1692346.v2

Exhibit 10.36

 

Change Of Control Agreement

 

This Change Of Control Agreement (this “Agreement”) is made and entered into as
of February 1, 2020 (the “Effective Date”) by and between Midland States Bank,
an Illinois banking corporation (the “Bank, and collectively with Midland States
Bancorp, Inc. (the “Company”), the “Employer”), and Don Spring (the
“Executive”).

Recitals

A. The Bank is a wholly-owned subsidiary of the Company.

B. Executive and Employer have agreed that this Agreement shall set forth
certain terms and conditions of Executive’s employment in the event of a Change
of Control (as defined herein) and certain restrictive covenants applicable to
any termination of Executive’s employment with Employer.

C. Executive acknowledges that Employer is not required to provide the
Change of Control benefits set forth herein and such benefits are being provided
as an inducement for the Executive to remain with the Employer during a change
of control process, should such transaction occur during Executive’s term of
employment, and in consideration of the restrictive covenants set forth in
Section 5 of this Agreement.

D. This Agreement shall supersede and replace any prior written agreement
between Executive and Employer (or any of its Affiliates) regarding the same
subject matter. 

Now,  therefore, in consideration of the premises and of the covenants and
agreements hereinafter contained, the parties hereby agree as follows:

Agreements

1. Employment Status and Term of Agreement.    This Agreement does not affect
Executive’s status as an at-will employee of Employer.  Executive shall continue
to perform services for the Employer customarily performed by persons employed
in similar capacities. Executive shall devote full business time, energies, and
talents to promote the interests of the Employer and to perform such duties as
assigned by the Bank. The term of this Agreement shall commence on the Effective
Date and shall continue until December 31, 2020.  This Agreement shall
automatically renew for additional one year terms from January 1st to December
31st of each year unless either the Employer or the Executive notifies the other
party, by written notice delivered no later than 90 days prior to December
31st of each year that this Agreement shall not be extended for an additional
year.  Notwithstanding anything contained herein to the contrary, if a Change of
Control occurs during Executive’s employment with the Bank or any Bank
Affiliate, this Agreement shall remain in effect for twelve (12) months period
following the Change of Control and shall then terminate.

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2. Definitions.  As used throughout this Agreement, all of the terms defined in
this Section 2 shall have the meanings given below.

(a) “Affiliate” shall mean each company, corporation, partnership, bank, savings
bank, savings and loan association, credit union or other financial institution,
directly or indirectly, which is controlled by, controls, or is under common
control with, the Company, where “control” means (x) the ownership of 51% or
more of the voting securities or other voting interest or other equity interest
of any corporation, partnership, joint venture or other business entity, or
(y) the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such corporation, partnership, joint
venture or other business entity.

(b) “Base Compensation” shall mean the amount equal to the sum of (i) the
greater of Executive’s then-current annual base salary or Executive’s annual
base salary as of the date one (1) day prior to the Change of Control; and (ii)
the average of the annual short-term incentive bonus paid (or payable) for the
three most recently completed fiscal years of the Company.  

(c) “Change of Control” shall mean the first to occur of the following: 

(i) Any Person, other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange
Act of 1934, as amended), directly or indirectly, of securities representing
fifty percent (50%) or more of the total voting power represented by the
Company’s then outstanding Voting Securities; or

(ii) During any period of twelve (12) consecutive months, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new Director whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were Directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

(iii) Consummation of:  (i) a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) more than fifty percent (50%) of
the total voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or (ii) a complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially all the Company’s
assets.

However, in no event shall a Change of Control be deemed to have occurred, with
respect to the Executive if the Executive is part of a purchasing group that
consummates the Change-in-Control transaction.  The Executive shall be deemed
“part of a purchasing group” for purposes of the preceding sentence if the
Executive is an equity participant in the purchase company or group

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(except for (i) passive ownership of less than two percent (2%) of the stock of
the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not significant, as determined
prior to the Change in Control by a majority of the non‑employee continuing
Directors).

In the event that any benefit under this Agreement constitutes deferred
compensation under Section 409A of the Code, and the settlement of, or
distribution of such benefits  is to be triggered by a Change of Control, then
such settlement or distribution shall be subject to the event constituting the
Change of Control also constituting a “change in the ownership” or “change in
the effective control” of the Company, as permitted under Code Section 409A.

(d) “Code”  shall mean the Internal Revenue Code of 1986, as amended.

(e) “Covered Period”  shall mean the period beginning six (6) months prior to a
Change of Control and ending twelve  (12) months after the Change of Control.

(f) “Disability” shall mean that Executive is  (i) unable to engage in any
substantial gainful activity by reason of any 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, or (ii) by
reason of any 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, receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering
employees of the Employer.

(g) “Good Reason” shall mean Executive’s voluntary termination of employment
during a Covered Period for one or more of the following reasons:

(i) a materially adverse change in the nature, scope or status of Executive’s
position, authorities or duties from those in effect immediately prior to the
Covered Period (but a change in title based on an acquirer’s organizational
system that does not result in an diminishment of duties with respect to the
Bank’s operations and personnel shall not be deemed a material adverse change);

(ii) a  material reduction in Executive’s annual base salary, target incentive
bonus opportunity, or material reduction in Executive’s aggregate compensation
and benefits from that in effect immediately following the Effective Date, or if
applicable and greater, immediately prior to the Covered Period (in each case
excluding a reduction principally resulting from Executive’s actual incentive
bonus);

(iii) relocation of Executive’s primary place of employment of more than
twenty-five (25) miles from Executive’s primary place of employment immediately
prior to the Covered Period, or a requirement that Executive engage in travel
that is materially greater than was required prior to the Covered Period;

(iv) failure by an acquirer to assume this Agreement at the time of a Change of
Control; or

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(v) a material breach by the Employer, or its successor, of this Agreement.

Notwithstanding the foregoing, prior to Executive’s Termination for Good Reason,
Executive must give the Employer written notice of the existence of any
condition set forth in clause (i) – (v) above within thirty (30) days of such
initial existence and the Employer shall have thirty (30) days from the date of
receipt of such notice in which to cure the condition giving rise to Good
Reason, if curable.  If, during such thirty (30)  day period the Employer cures
the condition giving rise to Good Reason, no payments or benefits shall be due
under Section 3 of this Agreement with respect to such occurrence.  If, during
such thirty (30)  day period, the Employer fails or refuses to cure the
condition giving rise to Good Reason, Executive shall be entitled to payments or
benefits under Section 3 of this Agreement upon such Termination; provided such
Termination occurs within 30 days after the end of such cure period.

(h) “Minimum Payments” shall mean, as applicable, the following amounts:

(i) Executive’s earned but unpaid annual salary for the period ending on the
Termination Date;

(ii) Executive’s earned but unpaid incentive bonus for the previously completed
fiscal year;

(iii) Executive’s accrued but unpaid vacation pay for the period ending on the
Termination Date; and

(iv) Executive’s unreimbursed business expenses and all other items earned and
owed to Executive through the Termination Date; and

(v) benefits, incentives and awards described in Section 3(c).

(i) “Pro Rata Bonus” means a payment equal to the incentive bonus that Executive
would have earned for the year of termination, based upon actual results of the
Employer and pro-rated on a per diem basis (by dividing the number of days
employed during the applicable performance period by the total number of days in
the applicable performance period).

(j) “Release” shall mean a general release and waiver substantially in the form
attached hereto as Exhibit A.

(k) “Severance Amount” shall mean:

(i) for any Termination occurring not during a Covered Period while this
Agreement is in force, the benefit available under the Company’s severance plan
or severance policy as is effect from time to time; or

(ii) for any Termination occurring during a Covered Period while this Agreement
is in force,  an amount equal to one hundred fifty percent  (150%) of
Executive’s Base Compensation.

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(l) “Termination” shall mean termination of Executive’s employment either:

(i) by the Employer or its successor, as the case may be, other than (1) a
Termination for Cause or (2) any termination as a result of death or Disability;
or

(ii) by Executive for Good Reason.

(m) “Termination Date” shall mean the date of employment termination, for any
reason or no reason, indicated in the written notice provided by the Employer or
Executive to the other.

(n) “Termination for Cause” shall mean only a termination by the Employer as a
result of:

(i) Executive’s willful failure, that is not remedied within twenty (20) days
after receipt of written notice of such failure from the Company, to perform his
obligations hereunder;

(ii) Executive’s willful act or acts of misconduct that are, alone or in the
aggregate, demonstrably injurious, monetarily or otherwise, to the Employer or
an Affiliate, and/or a violation of Company policy/regulatory requirements as
determined in the discretion of the Company; or

(iii) Executive’s breach of fiduciary responsibility or any obligation of
Executive pursuant to Section 5.

(o)  “Voting Securities” shall mean any securities that ordinarily possess the
power to vote in the election of directors without the happening of any
pre-condition or contingency.

3. Rights and Payments Upon Termination in a Covered Period.    

(a) Subject to Section 4 below, if  Executive is subject to a Termination within
a Covered Period, then, in addition to Minimum Payments, which shall be paid as
part of the Employer’s next payroll date, the Employer shall provide Executive
the following benefits:

(i) Within fifteen  (15) days after the expiration of any revocation period
applicable to the Release described in Section 4,  the Employer shall pay
Executive a lump sum payment in an amount equal to the Severance Amount.

(ii) Executive (and his dependents, as may be applicable) shall be entitled to
the medical benefits provided in Section 3‎(b) below.

(iii) Executive shall be entitled to receive a Pro Rata Bonus, when incentive
bonuses are paid to other senior management of Employer for the year in which
the Termination Date occurred, but in any event no later than March 15 of the
year following the year in which the Termination Date occurred.

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(b) Medical and Dental Benefits.  Subject to Section 4 below, If Executive’s
employment by the Employer or any Affiliate or successor of the Employer shall
be subject to a Termination during a Covered Period, then to the extent that
Executive or any of Executive’s dependents may be covered under the terms of any
medical and dental plans of the Employer (or any Affiliate) for active employees
immediately prior to the termination, then, for as long as Executive is eligible
for and elects coverage under the health care continuation rules of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Employer
will provide Executive and those dependents with equivalent coverage, with
Executive required to pay the same amount as Executive would pay if Executive
continued in employment with the Employer or an Affiliate during such period,
but in no event more than twelve (12) months following termination.  The
coverage may be procured directly by the Employer (or any Affiliate, if
appropriate) apart from, and outside of the terms of the plans themselves;
provided that Executive and Executive’s dependents comply with all of the
conditions of the medical or dental plans, with the cost to the Employer not to
exceed the cost for continued COBRA coverage.  In the event Executive or any of
Executive’s dependents become eligible for coverage under the terms of any other
medical and/or dental plan of a subsequent employer which plan benefits are
comparable to Employer (or any Affiliate) plan benefits, coverage under Employer
(or any Affiliate) plans will cease for the eligible Executive and/or
dependent.  Executive and Executive’s dependents must notify the Employer (or
any Affiliate) of any subsequent employment and provide information regarding
medical and/or dental coverage available.  In the event the Employer (or any
Affiliate) discovers that Executive and/or dependent has become employed and not
provided the above notification, all payments and benefits under this subsection
(b) will cease.    

(c) Other Benefits.    Executive’s rights following a Termination with respect
to any benefits, incentives or awards provided to Executive pursuant to the
terms and conditions of any plan, program or arrangement sponsored or maintained
by the Employer, whether tax-qualified or not, which are not specifically
addressed herein, shall be subject to the terms and conditions of such plan,
program or arrangement and this Agreement shall have no effect upon such terms
and conditions except as specifically provided herein.

4. Release.    Notwithstanding anything contained in this Agreement to the
contrary, except for the Minimum Payments, no payments or benefits payable to
Executive under Section 3(a) and 3(b) shall be paid or provided to Executive
unless he/she first executes (without subsequent revocation) and delivers to the
Employer a Release.  To the extent any of the payments and/or benefits due under
Section 3(a) or 3(b) are determined to be subject to Section 409A of the Code,
the Release must be executed and become irrevocable on or before the 60th day
following the Termination Date.  Provided that an executed, irrevocable Release
has been delivered on or before the 60th day following the Termination Date, any
payments and benefits that are determined to be subject to Section 409A of the
Code shall become payable, or shall otherwise commence, as of the 60th day
following the Termination Date. If an executed, irrevocable Release is not
delivered on or before the 60th day following the Termination Date, Executive
shall forever forfeit any and all rights to any payment or benefit (to the
extent such payment or benefit is determined to be subject to Section 409A of
the Code) under Section 3(a), or 3(b) or any payment or benefit in lieu thereof.

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5. Restrictive Covenants.    

(a) Confidential Information.  Executive acknowledges that, during the course of
his employment with the Employer,  Executive may produce and have access to
confidential and/or proprietary non‑public information concerning the Employer
and its Affiliates, including,  marketing materials, financial and other
information concerning customers and prospective customers, customer lists,
records, data, trade secrets, proprietary business information, pricing and
profitability information and policies, strategic planning, commitments, plans,
procedures, litigation, pending litigation and other information not generally
available to the public (collectively, “Confidential Information”).  Executive
agrees not to directly or indirectly use, disclose, copy or make lists of
Confidential Information for the benefit of anyone other than the Employer,
either during or after his employment with the Employer, except to the extent
that such information is or thereafter becomes lawfully available from public
sources, or such disclosure is authorized in writing by the Employer, required
by law or any competent administrative agency or judicial authority, or
otherwise as reasonably necessary or appropriate in connection with performance
by Executive of his duties hereunder.  Executive agrees that, if she receives a
subpoena or other court order or is otherwise required by law to provide
information to a governmental authority or other person concerning the
activities of the Employer or any of its Affiliates, or his activities in
connection with the business of the Employer or any of its Affiliates, Executive
will immediately notify the Employer of such subpoena, court order or other
requirement and deliver forthwith to the Employer a copy thereof and any
attachments and non‑privileged correspondence related thereto.  Executive shall
take reasonable precautions to protect against the inadvertent disclosure of
Confidential Information.  Executive agrees to abide by the Employer’s
reasonable policies, as in effect from time to time, respecting avoidance of
interests conflicting with those of the Employer and its Affiliates.  In this
regard, Executive shall not directly or indirectly render services to any person
or entity where Executive’s service would involve the use or disclosure of
Confidential Information.  Executive agrees not to use any Confidential
Information to guide his in searching publications or other publicly available
information, selecting a series of items of knowledge from unconnected sources
and fitting them together to claim that he did not violate any agreements set
forth in this Agreement.

(b) Documents and Property.  All records, files, documents and other materials
or copies thereof relating to the business of the Employer and its Affiliates,
which Executive shall prepare, receive, or use, shall be and remain the sole
property of the Employer and, other than in connection with performance by
Executive of his duties hereunder, shall not be removed from the premises of the
Employer or any of its Affiliates without the Employer’s prior written consent,
and shall be promptly returned to the Employer upon Executive’s termination of
employment together with all copies (including copies or recordings in
electronic form), abstracts, notes or reproductions of any kind made from or
about the records, files, documents or other materials.

(c) Non-Solicitation and Non-Competition.  The Employer and Executive have
agreed that the primary service area of the Employer’s business in which
Executive actively participate extends separately to an area that encompasses a
twenty-five (25) mile radius from the Company’s Effingham, Illinois headquarters
(the  “Restricted Area”). Therefore, as an essential ingredient of and in
consideration of this Agreement and his employment by the Employer,

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Executive agrees that, during his employment with the Employer and for a period
of twelve (12) months immediately following the termination of his employment
(the “Restricted Period”), for whatever reason, where such termination occurs
during the term of this Agreement or thereafter, he will not, except with the
express prior written consent of the Employer, directly or indirectly, do any of
the following (all of which are collectively referred to in this agreement as
the “Restrictive Covenant”):

(i) Executive will not, directly or indirectly, either for himself/herself, or
any Financial Institution: (1) induce or attempt to induce any employee of the
Employer or any of its Affiliates to leave the employ of the Employer or any of
its Affiliates; (2) in any way interfere with the relationship between the
Employer or any of its Affiliates and any employee of the Employer or any of its
Affiliates; or (3) induce or attempt to induce any customer, supplier, licensee,
or business relation of the Employer or any of its Affiliates to cease doing
business with the Employer or any of its Affiliates or in any way interfere with
the relationship between the Employer or any of its Affiliates and their
respective customers, suppliers, licensees or business relations.

(ii) Executive will not, directly or indirectly, either for himself/herself, or
any Financial Institution, solicit the business of any person or entity known to
Executive to be a customer of the Employer or any of its Affiliates, where
Executive, or any person reporting to Executive, had personal contact with such
person or entity, with respect to products, activities or services which compete
in whole or in part with the products, activities or services of the Employer or
any of its Affiliates.

(iii) If Executive is to receive the payments set forth in Section
3(a)(i)-(iii), Executive will not engage or invest in, own, manage, operate,
finance, control, or participate in the ownership, management, operation or
control of, be employed by, associated with, or in any manner connected with,
serve as a director, officer or consultant to, lend his name or any similar name
to, lend his credit to, or render services or advice to, any person, firm,
partnership, corporation or trust which owns, operates or is in the process of
forming, a bank, savings and loan association, credit union or similar financial
institution (a “Financial Institution”) with an office located, or to be located
at an address identified in a filing with any regulatory authority, within the
Restricted Area; provided however, that the ownership by Executive of shares of
the capital stock of any Financial Institution which shares are listed on a
securities exchange or quoted on the National Association of Securities Dealers
Automated Quotation System and which do not represent more than five percent
(5%) of the institution’s outstanding capital stock, shall not violate any terms
of this Agreement.

(iv) If Executive is to receive the payments set forth in Section 3(a)(i)-(iii),
Executive will not, directly or indirectly, serve as the agent, broker or
representative of, or otherwise assist, any person or entity in obtaining
services or products from any Financial Institution within the Restricted Area,
with respect to the products, activities or services which compete in whole or
in part with the products, activities or services of the Employer or any of its
Affiliates.

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(d) Work for Hire Provisions.

(i) Exclusive Rights of the Employer in Work Product.  The parties acknowledge
and agree that all work performed by Executive for the Employer or any of its
Affiliates shall be deemed “work for hire.”  The Employer shall at all times own
and have exclusive right, title and interest in and to all Confidential
Information and Inventions (as defined below), and the Employer shall retain the
exclusive right to license, sell, transfer and otherwise use and dispose of the
same.  Any and all enhancements of the technology of the Employer or any of its
Affiliates that are developed by Executive shall be the exclusive property of
the Employer.  Executive hereby assigns to the Employer any right, title and
interest in and to all Inventions that he/she may have, by law or equity,
without additional consideration of any kind whatsoever from the Employer or any
of its Affiliates.  Executive agrees to execute and deliver any instruments or
documents and to do all other things (including the giving of testimony)
requested by the Employer (both during and after the termination of his
employment with the Employer) in order to vest more fully in the Employer or any
of its Affiliates all ownership rights in the Inventions (including obtaining
patent, copyright or trademark protection therefore in the United States and/or
foreign countries).

(ii) Definitions and Exclusions.  For purposes of this Agreement, “Inventions”
means all systems, procedures, techniques, manuals, data bases, plans, lists,
inventions, trade secrets, copyrights, patents, trademarks, discoveries,
innovations, concepts, ideas and software conceived, compiled or developed by
Executive in the course of his employment with the Employer or any of its
Affiliates and/or comprised, in whole or part, of Confidential
Information.  Notwithstanding the foregoing, Inventions shall not include:
(i) any inventions independently developed by Executive and not derived, in
whole or part, from any Confidential Information or (ii) any invention made by
Executive prior to his exposure to any Confidential Information.

(e) Remedies for Breach of Restrictive Covenants.  Executive has reviewed the
provisions of this Agreement with legal counsel, or has been given adequate
opportunity to seek such counsel, and Executive acknowledges and expressly
agrees that the covenants contained in this Section 5 are reasonable with
respect to their duration, geographical area and scope.  Executive further
acknowledges that the restrictions contained in this Section 5 are reasonable
and necessary for the protection of the legitimate business interests of the
Employer, that they create no undue hardships, that any violation of these
restrictions would cause substantial injury to the Employer and such interests,
and that such restrictions were a material inducement to the Employer to enter
into this Agreement.  In the event of any violation or threatened violation of
these restrictions, the Employer, in addition to and not in limitation of, any
other rights, remedies or damages available to the Employer under this Agreement
or otherwise at law or in equity, shall be entitled to terminate any further
payments or benefits set forth in Section 3(a)(i)-(iii), preliminary and
permanent injunctive relief to prevent or restrain any such violation by
Executive and any and all persons directly or indirectly acting for or with her,
as the case may be.

(f) In the event of the existence of any  other agreement between the parties
which (i) is in effect during the Restricted Period, and (ii) which contains
restrictive covenants that conflict with any of the provisions of this Section
 5, then the more restrictive of such provisions

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from the agreements shall control for the period during which the agreements
would otherwise be in effect.

(g) Nothing contained herein shall impede Executive’s ability to communicate
with the staff of the Securities and Exchange Commission or other governmental
agencies regarding possible federal securities law violations (i) without the
Company’s prior approval, and (ii) without having to forfeit or forgo any
resulting whistleblower awards.

(h) Executive shall not be held criminally or civilly liable under any federal
or state trade secret law for the disclosure of a trade secret that (i) is made
(A) in confidence to a federal, state, or local government official, either
directly or indirectly, or to an attorney, and (B) solely for the purpose of
reporting or investigating a suspected violation of law; or (ii) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such
filing is made under seal.  Accordingly, Executive has the right to disclose in
confidence trade secrets to federal, state, and local government officials, or
to an attorney, for the sole purpose of reporting or investigating a suspected
violation of law. Executive also has the right to disclose trade secrets in a
document filed in a lawsuit or other proceeding, but only if the filing is made
under seal and protected from public disclosure. Nothing in this Agreement is
intended to conflict with 18 U.S.C. § 1833(b) or create liability for
disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).
Nothing in this Agreement shall be construed to authorize, or limit liability
for, an act that is otherwise prohibited by law, such as the unlawful access of
material by unauthorized means.

6. No Set-Off; No Mitigation.  Except as provided herein, the Employer’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including any set-off, counterclaim, recoupment, defense or other right which
the Employer may have against Executive or others.  In no event shall Executive
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to Executive under any of the provisions of
this Agreement, and such amounts shall not be reduced whether or not Executive
obtains other employment.

7. Notices.  Notices and all other communications under this Agreement shall be
in writing and shall be deemed given when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Employer (with a copy to the Company):

Midland States Bancorp, Inc.
Attention: Chief Executive Officer and Corporate Counsel
1201 Network Centre Drive
Effingham, Illinois 62401

If to Executive, to such home address or other address as Executive has most
recently provided to the Employer.

 

or to such other address as either party may furnish to the other in writing,
except that notices of changes of address shall be effective only upon receipt.

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8. Applicable Law.  All questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement shall be governed by the internal laws of the State of
Illinois applicable to agreements made and wholly to be performed in such state
without regard to conflicts of law provisions of any jurisdiction, and any court
action commenced to enforce this Agreement shall have as its sole and exclusive
venue the County of Effingham, Illinois.

9. Entire Agreement; Survival.

(a) This Agreement constitutes the entire agreement between Executive and the
Employer concerning the subject matter hereof, and supersedes all prior
negotiations, undertakings, agreements and arrangements with respect thereto,
whether written or oral, specifically including any prior agreement.  If a court
of competent jurisdiction determines that any provision of this Agreement is
invalid or unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision
of this Agreement and all other provisions shall remain in full force and
effect.  The various covenants and provisions of this Agreement are intended to
be severable and to constitute independent and distinct binding
obligations.  Without limiting the generality of the foregoing, if the scope of
any covenant contained in this Agreement is too broad to permit enforcement to
its full extent, such covenant shall be enforced to the maximum extent permitted
by law, and Executive hereby agrees that such scope may be judicially modified
accordingly.

(b) The provisions of Sections 4, 5, 6, 7 and 8 shall survive the termination of
this Agreement.

10. Withholding of Taxes.  The Employer may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes as may be required
pursuant to any law, governmental regulation or ruling.

11. No Assignment.  Executive’s rights to receive payments or benefits under
this Agreement shall not be assignable or transferable whether by pledge,
creation of a security interest or otherwise, other than a transfer by will or
by the laws of descent or distribution.  In the event of any attempted
assignment or transfer contrary to this Section, the Employer shall have no
liability to pay any amount so attempted to be assigned or transferred.  This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

12. Successors.  This Agreement shall be binding upon and inure to the benefit
of the Employer, its successors and assigns (including, without limitation, any
company into or with which the Employer may merge or consolidate).  The Employer
agrees that it will not affect the sale or other disposition of all or
substantially all of its assets (where such transaction would constitute a
Change in Control) unless either (a) the person or entity acquiring the assets,
or a substantial portion of the assets, shall expressly assume by an instrument
in writing all duties and obligations of the Employer under this Agreement, or
(b) the Employer shall provide, through the establishment of a separate reserve,
for the payment in full of all amounts which are or may reasonably be expected
to become payable to Executive under this Agreement.

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13. Legal Fees.  In the event that either party commences arbitration or
litigation to enforce or protect his and/or its rights under this Agreement, the
prevailing party in any such action shall be entitled to recover reasonable
attorneys’ fees and costs (including the costs of experts, evidence and counsel)
relating to such action, in addition to all other entitled relief, including but
not limited to damages and injunctive relief.

14. Amendment.  This Agreement may not be amended or modified except by written
agreement signed by Executive and the Employer.

15. Internal Revenue Code Section 409A.

(a) It is intended that this Agreement be exempt from or comply with the
provisions of Section 409A of the Code so as not to subject Executive to the
payment of additional taxes and interest under Section 409A of the Code.  In
furtherance of this intent, this Agreement shall be interpreted, operated and
administered in a manner consistent with these intentions, and to the extent
that any regulations or other guidance issued under Section 409A of the Code
would result in Executive being subject to payment of additional income taxes or
interest under Section 409A of the Code, the parties agree to amend this
Agreement to maintain to the maximum extent practicable the original intent of
the Agreement while avoiding the application of such taxes or interest under
Section 409A of the Code.

(b) Notwithstanding any provision in this Agreement to the contrary, if
Executive is determined to be a Specified Executive as of the Termination Date,
then,  to the extent required pursuant to Section 409A(a)(2)(B)(i) of the Code,
payments due under this Agreement which are deemed to be deferred compensation
shall be subject to a six (6) month delay following the Termination Date.  For
purposes of Section 409A of the Code, all installment payments of deferred
compensation made hereunder, or pursuant to another plan or arrangement, shall
be deemed to be separate payments and, accordingly, the aforementioned deferral
shall only apply to separate payments which would occur during the six (6) month
deferral period and all other payments shall be unaffected.  All delayed
payments shall be accumulated and paid in a lump-sum catch-up payment as of the
first day of the seventh-month following the Termination Date (or, if earlier,
the date of death of Executive) with all such delayed payments being credited
with interest (compounded monthly) for this period of delay equal to the prime
rate in effect on the first day of such six-month period.  Any portion of the
benefits hereunder that were not otherwise due to be paid during the six-month
period following the Termination Date shall be paid to Executive in accordance
with the payment schedule established herein.

(c) The term “Specified Executive” shall mean any person who is a “key employee”
(as defined in Code Section 416(i)  of the Code without regard to paragraph (5)
thereof), as determined by the Employer based upon the 12-month period ending on
each December 31st (such 12-month period is referred to below as the
“identification period”).  If Executive is determined to be a key employee under
Section 416(i)  of the Code (without regard to paragraph (5)
thereof), he/she will be treated as a Specified Executive for purposes of this
Agreement during the 12-month period that begins on the April 1 following the
close of such identification period.  For purposes of determining whether
Executive is a key employee under Section 416(i) of the

12

 

Code, “compensation” shall mean Executive’s W-2 compensation as reported by the
Employer for a particular calendar year.

(Remainder of page intentionally left blank)

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

 

MIDLAND STATES BANKDON SPRING

 

 

 

By:  /s/ Jeffrey G. Ludwig                                          /s/ Donald
J. Spring

Name:  Jeffrey G. Ludwig

Its:  President and Chief Executive Officer

 

 

 

 

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Exhibit A

General Release and Waiver

This General Release and Waiver (the “Release”) is made and entered into as of
this ___ day of __________, 20__, by and between Midland States Bank, an
Illinois banking corporation (the “Employer”), and __________ (“Executive”).

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

1. Termination of Employment.    Executive and the Employer agree that
Executive’s employment with the Employer terminated effective _______________
and that such date is within a Covered Period (as defined in the Agreement). 
Executive further agrees that without prior written consent of the
Employer he/she will not hereafter seek reinstatement, recall or reemployment
with the Employer.

1. Severance Payment.

(a) A description of the payments to which Executive may be entitled upon
termination of employment during a Covered Period are contained in Section 3 of
that certain Change of Control Agreement entered into by and between the
Employer and Executive dated , which is incorporated by reference herein (the
”Agreement”).

(b) The payments described in this Section 2 are over and above that to which
Executive would be otherwise entitled to upon the termination of his/her
employment with the Employer, absent executing this Release, notwithstanding the
terms of the Agreement.  Executive affirms that he/she has agreed in the
Agreement, and again herein, that he/she is only entitled to such payments if
he/she executes this Release.

1. General Release.  In consideration of the payments and benefits to be made by
the Employer to Executive in Section 2 above, Executive, with full understanding
of the contents and legal effect of this Release and having the right and
opportunity to consult with his/her counsel, releases and discharges the
Employer, its shareholders, officers, directors, supervisors, managers,
employees, agents, representatives, attorneys, parent companies, divisions,
subsidiaries and affiliates, and all related entities of any kind or nature, and
its and their predecessors, successors, heirs, executors, administrators, and
assigns (collectively, the “Released Parties”) from any and all claims, actions,
causes of action, grievances, suits, charges, or complaints of any kind or
nature whatsoever, that he/she ever had or now has, whether fixed or contingent,
liquidated or unliquidated, known or unknown, suspected or unsuspected, and
whether arising in tort, contract, statute, or equity, before any federal,
state, local, or private court, agency, arbitrator, mediator, or other entity,
regardless of the relief or remedy, arising prior to the execution of this
Release.    Without limiting the generality of the foregoing, it being the
intention of the parties to make this Release as broad and as general as the law
permits, this Release specifically includes any and all subject matters and
claims arising from any alleged violation by the Released Parties under the Age
Discrimination in Employment Act of 1967, as amended; Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of 1866, as amended by the
Civil Rights Act of 1991 (42

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U.S.C. § 1981); the Rehabilitation Act of 1973, as amended; the Executive
Retirement Income Security Act of 1974, as amended; the Illinois Human Rights
Act, and other similar state or local laws; the Americans with Disabilities Act;
the Worker Adjustment and Retraining Notification Act; the Equal Pay Act;
Executive Order 11246; Executive Order 11141; and any other statutory claim,
employment or other contract or implied contract claim, claim for equity in the
Employer, or common law claim for wrongful discharge, breach of an implied
covenant of good faith and fair dealing, defamation, or invasion of privacy
arising out of or involving his employment with the Employer, the termination of
his employment with the Employer, or involving any continuing effects of his
employment with the Employer or termination of employment with the Employer;
provided, however, that nothing herein waives or releases Executive’s rights to
any payments or benefits the Employer is required to pay or provide pursuant to
the terms of the Agreement or this Release or to indemnification which Executive
may have under the Employer’s governing documents, by any agreement, under any
applicable law or otherwise.  Executive further acknowledges that he/she is
aware that statutes exist that render null and void releases and discharges of
any claims, rights, demands, liabilities, action and causes of action which are
unknown to the releasing or discharging part at the time of execution of the
release and discharge.  Executive hereby expressly waives, surrenders and agrees
to forego any protection to which he/she would otherwise be entitled by virtue
of the existence of any such statute in any jurisdiction including, but not
limited to, the State of Illinois.    

1. Covenant Not to Sue.    Executive agrees not to bring, file, charge, claim,
sue or cause, assist, or permit to be brought, filed, charged or claimed any
action, cause of action, or proceeding regarding or in any way related to any of
the claims described in Section 3 hereof, and further agrees that his Release
is, will constitute and may be pleaded as, a bar to any such claim, action,
cause of action or proceeding.  If any government agency or court assumes
jurisdiction of any charge, complaint, or cause of action covered by this
Release, Executive will not seek and will not accept any personal equitable or
monetary relief in connection with such investigation, civil action, suit or
legal proceeding.

1. No Disparaging, Untrue Or Misleading Statements.    Executive represents that
he/she has not made, and agrees that he/she will not make, to any third party
any disparaging, untrue, or misleading written or oral statements about or
relating to, respectively, the Employer, its products or services (or about or
relating to any officer, director, agent, employee, or other person acting on
the Employer’s behalf), or Executive.

1. Severability.  If any provision of this Release shall be found by a court to
be invalid or unenforceable, in whole or in part, then such provision shall be
construed and/or modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed excised
from this Release, as the case may require, and this Release shall be construed
and enforced to the maximum extent permitted by law, as if such provision had
been originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.  The
parties further agree to seek a lawful substitute for any provision found to be
unlawful; provided, that, if the parties are unable to agree upon a lawful
substitute, the parties desire and request that a court or other authority
called upon to decide the enforceability of this Release modify the Release so
that, once modified, the Release will be enforceable to the maximum extent
permitted by the law in existence at the time of the requested enforcement.

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1. Waiver.  A waiver by the Employer of a breach of any provision of this
Release by Executive shall not operate or be construed as a waiver or estoppel
of any subsequent breach by Executive.  No waiver shall be valid unless in
writing and signed by an authorized officer of the Employer.

1. Non-Disclosure.    Executive agrees that he/she will keep the terms and
amounts set forth in this Release completely confidential and will not disclose
any information concerning this Release’s terms and amounts to any person other
than his/her attorney, accountant, tax advisor, or immediate family, until such
time as the information in this Release is disclosed by the Employer as may be
required by law.

1. Restrictive Covenants.    Executive agrees that he/she will abide by the
terms set forth in Section 5 of the Agreement.

1. Return of Employer Materials. Executive represents that he/she has returned
all Employer property and all originals and all copies, including electronic and
hard copy, of all documents, within his possession at the time of the execution
of this Release, including but not limited to the laptop computer, printer,
Blackberry device, telephone, and credit card, as may be applicable.  

1. Representation.    Executive hereby agrees that this Release is made
knowingly and voluntarily and acknowledges that:

(a) this Release is written in a manner understood by Executive;

(b) this Release refers to and waives any and all rights or claims that he/she
may have arising under the Age Discrimination in Employment Act, as amended;

(c) Executive has not waived any rights arising after the date of this Release;

(d) Executive has received valuable consideration in exchange for the Release in
addition to amounts Executive is already entitled to receive; and

(e) Executive has been advised to consult with an attorney prior to executing
this Release.

1. Consideration and Revocation.    Executive is receiving this Release on
__________, ____, and Executive shall be given twenty-one (21) days from receipt
of this Release to consider whether to sign the Release.  Executive agrees that
changes or modifications to this Release do not restart or otherwise extend the
above twenty-one (21) day period, unless specifically agreed to in writing by
the Employer.  Moreover, Executive shall have seven (7) days following execution
to revoke this Release in writing to the Secretary of the Employer and the
Release shall not take effect until those seven (7) days have ended.

1. Future Cooperation.  In connection with any and all claims, disputes,
negotiations, investigations, lawsuits or administrative proceedings involving
the Employer which relate to periods of time during the term of the Agreement
(as defined in the Agreement),  Executive agrees to make himself/herself
reasonably available, upon reasonable notice from the Employer 

A-3

 

and without the necessity of subpoena, to provide information or documents,
provide declarations or statements to the Employer, meet with attorneys or other
representatives of the Employer, prepare for and give depositions or testimony,
and/or otherwise cooperate in the investigation, defense or prosecution of any
or all such matters.  Executive shall be reimbursed for reasonable costs and
expenses incurred by him as a result of actions taken pursuant to this Section
13.  It is expressly agreed and understood that Executive will provide only
truthful testimony if required to do so, and that any payment to him is solely
to reimburse his expenses and costs for cooperation with the Employer.  
 Nothing in this Section 13 is intended to require Executive to expend an
unreasonable period of time in activities required by this Section.

1. Amendment.  This Release may not be altered, amended, or modified except in
writing signed by both Executive and the Employer. 

1. Joint Participation.  The parties hereto participated jointly in the
negotiation and preparation of this Release, and each party has had the
opportunity to obtain the advice of legal counsel and to review and comment upon
the Release.  Accordingly, it is agreed that no rule of construction shall apply
against any party or in favor of any party.  This Release shall be construed as
if the parties jointly prepared this Release, and any uncertainty or ambiguity
shall not be interpreted against one party and in favor of the other.

1. Binding Effect; Assignment.  This Release and the various rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
the parties and their respective successors, heirs, representatives and
permitted assigns.  Neither party may assign its respective interests hereunder
without the express written consent of the other party.

1. Applicable Law.    All questions concerning the construction, validity and
interpretation of this Release and the performance of the obligations imposed by
this Release shall be governed by the internal laws of the State of Illinois
applicable to agreements made and wholly to be performed in such state without
regard to conflicts of law provisions of any jurisdiction and any court action
commenced to enforce this Release shall have as its sole and exclusive venue the
County of Effingham, Illinois.

1. Execution of Release.  This Release may be executed in several counterparts,
each of which shall be considered an original, but which when taken together,
shall constitute one Release.

PLEASE READ THIS RELEASE AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS BEFORE
SIGNING IT.  THIS RELEASE CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS,
INCLUDING THOSE UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT, AND
OTHER FEDERAL, STATE AND LOCAL LAWS PROHIBITING DISCRIMINATION IN EMPLOYMENT.

If Executive signs this Release less than 21 days after he/she receives it from
the Employer,  he/she confirms that he/she does so voluntarily and without any
pressure or coercion from anyone at the Employer.

IN WITNESS WHEREOF, the parties have executed this Release as of the date first
stated above.

A-4

 

MIDLAND STATES BANK [EXECUTIVE’S NAME]

 

 

By: 
_________________________________           _________________________________ 

Name:  ______________________________[Signature]

Its:  _________________________________

 

 

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