
surrender the Policy or obtain Policy loans prior to termination of this
Agreement.

    


    SECTION
6

    TERMINATION

     

    Subject
to Section 7 below, each Agreement shall terminate as of the earlier of (i) the
date of the Participant’s termination from employment with the Employer,
including, without limitation, termination of employment on account of
disability or retirement, or (ii) the Participant’s attainment of age
65.  Additionally, each Agreement may be terminated by mutual written
agreement of the Employer and the Participant.

    


    SECTION
7

    CHANGE
OF CONTROL

     

    In the event of a Change of Control,
the Employer, the Company or any successor to this Plan shall pay, as provided
in Section 4 above, bonus compensation in a lump sum in an amount necessary to
provide the death benefit listed on Schedule 2 to the Participant’s Agreement
based upon the date of the Change of Control until the date the Participant
would attain age 80.  Notwithstanding the foregoing, the payment
hereunder shall not exceed an amount that would cause the Policy to cease to be
a “life insurance” contract under Section 7702(a) of the Internal Revenue
Code using the guideline premium requirements of Section 7702(c) of the
Internal Revenue Code.  Additionally, the Employer, the Company or any
successor to this Plan shall pay to the Participant an amount equal to forty
percent (40%) of such lump sum payment.  If the Participant incurs
legal fees or other expenses on or after the date of a Change of Control in an
effort to enforce or obtain the benefits of this Plan, the Company, shall,
regardless of the outcome of such effort, reimburse the Participant for such
legal fees and other expenses in an amount not to exceed $500,000.

    


    SECTION
8

    AMENDMENT

     

    With
respect to a current (as of 12/31/07) Participant, this Plan shall not be
modified or amended without the consent of the Participant.  With
respect to any future Participants, the Company may amend this Plan at any
time.

    


    


    IN
WITNESS WHEREOF, the Company has caused this Plan to be executed and the
Employee has executed this Agreement, all as of December 31, 2007.

     

    HEARTLAND FINANCIAL USA,
INC.

     

    


     

    By:                                                                

    Its:                                                                


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    EXECUTIVE
LIFE INSURANCE BONUS PLAN AGREEMENT

    


    


    This AGREEMENT, made and entered into
effective as of December 31, 2007 by and between the Employer and
_____________________ (the “Employee”).

    


    W I T N E S S E T
H

    


    WHEREAS, the Company desires to provide
the Employee with bonus compensation in recognition of the Employee’s
contribution to the financial success of the Company; and

    


    WHEREAS, the Company and the Employee
desire to enter into this Agreement to reflect the terms and conditions of the
Heartland Financial USA, Inc. Executive Life Insurance Bonus Plan;

    


    NOW, THEREFORE, in consideration of the
premises and the material covenants and agreements contained herein, the Company
and the Employee do hereby agree as follows:

    


    


    SECTION
1

    BONUS
COMPENSATION

     

    The
Company shall pay to the Employee, as provided in Section 2 below, for services
rendered to the Company an amount equal to the annual premium on a flexible
premium policy of insurance on the life of the Employee (the
“Policy”).  Each annual premium shall be determined by the Employer to
be an amount that is sufficient such that, if this Agreement remains in effect
until the Participant attains age 65, the Policy will remain in force until the
Participant attains age 80 under Policy interest crediting rates and Policy
charges in effect as of the Effective Date of this Agreement; see attached
Schedule 1, which is a life insurance illustration produced for the Employee
using the insurance carrier’s policy interest crediting rates and policy charges
as of the Effective Date. The Policy shall have an initial face amount of
________, representing two (2) times the Employee’s calendar year 2007
compensation.   As of each January 1 beginning January 1,
2009 and prior to termination of this Agreement pursuant to Section 4
below, the face amount of the Policy shall be increased by five percent (5%)
over the face amount of the Policy immediately prior to such increase; provided,
that in no event shall the face amount at any time exceed
$1,000,000.

    


    In the
event an Employee shall cease to be a full-time employee of an Employer and
becomes a part-time employee on or after age 55 and after the completion of 10
years of service, the Employer shall continue bonus payments hereunder as if
such Employee had continued as a full-time employee.  However, the
face amount of the Policy shall not be increased by 5% over the previous face
amount after the Participant elects part-time status.  Premium
payments will be adjusted to maintain the face amount of the Policy at the date
the Participant elects part-time status until the Participant attains age 80
under Policy interest crediting rates and Policy charges in effect at the date
the Participant begins part-time status.

    


    In the
event of any other change to part-time status, the bonus payments otherwise
payable hereunder shall be prorated based upon the ratio of the hours to be
worked by the participant per year under the part-time arrangement with the
Employer to 2,080 hours.  As a condition of continuing bonus payments,
an Employee who has become a part-time employee shall sign an acknowledgement of
the effect of changing to such status.

    


    As
additional bonus compensation, the Employer shall pay to the Participant an
amount equal to forty percent (40%) of the annual premium paid
hereunder.  The compensation to be paid hereunder shall be in addition
to all other compensation payable by the Company to the Employee.

    


    SECTION
2

    PAYMENT
OF BONUS COMPENSATION

     

    The bonus
compensation payable to the Employee representing the annual premium shall be
paid by the Company directly to the insurance company that issued the
Policy.  Each premium payment shall be made on or prior to the due
date for such premium payment.  The additional bonus compensation
provided for in  Section 1 above shall be paid in cash to the Employee
within the same calendar year but not later than sixty (60) days following each
premium payment.   The Employee acknowledges that all bonus
compensation shall represent taxable income to the Employee.  The
Company shall withhold, from such payment or any other compensation payable to
the Employee, the applicable required tax withholding for federal, state and
local income taxes and FICA taxes.

    


    SECTION
3

    POLICY
OWNERSHIP

     

    The
Policy shall be purchased and owned by the Employee.  All incidents of
ownership of the Policy shall belong to the Employee, including, without
limitation, the right to name a beneficiary of the
Policy.  Notwithstanding the foregoing, the Employee may not surrender
the Policy or secure any Policy loan prior to termination of this
Agreement.

    


    SECTION
4

    TERMINATION

     

    This
Agreement shall terminate as of the earlier of (i) the date of the Participant’s
termination from employment with the Employer, including, without limitation,
termination of employment on account of disability or retirement, or (ii) the
Participant’s attainment of age 65.  Additionally, this Agreement may
be terminated by mutual written agreement of the Company and the
Employee.  Upon termination of this Agreement, the Company’s
obligations under Sections 1 and 2 above shall cease.

    


    SECTION
5

    INSURER
NOT A PARTY

     

    The
insurer issuing the Policy shall not be a party to this Agreement for any
purpose.

    


    SECTION
6

    CHANGE
OF CONTROL

     

    In the event of a Change of Control (as
defined in the Heartland Financial USA, Inc. Executive Life Insurance Bonus
Plan), the Employer (or any successor to this Plan) shall pay, as provided in
Section 4 above, bonus compensation in a lump sum in an amount necessary to
provide the death benefit listed on Schedule 2 hereto based upon the date of the
Change of Control until the date the Employee would attain age
80.  Notwithstanding the foregoing, the payment hereunder shall not
exceed an amount that would cause the Policy to cease to be a “life insurance”
contract under Section 7702(a) of the Internal Revenue Code using the
guideline premium requirements of Section 7702(c) of the Internal Revenue
Code.  Additionally, the Employer, the Company or any successor to
this Plan shall pay to the Participant an amount equal to forty percent (40%) of
such lump sum payment.  If the Employee incurs legal fees or other
expenses on or after the date of a Change of Control in an effort to enforce or
obtain the benefits of this Plan, the Company, shall, regardless of the outcome
of such effort, reimburse the Employee for such legal fees and expenses in an
amount not to exceed $500,000.

    


    SECTION
7

    AMENDMENT

     

    This
Agreement shall not be modified or amended except in writing duly executed by
the Company and the Employee.

    


    SECTION
8

    NO
CONTRACT OF EMPLOYMENT

     

    This
Agreement shall not constitute a contract for the continuing employment of the
Employee by the Company or any affiliate of the Company.

    


    SECTION
9

    ASSIGNMENT

     

    This
Agreement may be assigned to an affiliate of the Company who becomes the
employer of the Employee.


    


     

    IN
WITNESS WHEREOF, the Employer has caused this Agreement to be executed and the
Employee has executed this Agreement, all as of December 31, 2007.

     

    


     

    ___________________________________

     

    


     

    By:                                                                

    Its:                                                                

    


    


    EMPLOYEE

    


    


    



    
      
        
          1/1662061.5 

           

        

         


      

      
         


        
          

        

      

      
         


      

    


    AMENDMENT
NO. 1 TO THE

    HEARTLAND
FINANCIAL USA, INC.

    EXECUTIVE
LIFE INSURANCE BONUS PLAN

    


    


    THIS
AMENDMENT, is effective as of December 31, 2007 by Heartland Financial USA, Inc.
(the “Company”).

    


    W I T N E S S E T
H

    


    WHEREAS,
the Company maintains the Heartland Financial USA, Inc. Executive Life Insurance
Bonus Plan (the “Plan”) effective December 31, 2007;

    


    WHEREAS,
the Company desires to amend the Plan effective as of December 31,
2007;

    


    WHEREAS,
Section 8 of the Plan reserves to the Company the right to amend the Plan;
and

    


    NOW,
THEREFORE, the Plan is hereby amended as follows:

    


    FIRST:  Section 1
of the Plan is hereby amended to add the following new definition of
“Disability” immediately prior to the definition of “Employer”
therein:

    


    “Disability”
shall mean a medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months.

    


    SECOND:  Section
6 of the Plan is hereby amended to read as follows:

    


    SECTION
6

    TERMINATION

     

    Subject
to Section 7 below, each Agreement shall terminate as of the earlier of (i) the
date of the Participant’s termination from employment with the Employer,
including, without limitation, termination of employment on account of
retirement, but excluding termination of employment on account of Disability, or
(ii) the Participant’s attainment of age 65.  Additionally, each
Agreement may be terminated by mutual written agreement of the Employer and the
Participant.


    


    THIRD:  Section
7 of the Plan is hereby amended to read as follows:

    


    SECTION
7

    CHANGE
OF CONTROL; DISABILITY

     

    In the event of a Change of Control or
Disability of a Participant, the Employer, the Company or any successor to this
Plan shall pay, as provided in Section 4 above, bonus compensation in a lump sum
in an amount necessary to provide the death benefit listed on Schedule 2 to the
Participant’s Agreement based upon the date of the Change of Control or date of
Disability until the date the Participant would attain age
80.  Notwithstanding the foregoing, the payment hereunder shall not
exceed an amount that would cause the Policy to cease to be a “life insurance”
contract under Section 7702(a) of the Internal Revenue Code using the
guideline premium requirements of Section 7702(c) of the Internal Revenue
Code.  Additionally, the Employer, the Company or any successor to
this Plan shall pay to the Participant an amount equal to forty percent (40%) of
such lump sum payment.  If the Participant incurs legal fees or other
expenses on or after the date of a Change of Control in an effort to enforce or
obtain the benefits of this Plan, the Company, shall, regardless of the outcome
of such effort, reimburse the Participant for such legal fees and other expenses
in an amount not to exceed $500,000.

    


    FOURTH:  The
Plan, as hereinabove amended shall remain in full force and effect.

    


    IN
WITNESS WHEREOF, the Company hereto has executed this Amendment on this day of,
2008, effective as of December 31, 2007.

    


    


    HEARTLAND FINANCIAL USA,
INC.

    


    


    


    By:                                                                

    Its:                                                                

    


    



    
      
        
          1/1662061.5 

           

        

         


      

      
         


        
          

        

      

      
         


      

    


    AMENDMENT
NO. 1

    TO

    EXHIBIT
A

    


    EXECUTIVE
LIFE INSURANCE BONUS PLAN AGREEMENT

    


    


    THIS
AMENDMENT, is effective as of December 31, 2007 between the Company and (the
“Employee”).

    


    W I T N E S S E T
H

    


    WHEREAS,
the Company maintains the Heartland Financial USA, Inc. Executive Life Insurance
Bonus Plan (the “Plan”) effective December 31, 2007;

    


    WHEREAS,
the Employee and the Company have previously executed an Executive Life
Insurance Bonus Plan Agreement (the “Agreement”);

    


    WHEREAS,
the Company desires to amend the Plan and the Agreement effective as of December
31, 2007;

    


    WHEREAS,
Section 7 of the Agreement provides that the Agreement shall not be
modified or amended except in writing duly executed by the Company and the
Employee; and

    


    WHEREAS,
by executing this amendment, the Company and the Employee hereby agree to such
amendment to the Plan and to the Agreement; and

    


    NOW,
THEREFORE, the Agreement is hereby amended as follows:

    


    FIRST:  Section 4
of the Agreement is hereby amended to read as follows:

    


    SECTION
4

    TERMINATION

     

    This
Agreement shall terminate as of the earlier of (i) the date of the Participant’s
termination from employment with the Employer, including, without limitation,
termination of employment on account of retirement, but excluding termination of
employment on account of Disability, or (ii) the Participant’s attainment of age
65.  Additionally, this Agreement may be terminated by mutual written
agreement of the Company and the Employee.  Upon termination of this
Agreement, the Company’s obligations under Sections 1 and 2 above shall
cease.


    


    SECOND:  Section
6 of the Agreement is hereby amended to read as follows:

    


    SECTION
6

    CHANGE
OF CONTROL; DISABILITY

     

    In the
event of a Change of Control or Disability of the Participant, the Employer, the
Company or any successor to this Plan shall pay, as provided in Section 4 above,
bonus compensation in a lump sum in an amount necessary to provide the death
benefit listed on Schedule 2 hereto based upon the date of the Change of Control
or the date of Disability until the date the Employee would attain age
80.  Notwithstanding the foregoing, the payment hereunder shall not
exceed an amount that would cause the Policy to cease to be a “life insurance”
contract under Section 7702(a) of the Internal Revenue Code using the
guideline premium requirements of Section 7702(c) of the Internal Revenue
Code.  Additionally, the Employer, the Company or any successor to
this Plan shall pay to the Participant an amount equal to forty percent (40%) of
such lump sum payment.  If the Employee incurs legal fees or other
expenses on or after the date of a Change of Control in an effort to enforce or
obtain the benefits of this Plan, the Company, shall, regardless of the outcome
of such effort, reimburse the Employee for such legal fees and expenses in an
amount not to exceed $500,000.

    


    


    IN
WITNESS WHEREOF, the parties hereto have executed this Amendment on this day of,
2008, as of December 31, 2007.

    


    


    


    


    


    By:                                                                

    Its:                                                                

    


    


    PARTICIPANT