Document:

Exhibit 10.9

 

MIDLAND STATES BANCORP, INC.

 

AMENDED AND RESTATED

 

2010 LONG-TERM INCENTIVE PLAN

 

Article 1
 GENERAL

 

Section 1.1                                   Purpose, Effective Date and Term.  The purpose of this MIDLAND STATES BANCORP, INC. AMENDED AND RESTATED 2010 LONG-TERM INCENTIVE PLAN (the “Plan”) is to promote the long-term financial success of MIDLAND STATES BANCORP, INC., an Illinois corporation (the “Company”), and any Subsidiary by providing a means to attract, retain and reward individuals who can and do contribute to such success and to further align their interests with those of the Company’s stockholders.  The “Effective Date” of the Plan is October 18, 2010, in accordance with the approval of the Plan by the Company’s stockholders.  The Plan has been amended and restated effective December 31, 2010 to reflect a ten-for-one Stock exchange that occurred as part of the Company’s reincorporation from the State of Delaware to the State of Illinois, on December 31, 2010.  The Plan shall remain in effect as long as any awards under it are outstanding; provided, however, that no awards may be granted under the Plan after the ten-year anniversary of the Effective Date.

 

Section 1.2                                   Administration.  The authority to control and manage the operation of the Plan shall be vested in a committee of the Board (the “Committee”), in accordance with Section 5.1.

 

Section 1.3                                   Participation.  Each employee or Director of, or service provider to, the Company or any Subsidiary of the Company who is granted, and currently holds, an award in accordance with the terms of the Plan shall be a “Participant” in the Plan.  Awards under the Plan shall be limited to employees and Directors of, and service providers to, the Company or any Subsidiary; provided, however, that an award (other than an award of an ISO) may be granted to an individual prior to the date on which he or she first performs services as an employee or a Director, provided that such award does not become vested prior to the date such individual commences such services.

 

Section 1.4                                   Definitions.  Capitalized terms in the Plan shall be defined as set forth in the Plan (including the definition provisions of Article 8).

 

Article 2
 AWARDS

 

Section 2.1                                   General.  Any award under the Plan may be granted singularly, in combination with another award (or awards), or in tandem whereby the exercise or vesting of

 

 

one award held by a Participant cancels another award held by the Participant.  Each award under the Plan shall be subject to the terms and conditions of the Plan and such additional terms, conditions, limitations and restrictions as the Committee shall provide with respect to such award and as evidenced in the Award Agreement.  Subject to the provisions of Section 2.6, an award may be granted as an alternative to or replacement of an existing award under (i) the Plan; (ii) any other plan of the Company or any Subsidiary; (iii) any Prior Plan; or (iv) as the form of payment for grants or rights earned or due under any other compensation plan or arrangement of the Company or any Subsidiary, including without limitation the plan of any entity acquired by the Company or any Subsidiary.  The types of awards that may be granted under the Plan include:

 

(a)                                 Stock Options.  A stock option represents the right to purchase shares of Stock at an Exercise Price established by the Committee.  Any option may be either an incentive stock option (an “ISO”) that is intended to satisfy the requirements applicable to an “incentive stock option” described in Code Section 422(b) or a non-qualified option that is not intended to be an ISO, provided, however, that no ISOs may be:  (i) granted after the ten-year anniversary of the earlier of the Effective Date or stockholder approval of the Plan; or (ii) granted to a non-employee.  Unless otherwise specifically provided by its terms, any option granted under the Plan shall be a non-qualified option.  Any ISO granted under this Plan that does not qualify as an ISO for any reason shall be deemed to be a non-qualified option.  In addition, any ISO granted under this Plan may be unilaterally modified by the Committee to disqualify such option from ISO treatment such that it shall become a non-qualified option.

 

(b)                                 Stock Appreciation Rights.  A stock appreciation right (an “SAR”) is a right to receive, in cash, Stock or a combination of both (as shall be reflected in the Award Agreement), an amount equal to or based upon the excess of: (i) the Fair Market Value of a share of Stock at the time of exercise; over (ii) an Exercise Price established by the Committee.

 

(c)                                  Stock Awards.  A stock award is a grant of shares of Stock or a right to receive shares of Stock (or their cash equivalent or a combination of both) in the future.  Such awards may include, but shall not be limited to, bonus shares, stock units, performance shares, performance units, restricted stock or restricted stock units or any other equity-based award as determined by the Committee.

 

(d)                                 Cash Incentive Awards.  A cash incentive award is the grant of a right to receive a payment of cash, determined on an individual basis or as an allocation of an incentive pool (or Stock having a value equivalent to the cash otherwise payable) that is contingent on the achievement of performance objectives established by the Committee.

 

Section 2.2                                   Exercise of Options and SARs.  An option or SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee.  In no event, however, shall an option or SAR expire later than ten (10) years after the date of its grant (five (5) years in the case of a 10% Stockholder with respect to an ISO).  The “Exercise Price” of each option and SAR shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant (or, if greater, the par value of a share of Stock); provided, however, that the Exercise Price of an ISO shall not be less than 110% of Fair Market Value of a share of Stock on the date of grant in the case of a 10% Stockholder; further,

 

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provided, that, to the extent permitted under Code Section 409A, the Exercise Price may be higher or lower in the case of options or SARs granted in replacement of existing awards held by an employee, Director or service provider granted under a Prior Plan or by an acquired entity.  The payment of the Exercise Price of an option shall be by cash or, subject to limitations imposed by applicable law, by such other means as the Committee may from time to time permit, including:  (a) by tendering, either actually or by attestation, shares of Stock acceptable to the Committee, and valued at Fair Market Value as of the day of exercise; (b) by irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise; (c) with respect to options, payment through a net exercise such that, without the payment of any funds, the Participant may exercise the option and receive the net number of shares of Stock equal in value to (i) the number of shares of Stock as to which the option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value (on such date as is determined by the Committee) less the Exercise Price, and the denominator of which is such Fair Market Value (the number of net shares of Stock to be received shall be rounded down to the nearest whole number of shares of Stock); (d) by personal, certified or cashiers’ check; (e) by other property deemed acceptable by the Committee; or (f) by any combination thereof.

 

Section 2.3                                   Performance-Based Compensation. Any award under the Plan which is intended to be “performance-based compensation” within the meaning of Code Section 162(m) shall be conditioned on the achievement of one or more objective performance measures, to the extent required by Code Section 162(m), as may be determined by the Committee.  The grant of any award and the establishment of performance measures that are intended to be performance-based compensation shall be made during the period required under Code Section 162(m).

 

(a)                                 Performance Measures.  Such performance measures may be based on any one or more of the following: earnings (e.g., earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization; or earnings per share); financial return ratios (e.g., return on investment, return on invested capital, return on equity or return on assets); increase in revenue, operating or net cash flows; cash flow return on investment; total stockholder return; market share; net operating income, operating income or net income; debt load reduction; loan and lease losses; expense management; economic value added; stock price; book value; overhead; assets, asset quality level, charge offs, loan reserves, non-performing assets, loans, deposits, growth of loans, deposits or assets; interest sensitivity gap levels, regulatory compliance, improvement of financial rating, achievement of balance sheet or income statement objectives; efficiency ratio; net interest margin and strategic business objectives, consisting of one or more objectives based on meeting specific cost targets, business expansion goals and goals relating to acquisitions or divestitures.  Performance measures may be based on the performance of the Company as a whole or of any one or more Subsidiaries or business units of the Company or a Subsidiary and may be measured relative to a peer group, an index or a business plan and may be stated in the aggregate or on a per share basis or other measure.

 

(b)                                 Partial Achievement.  The terms of any award may provide that partial achievement of the performance measures may result in a payment or vesting based upon the degree of achievement.

 

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(c)                                  Extraordinary Items.  In establishing any performance measures, the Committee may provide for the exclusion of the effects of the following items, to the extent identified in the audited financial statements of the Company, including footnotes, or in the Management’s Discussion and Analysis section of the Company’s annual report:  (i) extraordinary, unusual, and/or nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting principles, regulations or laws; or (iv) mergers or acquisitions.  To the extent not specifically excluded, such effects shall be included in any applicable performance measure.

 

(d)                                 Adjustments.  Pursuant to this Section 2.3, in certain circumstances the Committee may adjust performance measures; provided, however, no adjustment may be made with respect to an award that is intended to be performance-based compensation, except to the extent the Committee exercises such negative discretion as is permitted under applicable law for purposes of an exception under Code Section 162(m).  If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or any Subsidiary conducts its business or other events or circumstances render current performance measures to be unsuitable, the Committee may modify such performance measures, in whole or in part, as the Committee deems appropriate.  If a Participant is promoted, demoted or transferred to a different business unit during a performance period, the Committee may determine that the selected performance measures or applicable performance period are no longer appropriate, in which case, the Committee, in its sole discretion, may: (i) adjust, change or eliminate the performance measures or change the applicable performance period; or (ii) cause to be made a cash payment to the Participant in an amount determined by the Committee.

 

Section 2.4                                   Dividends and Dividend Equivalents.  Any award under the Plan may provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to shares of Stock subject to the award, which payments may be either made currently or credited to an account for the Participant, may be settled in cash or Stock and may be subject to restrictions similar to the underlying award.

 

Section 2.5                                   Deferred Compensation.  If any award would be considered “deferred compensation” as defined under Code Section 409A (“Deferred Compensation”), the Committee reserves the absolute right (including the right to delegate such right) to unilaterally amend the Plan or the Award Agreement, without the consent of the Participant, to avoid the application of, or to maintain compliance with, Code Section 409A.  Any amendment by the Committee to the Plan or an Award Agreement pursuant to this Section 2.5 shall maintain, to the extent practicable, the original intent of the applicable provision without violating Code Section 409A.  A Participant’s acceptance of any award under the Plan constitutes acknowledgement and consent to such rights of the Committee, without further consideration or action.  Any discretionary authority retained by the Committee pursuant to the terms of this Plan or pursuant to an Award Agreement shall not be applicable to an award which is determined to constitute Deferred Compensation, if such discretionary authority would contravene Code Section 409A.

 

Section 2.6                                   Repricing of Awards.  Except for adjustments pursuant to Section 3.3 (relating to the adjustment of shares), and reductions of the Exercise Price approved by the Company’s stockholders, the Exercise Price for any outstanding option or SAR may not be

 

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decreased after the date of grant nor may an outstanding option or SAR granted under the Plan be surrendered to the Company as consideration for the grant of a replacement option or SAR with a lower exercise price.

 

Section 2.7                                   Forfeiture of Awards.  Unless specifically provided to the contrary in an Award Agreement, upon notification of Termination of Service for Cause, any outstanding award, whether vested or unvested, held by a Participant shall terminate immediately, the award shall be forfeited and the Participant shall have no further rights thereunder.

 

Article 3
 SHARES SUBJECT TO PLAN

 

Section 3.1                                   Available Shares.  The shares of Stock with respect to which awards may be made under the Plan shall be shares currently authorized but unissued, currently held or, to the extent permitted by applicable law, subsequently acquired by the Company, including shares purchased in the open market or in private transactions.

 

Section 3.2                                   Share Limitations.

 

(a)                                 Share Reserve.  Subject to the following provisions of this Section 3.2, the maximum number of shares of Stock that may be delivered to Participants and their beneficiaries in the aggregate under the Plan shall be 1,500,000 shares of Stock (all of which may be granted as ISOs to the extent that such shares are granted under the Plan) (the “Share Reserve”).  As of the date of stockholder approval, no further awards shall be granted pursuant to the Prior Plans.  The aggregate number of shares available for grant under this Plan (including the number that may be granted as ISOs and as awards other than options and SARs) and the number of shares of Stock subject to outstanding awards shall be subject to adjustment as provided in Section 3.3.  Notwithstanding the foregoing, the Share Reserve shall automatically be reduced by up to 500,000 shares of Stock (the “Offering Share Reserve”) if by December 31, 2011 the Company has not had an Offering.  Prior to the occurrence of an Offering, the Committee may grant awards under the Plan with respect to Offering Shares Reserve, provided that such awards are contingent upon an Offering occurring on or before December 31, 2011 and that such award cannot become vested prior to the date of such Offering.

 

(b)                                 Reuse of Shares.  To the extent any shares of Stock covered by an award (including stock awards), under the Plan are forfeited or are not delivered to a Participant or beneficiary for any reason, including because the award is forfeited, canceled or settled in cash, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan and shall again become eligible for issuance under the Plan.  Any shares of Stock that are covered under the terms of a Prior Plan award which would otherwise become available for reuse under the terms of a Prior Plan shall instead become available for issuance under the Plan and shall be subject to adjustment as provided in Section 3.3.  With respect to SARs that are settled in Stock, only actual shares delivered shall be counted for purposes of these limitations.  If the Exercise Price of any option granted under the Plan is satisfied by tendering shares of Stock to the Company (whether by actual delivery or by attestation and whether or not such surrendered shares were

 

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acquired pursuant to any award granted under the Plan), only the number of shares of Stock issued net of the shares of Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for issuance under the Plan.

 

Section 3.3                                   Corporate Transactions.  To the extent permitted under Code Section 409A, to the extent applicable, in the event of a corporate transaction involving the Company or the shares of Stock of the Company (including any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), whether or not such event constitutes a Change in Control, all outstanding awards under the Plan and the Prior Plans, the number of shares reserved for issuance under the Plan and the Prior Plans under Section 3.2 shall automatically be adjusted to proportionately and uniformly reflect such transaction (but only to the extent that such adjustment will not affect the status of an award intended to qualify as “performance-based compensation” under Code Section 162(m), if applicable); provided, however, that the Committee may otherwise adjust awards (or prevent such automatic adjustment) as it deems necessary, in its sole discretion, to preserve the benefits or potential benefits of the awards and the Plan.  Action by the Committee may include: (i) adjustment of the number and kind of shares which may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding awards; (iii) adjustment of the Exercise Price of outstanding options and SARs; and (iv) any other adjustments that the Committee determines to be equitable (which may include, (A) replacement of awards with other awards which the Committee determines have comparable value and which are based on stock of a company resulting from the transaction, and (B) cancellation of the award in return for cash payment of the current value of the award, determined as though the award were fully vested at the time of payment, provided that in the case of an option or SAR, the amount of such payment shall be the excess of the value of the Stock subject to the option or SAR at the time of the transaction over the Exercise Price; provided, that no such payment shall be required in consideration of the award if the Exercise Price is greater than the value of the Stock at the time of such corporate transaction or event).

 

Section 3.4                                   Delivery of Shares.  Delivery of shares of Stock or other amounts under the Plan shall be subject to the following:

 

(a)                                 Compliance with Applicable Laws.  Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any shares of Stock or make any other distribution of benefits under the Plan unless such delivery or distribution complies with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities exchange or similar entity.

 

(b)                                 Certificates.  To the extent that the Plan provides for the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

 

Section 3.5                                   Participant’s Representation Statement and Stockholders Agreement.  In the event that the shares of Stock have not been registered under the Securities Act, at the time of exercise, settlement or delivery of shares pursuant to an award under the Plan, the Participant shall, if requested by the Company (i) execute and deliver to the Company his or her investment representation statement (in the form provided by the Company); and (ii) agree to execute and

 

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become a party to a stockholders agreement, as may be in effect from time to time.  Failure to execute and deliver the foregoing documents to the Company within thirty (30) days of request by the Company, shall relieve the Company of any obligations under the applicable award and the Participant shall forfeit any and all interest under such award as of such thirtieth day.

 

Section 3.6                                   Lock-Up Period.  The Participant hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act, the Participant shall not sell or otherwise transfer any shares or other securities of the Company during the 180-day period, or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act.  Such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act.  The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

 

Article 4
 CHANGE IN CONTROL

 

Section 4.1                                   Consequence of a Change in Control.  Subject to the provisions of Section 3.3 (relating to the adjustment of shares), and except as otherwise provided in the Plan or in the terms of any Award Agreement:

 

(a)                                 At the time of a Change in Control, all options and SARs then held by the Participant shall become fully exercisable immediately upon the Change in Control (subject to the expiration provisions otherwise applicable to the option or SAR).

 

(b)                                 At the time of a Change in Control, all stock awards described in Section 2.1(c) or cash incentive awards described in Section 2.1(d) shall be fully earned and vested immediately upon the Change in Control.

 

Section 4.2                                   Definition of Change in Control.  For purposes of the Plan, “Change in 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 the total voting power represented by the Company’s then outstanding Voting Securities; or

 

(b)                                 During any period of twelve (12) consecutive months, individuals who at the beginning of such period constitute the Board and any new member of the Board whose election by the Board or nomination for election by the Company’s stockholders was approved

 

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by a vote of at least two-thirds (2/3) of the members of the Board then still in office who either were members of the Board 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 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 Midland States Bank or an agreement for the sale or disposition by the Company of all or substantially all the Company’s or Midland States Bank’s assets.

 

However, in no event shall a Change in Control be deemed to have occurred, with respect to the Participant if the Participant is part of a purchasing group which consummates the Change-in-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 in Control by a majority of the non-employee continuing members of the Board).

 

In the event that any award under the Plan constitutes Deferred Compensation, and the settlement of, or distribution of benefits under such award 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.

 

Article 5
 COMMITTEE

 

Section 5.1                                   Administration.  The authority to control and manage the operation and administration of the Plan shall be vested in the Committee in accordance with this Article 5.  The Committee shall be selected by the Board, provided that the Committee shall consist of two (2) or more members of the Board, each of whom are (each as may be applicable to the Company) (i) a “non-employee director” (within the meaning of Rule 16b-3 promulgated under the Exchange Act), (ii) an “outside director” (within the meaning of Code Section 162(m)) and (iii) an “independent director” (within the meaning of the applicable principal stock exchange of the Company).  Subject to applicable stock exchange rules, if the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.

 

Section 5.2                                   Powers of Committee.  The Committee’s administration of the Plan shall be subject to the following:

 

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(a)                                 Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the Company’s and any Subsidiary’s employees, Directors and service providers those persons who shall receive awards, to determine the time or times of receipt, to determine the types of awards and the number of shares covered by the awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such awards, (subject to the restrictions imposed by Article 6) to cancel or suspend awards and to reduce or eliminate any restrictions or vesting requirements applicable to an award at any time after the grant of the award.

 

(b)                                 The Committee will have the authority and discretion to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.

 

(c)                                  The Committee will have the authority to define terms not otherwise defined herein.

 

(d)                                 Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.

 

(e)                                  In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the articles and bylaws of the Company and applicable state corporate law.

 

Section 5.3                                   Delegation by Committee.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or the Plan, or as necessary to comply with the exemptive provisions of Rule 16b-3 promulgated under the Exchange Act, if applicable, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it, including: (a) delegating to a committee of one or more members of the Board who are not “outside directors” within the meaning of Code Section 162(m), the authority to grant awards under the Plan to eligible persons who are either: (i) not then “covered employees,” within the meaning of Code Section 162(m) and are not expected to be “covered employees” at the time of recognition of income resulting from such award; or (ii) not persons with respect to whom the Company wishes to comply with Code Section 162(m); and/or (b) delegating to a committee of one or more members of the Board who are not “non-employee directors,” within the meaning of Rule 16b-3, the authority to grant awards under the Plan to eligible persons who are not then subject to Section 16 of the Exchange Act.  The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report regularly to the Committee regarding the delegated duties and responsibilities and any awards so granted.  Any such allocation or delegation may be revoked by the Committee at any time.

 

Section 5.4                                   Information to be Furnished to Committee.  As may be permitted by applicable law, the Company and any Subsidiary shall furnish the Committee with such data and information as it determines may be required for it to discharge its duties.  The records of the Company and any Subsidiary as to an employee’s or Participant’s employment, termination of employment, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined by the Committee to be manifestly incorrect.  Subject to applicable

 

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law, Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan.

 

Section 5.5                                   Expenses and Liabilities.  All expenses and liabilities incurred by the Committee in the administration and interpretation of the Plan or any Award Agreement shall be borne by the Company.  The Committee may employ attorneys, consultants, accountants or other persons in connection with the administration and interpretation of the Plan.  The Company, and its officers and Directors, shall be entitled to rely upon the advice, opinions or valuations of any such persons.

 

Article 6
 AMENDMENT AND TERMINATION

 

Section 6.1                                   General.  The Board may, as permitted by law, at any time, amend or terminate the Plan, and may amend any Award Agreement, provided that no amendment or termination (except as provided in Section 2.5, Section 3.3 and Section 6.2) may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), impair the rights of any Participant or beneficiary under any award granted which was granted under the Plan prior to the date such amendment is adopted by the Board; provided, however, that, no amendment may (a) materially increase the benefits accruing to Participants under the Plan, (b) materially increase the aggregate number of securities which may be issued under the Plan, other than pursuant to Section 3.3, or (c) materially modify the requirements for participation in the Plan, unless the amendment under (a), (b) or (c) above is approved by the Company’s stockholders.

 

Section 6.2                                   Amendment to Conform to Law.  Notwithstanding any provision in this Plan or any Award Agreement to the contrary, the Committee may amend the Plan or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or the Award Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Code Section 409A).  By accepting an award under this Plan, each Participant agrees and consents to any amendment made pursuant to this Section 6.2 or Section 2.5 to any award granted under this Plan without further consideration or action.

 

Article 7
 GENERAL TERMS

 

Section 7.1                                   No Implied Rights.

 

(a)                                 No Rights to Specific Assets.  Neither a Participant nor any other person shall by reason of participation in the Plan acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including any specific funds, assets, or other property which the Company or any Subsidiary, in its sole discretion, may set aside in anticipation of a liability under the Plan.  A Participant shall have only a contractual right to the Stock or amounts, if any, payable or distributable under the Plan, unsecured by any assets of the

 

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Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.

 

(b)                                 No Contractual Right to Employment or Future Awards.  The Plan does not constitute a contract of employment, and selection as a Participant will not give any participating employee the right to be retained in the employ of the Company or any Subsidiary or any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan.  No individual shall have the right to be selected to receive an award under this Plan, or, having been so selected, to receive a future award under this Plan.

 

(c)                                  No Rights as a Stockholder.  Except as otherwise provided in the Plan, no award under the Plan shall confer upon the holder thereof any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights.

 

Section 7.2                                   Transferability.  Except as otherwise provided by the Committee, awards under the Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order, as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended.  The Committee shall have the discretion to permit the transfer of awards under the plan; provided, however, that such transfers shall be limited to immediate family members of Participants, trusts and partnerships established for the primary benefit of such family members or to charitable organizations, and; provided, further, that such transfers are not made for consideration to the Participant.

 

Section 7.3                                   Designation of Beneficiaries.  A Participant hereunder may file with the Company a written designation of a beneficiary or beneficiaries under this Plan and may from time to time revoke or amend any such designation (“Beneficiary Designation”).  Any designation of beneficiary under this Plan shall be controlling over any other disposition, testamentary or otherwise; provided, however, that if the Committee is in doubt as to the entitlement of any such beneficiary to any award, the Committee may determine to recognize only the legal representative of the Participant in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.

 

Section 7.4                                   Non-Exclusivity.  Neither the adoption of this Plan by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including, without limitation, the granting of restricted stock, stock options or other equity awards otherwise than under the Plan or an arrangement that is or is not intended to qualify under Code Section 162(m), and such arrangements may be either generally applicable or applicable only in specific cases.

 

Section 7.5                                   Award Agreement.  Each award granted under the Plan shall be evidenced by an Award Agreement.  A copy of the Award Agreement, in any medium chosen by the Committee, shall be provided (or made available electronically) to the Participant, and the Committee may but need not require that the Participant sign a copy of the Award Agreement.

 

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Section 7.6                                   Form and Time of Elections.  Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification, or revocation thereof, shall be filed with the Company at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require.

 

Section 7.7                                   Evidence.  Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties.

 

Section 7.8                                   Tax Withholding.  All distributions under the Plan are subject to withholding of all applicable taxes and the Committee may condition the delivery of any shares or other benefits under the Plan on satisfaction of the applicable withholding obligations.  Except as otherwise provided by the Committee, such withholding obligations may be satisfied:  (a) through cash payment by the Participant; (b) through the surrender of shares of Stock which the Participant already owns; or (c) through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan; provided, however, that except as otherwise specifically provided by the Committee, such shares under clause (c) may not be used to satisfy more than the Company’s minimum statutory withholding obligation.

 

Section 7.9                                   Action by Company or Subsidiary.  Any action required or permitted to be taken by the Company or any Subsidiary shall be by resolution of its board of directors, or by action of one or more members of the board (including a committee of the board) who are duly authorized to act for the board, or (except to the extent prohibited by applicable law or applicable rules of any stock exchange) by a duly authorized officer of the Company or such Subsidiary.

 

Section 7.10                            Successors.  All obligations of the Company under this Plan shall be binding upon and inure to the benefit of any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business, Stock, and/or assets of the Company.

 

Section 7.11                            Indemnification.  To the fullest extent permitted by law, each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority was delegated in accordance with Section 5.3, or an employee of the Company shall be indemnified and held harmless by the Company against and from any loss (including amounts paid in settlement), cost, liability or expense (including reasonable attorneys’ fees) that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of his or her own willful misconduct or except as expressly provided by statute.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such

 

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persons may be entitled under the Company’s charter or bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

Section 7.12                            No Fractional Shares.  Unless otherwise permitted by the Committee, no fractional shares of Stock shall be issued or delivered pursuant to the Plan or any award.  The Committee shall determine whether cash, Stock or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

Section 7.13                            Governing Law.  The Plan, all awards granted hereunder, and all actions taken in connection herewith shall be governed by and construed in accordance with the laws of the State of Illinois without reference to principles of conflict of laws, except as superseded by applicable federal law.

 

Section 7.14                            Benefits Under Other Plans.  Except as otherwise provided by the Committee, awards to a Participant (including the grant and the receipt of benefits) under the Plan shall be disregarded for purposes of determining the Participant’s benefits under, or contributions to, any Qualified Retirement Plan, non-qualified plan and any other benefit plans maintained by the Participant’s employer.  The term “Qualified Retirement Plan” means any plan of the Company or a Subsidiary that is intended to be qualified under Code Section 401(a).

 

Section 7.15                            Validity.  If any provision of this Plan is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been included herein.

 

Section 7.16                            Notice.  Unless otherwise provided in an Award Agreement, all written notices and all other written communications to the Company provided for in the Plan, or any Award Agreement, shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid  (provided that international mail shall be sent via overnight or two-day delivery),  or sent by facsimile or prepaid overnight courier to the Company at the address set forth below:

 

Midland States Bancorp, Inc.

133 West Jefferson Avenue

Effingham, Illinois  62401

Fax:  (217) 342-7397

 

Such notices, demands, claims and other communications shall be deemed given:

 

(a)                                 in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;

 

(b)                                 in the case of certified or registered U.S. mail, five (5) days after deposit in the U.S. mail; or

 

(c)                                  in the case of facsimile, the date upon which the transmitting party received confirmation of receipt by facsimile, telephone or otherwise;

 

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provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received, provided they are actually received.  In the event a communication is not received, it shall only be deemed received upon the showing of an original of the applicable receipt, registration or confirmation from the applicable delivery service provider.  Communications that are to be delivered by the U.S. mail or by overnight service to the Company shall be directed to the attention of the Company’s senior human resource officer and Corporate Secretary.

 

Article 8
 DEFINED TERMS; CONSTRUCTION

 

Section 8.1                                   In addition to the other definitions contained herein, unless otherwise specifically provided in an Award Agreement, the following definitions shall apply:

 

(a)                                 “10% Stockholder” means an individual who, at the time of grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company.

 

(b)                                 “Award Agreement” means the document (in whatever medium prescribed by the Committee) which evidences the terms and conditions of an award under the Plan.  Such document is referred to as an agreement regardless of whether Participant signature is required.

 

(c)                                  “Board” means the Board of Directors of the Company.

 

(d)                                 If the Participant is subject to an employment agreement (or other similar agreement) with the Company or a Subsidiary that provides a definition of termination for “cause,” then, for purposes of this Plan, the term “Cause” shall have meaning set forth in such agreement.  In the absence of such a definition, “Cause” means (1) any act of (A) fraud or intentional misrepresentation, or (B) embezzlement, misappropriation or conversion of assets or opportunities of the Company or Subsidiary, or (2) willful violation of any law, rule or regulation in connection with the performance of a Participant’s duties (other than traffic violations or similar offenses), or (3) with respect to any employee of the Company or Subsidiary, commission of any act of moral turpitude or conviction of a felony, or (4) the willful or negligent failure of the Participant to perform his duties in any material respect.

 

(e)                                  “Change in Control” has the meaning ascribed to it in Section 4.2.

 

(f)                                   “Code” means the Internal Revenue Code of 1986, as amended, and   any rules, regulations and guidance promulgated thereunder, as modified from time to time.

 

(g)                                 “Code Section 409A” means the provisions of Section 409A of the Code and any rules, regulations and guidance promulgated thereunder.

 

(h)                                 “Committee” means the Committee acting under Article 5.

 

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(i)                                    “Director” means a member of the board of directors of the Company or a Subsidiary.

 

(j)                                    “EESA” means the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009, and any rules and regulations promulgated thereunder.

 

(k)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

(l)                                    “Exercise Price” means the price established with respect to an option or SAR pursuant to Section 2.2.

 

(m)                             “Fair Market Value”  shall, on any date, mean the officially-quoted closing selling price of the shares on such date on the principal national securities exchange on which such 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 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 Board in good faith and in accordance with Code Sections 422 and 409A.

 

(n)                                 “ISO” has the meaning ascribed to it in Section 2.1(a).

 

(o)                                 “Offering” means one or more public or private placement(s) of newly issued shares of Stock, which in the aggregate equals or exceeds 5,000,000 shares.  In the event that as of December 31, 2011 the aggregate of such newly issued shares is less than 5,000,000 shares, then the term “Offering Share Reserve” shall automatically be reduced proportionately to reflect the aggregate of new shares issued as of December 31, 2011, divided by 5,000,000.

 

(p)                                 “Participant” means any individual who has received, and currently holds, an outstanding award under the Plan.

 

(q)                                 “Prior Plans” means collectively the Midland States Bancorp, Inc. Omnibus Stock Ownership and Long-Term Incentive Plan and the Midland States Bancorp, Inc. 1999 Stock Option Plan, Second Amendment and Restatement.

 

(r)                                  “Securities Act” means the Securities Act of 1933, as amended from time to time.

 

(s)                                   “SAR” has the meaning ascribed to it in Section 2.1(b).

 

(t)                                    “Stock” means the common stock of the Company, $00.01 par value per share which the Company is authorized to issue, or any securities into which or for which the common stock of the Company may be converted or exchanged, as the case may be, pursuant to the terms of this Plan.

 

(u)                                 “Subsidiary” means any corporation, affiliate or other entity which would be a subsidiary corporation with respect to the Company as defined in Code Section 424(f) and,

 

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other than with respect to an ISO, shall also mean any partnership or joint venture in which the Company and/or other Subsidiary owns more than fifty percent (50%) of the capital or profits interests.

 

(v)                                 “Termination of Service” means the first day occurring on or after a grant date on which the Participant ceases to be an employee of, or service provider to (which, for purposes of this definition, includes Directors), the Company or any Subsidiary, regardless of the reason for such cessation, subject to the following:

 

(i)                                     The Participant’s cessation as an employee or service provider shall not be deemed to occur by reason of the transfer of the Participant between the Company and a Subsidiary or between two Subsidiaries.

 

(ii)                                  The Participant’s cessation as an employee or service provider shall not be deemed to occur by reason of the Participant’s being on a leave of absence from the Company or a Subsidiary approved by the Company or Subsidiary otherwise receiving the Participant’s services.

 

(iii)                               If, as a result of a sale or other transaction, the Subsidiary for whom Participant is employed (or to whom the Participant is providing services) ceases to be a Subsidiary, and the Participant is not, following the transaction, an Employee of or service provider to the Company or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Participant’s Termination of Service caused by the Participant being discharged by the entity for whom the Participant is employed or to whom the Participant is providing services.

 

(iv)                              A service provider whose services to the Company or a Subsidiary are governed by a written agreement with the service provider will cease to be a service provider at the time the term of such written agreement ends (without renewal); and a service provider whose services to the Company or a Subsidiary are not governed by a written agreement with the service provider will cease to be a service provider on the date that is ninety (90) days after the date the service provider last provides services requested by the Company or any Subsidiary (as determined by the Committee).

 

(v)                                 Unless otherwise provided by the Committee, an employee who ceases to be an employee, but becomes or remains a Director, or a Director who ceases to be a Director, but becomes or remains an employee, shall not be deemed to have incurred a Termination of Service.

 

(vi)                              Notwithstanding the forgoing, in the event that any award under the Plan constitutes Deferred Compensation, the term Termination of Service shall be interpreted by the Committee in a manner not to be inconsistent with the definition of “Separation from Service” as defined under Code Section 409A.

 

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

 

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Section 8.2                                   In this Plan, unless otherwise stated or the context otherwise requires, the following uses apply:

 

(a)                                 actions permitted under this Plan may be taken at any time and from time to time in the actor’s reasonable discretion;

 

(b)                                 references to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time;

 

(c)                                  in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”;

 

(d)                                 references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority or instrumentality;

 

(e)                                  indications of time of day shall be based upon the time applicable to the location of the principal headquarters of the Company;

 

(f)                                   “including” means “including, but not limited to”;

 

(g)                                 all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Plan unless otherwise specified;

 

(h)                                 all words used in this Plan will be construed to be of such gender or number as the circumstances and context require;

 

(i)                                    the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Plan have been inserted solely for convenience of reference and shall not be considered a part of this Plan nor shall any of them affect the meaning or interpretation of this Plan or any of its provisions;

 

(j)                                    any reference to a document or set of documents in this Plan, and the rights and obligations of the parties under any such documents, shall mean such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof; and

 

(k)                                 all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

 

17Exhibit 10.10

 

THE AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

OF MIDLAND STATES BANCORP, INC.

 

R E C I T A L S

 

WHEREAS, Midland States Bancorp, Inc. (the “Company”) desires to assist its directors and certain employees in their ability to better provide for their own financial future by permitting such directors and certain employees to defer all or a portion of their current director fees and a portion of their annual salary and any bonus compensation;

 

WHEREAS, the Company desires that such deferrals are to be made without restrictions imposed by those provisions of the Code which apply to tax-qualified retirement plans.

 

WHEREAS, The Company previously adopted the Deferred Compensation Plan For Directors and Executives of Midland States Bancorp, Inc. to allow for certain directors and employees to make such deferrals of director fees, salary and bonus compensation; and

 

WHEREAS, the Company desires to amend, restate and rename the Plan to best reflect the eligibility and participation by certain selected employees by modifying the name of the Plan and modifying descriptive provisions of the Plan.

 

SECTION 1
 DEFINITIONS

 

1.1          “Applicable Interest Rate” shall mean with respect to each calendar quarterly period, the average during the then most recently completed calendar quarter of the monthly averages for 20-year U.S. Treasury securities, adjusted to a constant maturity, as published by the Board of Governors of the Federal Reserve System in its “Federal Reserve Statistical Release.”

 

1.2          “Applicable Interest Rate Fund” shall mean a Measurement Fund in which earnings are calculated based on the Applicable Interest Rate.

 

1.3          “Bank” shall mean Midland States Bank, a wholly owned banking subsidiary of the Company.

 

1.4          “Beneficiary” shall mean the person or persons Participant has designated in writing to the Company 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 Agreement, then the Beneficiary shall become the Participant’s estate.  In the case of the death of the Beneficiary before completion of payments under the

 

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Agreement to the Beneficiary, then the Beneficiary’s estate shall become entitled to any remaining payments.

 

1.5          “Board” means the Board of Directors of the Company, or the Board of Directors of any member of the Controlled Group.

 

1.6          “Bonus” shall mean any special and/or discretionary compensation amounts in excess of Salary determined by the Company to be payable to a Participant with respect to services rendered.

 

1.7          “Change in Capital Stock” shall mean any increase or decrease in the number of shares of issued Stock resulting from a subdivision or consolidation of shares, whether through reorganization, recapitalization, stock split-up, stock distribution or combination of shares, or the payment of a share dividend or other increase or decrease in the number of such shares outstanding effected without receipt of consideration by the Company.

 

1.8          “Change Of Control” shall mean the occurrence of the earliest of any of the following events:

 

A.    The acquisition by any entity, person or group, excluding any entity, person or group owning Voting Stock at the effective date of this Plan, of beneficial ownership, as that term is defined in Rule  13d-3 of the Securities Exchange Act of 1934, of twenty-five percent (50%) or more of the Voting Stock of the Company; or

 

B.    The commencement and consummation by any entity, person, or group (other than the Company) of a tender offer or an exchange offer for more  than twenty-five percent (50%) or more of the Voting Stock of the Company; or

 

C.    The effective date of a (i) merger or consolidation of the Company with one or more other corporations, the result of which is that the holders of the Voting Stock of the Company immediately prior to such merger or consolidation hold less than fifty percent (50%) of the Voting Stock of the surviving or resulting corporation, or (ii) a sale or transfer of a majority of the property of the Company, other than to an entity of which the Company controls fifty percent (50%) or more of the Voting Stock.

 

An event or transaction described in paragraph A., B., or C. shall be a “Change of Control” only if such event or transaction is a “change in ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation,” within the meaning of Section 409A(a)(2)(A)(v) of the Code, to the extent provided by the Secretary of the Treasury.

 

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

 

1.10        “Committee” shall mean, initially, the Compensation and Benefits Committee, as designated by the Executive Committee of the Board and thereafter, any

 

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other committee designated from time to time by the Board with the oversight of this Plan.

 

1.11        “Common Stock” shall mean  the common stock of the Company.

 

1.12        “Company” shall mean Midland States Bancorp, Inc.

 

1.13        “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).

 

1.14        “Deferred Compensation” shall mean (i) with respect to eligible employees (excluding Inside Directors), the sum of his or her Salary and/or Bonus that is the subject of an elective deferral under Section 4.1 of the Plan, (ii) with respect to Inside Directors the sum of his or her Salary, Bonus and/or Director Fees that is the subject of an elective deferral under Section 4.1 of the Plan, and (iii) with respect to a Director, his or her Director Fees that are the subject of an elective deferred under Section 4.1 of the Plan.

 

1.15        “Deferred Compensation Election Form” shall mean the form which Participants use to defer Salary and/or Bonus and to elect distribution options.

 

1.16        “Deferred Compensation Subaccount” shall mean the bookkeeping account established for a Participant under the Plan to which Deferred Compensation amounts with respect to such Participant are credited from time to time, as provided in Section 5.2 of the Plan.  For purposes of this definition, unless otherwise indicated by the Plan, a Deferred Compensation Subaccount shall refer to both the Cash Subpart Account and Stock Subpart Account thereof.

 

1.17        “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.

 

1.18        “Director Fees” shall mean with respect to a Director the sum of his or her retainer and fees paid to such Director for services rendered in the capacity of a Director.

 

1.19        “Disability” shall mean with respect to a Participant, that the Participant: (1) 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 (2) 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

 

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than three months under an accident or health plan covering employees of such Participant’s Employer, as determined in accordance with Section 409A(a)(2)(C) of the Code and the Treasury Regulations thereunder.

 

1.20        “Distributable Amount” of a Participant’s subaccounts with respect to a Plan Year shall mean the sum of the vested balance of the subaccount in a Participant’s Deferred Compensation Subaccount with respect to such PlanYear subject to the rules of Article 7 of the Plan.

 

1.21        “Dividend Payment Date” shall mean the date upon which cash dividends are paid to holders of the Common Stock of the Company.

 

1.22        “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 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 Section 409A(a)(4)(B)(ii) of the Code and the Treasury Regulations thereunder.

 

1.23        “Eligible Employee” shall mean any Employee who is selected to participate in the Plan in accordance with Section 2 of the Plan, including any Eligible Employee who is also an Inside Director.

 

1.24        “Employee” 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 own discretion, or its designee, determines in his own discretion, is a member of a select group of management or highly compensated employees.

 

1.25        “Fair Market Value” means with respect to the Common Stock at any date shall be the share value determined by the Board, in good faith, taking into account the per share book value thereof and any other factor deemed appropriate by the Board.

 

1.26        “Inside Director” means 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 and is also an Eligible Employee.

 

1.27        “Matching Contributions Subaccount” shall mean the bookkeeping account established for a Participant under Section 5.4 of the Plan to which the Company’s Matching Contributions under Section 4.2 of the Plan are credited from time to time.

 

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

 

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1.29        “Participant” shall mean a Director, an Inside Director or an Eligible Employee who has been selected by the Committee to participate in the Plan, and who has elected to participate in the Plan.

 

1.30        “Participation Certificate” shall mean that Agreement entered into by a Participant (as set forth in Exhibit A to the Plan) prior to participation in the Plan

 

1.31        “Payment Date “ shall mean the time as soon as practicable after one of the following dates as designated by the Participant in his distribution form election with respect to a Plan Year:  (1) the last day of the calendar month following the date of the Participant’s Separation from Service, or (2) the last day of the calendar month specified by the Participant that is no earlier than the year after the year in which the Compensation would have been paid but for the Participant’s election to defer such Compensation, or (3) the earlier of:  (i) the last day of the calendar month following the date of the Participant’s Separation from Service, or (ii) the last day of the calendar month specified by the Participant that is no earlier than the year after the year in which the Compensation would have been paid but for the Participant’s election to defer such Compensation.

 

1.32        “Plan” shall mean the Amended and Restated Deferred Compensation Plan of Midland States Bancorp, Inc., as set forth herein and as amended from time to time.

 

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

 

1.34        “Retirement” shall mean the cessation of the services of a Director for any reason other than death or Disability if, and provided that, such Director is at least 70 years of age.

 

1.35        “Rule 701” means Rule 701 promulgated under the Securities Act of 1933, as amended.

 

1.36        “Salary” shall mean the regular annual base compensation paid by a member of the Controlled Group to an Eligible Employee (without regard to any reduction thereof pursuant to the Plan, any 401(k) plan or Code Section 125 flexible benefits plan maintained by the Company), exclusive of Bonus and any other incentive payments made by the Company to such Participant.

 

1.37        “Separation from Service” shall mean with respect to a Participant, such Participant’s Termination, if such Termination is a “separation from service,” within the meaning of Section 409A(a)(2)(A)(i) of the Code, as determined by the Secretary of the Treasury (or such Participant’s other “separation from service,” as so defined).

 

1.38        “Stock Units” shall mean the number of shares of Common Stock (carried to four decimal places) credited to a Participant’s Deferred Compensation or Matching Contribution Subaccount in accordance with the provisions of Sections 5.2 and 5.3 of the Plan; provided, however, that in the event of a Change in Capital Stock, the Stock Units then credited to a Participant’s Deferred Compensation and Matching

 

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Contribution Subaccounts shall be appropriately adjusted, based on the Committee’s directions, to account for the change in number of issued and outstanding shares of Common Stock.

 

1.39        “Stock Unit Election” shall mean the election by a Director with respect to Director Fees or an Inside Director, with respect to such Inside Director’s Director Fees (but not with respect to such Inside Director’s Salary or Bonus), to designate all or any portion of such Participant’s Director Fees to constitute Stock Units to be allocated to the Stock Subpart portion of his or her Deferred Compensation Subaccount.

 

1.40        “Subaccount” means the accounts established for each Participant pursuant to Section 5.1, consisting of a Deferred Compensation Subaccount (comprised of a Cash Subpart and a Stock Subpart) and a Matching Contribution Subaccount.

 

1.41        “Subsidiary” means any bank or corporation or other entity in which the Company owns a majority of and class of voting securities entitled to vote for the directors (or persons to serve in a similar capacity) of such bank, corporation or other entity.

 

1.42        “Termination” shall mean for any Participant who is an employee, ceasing to be an employee of the Company or any member of the Controlled Group for reasons other than death or Disability. If a Participant is both an employee of the Company and a Director, he shall not have a Termination until he resigns from both positions.

 

1.43        “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 Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B) of the Code), (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 based on the relevant facts and circumstances and as provided for in Treasury Regulations §1.409A-3(i)(3) or any successor provision.

 

1.44        “Voting Stock” shall mean that class (or classes) of common stock of the Company 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 the Directors and Certain Employees within the Controlled Group.

 

2.2          Participation.   Participation in the Plan by Eligible Employees shall be determined by the Committee in its sole discretion, the President & CEO of the Company, or, as set forth in Section 3.1 of the Plan, a designee of the Committee, in his or her sole discretion, and shall be subject to the terms and conditions of the Plan;

 

6

 

provided, however, that all Directors shall be eligible to participate in the Plan without discretion on the part of the Committee, the President & CEO, or the Committee’s designee.  All Participants in the Plan shall, prior to participation, execute a Participation Certificate in the form of Exhibit A to the Plan.

 

Once becoming a Participant in the Plan, a Participant shall continue to participate in the Plan until such time as (i) the Participant ceases to be a Director or an Eligible Employee, as the case may be, or (ii) the Committee or its designee takes action to terminate the Eligible Employee’s right to continued participation in the Plan.  Should an individual cease to be a Participant under the provisions of (i) or (ii) above while still employed by or serving as a Director of the Company, any payment to Participant will be made in accordance with the provisions of Section 7.1 upon the termination of employment by the individual with the Company.

 

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 shall make all determinations necessary or advisable for the implementation, administration and maintenance of the Plan including, without limitation, determining the Eligible Employees and correcting any technical defect(s) or technical omission(s), or reconciling any technical inconsistencies, in 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; provided, however, that the Committee shall only delegate its authority with regard to the determination of Eligible Employees to certain officers of the Company and may only delegate such authority in writing.  The Committee’s determinations under the Plan need not be uniform and may be made selectively among Eligible Employees (but not Directors), whether or not such Eligible Employees 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          The Company As Fiduciary.  The Company is hereby designated as a fiduciary under the Plan.  Any decision by the Company or the Committee denying a claim by Participant or a Beneficiary for benefits under the Agreement shall be stated in writing and shall be delivered or mailed to the Participant or Beneficiary.  Such statement shall set forth the specific reasons for the denial, written to the best of the Company’s ability in a manner that may be understood without legal counsel.  In addition, the

 

7

 

Company shall afford a reasonable opportunity to the Participant or Beneficiary for a full and fair review of the decision denying such claim.

 

Notwithstanding the above provisions of Section 3.2, to the extent that the Employee Retirement Income Security Act (“ERISA”) may require specific procedures to be followed in the event of a denial of a claim, such provisions of ERISA will be followed.

 

3.3          Indemnification.  The Company will indemnify and hold harmless the Committee and each member thereof 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 AND MATCHING CONTRIBUTIONS

 

4.1          Deferred Compensation.  Participants may defer all or a portion of their Salary and/or Bonus, in the case of Eligible Employees (including Inside Directors), or Director Fees, in the case of Directors (including Inside Directors), earned during any calendar year, in accordance with the following provisions.

 

A.            Deferral Election.  To defer compensation during any particular year, those Directors or Eligible Employees participating in the Plan must execute a Deferred Compensation Election Form (“Form”) and file such Form with the Committee (or its designee).

 

B.            Timing of Election.  In the year in which the Plan is first implemented, those Directors and Eligible Employees must make an election to defer Director Fees or Salary and/or Bonus, respectively, within 30 days after the later of (i) in the case of an Eligible Employee, the date such Eligible Employee is selected by the Committee to participate in the Plan, or (ii) the effective date of the Plan.  Such election will only be effective for Director Fees or Salary and/or Bonus earned subsequent to such election.

 

Once participating in the Plan, deferral elections by Participants during subsequent years shall be completed and filed with the Committee (or its designee) during the Election Period.

 

C.            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 Director Fees or Salary and/or Bonus, as the case may be, for a specified calendar year, that is earned and becomes payable to the Participant after the filing

 

8

 

of such deferral election and, with respect to a Director, including an Inside Director, that portion of such Participant’s Deferred Compensation to constitute Stock Units;

 

(ii)  Except for the provisions of subsection (iii) below, any deferral election shall only apply to the Director Fees or Salary and/or Bonus, as the case may be, that is attributable to the Participant’s services rendered to the Company during the calendar year for which such election is made (whether or not such compensation is actually paid and received in such calendar year);

 

(iii)  If a Participant is currently deferring Director Fees or Salary and/or Bonus and fails to complete and return a Form prior to the January 1 of the calendar year to which such Form is to be effective, then the deferral election made by the Participant on the most recently filed Form shall be considered effective for the new calendar year; and

 

(iv)  A Participant may terminate a deferral election for any calendar year by filing with the Committee (or its designee) written notice of such termination prior to January 1 of the calendar year in which such termination is to become effective, whereupon a Participant shall not be entitled to participate in the Plan for such calendar year.  Such a participant may, however, participate in the Plan effective for the calendar year following the calendar year in which such termination becomes effective in the same manner as prescribed in the Plan.

 

4.2          Matching Contributions.  Provided the Participant is then serving as a Director or Inside Director and has elected to defer all (but not less than all) of his or her Director Fees relative to service for a particular Board in the form of Stock Units pursuant to Section 4.1C(i), on the first business day of each month the Company shall credit to the Participant’s Matching Contribution Subaccount, pursuant to Section 5.3, a contribution equal to 25% of such Participant’s Director Fees deferred under the Plan by the Participant during the preceding month.  No matching contributions shall be made with respect to Salary or Bonus.

 

SECTION 5

DEFERRAL PLAN ACCOUNTS

 

5.1          Establishment of Deferral Plan Accounts.  The Company shall establish a Deferral Plan Account (“DPA”) for each Participant.  Each Participant’s DPA shall be comprised of (i) a Deferred Compensation Subaccount, consisting of a Cash Subpart Account and, in the case of Directors and Inside Directors who so elect, a Stock Subpart Account, and (ii) a Matching Contribution Subaccount.

 

5.2          Election of Measurement Funds in Cash Subpart Account.  In the manner designated by the Committee or its designee, Participants may elect one or more Measurement Funds to be used to determine the additional amounts to be credited to their

 

9

 

Cash Subpart Account. The Committee or its designee shall select from time to time, in the Committee’s or its designee’s sole discretion, the Measurement Funds to be available under the Plan.

 

Notwithstanding any other provision of this Plan that may be interpreted 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 Cash Subpart Account thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Cash Subpart Account shall not be considered or construed in any manner as an actual investment of his Cash Subpart 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 Cash Subpart Account shall at all times be a bookkeeping entry only and shall not represent any investment made on a Participant’s 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 Cash      Subpart Accounts, 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 Cash Subpart Accounts.

 

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

 

(iii) Except as otherwise designated by the Committee or its designee, the available Measurement Funds under this Section 5.2 shall generally be the investment funds found in the Plan’s summary plan description.

 

(iv) If a Participant fails to elect a Measurement Fund under this Section, he shall be deemed to have elected a default Measurement Fund as selected by the Compensation and Benefits Committee for his Cash Subpart Account.

 

B.  Continuing Investment Elections. Participants who have had a Termination 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.

 

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

 

10

 

amounts deferred by a Participant in accordance with Section 4.1 of the Plan shall be credited.

 

A.                                    Initial Credit To Subaccount.  Each Participant’s Deferred Compensation Subaccount, Cash Subpart, shall be credited no less frequently than the last day of each valuation period which will generally be the last day of each calendar quarter, unless otherwise designated by the Compensation and Benefits Committee, an amount equal to the sum of the Deferred Compensation deferred by the Participant during the valuation period, in accordance with Section 4.1 of the Plan.  Each Participant’s Deferred Compensation Subaccount, Stock Subpart, shall be credited no less frequently than the first day of the month following the month of the deferral.

 

(i)  Credit To Cash Subpart.  The actual dollar amount of Deferred Compensation as to which no Stock Unit Election has been deferred shall initially be credited as cash to the Participant’s Cash Subpart.

 

(ii)  Credit To Stock Subpart.  The dollar amount of the Deferred Compensation as to which (and to the extent that) a Stock Unit Election has been made shall be credited as Stock Units, the number of which shall be calculated by dividing the dollar amount deferred by the Fair Market Value of the Common Stock as of the date such Deferred Compensation is credited to the Participant’s Stock Subpart.

 

B.                                    Earnings Credit To Subaccount.  The Cash Subpart and Stock Subpart (if any) of Participant’s Deferred Compensation Subaccount shall be credited with earnings amounts equal to the following.

 

(i)  Earnings Credit To Stock Subpart.  On each Dividend Payment Date, an amount equal to the sum of the cash dividends that would have been payable on all Stock Units then allocated to the Participant’s Stock Subpart had such Stock Units then been converted to shares of Common Stock and distributed to the Participant immediately prior to such Dividend Payment Date, shall be credited to such Participant’s Stock Subpart, whereupon the dollar amount of such cash dividends shall be converted into Stock Units by dividing such dollar amount by the Fair Market Value of the Common Stock as of such Dividend Payment Date.

 

(ii)  Earnings Credit To Cash Subpart.  Each such subaccount shall be further 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 or its designee and will be determined at the Committee or designee’s discretion, based on the performance of the Measurement Funds during the applicable valuation period.

 

11

 

A Participant’s Cash Subpart Account shall be credited or debited on the earlier of the last day of each valuation period or each December 31st  (the “Applicable Period”), based on the performance of each Measurement Fund selected by the Participant, as though (a) a Participant’s Cash Subpart Account and the underlying separate investment fund subaccounts of amounts deferred in periods prior to the present Applicable Period, were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such Cash Subpart Account, on the first day of the present Applicable Period; (b) fifty-percent (50%) of the portion of the Participant’s Deferred Compensation that was actually deferred during such Applicable Period, if any, 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 of such Applicable Period; (c) any withdrawal or distribution made to a Participant, if any, that decreases such Participant’s Cash Subpart 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; and, (d) any transfers into or out of a Measurement Fund will be credited or debited, as applicable, as of the first business day of the Applicable Period which contains the effective date of the transfer.

 

The Committee shall establish and maintain, with respect to a Participant’s Cash Subpart 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.

 

5.4                               Matching Contribution Subaccount.   Each Participant’s Matching Stock Subaccount shall be credited no less frequently than the first business day of each month with an amount equal to the Company’s contributions made in accordance with Section 4.2 of the Plan.  The dollar amount of such Company’s contributions shall be converted into Stock Units by dividing such dollar amount by the Fair Market Value of the Common Stock as of the date such Deferred Compensation is credited, which shall be credited to the Participant’s Stock Subpart.

 

SECTION 6

VESTING OF DPA SUBACCOUNTS

 

6.1                               Vesting.  A Participant’s Subaccounts shall vest in accordance with the following.

 

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A.                                    Deferred Compensation Subaccount.  A Participant’s Deferred Compensation Subaccount shall at all times be 100% Vested.

 

B.                                    Matching Contribution Subaccount.  A Participant’s Matching Contribution Subaccount shall vest in accordance with the following schedule:

 

	
 
    	
At End of Year
    	
 
    	
Vested Percentage
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1
    	
 
    	
25%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2
    	
 
    	
50%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
3
    	
 
    	
75%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
4
    	
 
    	
100%
    	
 
    	
 
    	
 
    	
 
    

 

Notwithstanding the above vesting schedule under Section 6.1 (B), upon the following events, a Participant’s Matching Contribution Subaccount shall become 100% vested: (i) the death or Disability of the Participant; (ii) a Change in Control of the Company; or (iii) Retirement.

 

SECTION 7

PAYMENT TO PARTICIPANTS

 

7.1                               General Rule. Each Participant shall make a separate distribution election with respect to each Plan Year for which such Participant elects to defer Salary, Bonus or Director Fees.  A Participant’s distribution election with respect to a Plan Year shall apply to each subaccount in his Deferred Compensation Subaccount.  A Participant’s distribution election with respect to a Plan Year shall elect the Payment Date and the form of distribution of his Distributable Amount with respect to such Plan Year for purposes of distributions in the event of such Participant’s Separation from Service or Disability. Such Payment Date and distribution form elections shall be made on such Participant’s deferral election form during the Election Period for which such Participant elects to defer Salary, Bonus or Director Fees for such Plan Year, and such Payment Date and distribution form elections with respect to such Plan Year shall be irrevocable.  A Participant’s distribution for his Distributable Amount with respect to a Plan Year shall be made or commence as soon as administratively practicable after such Participant’s Payment Date.

 

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

 

A.                                    Normal Form. Except as provided in paragraph B, 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.

 

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B.                                    Optional Forms. Instead of receiving his Distributable Amount with respect to each Plan Year, the Participant may elect an optional form of payment (on the form provided by Company) at the time of his deferral election for such Plan Year to receive his Distributable Amount in equal annual installments in cash over a period of from two (2) up to fifteen (15) years beginning on the Participant’s Payment Date. The payment of such Participant’s Distributable Amount with respect 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 subaccounts in the Participant’s Accounts with respect to a Plan Year shall be calculated as of the close of business on the last business day of the year. 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 the Participant. By way of example, if the Participant elects 10 year installments for the distribution of the subaccounts in his Accounts with respect to a Plan Year, the first payment shall be 1/10 of the balance of such subaccounts in his Accounts calculated as described in this definition. The following year, the payment shall be 1/9 of such subaccounts in the balance of the Participant’s Accounts, calculated as described in this definition. Each annual installment shall be paid on or as soon as practicable after the last business day of the applicable year.

 

7.2                               Death Before Payment of Benefits.  Should a Participant die before the balance of the Participant’s Deferred Compensation and Matching Contribution Subaccounts have 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 of the Plan.

 

7.3.                            Distributions in Cases of Hardship.  Notwithstanding the provisions of Section 7.1 of the Plan, the Committee may, in its sole discretion, choose to permit a Participant to withdraw amounts from his or her Deferred Compensation Subaccount 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 Deferred Compensation Subaccount during any calendar year.

 

The dollar amount of any withdrawal shall reduce the value of both the Participant’s Cash and Stock Subparts.  To determine the cash value of the Participant’s Stock Subpart on the date of withdrawal of funds, the number of Stock Units credited on the date of withdrawal of funds shall be multiplied by the Fair Market Value of the Common Stock as of such date.  To determine the value of the Participant’s Cash Subpart on the date of withdrawal of funds, the cash amount credited to such Cash Subpart on such date shall be utilized.

 

14

 

Any amounts distributed to a Participant pursuant to a hardship withdrawal shall be considered to be taxable wages to the Participant in the calendar year of withdrawal.

 

7.4                               Prohibition on Acceleration of Distributions.  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 Section 409A of the Code.

 

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 and Matching Contribution Subaccounts.

 

8.2                               Termination of Participant’s Service.  Within 30 days following the date of the termination of service by a Participant (for any reason) to the Company, as a Director, employee or both (in the case of an Inside Director), such Participant shall be provided with a statement showing the vested balances of his or her Deferred Compensation and Matching Contribution Subaccounts as of the date of such termination of service.

 

SECTION 9

AMENDMENT OR TERMINATION OF PLAN

 

9.1                               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).

 

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 shall 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.

 

15

 

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, 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 Company 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.

 

16

 

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

 

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 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 (for these purposes, “the Company”) or 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 Participant, he or she shall also be entitled to interest on any delayed payments, with such interest computed at the Applicable Rate.

 

10.14                 Payment of Taxes.  Should the payment of any benefits under this Plan be classified as payment of an excess parachute payment under the provisions of Code Sections 280G and 4999, then an additional payment will be made to the Participant based on the amount of excise tax or penalty payable by the Participant because of such

 

17

 

classification.  Such payment will be made within two (2) months following Participant’s termination of employment, once a good faith determination is made by either the Company or Participant that the payment of any benefit under the Plan will constitute an excess parachute payment.  The amount payable to the Participant will be determined by the Committee, in its reasonable judgment, as to the amount required to meet the intent of this Section 10.14.

 

10.15                 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, local, income or other taxes imposed on amounts paid under the Plan.

 

10.16                 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 other Participant Successors of each Participant.  Each Participant shall receive a copy of the Plan.

 

10.17                 Rule 701.  It is the intent of the Board in establishing the Plan that the offering and sale of any securities to a Participant hereunder be exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Rule 701.  Accordingly, notwithstanding anything to the contrary contained herein, any offer or sale of securities hereunder shall be subject to the limitations set forth in Rule 701, and any and all constructions of this Plan by the Committee shall be consistent with the requirements of Rule 701.

 

10.18                 No Distribution of Fractional Shares.  Notwithstanding the credit of fractional interest in Stock Units in a Participant’s Stock Subpart, no fractional shares or interests shall be distributed to a Participant.  Rather, such Participant shall be entitled to receive cash for such fractional shares or interest in an amount equal to the value thereof, determined with reference to the then per share Fair Market Value of the common Stock.

 

IN WITNESS WHEREOF, this Amendment and Restatement is hereby adopted and effective by the Company on this 6th day of April, 2011.

 

 

	
 
    	
MIDLAND   STATES BANCORP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Leon J. Holschbach
    
	
 
    	
Name:
    	
Leon   J. Holschbach
    
	
 
    	
Title:
    	
President &   CEO
    
				

 

18

 

EXHIBIT A

 

PARTICIPATION CERTIFICATE

 

THIS PARTICIPATION CERTIFICATE certifies that the Executive Committee of the Board of Directors of Midland States Bancorp, Inc., or its designee, has selected                                                        (“Participant”) as a Participant in its Amended and Restated Deferred Compensation Plan of Midland States Bancorp (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.  Participant also acknowledges that Participant must elect to participate for the Plan Year of his initial election no later than the 30th day following the date of his selection as a Participant.  If Participant fails to elect to participate in the Plan for the Plan Year of his initial selection within thirty (30) days of his selection, Participant acknowledges that his deferrals into the Plan may begin only upon the first day of the Plan Year subsequent to the Plan Year of his selection as a Participant.  Any deferral election for the Participant for a Plan Year other than the Plan Year of his initial selection must be made by the Participant prior to the beginning of the Plan Year for which deferrals are being elected.

 

	
Dated as of the                    day of                           ,   200    .
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MIDLAND   STATES BANCORP, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Received by Participant the          day of                             ,   200    .
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Name   of Participant]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
City,   State and Zip Code
    	
 
    
						

 

 

EXHIBIT B-1

[For Directors, with respect to Director Fees]

 

THE AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

OF

MIDLAND STATES BANCORP, INC.

 

Deferral and Distribution Election

 

Pursuant to the Amended and Restated Deferred Compensation Plan of Midland States Bancorp, Inc. (the “Plan”), a copy of which I have in my possession and have read, I hereby elect the following actions in conjunction with my service as a Director.  Defined terms herein shall have the same meanings as ascribed to them under the Plan.

 

·                  To defer Director Fees otherwise payable to me for calendar year 20         in the aggregate amount of  o all or  o $                          .

 

Of the amount deferred,                      shall be allocated to the Stock Subpart of my Deferred Compensation Subaccount and                            shall be allocated to the Cash Subpart of my Deferred Compensation Subaccount.

 

I understand that no Matching Contributions will be credited unless all of my Director Fees are deferred and allocated to the Stock Subpart of my Deferred Compensation Subaccount.

 

·                  Timing of Distributions:

 

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

 

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

 

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

 

 

·                  Method of Distribution (select one):

 

o             Monthly Installments over                years (maximum of 15).

 

o             Lump-sum.

 

 

I understand that this election relates to only a single year and that I must make a new election for later years not covered by this election form.

 

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Print   Name
    

 

 

EXHIBIT B-2

[For Certain Employees, including Inside Directors,

with respect to Salary and/or Bonus Only]

 

THE AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

OF MIDLAND STATES BANCORP, INC.

 

Deferral and Distribution Election

 

Pursuant to the Amended and Restated Deferred Compensation Plan of Midland States Bancorp, Inc. (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                                         .  Defined terms herein shall have the same meanings as ascribed to them under the Plan.

 

·                  Deferrals:

 

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

 

o   Bonus otherwise payable to me for the Plan Year 20             in the aggregate amount of 
        o all, or o  $                          , or o                           % thereof.

 

·                  Timing of Distributions:

 

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

 

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

 

o             I elect payment on ealier of the last day of                (month)                  (year) or upon a Separation from Service.

 

·                  Method of Distribution (select one):

 

o             Monthly Installments over                years (maximum of 15).

 

o             Lump-sum.

 

 

I understand that neither my participation in the Plan nor my election deferral of all or any portion of my Bonus shall affect in any manner my right to continued employment with my employer or guarantee that I will receive a Bonus for any year.  Additionally, I understand that this election relates to only a single year and that I must make a new election for later years not covered by this election form.

 

 

	
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EXHIBIT B-3

 

THE AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

OF MIDLAND STATES BANCORP, INC.

 

Beneficiary Designation Form

 

Pursuant to the Amended and Restated Deferred Compensation Plan of Midland States Bancorp, Inc.  (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
    	
 
    	
Relationship
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
%
    

 

Secondary Beneficiary(ies)

 

	
 
    	
Name
    	
 
    	
Relationship
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
%
    

 

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

 

 

	
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Print   Name
    

 

 

EXHIBIT B-4

 

THE AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

OF MIDLAND STATES BANCORP, INC.

 

Request for Hardship Withdrawal

 

Pursuant to the Amended and Restated Deferred Compensation Plan of Midland States Bancorp, Inc. (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 Subaccount relative to the                Plan Year in the amount of $                                 as a result of the occurrence of an Unforseeable Emergency, as more particularly described on the page attached hereto.

 

 

	
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