Document:

msbi_Current_Folio_Ex1022

		

			Exhibit 10.22

		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			Recitals
		

		
			The purpose of the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”) is to enable selected key Executives of Midland States Bancorp, Inc. (the “Company”), Midland States Bank, a wholly-owned subsidiary of the Company (the “Bank”), and members of their Controlled Group, to elect to defer all or a portion of the cash compensation payable on account of service as a key Executive. The Plan is intended as a means of maximizing the effectiveness and flexibility of the compensation arrangements to selected key Executives, and as an aid in attracting and retaining individuals of outstanding abilities and specialized skills for service. All obligations under the Plan will be solely borne by the Company, the Bank or the Controlled Group member that employs the key Executive. It is the intent of the Company that the Plan complies in its entirety with the provisions of Code Section 409A and the Treasury Regulations and guidance promulgated thereunder.
		

		
			The Plan was originally adopted by the Company as the Deferred Compensation Plan for Directors and Executive of Midland States Bancorp, Inc. on December 31, 2001 (the “Original Plan”) and was subsequently amended and restated from time to time. The Plan, as described herein, is effective as of November 8, 2018 (the “Effective Date”). As of the Effective Date, the Original Plan was split into two plans, one for key Executives and the other for non-employee directors of the Company, the Bank and members of their Controlled Group. The Plan, as described herein, is intended to amend and continue the Original Plan with respect to Eligible Executives.
		

			
	
			
				SECTION 1
			
Definitions

			
	
			
				 1.1
			“Account” means any of the accounts or subaccounts established for each Participant pursuant to Section ‎5.1.

			
	
			
				 1.2
			“Annual Bonus” shall mean compensation the amount of which, or the entitlement to which, is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least twelve (12) consecutive months (all as described in Treasury Regulations Section 1.409A-1(e)).

			
	
			
				 1.3
			“Beneficiary” shall mean the person(s) Participant has designated in writing to the Committee to receive benefits under this Plan in the event of the Participant’s death. If the Participant has not specifically designated any Beneficiary for purposes of the Plan, then the Beneficiary shall be the Participant’s estate. In the case of the death of the Beneficiary before completion of payments under the Plan to the Beneficiary, then the Beneficiary’s estate shall become entitled to any remaining payments.

			
	
			
				 1.4
			“Board” means the Board of Directors of the Company.

			
	
			
				 1.5
			“Change of Control” shall mean the first to occur of the following:

			
	
			
				 A.
			Any Person (as defined in Sections 13(d) and 14(d) of the Exchange Act), 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 Exchange Act), directly or indirectly, of securities representing fifty percent (50%) or more of 

		 

		

			 

		

		

			 

		

		

			1545177.v1

		

 

		

			

		

	the total voting power represented by the Company’s then outstanding Voting Stock;

			
	
			
				 B.
			During any period of twelve (12) consecutive months, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board 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

			
	
			
				 C.
			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 Stock 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) at least 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 the Bank or an agreement for the sale or disposition by the Company of all or substantially all the Company’s or the Bank’s assets.

		
			However, in no event shall a Change of Control be deemed to have occurred, with respect to the Participant if the Participant is part of a purchasing group which consummates the Change of Control transaction. The Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the purchase company or group (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 of Control by a majority of the continuing Directors).
		

		
			In the event that any amount under the Plan constitutes deferred compensation (as defined under Code Section 409A), and the settlement of, or distribution of such amount 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.
		

			
	
			
				 1.6
			“Code” shall mean the Internal Revenue Code of 1986, as amended.

			
	
			
				 1.7
			“Committee” shall mean the Compensation Committee of the Board or any other committee of the Board as may be designated from time to time by the Board, or any designee of either.

			
	
			
				 1.8
			“Controlled Group” shall mean any and all entities which share common ownership with the Company resulting in a “parent-subsidiary controlled group,” as that term is defined by Code Section 1563(a)(1), or “brother-sister controlled group,” as that term is defined by Code Section 1563(a)(2), or any “combined group,” as that term is defined by Code Section 1563(a)(3).

			
	
			
				 1.9
			“Deferred Compensation” shall mean Salary and Annual Bonus that is the subject of an elective deferral under Section ‎4.1 of the Plan.

			
	
			
				 1.10
			“Deferred Compensation Account” shall mean the bookkeeping account established for a Participant under the Plan to which Deferred Compensation with respect to such Participant is credited from time to time, as provided in Section ‎5.3 of the Plan.

			
	
			
				 1.11
			“Director” shall mean any person duly elected or appointed and serving as a director of the Company, the Bank or any other member of the Controlled Group and who is not a current employee of the Company, the Bank or any other member of the Controlled Group and has not been an employee of the Company, the Bank or any other member of the Controlled Group for at least one year.

		
			

		 

		

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				 1.12
			“Disability” shall mean with respect to a Participant, that the Participant: (A) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which 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 (B) is, by reason of any medically determinable physical or mental impairment which 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 or health plan covering employees or directors of such Participant’s employer, as determined in accordance with Code Section 409A(a)(2)(C) and the Treasury Regulations thereunder.

			
	
			
				 1.13
			“Distributable Amount” of a Participant’s Accounts with respect to a Plan Year shall mean the sum of the Deferred Compensation and earnings, if any, thereon credited to a Participant’s Deferred Compensation Account, or any other accounts or subaccounts, with respect to such Plan Year.

			
	
			
				 1.14
			“Election Form” shall mean the form (as set forth in EXHIBITS B-1 and B-2 to the Plan) which Participants use to defer Salary and Annual Bonus and to elect distribution options.

			
	
			
				 1.15
			“Election Period” with respect to a Plan Year shall mean the period designated by the Committee; provided, however, that such period shall be no less than ten (10) business days. The Election Period with respect to a Plan Year shall end not later than the last day of the prior Plan Year; provided, however, that, in the case of a Participant who first becomes eligible to participate in the Plan during a Plan Year, the Election Period may be the thirty (30) day period commencing on the date such Participant first becomes eligible to participate in accordance with Code Section 409A(a)(4)(B)(ii) and the Treasury Regulations thereunder; provided further, that, with respect to Annual Bonus being deferred in accordance with the requirements of Treasury Regulations Section 1.409A-1(e), the Election Period may extend until a date on or before the date that is six (6) months before the end of the “performance period” (as described in Treasury Regulations Section 1.409A-1(e)).

			
	
			
				 1.16
			“Eligible Executive” shall mean any Executive who is selected by the Committee to participate in the Plan, including any Executive who is also an Inside Director.

			
	
			
				 1.17
			“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

			
	
			
				 1.18
			“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

			
	
			
				 1.19
			“Executive” shall mean any officer or other employee of the Company, the Bank or any other member of the Controlled Group whom the Committee, in its sole discretion, determines is a member of a select group of management or highly compensated employees.

			
	
			
				 1.20
			“Fair Market Value” means, on any date, the officially-quoted closing selling price of the shares on such date on the principal national securities exchange on which the shares are listed or admitted to trading (including the New York Stock Exchange, Nasdaq Stock Market, Inc. or such other market or exchange in which such prices are regularly quoted) or, if there have been no sales with respect to the shares on such date, or if the shares are not so listed or admitted to trading, the Fair Market Value shall be the value established by the Committee in good faith and in accordance with Code Sections 422 and 409A.

			
	
			
				 1.21
			“Inside Director” shall mean a Director of the Company, the Bank or any other member of the Controlled Group who is an employee of the Company, the Bank or any other member of the Controlled Group.

			
	
			
				 1.22
			“Measurement Fund” shall mean one or more of the investment funds selected by the Committee.

		
			

		 

		

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				 1.23
			“Participant” shall mean an Eligible Executive who has been selected by the Committee to participate in the Plan, and who has elected to participate in the Plan.

			
	
			
				 1.24
			“Participation Certificate” shall mean that agreement (as set forth in Exhibit A to the Plan) entered into by a Participant and the Company prior to participation in the Plan.

			
	
			
				 1.25
			“Payment Date” shall mean, unless otherwise designated by the Participant on his or her Election Form, the last day of the calendar month following the date of the Participant’s Separation from Service.

			
	
			
				 1.26
			“Plan Year” shall mean the twelve (12) consecutive month period beginning on each January 1 and ending on each December 31.

			
	
			
				 1.27
			“Salary” shall mean the regular annual base compensation paid by the Company, the Bank or any other member of the Controlled Group to an Eligible Executive (without regard to any reduction thereof pursuant to the Plan, but net of any reduction for applicable taxes and other benefits elected by such Eligible Executive including, but not limited to, those provided under a 401(k) plan or Code Section 125 flexible benefits plan maintained by the Company, the Bank or any other member of the Controlled Group), exclusive of Annual Bonus and any other incentive payments made by the Company, the Bank or any other member of the Controlled Group to such Eligible Executive.

			
	
			
				 1.28
			“Securities Act” shall mean the Securities Act of 1933, as amended.

			
	
			
				 1.29
			“Separation from Service” shall mean a Participant’s termination of employment, if such termination is a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i).

			
	
			
				 1.30
			“Specified Employee” shall have the meaning set forth in Code Section 409A(a)(2)(B)(i) and Treasury Regulation Section 1.409A-1(i).

			
	
			
				 1.31
			“Treasury Regulations” shall mean the regulations promulgated by the U.S. Department of Treasury under Chapter 26 of the U.S. Code of Federal Regulations or any successor thereto.

			
	
			
				 1.32
			“Unforeseeable Emergency” shall mean a severe financial hardship to the Participant resulting from: (A) an illness or accident of the Participant, or the Participant’s spouse, Beneficiary, or dependent (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2), and (d)(1)(B)); (B) loss of the Participant’s property due to casualty; or (C) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control, as determined by the Committee, in its sole discretion, based on the relevant facts and circumstances and as provided for in Treasury Regulations §1.409A-3(i)(3) or any successor provision.

			
	
			
				 1.33
			“Voting Stock” shall mean that class (or classes) of common stock entitled to vote in the election of the Company’s directors.

			
	
			
				SECTION 2
			
Eligibility and Participation

			
	
			
				 2.1
			Eligibility. Individuals eligible to participate in the Plan shall consist of Eligible Executives.

			
	
			
				 2.2
			Participation. Participation in the Plan by Eligible Executives shall be determined by the Committee, in its sole discretion, and shall be subject to the terms and conditions of the Plan, the Election Form(s) and the Participation Certificate. All Participants in the Plan shall, prior to participation, execute a 

		 

		

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	Participation Certificate. Upon becoming a Participant in the Plan, a Participant shall continue to participate in the Plan until such time as (A) the Participant ceases to be an Eligible Executive, or (B) the Committee takes action to terminate the Eligible Executive’s right to continued participation in the Plan.

			
	
			
				SECTION 3
			
Administration

			
	
			
				 3.1
			General Powers of Administration. The Plan shall be administered by the Committee. The Committee is authorized to construe and interpret the Plan and promulgate, amend and rescind rules and regulations relating to the implementation, administration and maintenance of the Plan. Subject to the terms and conditions of the Plan, the Committee, in its sole discretion, shall make all determinations necessary or advisable for the implementation, administration and maintenance of the Plan. The Committee may designate persons other than members of the Committee to carry out the day-to-day ministerial administration of the Plan under such conditions and limitations as it may prescribe. The Committee’s determinations with respect to Eligible Executives under the Plan need not be uniform and may be made selectively among Eligible Executives whether or not such Eligible Executives are similarly situated. Any determination, decision or action of the Committee in connection with the construction, interpretation, administration, implementation or maintenance of the Plan shall be final, conclusive and binding upon all Participants and any person(s) claiming any Plan benefits under or through any Participants.

			
	
			
				 3.2
			Indemnification. The Company will indemnify and hold harmless the Committee, any Director or any employee charged with duties associated with the Plan against any cost or expense (including, without limitation, attorneys’ fees) or liability (including, without limitation, any sum paid with the approval of the Company in settlement of a claim) arising out of any act or omission to act, except in the case of willful gross misconduct or gross negligence.

			
	
			
				SECTION 4
			
Deferral Contributions

			
	
			
				 4.1
			Deferred Compensation. Participants may defer all or a portion of their Salary and Annual Bonus earned during any Plan Year, in accordance with the following provisions.

			
	
			
				 A.
			Deferral Election. To defer Salary or Annual Bonus during any particular Plan Year, during the Election Period, Participants must complete, execute and file with the Committee an  Election Form.

			
	
			
				 B.
			Content of Deferral Elections. The following shall apply to all deferral elections:

			
	
			
				 (i)
			All deferral elections shall contain a statement that the Participant elects to defer all or a portion of such Participant’s Salary and Annual Bonus, as the case may be, for a specified Plan Year or performance period, that are earned and become payable to the Participant after the filing of such deferral election;

			
	
			
				 (ii)
			Except for the provisions of subsection ‎(iii) below, any deferral election shall apply only to the Salary and Annual Bonus, as the case may be, that is attributable to the Participant’s services rendered to the Company during the Plan Year or performance period for which such election is made (whether or not such compensation is actually paid and received in such Plan Year or performance period),  provided that, once a Participant has timely filed an Election Form in accordance with the Plan, such Election Form shall be effective for future Plan Years until modified or cancelled by the Participant in accordance with the Plan;

		
			

		 

		

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				 (iii)
			If a Participant has previously deferred Annual Bonus and fails to complete and return a Form on or before the date that is six (6) months before the end of the then-current “performance period” (as described in Treasury Regulations Section 1.409A-1(e)), then the deferral election with respect to Annual Bonus made by the Participant on the most recently filed Election Form shall be considered effective for such current performance period; and,

			
	
			
				 (iv)
			A Participant may cancel a deferral election for any Plan Year by filing with the Committee written notice of such cancellation prior to January 1 of the Plan Year in which such cancellation is to become effective, whereupon a Participant shall not be entitled to participate in the Plan for such Plan Year. A Participant may cancel a deferral election for any performance period by filing with the Committee written notice of such cancellation on or before the date that is six (6) months before the end of the then-current “performance period” (as described in Treasury Regulations Section 1.409A-1(e)), whereupon a Participant shall not be entitled to participate in the Plan for such performance period. Such a Participant may, however, participate with respect to future Plan Years or performance periods, as the case may be, by filing a new Election Form in accordance with the Plan.

			
	
			
				SECTION 5
			
Plan Accounts

			
	
			
				 5.1
			Establishment of Plan Accounts. The Company shall establish on behalf of each Participant a Deferred Compensation Account and such other accounts and subaccounts as the Committee, in its sole discretion, shall determine from time to time.

			
	
			
				 5.2
			Election of Measurement Funds in Deferred Compensation Account. In the manner designated by the Committee, Participants may elect one or more Measurement Funds to be used to determine the additional amounts to be credited to their Deferred Compensation Account. The Committee shall select from time to time, in the Committee’s sole discretion, the Measurement Funds to be available under the Plan. Notwithstanding any other provision of the Plan to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his Deferred Compensation Account thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Deferred Compensation Account shall not be considered or construed in any manner as an actual investment of his Deferred Compensation Account in any such Measurement Fund. In the event that the Company, in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Deferred Compensation Account shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company. The Participant shall at all times remain an unsecured creditor of the Company.

			
	
			
				 A.
			Investment Elections. Participants may designate how their Deferred Compensation Account, if any, shall be deemed to be invested under the Plan.

			
	
			
				 (i)
			Such Participants may make separate investment elections for their future deferrals, and the existing balances of their Deferred Compensation Account.

			
	
			
				 (ii)
			Such Participants may make and change their investment elections by choosing from the Measurement Funds designated by the Committee in accordance with the procedures established by the Committee.

		
			

		 

		

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				 (iii)
			Except as otherwise designated by the Committee, the available Measurement Funds under Section ‎5.2 above shall generally be the same as, or similar to, investment funds under the Midland States Bank 401(k) Profit Sharing Plan (excluding any brokerage account option).

			
	
			
				 (iv)
			If a Participant fails to elect a Measurement Fund under this Section, he or she shall be deemed to have elected the Qualified Default Investment Alternative (or other default investment alternative) specified from time-to-time in the Midland States Bank 401(k) Profit Sharing Plan for his Deferred Compensation Account.

			
	
			
				 B.
			Continuing Investment Elections. Participants who have had a Separation from Service but not yet commenced distributions under the Plan or Participants who are receiving installment payments may continue to make investment elections pursuant to subsection ‎A above, as applicable, except as otherwise determined by the Committee;  provided, however, if the Participant’s Separation from Service is for cause, as determined pursuant to a Participant’s employment agreement or otherwise by the Committee in its sole discretion, no earnings shall accrue to such Participant’s Deferred Compensation Account for any period of time following the Participant’s Separation from Service.

			
	
			
				 5.3
			Credit to Deferred Compensation Account. A Deferred Compensation Account shall be created for each Participant, to which all Deferred Compensation shall be credited.

			
	
			
				 A.
			Initial Credit to Deferred Compensation Account. Each Participant’s Deferred Compensation Account shall be credited no less frequently than the first business day of each calendar quarter with an amount equal to the sum of the Deferred Compensation deferred by the Participant during the preceding calendar quarter in accordance with Section ‎4.1 of the Plan.

			
	
			
				 B.
			Earnings Credit to Account.  Each Deferred Compensation Account shall be divided into separate investment fund subaccounts, each of which corresponds to a Measurement Fund elected by the Participant. The performance of each elected Measurement Fund (either positive or negative) shall be determined by the Committee, based on the performance of the Measurement Funds themselves. A Participant’s Deferred Compensation Account shall be credited or debited on each December 31st, or more frequently as determined by the Committee, based on the performance of each Measurement Fund selected by the Participant, as though (a) a Participant’s Deferred Compensation Account and the underlying separate investment fund subaccounts were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such period, as of the close of business on the first business day of such period, at the closing price on such date, (b) the portion of the Participant’s Deferred Compensation that was actually deferred during any period were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such period, no later than the close of business on the first business day after the day on which such amounts are actually deferred, at the closing price on such date, and (c) any withdrawal or distribution made to a Participant that decreases such Participant’s Deferred Compensation Account ceased being invested in the Measurement Fund(s), in the percentages applicable to such period, no earlier than one business day prior to the distribution, at the closing price on such date. The Committee shall establish and maintain, with respect to a Participant’s Deferred Compensation Account, an additional subaccount with respect to each Plan Year, to which shall be credited the amount equal to the portion of the Participant’s Deferred Compensation for such Plan Year, debited by amounts equal to distributions to and withdrawals made by the Participant and adjusted for investment earnings and losses as described herein.

			
	
			
				SECTION 6
			

		 

		

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	Vesting of Plan Accounts

		
			Subject to Section ‎10.12 below, a Participant’s Accounts shall vest in accordance with the following:
		

			
	
			
				 6.1
			Deferred Compensation Account. A Participant’s Deferred Compensation Account shall at all times be 100% vested.

			
	
			
				 6.2
			Other Accounts and Subaccounts.  Any other accounts or subaccounts established by the Committee from time to time shall vest in accordance with the terms and conditions established by the Committee.

			
	
			
				SECTION 7
			
Payment to Participants

			
	
			
				 7.1
			General Rule. Unless otherwise determined by the Committee in its sole discretion, each Participant shall make a separate distribution election with respect to each Plan Year for which such Participant elects to defer Salary or Annual Bonus. A Participant’s distribution election with respect to a Plan Year shall apply to his or her Deferred Compensation Account as well as each account or subaccount in the Deferred Compensation Account. A Participant’s Election Form with respect to a Plan Year shall specify the Payment Date and the form of distribution of his or her Distributable Amount with respect to such Plan Year. Any distribution to a Participant pursuant to the Plan shall be made or commence on such Participant’s Payment Date.

		
			The limitations under this subsection shall be applied in accordance with Code Section 409A(a)(4)(C) and the Treasury Regulations thereunder.
		

			
	
			
				 A.
			Normal Form.  Except as provided in paragraph B below, a Participant’s Distributable Amount with respect to each Plan Year shall be paid to the Participant in a single lump sum in cash on the Participant’s Payment Date.

			
	
			
				 B.
			Optional Forms. Instead of receiving his or her Distributable Amount with respect to each Plan Year in the form of a single lump sum, the Participant may elect an optional form of payment (on the Election Form) at the time of the Participant’s deferral election for such Plan Year. The Participant may elect on his or her timely executed and filed Election Form to receive the Distributable Amount in equal monthly installments over a period of two (2) to fifteen (15) years beginning on the Participant’s Payment Date. The payment of such Participant’s Distributable Amount with respect to each Plan Year shall be made or commence on such Participant’s Payment Date.

		
			All installment payments made under the Plan shall be determined in accordance with the annual fractional payment method, calculated as follows: the balance of the Participant’s Accounts with respect to a Plan Year shall be calculated as of the date of distribution. The annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one, and the denominator of which is the remaining number of annual payments due to the Participant. By way of example, if the Participant elects 10 annual installments for the distribution of his or her Accounts with respect to a Plan Year, the first payment shall be 1/10 of the balance of such Accounts calculated as described in this paragraph. The following year, the payment shall be 1/9 of the balance of the Participant’s Accounts, calculated as described in this paragraph. The final distribution shall be based on 100% of the balance of the Participant’s Accounts as of the date of distribution.
		

		
			The amount of each monthly installment shall then be determined by further dividing the annual 

		 

		

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installment with respect to any particular year by 12 to arrive at the amount of each monthly installment. Each monthly installment shall be paid on the last business day of the applicable month. The Committee may, in its sole discretion, adjust an elected distribution schedule in an effort to avoid any potential violation of Code Section 409A.
		

			
	
			
				 7.2
			Death Before Payment of Benefits.  If a Participant dies before the balance of the Participant’s Accounts has been paid to the Participant, any remaining payments will be made to the Participant’s Beneficiary in the same form and manner as they would have been made to the Participant under the provisions of Section ‎7.1 above.

			
	
			
				 7.3
			Distributions in Cases of Hardship. Notwithstanding the provisions of Section ‎7.1 above, the Committee may, in its sole discretion, choose to permit a Participant to withdraw amounts from his or her vested Accounts upon a showing by such Participant that an Unforeseeable Emergency has occurred. Such distribution shall be limited to the amount shown to be necessary to meet the Unforeseeable Emergency, and no more than one withdrawal will be permitted from a Participant’s Accounts during any Plan Year.

		
			Any amounts distributed to a Participant pursuant to an Unforeseeable Emergency shall be considered to be taxable compensation to the Participant in the Plan Year of withdrawal.
		

			
	
			
				 7.4
			Prohibition on Acceleration of Distributions. Subject to Section ‎7.5 below, the time or schedule of payment of any withdrawal or distribution under the Plan shall not be subject to acceleration, except as provided under Treasury Regulations promulgated in accordance with Code Section 409A.

			
	
			
				 7.5
			Re-deferrals and Changing the Form of Payment. In accordance with procedures established from time-to-time by the Committee in its sole discretion, the Participant may make an election to re-defer all or a portion of the amounts in his or her Deferred Compensation Account until a later distribution date or to change the form of a payment (a “Re-deferral Election”); provided that, the following requirements are met:

			
	
			
				 A.
			The Re-deferral Election is made at least twelve (12) months before the original distribution date;

			
	
			
				 B.
			The distribution date for the re-deferred amounts is at least five (5) years later than the original distribution date; and

			
	
			
				 C.
			The Re-deferral Election will not take effect for at least twelve (12) months after the Re-deferral Election is made.

			
	
			
				 7.6
			Limited Cashouts.  Notwithstanding any provision of the Plan or any Participant election to the contrary, the Committee may accelerate payment of a Participant’s  Account(s) to the extent that (i) the aggregate amount of the Participant’s  Account(s) does not exceed the applicable dollar amount under Code Section 402(g)(1)(B), (ii) the payment results in the termination of the Participant’s entire interest in the Plan and any plans that are aggregated with the Plan pursuant to Treas. Reg. Section 1.409A-1(c)(2), and (iii) the Committee’s decision to cash out the Participant’s  Account(s) is evidenced in writing no later than the date of payment.

			
	
			
				 7.7
			Specified Employee.  Notwithstanding anything in the Plan to the contrary, if a Participant is a Specified Employee as of the date of his or her Separation from Service, then no distribution of such Participant’s Account shall be made upon the Participant’s Separation from Service until the first payroll date of the seventh month following the Participant’s Separation from Service (or, if earlier, upon the date of the Participant’s death) (the “Specified Employee Payment Date”). Any payments to which a Specified 

		 

		

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	Employee otherwise would have been entitled under the Plan during the period between the Participant’s Separation from Service and the Specified Employee Payment date shall be accumulated and paid in a lump sum payment on the Specified Employee Payment Date.

			
	
			
				SECTION 8
			
Participant Statements

			
	
			
				 8.1
			Annual Participant Statements. Within a reasonable period of time following the end of each Plan Year, each Participant shall be provided with a statement showing the balances (vested and nonvested) in the Participant’s Deferred Compensation  Account.

			
	
			
				 8.2
			Termination of Participant’s Employment. Within 30 days following the date of the Participant’s termination of employment (for any reason), the Participant shall be provided with a statement showing the vested balances of his or her Deferred Compensation Account as of the date of such Separation from Service.

			
	
			
				SECTION 9
			
Amendment or Termination of Plan

		
			Any amendment to this Plan shall be made pursuant to a duly adopted resolution of the Board; provided, however, that if such amendment directly or indirectly affects the benefits payable under the Plan, such amendment must be mutually agreed to in writing by a Participant (or, in the event that such Participant is deceased at the date of amendment, the Beneficiary). Notwithstanding the foregoing, at the time of a Change of Control, the Board may unilaterally terminate and distribute all Accounts in accordance with Code Section 409A.
		

			
	
			
				SECTION 10
			
General Provisions

			
	
			
				 10.1
			Participant’s Rights Unfunded. The Plan at all times shall be unfunded as defined under provisions of the Code. The right of any Participant or Beneficiary to receive a distribution hereunder shall be an uninsured claim against the general assets of the Company in the event of the Company’s insolvency or bankruptcy. The Company may implement a form of trust arrangement (known generally as a “rabbi trust”) to hold the Company assets which will be used to make payments to the Participant (or any Beneficiary) under the terms of the Plan. Such trust arrangement will not be a “funded” arrangement under the provisions of the Code.

			
	
			
				 10.2
			Independence of Other Benefit Arrangements. Participation in the Plan shall in no way restrict or otherwise impact Participant’s participation in any other welfare benefit plan, employment or other contract, deferred compensation arrangement, equity participation plan or any other form of retirement benefit arrangement sponsored by the Company.

			
	
			
				 10.3
			No Secured Guarantee of Benefits. In the event of the insolvency or bankruptcy of the Company, Participant shall remain a general creditor of the Company with respect to any benefits payable under the Plan, and nothing contained in the Plan shall constitute a secured guaranty by the Company or any other person or entity that the assets of the Company will be sufficient to pay any benefit hereunder in the event of the Company’s insolvency or bankruptcy.

			
	
			
				 10.4
			No Enlargement of Rights. No Participant shall have any right to receive a distribution of any benefits under the Plan except in accordance with the terms of the Plan. Establishment of the Plan shall not be construed to give any Participant the right to be retained in the service of the Company or any other 

		 

		

			10

		

		

			 

		

 

		

			

		

	member of the Controlled Group, whether as an employee, officer or director.

			
	
			
				 10.5
			Spendthrift Provision. No interest of any person or entity in, or right to receive a distribution under the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment or other alienation or encumbrance of any kind; nor may such interest or right to receive a distribution be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.

			
	
			
				 10.6
			Applicable Law. The Plan shall be construed and administered under the laws of the State of Illinois.

			
	
			
				 10.7
			Severability. In the event that any of the provisions of the Plan are held to be inoperative or invalid by any court of competent jurisdiction, then: (i) insofar as is reasonable, effect will be given to the intent manifested in the provision held invalid or inoperative; and (ii) the validity and enforceability of the remaining provisions of the Plan will not be affected thereby.

			
	
			
				 10.8
			Incapacity of Recipient. If any person entitled to a distribution under the Plan is deemed by the Committee to be incapable (physically or mentally) of personally receiving and giving a valid receipt for any payment pursuant to the Plan, then, unless and until claim therefore shall have been made by a duly appointed guardian or other legal representative of such person, the Company may provide for such payment or any part thereof to be made to any other person or institution then contributing towards or providing for the care and maintenance of such person. Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan with respect to such payment.

			
	
			
				 10.9
			Successors. The terms and conditions of the Plan will be binding on the Company’s and Participant’s successors, heirs and assigns.

			
	
			
				 10.10
			Unclaimed Benefits. Participant shall keep the Company informed of his or her current address and the current address of his or her Beneficiary. The Company shall not be obligated to search for the whereabouts of any person. If the location of any Participant is not made known to the Company within a one (1) year period after the date on which payment is to be made under the provisions of Section ‎7.1, then payment may be made by the Company to the Beneficiary instead. If, within one (1) additional year after such initial one (1) year period, the Company is unable to locate any designated Beneficiary of the Participant, then the Company shall use its reasonable best efforts to distribute all unclaimed benefits to the estate or other representative of the Participant.

			
	
			
				 10.11
			Limitations on Liability. Participant and any other person claiming benefits under the Plan shall be entitled under this Plan only to those payments provided in accordance with the provisions of the Plan (“Payment Claims”). With the exception of the provisions of Section ‎10.13 of the Plan, neither the Company, the Company Successor nor any individual acting as an employee or agent of the Company or the Company Successor, shall be liable to Participant or any other person for any other claim, loss, liability or expense under this Plan not directly related to a Payment Claim.

			
	
			
				 10.12
			Forfeiture of Benefits. Notwithstanding any other provision of the Plan, should Participant engage in theft, fraud or embezzlement causing significant property damage to the Company, then any benefits payable to such Participant under the Plan will automatically be forfeited. The determination of theft or embezzlement will be made by the Board in good faith, but such determination does not require an actual criminal indictment or conviction prior to or after such decision. In any determination of forfeiture pursuant to this Section ‎10.12, the Participant will be given the opportunity to refute any such decision by 

		 

		

			11

		

		

			 

		

 

		

			

		

	the Board, but the Board’s decision on the matter will be considered final and binding on Participant and all other parties.

			
	
			
				 10.13
			Payment of Attorneys’ Fees, Court Costs, and Interest on Loss of Benefits. Should either the Company or the Company Successor or a Participant bring an action at law (or through arbitration) in order that the Plan’s terms be enforced, then the party prevailing in the action at law (or through arbitration) shall be entitled to reimbursement from the losing party for reasonable attorneys’ fees, court costs and other similar amounts expended in the enforcement of the terms of the Plan. In addition, should the prevailing party be the Participant, he or she shall also be entitled to interest on any delayed payments, with such interest computed in accordance with Section ‎5.3 above.

			
	
			
				 10.14
			Withholding. There shall be deducted from all payments under the Plan the amount of any taxes required to be withheld by any federal, state or local government. The Participants, any Beneficiaries and personal representatives shall bear any and all federal, foreign, state, and local, income or other taxes imposed on amounts paid under the Plan.

			
	
			
				 10.15
			Participants Bound By Terms of the Plan. Each Participant shall be deemed conclusively to have accepted and consented to all terms of the Plan and all actions or decisions made by the Company with regard to the Plan. Such terms and consent shall also apply to and be binding upon any Beneficiaries, personal representatives and successors of each Participant. Each Participant shall receive a copy of the Plan.

			
	
			
				 10.16
			Code Section 409A. The Company intends that the Plan comply with the requirements of Code Section 409A and shall be operated and interpreted consistent with that intent. Notwithstanding the foregoing, the Company makes no representation that the Plan complies with Code Section 409A and shall have no liability to any Participant for any failure to comply with Code Section 409A. The Plan shall constitute an “account balance plan” as defined in Treasury Regulation Section 31.3121(v)(2)-1(c)(1)(ii)(A). For purposes of Code Section 409A, all amounts deferred under this Plan shall be aggregated with amounts deferred under other account balance plans.

			
	
			
				SECTION 11
			
Claims Procedures

			
	
			
				 11.1
			Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred-eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

			
	
			
				 11.2
			Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, but no later than ninety (90) days; provided that claims based on Disability shall be considered within forty-five (45) days, unless, within such time, the Committee notifies the Claimant in writing that an extension is required pursuant to Labor Regulation 2560.503-1 (up to ninety (90) days for non-Disability claims and thirty (30) days for Disability claims). Once a decision is made, the Committee shall notify the Claimant in writing:

			
	
			
				 A.
			That the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

		
			

		 

		

			12

		

		

			 

		

 

		

			

		

		

			
	
			
				 B.
			That the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

			
	
			
				 (i)
			the specific reason(s) for the denial of the claim, or any part of it;

			
	
			
				 (ii)
			the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

			
	
			
				 (iii)
			a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

			
	
			
				 (iv)
			an explanation of the claim review procedure set forth in Section ‎11.3 below, including the Claimant’s right to bring a civil action under ERISA Section 502(a) as described in Section ‎11.5 below.

			
	
			
				 11.3
			Review of a Denied Claim. Within sixty (60) days (one hundred-eighty (180) days for a claim based on Disability) after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s’ duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

			
	
			
				 A.
			may review pertinent documents;

			
	
			
				 B.
			may submit written comments or other documents; and/or

			
	
			
				 C.
			may request a hearing, which the Committee, in its sole discretion, may grant.

			
	
			
				 11.4
			Decision on Review. The Committee shall render its decision on review promptly, and not later than sixty (60) days (forty-five (45) days for a claim based on Disability) after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within one hundred-twenty (120) days after such date; provided that this period shall include up to one (1) forty‐five (45)-day extension for claims based on Disability. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

			
	
			
				 A.
			specific reasons for the decision;

			
	
			
				 B.
			specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

			
	
			
				 C.
			such other matters as the Committee deems relevant.

			
	
			
				 11.5
			Legal Action. A Claimant’s compliance with the foregoing provisions of this Section ‎11 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

		
			 
		

		
			 
		

		
			

		 

		

			13

		

		

			 

		

 

		

			

		

		

		
			EXHIBIT A
		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			PARTICIPATION CERTIFICATE
		

		
			THIS PARTICIPATION CERTIFICATE certifies that the Compensation Committee of the Board of Directors of Midland States Bancorp, Inc. has selected  (“Participant”) as a Participant in the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”), with all of the rights and privileges appurtenant thereto.
		

		
			By signing this Certificate in the space provided below, Participant acknowledges having received a copy of the Plan and having read and reviewed the terms and provisions thereof.
		

		
			Dated as of the _______ day of , 20___.
		

		
			 
		

		
			MIDLAND STATES BANCORP, INC.
		

		
			
		

		
			By:
		

		
			Title:
		

		
			 
		

		
			Received by Participant the ___ day of ______________, 20___.
		

		
			_______________________________________________
[Name of Participant]
		

		
			_______________________________________________
Address 
		

		
			_______________________________________________
City, State and Zip Code
		

		
			 
		

		
			

		 

		

			 

		

		

			 

		

 

		

			

		

		

		
			EXHIBIT B-1
		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			DEFERRED COMPENSATION ELECTION FORM
		

		
			Pursuant to the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”), a copy of which I have in my possession and have read, I hereby elect the following actions in conjunction with my employment with Midland States Bancorp, Inc. or one of its subsidiaries. Unless the context clearly requires otherwise, capitalized terms herein shall have the same meanings as ascribed to them under the Plan.
		

			
	
			
				 ·
			

			
	
			
			Deferrals:

			
	
			
				  ̈
			

			
	
			
			Salary otherwise payable to me for the 20____ Plan Year in the aggregate amount of ◻ all, or ◻ $_____________, or ◻ _____________% thereof, and/or

			
	
			
				 ·
			

			
	
			
			Timing of Distributions (Participant Payment Date) (select one):

			
	
			
				  ̈
			

			
	
			
			Date Certain Election: For all deferrals for the 20____ Plan Year, I elect payment on the last day of ________ (month) ________ (year), or

			
	
			
				  ̈
			

			
	
			
			Separation from Service: For all deferrals for the 20____ Plan Year, I elect payment only upon a Separation from Service, or

			
	
			
				  ̈
			

			
	
			
			I elect payment on earlier of the last day of _______ (month) ________ (year) or upon a Separation from Service.

			
	
			
				 ·
			

			
	
			
			Method of Distribution (select one):

			
	
			
				  ̈
			

			
	
			
			Monthly installments over _______ years (minimum of 2, maximum of 15).

			
	
			
				  ̈
			

			
	
			
			Lump-sum.

		
			The elections specified above (if any) will continue in effect for future years until revoked.
		

		
			Date:
		

		
			
Signature
		

		
			
Print Name
		

		
			

		 

		

			 

		

		

			 

		

 

		

			

		

EXHIBIT B-2
		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			DEFERRED COMPENSATION ELECTION FORM
		

		
			Pursuant to the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”), a copy of which I have in my possession and have read, I hereby elect the following actions in conjunction with my employment with Midland States Bancorp, Inc. or one of its subsidiaries. Unless the context clearly requires otherwise, capitalized terms herein shall have the same meanings as ascribed to them under the Plan.
		

			
	
			
				 ·
			

			
	
			
			Deferrals:

			
	
			
				  ̈
			

			
	
			
			Annual Bonus otherwise earned by me during the ____ annual performance period in the aggregate amount of ◻ all, or ◻ $_____________, or ◻ _____________% thereof.

		
			The elective deferral made pursuant to this Form is with respect to Annual Bonus only. “Annual Bonus” is, generally, compensation the amount of which, or the entitlement to which, is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least twelve (12) consecutive months (all as described in Treasury Regulations Section 1.409A-1(e)).
		

			
	
			
				 ·
			

			
	
			
			Timing of Distributions (Participant Payment Date) (select one):

			
	
			
				  ̈
			

			
	
			
			Date Certain Election: For all deferrals for the ____ annual performance period, I elect payment on the last day of ________ (month) ________ (year), or

			
	
			
				  ̈
			

			
	
			
			Separation from Service: For all deferrals for the ____ annual performance period, I elect payment only upon a Separation from Service, or

			
	
			
				  ̈
			

			
	
			
			I elect payment on earlier of the last day of _______ (month) ________ (year) or upon a Separation from Service.

			
	
			
				 ·
			

			
	
			
			Method of Distribution (select one):

			
	
			
				  ̈
			

			
	
			
			Monthly installments over _______ years (minimum of 2, maximum of 15).

			
	
			
				  ̈
			

			
	
			
			Lump-sum.

		
			The elections specified above (if any) will continue in effect for future annual performance periods until revoked.
		

		
			Date:
		

		
			
Signature
		

		
			
Print Name
		

		
			

		 

		

			 

		

		

			 

		

 

		

			

		

EXHIBIT B-3
		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			BENEFICIARY DESIGNATION FORM
		

		
			Pursuant to the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”), a copy of which I have in my possession and have read, I hereby designate the following persons as my beneficiaries to receive all amounts held for me under the Plan which have not been paid to me at the date of my death:
		

		
			Primary Beneficiary(ies):
		

		
			Name: Name: 
		

		
			Relationship: Relationship: 
		

		
			Percentage: Percentage: 
		

		
			 
		

		
			Secondary Beneficiary(ies)
		

		
			Name: Name: 
		

		
			Relationship: Relationship: 
		

		
			Percentage: Percentage: 
		

		
			 
		

		
			The designation of beneficiaries specified above (if any) will continue in effect for future years until revoked.
		

		
			Date:
		

		
			
Signature
		

		
			
Print Name
		

		
			

		 

		

			 

		

		

			 

		

 

		

			

		

EXHIBIT B-4
		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			REQUEST FOR HARDSHIP WITHDRAWAL
		

		
			Pursuant to the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”), a copy of which I have in my possession and have read, I hereby request a hardship withdrawal from the balance in my Deferred Compensation Account relative to the _______ Plan Year in the amount of $________________ as a result of the occurrence of an Unforeseeable Emergency, as more particularly described on the page attached hereto.
		

		
			 
		

		
			Date:
		

		
			
Signature
		

		
			
Print Name
		

		
			

		 

		

			 

		

		

			 

		

 

		

			

		

EXHIBIT B-5
		

		
			Deferred Compensation Plan for Executives
of Midland States Bancorp, Inc.
(Effective November 8, 2018)
		

		
			RE-DEFERRAL ELECTION FORM
		

		
			Pursuant to the Deferred Compensation Plan For Executives of Midland States Bancorp, Inc., effective November 8, 2018 (the “Plan”), a copy of which I have in my possession and have read, I hereby elect the following actions with respect to amounts that I have previously deferred under the Plan. Unless the context clearly requires otherwise, capitalized terms herein shall have the same meanings as ascribed to them under the Plan.
		

		
			Previous Deferral Election:
		

			
	
			
				 ·
			

			
	
			
			This Re-Deferral Election is made with respect to (select only one):

			
	
			
				  ̈
			

			
	
			
			Salary otherwise payable to me for the 20____ Plan Year

			
	
			
				  ̈
			

			
	
			
			Annual Bonus otherwise earned by me during the ____ annual performance period

			
	
			
				 ·
			

			
	
			
			With respect to the Salary or Annual Bonus identified above, I originally elected to receive such deferrals:

			
	
			
				  ̈
			

			
	
			
			In the form of (select only one):

			
	
			
				  ̈
			

			
	
			
			monthly installments over _______ years, or

			
	
			
				  ̈
			

			
	
			
			a lump sum

			
	
			
				  ̈
			

			
	
			
			With such payment originally scheduled to commence (select only one):

			
	
			
				  ̈
			

			
	
			
			Date Certain Election: On the last day of ________ (month) ________ (year), or

			
	
			
				  ̈
			

			
	
			
			Upon a Separation from Service, or

			
	
			
				  ̈
			

			
	
			
			Upon the earlier of the last day of _______ (month) ________ (year) or a Separation from Service.

		
			Re-Deferral Election:
		

			
	
			
				 ·
			

			
	
			
			In the form of (select only one):

			
	
			
				  ̈
			

			
	
			
			monthly installments over _______ years, or

			
	
			
				  ̈
			

			
	
			
			a lump sum

			
	
			
				 ·
			

			
	
			
			With such payment re-deferred until (select only one):

			
	
			
				  ̈
			

			
	
			
			Date Certain Election (must be at least five (5) years later than originally elected Date Certain Election identified above):  On the last day of ________ (month) ________ (year), or

			
	
			
				  ̈
			

			
	
			
			Five (5) years after my Separation from Service, or

			
	
			
				  ̈
			

			
	
			
			Upon the earlier of the last day of _______ (month) ________ (year) (any new specified date must be at least five (5) years later than the originally elected date) or a Separation from Service, or

			
	
			
				  ̈
			

			
	
			
			(Available only in limited circumstances) Upon the later of five years following a Separation from Service or the last day of _______ (month) ________ (year)

		
			[Signature page follows]
		

		
			By signing below, I acknowledge that: (i) this Re-Deferral Election Form is being executed by me at least twelve (12) months prior to the time I would otherwise be entitled to receive the Salary or Annual Bonus identified above; (ii) this Re-Deferral Election Form will not take effect until the date that is twelve (12) months after this Re-Deferral Election Form has been executed and presented to the Plan administrator; and (iii) if I have incorrectly completed this Re-Deferral Form, the Plan administrator has no obligation to accept 

		 

		

			 

		

		

			 

		

 

		

			

		

it as an effective Re-Deferral Election. I further acknowledge and agree that this Re-Deferral Election will not be effective until acknowledged and accepted by Human Resources at Midland States Bancorp, Inc.
		

		
			You must attach a copy of your originally submitted Deferred Compensation Election Form to this Re-Deferral Election Form.
		

		
			 
		

		
			Date:
		

		
			
Signature
		

		
			
Print Name
		

		
			 
		

		
			Acknowledged and accepted by Human Resources at Midland States Bancorp, Inc.
		

		
			Date:
		

		
			
Signature
		

		
			
Print Namemsbi_Current_Folio_Ex1028

		

			Exhibit 10.28

		

		
			Employment Agreement
		

		
			 
		

		
			This Employment Agreement (this “Agreement”) is made and entered into as of December 20, 2012 (the “Effective Date”) by and between Midland States Bank, an Illinois banking corporation (the “Employer”) and Jeffrey Mefford (the “Executive”).
		

		
			Recitals
		

			
	
			
				 A.
			The Employer is a wholly-owned subsidiary of Midland States Bancorp, Inc., (the “Company”).

			
	
			
				 B.
			Executive is currently employed as Senior Vice President Community Banking of the Employer pursuant to the terms and conditions of that certain employment agreement by and between the parties dated December 1, 2010 (the “Prior Agreement”). 

			
	
			
				 C.
			The Company is considering various strategic initiatives, one of which may be an initial public offering (an “IPO”) of its common stock pursuant to which the Company would become a publicly-traded corporation. 

			
	
			
				 D.
			In anticipation of the possibility of an IP, or other strategic initiatives, the parties desire to reconsider, amend and restate the terms and conditions of employment applicable to Executive’s employment with the Employer. 

		
			Now,  therefore, in consideration of the premises and of the covenants and agreements hereinafter contained, it is covenanted and agreed by and between the parties hereto as follows:
		

		
			Agreements
		

			
	
			
				 1.
			Prior Agreement. As of the Effective Date, the Agreement shall supersede and replace any and all prior agreements respecting Executive’s employment by, or service to, the Employer or the Company as may from time to time have been made by and between the parties, whether or not in writing, including but not limited to the Prior Agreement; provided, however, that any vested benefits due to Executive pursuant to any pension plan, welfare benefit plan or any other employee benefit plan shall continue to be available to Executive subject to the terms and conditions of the applicable plan as may be in effect from time to time. 

		
			 
		

			
	
			
				 2.
			Employment Period.  Subject to the terms and conditions of this Agreement, the Employer hereby agrees to continue to employ Executive during the Employment Period and Executive hereby agrees to continue to remain in the employ of the Employer and to provide services during the Employment Period in accordance with this Agreement.  The “Employment Period” shall be the period commencing on the Effective Date and ending two (2) years thereafter, unless sooner terminated as provided herein. As of the first anniversary of the Effective Date, and each anniversary thereafter (each an “Extension Date”), the Employment Period shall automatically be extended for one (1) additional year, unless either the Employer or the Executive notifies the other party, by written notice delivered no later than 90 days prior to such Extension Date, that the “Employment Period” shall not be extended for an additional year.  Notwithstanding anything contained herein to the contrary, if a Change of Control occurs during 

		 

 

	the Employment Period, this Agreement shall remain in effect for the two (2) year period following the Change of Control and shall then terminate.

			
	
			
				 3.
			Duties.  Executive agrees that during the Employment Period, Executive will devote his/her full business time, energies and talents to serving as the Senior Vice President Community Banking of the Employer, at the direction of the Chief Executive Officer of the Employwer  (the “CEO”).  Executive shall have such duties and responsibilities as may be assigned to Executive from time to time by the CEO, which duties and responsibilities shall be commensurate with Executive’s position, shall perform all duties assigned to Executive faithfully and efficiently, subject to the direction of the CEO, and shall have such authorities and powers as are inherent to the undertakings applicable to Executive’s position and necessary to carry out the responsibilities and duties required of Executive hereunder.  Executive will perform the duties required by this Agreement at the Company’s principal place of business unless the nature of such duties requires otherwise.  Notwithstanding the foregoing, during the Employment Period, Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious or similar nature (including professional associations) to the extent such activities do not, in the reasonable judgment of the CEO, inhibit, prohibit, interfere with or conflict with Executive’s duties under this Agreement or conflict in any material way with the business of the Employer and its Affiliates; provided, however, that Executive shall not serve on the board of directors of any business (other than the Employer or its Affiliates) or hold any other position with any business without receiving the prior written consent of the CEO.

			
	
			
				 4.
			Compensation and Benefits.  Subject to the terms and conditions of this Agreement, during the Employment Period, while Executive is employed by the Employer, the Employer shall compensate Executive for Executive’s services as follows for periods following the Effective Date:

			
	
			
				 (a)
			Executive shall be compensated at an annual rate of $220,000 (the “Annual Base Salary”), which shall be payable in accordance with the Employer’s normal payroll practices as are in effect from time to time.  Beginning on January 1, 2012 and on each anniversary of such date, Executive’s rate of Annual Base Salary shall be reviewed by the CEO, and following such review, the Annual Base Salary may be adjusted upward but in no event will it be decreased. 

			
	
			
				 (b)
			 Executive shall be entitled to receive performance based annual incentive bonuses (each, the “Incentive Bonus”) from the Employer for each fiscal year ending during the Employment Period.  Any such Incentive Bonus shall be paid to Executive within thirty (30) days of the completion of the annual audit by the Employer’s auditor, but in no event later than two and one‐half months after the close of each such fiscal year.  Executive’s target Incentive Bonus shall be not less than thirty-five percent (35%) of the Annual Base Salary, which Incentive Bonus shall be determined by specific performance criteria established from time to time by the CEO.

			
	
			
				 (c)
			Executive shall be eligible to participate, subject to the terms and conditions thereof, in all other incentive plans and programs, including such cash and deferred bonus programs and equity incentive plans as may be in effect from time to time with respect to senior executives employed by the Employer on as favorable  a basis as provided to other similarly situated senior executives. Executive and Executive’s dependents, as the case may be, shall be 

		 

		

			2

		

		

			 

		

 

	eligible to participate in all pension and similar benefit plans (qualified, non-qualified and supplemental), profit sharing, 401(k), as well as all medical and dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans and programs of the Employer, subject to the terms and conditions thereof, as in effect from time to time with respect to senior executives employed by the Employer on as favorable a basis as provided to other similarly situated senior executives.

			
	
			
				 (d)
			Executive shall be entitled to accrue vacation at a rate of no less than four (4) weeks paid vacation for each calendar year, subject to the Employer’s vacation programs and policies as may be in effect during the Employment Period. 

			
	
			
				 (e)
			Executive shall be reimbursed by the Employer, on terms and conditions that are substantially similar to those that apply to other similarly situated executives of the Employer, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items which are consistent with the Employer’s expense reimbursement policy and actually incurred by Executive in the promotion of the Employer’s business.

			
	
			
				 5.
			Definitions.  As used throughout this Agreement, all of the terms defined in this Section 5 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 of 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 Incentive Bonus paid (or payable) for the three (3) 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 Exchange Act), 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

		
			

		 

		

			3

		

		

			 

		

 

		

			
	
			
				 (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) at least 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 in Control be deemed to have occurred, with respect to the Executive if the Executive is part of a purchasing group which 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 (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, and the settlement of, or distribution of such benefits  is to be triggered by a Change in Control, then such settlement or distribution shall be subject to the event constituting the Change in Control also constituting a “change in the ownership” or “change in the effective control” of the Company, as permitted under Code Section 409A.
		

			
	
			
				 (d)
			“Covered Period” shall mean the period beginning six (6) months prior to a Change of Control and ending twenty-four  (24) months after the Change of Control. 

			
	
			
				 (e)
			“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.

			
	
			
				 (f)
			“Good Reason” shall mean Executive’s voluntary Termination of employment for one or more of the following reasons:

			
	
			
				 (i)
			an adverse change in the nature, scope or status of Executive’s position, authorities or duties from those in effect in accordance with Section 3 immediately following the Effective Date, or if applicable and greater, immediately prior to the Covered Period;

			
	
			
				 (ii)
			a reduction in Executive’s Annual Base Salary, 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;  

		
			

		 

		

			4

		

		

			 

		

 

		

			
	
			
				 (iii)
			relocation of Executive’s primary place of employment of more than ninety (90) miles from Executive’s primary place of employment immediately following the Effective Date, or if applicable, 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

			
	
			
				 (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 ninety (90) 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 6 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 6 of this Agreement upon such Termination; provided such Termination occurs within 24 months after such initial existence of the applicable condition.  
		

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

			
	
			
				 (i)
			Executive’s earned but unpaid Annual Base 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; 

			
	
			
				 (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 Section6(f)

			
	
			
				 (h)
			“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).

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

		
			

		 

		

			5

		

		

			 

		

 

		

			
	
			
				 (j)
			“Severance Amount” shall mean:

			
	
			
				 (i)
			for any Termination occurring during the Employment Period and not during a Covered Period, the benefit available under the Midland States Severance Plan; or

			
	
			
				 (ii)
			for any Termination occurring during a Covered Period, an amount equal to one hundred percent (100%) of Executive’s Base Compensation.

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

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

			
	
			
				 (ii)
			by Executive for Good Reason.

			
	
			
				 (l)
			“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.

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

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

			
	
			
				 (ii)
			Executive’s willful act or acts of misconduct that are, alone or in the aggregate, materially and demonstrably injurious, monetarily or otherwise, to the Employer or an Affiliate, as determined in the sole discretion of the CEO; or

			
	
			
				 (iii)
			Executive’s breach of fiduciary responsibility or any obligation of Executive pursuant to Section 8.

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

			
	
			
				 6.
			Rights and Payments Upon Termination.    Either party may terminate Executive’s employment under this Agreement pursuant to the terms and conditions of this Section 6.  Subject to Section 7 below, Executive’s right to benefits and payments, if any, for periods after the Termination Date shall be determined in accordance with this Section 6:

			
	
			
				 (a)
			Minimum Payments.  If the Termination Date occurs during the Employment Period for any reason, Executive shall be entitled to the Minimum Payments, in addition to any payments or benefits to which Executive may be entitled under the following provisions of this Section 6 (other than this Section 6‎(a)) or the express terms of any employee benefit plan or as required by law.  Any payments to be made to Executive pursuant to this Section 6‎(a) shall be made within thirty (30) days after the Termination Date; provided that any benefits, 

		 

		

			6

		

		

			 

		

 

	incentives or awards payable as described in Section 6‎(f) shall be made in accordance with the provisions of the applicable plan, program or arrangement.  Except as may be otherwise expressly provided to the contrary in this Agreement or as otherwise provided by law, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Employer following the Termination Date for purposes of any employee benefit plan or arrangement in which Executive may participate at such time.

			
	
			
				 (b)
			Termination for Cause, Death, Disability, Voluntary Resignation and Non-Renewal.

			
	
			
				 (i)
			Upon a determination of a Termination for Cause by the Employer, Executive’s death or Disability, or Executive’s voluntary resignation other than for Good Reason, Executive’s employment shall immediately terminate.

			
	
			
				 (ii)
			If the Termination Date occurs during the Employment Period and is a result of a Termination for Cause, death, Disability, voluntary resignation other than for Good Reason or if this Agreement expires due to notice of non-renewal by either party as provided under Section 2 or at the end of a Covered Period, then, other than the Minimum Payments, Executive shall have no right to payments or benefits under this Agreement (and the Employer shall have no obligation to make any such payments or provide any such benefits) for periods after the Termination Date.

			
	
			
				 (c)
			Termination Other than for Cause or Termination for Good Reason.    If Executive’s employment by the Employer, or any Affiliate or successor of the Employer, shall be subject to a Termination other than during a Covered Period, then, in addition to the Minimum Payments, the Employer shall provide Executive the following benefits:

			
	
			
				 (i)
			Commencing on the Termination Date, Executive shall receive the applicable Severance Amount (less any amount described in subparagraph (ii) below) paid in 12 substantially equal monthly installments, with each successive payment being due on the monthly anniversary of the Termination Date. 

			
	
			
				 (ii)
			To the extent any portion of the applicable Severance Amount exceeds the “safe harbor” amount described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), Executive shall receive such portion of the applicable Severance Amount that exceeds the “safe harbor” amount in a single lump sum payment payable within five (5) days after Executive’s Termination Date.

			
	
			
				 (iii)
			Executive (and dependents, as may be applicable) shall be entitled to the medical benefits provided in Section 6(e) below. 

			
	
			
				 (d)
			Termination Upon a Change of Control.  If Executive’s employment by the Employer, or any Affiliate or successor of the Employer, shall be subject to a Termination within a Covered Period, then, in addition to Minimum Payments, the Employer shall provide Executive the following benefits:

			
	
			
				 (i)
			Within five (5) days after Executive’s Termination Date, the Employer shall pay Executive a lump sum payment in an amount equal to the Severance Amount.

		
			

		 

		

			7

		

		

			 

		

 

		

			
	
			
				 (ii)
			Executive (and her dependents, as may be applicable) shall be entitled to the medical benefits provided in Section 6‎(e) below.

			
	
			
				 (iii)
			Executive shall be entitled to receive a Pro Rata Bonus, when Incentive Bonuses are paid to other senior management of Employer, consistent with Section ‎4(b) of this Agreement.

			
	
			
				 (e)
			Medical,  Dental and Life Insurance Benefits.  If Executive’s employment by the Employer or any Affiliate or successor of the Employer shall be subject to a Termination as provided in subsections (c) or ‎(d) above within the Employment 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 ‎(e) will cease.    

			
	
			
				 (f)
			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.

			
	
			
				 7.
			Release.    Notwithstanding anything contained in this Agreement to the contrary, no payments or benefits (including without limitation, vesting of any and all stock options, shares of restricted stock, restricted stock units and other unvested incentive awards) payable to Executive under Section 6(c),  ‎6(d) or ‎6(e) (except for payments and benefits described in Section ‎6(a)) 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 6(c),  6(d) or 6(e) are determined to be subject to Section 409A of the Internal Revenue Code of 1986, as amended (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 

		 

		

			8

		

		

			 

		

 

	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 6(c),  6(d) or 6(e) or any payment or benefit in lieu thereof.

			
	
			
				 8.
			Restrictive Covenants.    

			
	
			
				 (a)
			Confidential Information.  Executive acknowledges that, during the course of her 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 her 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 her 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 her 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 her 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/she 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, 

		 

		

			9

		

		

			 

		

 

	notes or reproductions of any kind made from or about the records, files, documents or other materials.

			
	
			
				 (c)
			Non-Competition and Non-Solicitation.  The Employer and Executive have agreed that the primary service area of the Employer’s lending and deposit taking functions in which Executive will actively participate extends separately to an area that encompasses a twenty-five (25) mile radius from each banking or other office location of the Employer and its Affiliates (collectively, the “Restricted Area”).  Therefore, as an essential ingredient of and in consideration of this Agreement and her employment by the Employer,  Executive agrees that, during her 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 Employment Period or thereafter, he/she 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)
			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 her name or any similar name to, lend her 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. 

			
	
			
				 (ii)
			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.

			
	
			
				 (iii)
			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.

		
			

		 

		

			10

		

		

			 

		

 

		

			
	
			
				 (iv)
			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.

			
	
			
				 (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 her 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 her 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 her 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 8 are reasonable with respect to their duration, geographical area and scope.  Executive further acknowledges that the restrictions contained in this Section 8 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 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.

		
			

		 

		

			11

		

		

			 

		

 

		

			
	
			
				 (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 8, then the more restrictive of such provisions from the agreements shall control for the period during which the agreements would otherwise be in effect.

			
	
			
				 9.
			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.

			
	
			
				 10.
			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 Bank
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.
		

			
	
			
				 11.
			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.

			
	
			
				 12.
			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 the 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 

		 

		

			12

		

		

			 

		

 

	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 Section 8 shall survive the termination of this Agreement.

			
	
			
				 13.
			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.

			
	
			
				 14.
			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.

			
	
			
				 15.
			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.

			
	
			
				 16.
			Legal Fees.  In the event that either party commences arbitration or litigation to enforce or protect her 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.

			
	
			
				 17.
			Amendment.  This Agreement may not be amended or modified except by written agreement signed by Executive and the Employer.

			
	
			
				 18.
			Internal Revenue Code Section 409A.

			
	
			
				 (a)
			It is intended that this Agreement 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 

		 

		

			13

		

		

			 

		

 

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

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

		
			 
		

		
			MIDLAND STATES BANKJEFFREY MEFFORD
		

		
			 
		

		
			 
		

		
			 
		

		
			By:  /s/ Leon J. Holschbach/s/ Jeffrey Mefford
		

		
			Name:  Leon J. Holschbach[Signature]
		

		
			Its: President & Chief Executive Officer
		

		
			 
		

		
			 
		

		 

		

			15

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