Employment Agreement, dated as of February 20, 2017, between Midland States Bank and James R. Stewart
This Employment Agreement (this “Agreement”) is made and entered into as of February 20, 2017 (the “Effective Date”) by and between Midland States Bank, an Illinois banking corporation (the “Employer”) and James Stewart (the “Executive”).
Now, therefore, in consideration of the premises and of the covenants and agreements hereinafter contained, it is covenanted and agreed by and between the parties hereto as follows:
(d) Executive shall be reimbursed by the Employer, on terms and conditions that are substantially similar to those that apply to other similarly situated executives of the Employer, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items which are consistent with the Employer’s expense reimbursement policy and actually incurred by Executive in the promotion of the Employer’s business.
5. Definitions. As used throughout this Agreement, all of the terms defined in this Section 5 shall have the meanings given below.
However, in no event shall a Change in Control be deemed to have occurred, with respect to the Executive if the Executive is part of a purchasing group which consummates the Change-in-Control transaction. The Executive shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Executive is an equity participant in the purchase company or group (except for (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the non‑employee continuing Directors).
In the event that any benefit under this Agreement constitutes deferred compensation, and the settlement of, or distribution of such benefits is to be triggered by a Change in Control, then such settlement or distribution shall be subject to the event constituting the Change in Control also constituting a “change in the ownership” or “change in the effective control” of the Company, as permitted under Code Section 409A.
(v) a material breach by the Employer, or its successor, of this Agreement.
Notwithstanding the foregoing, prior to Executive’s Termination for Good Reason, Executive must give the Employer written notice of the existence of any condition set forth in clause (i) – (v) above within thirty (30) days of such initial existence and the Employer shall have thirty (30) days from the date of receipt of such notice in which to cure the condition giving rise to Good Reason, if curable, or at the option of the Company, to treat Executive’s written notice as a resignation and accept such resignation. If, during such thirty (30) day period, the Employer cures the condition giving rise to Good Reason, no payments or benefits shall be due under Section 6 of this Agreement with respect to such occurrence. If, during such thirty (30) day period, the Employer fails or refuses to cure the condition giving rise to Good Reason, Executive shall be entitled to payments or benefits under Section 6 of this Agreement upon such Termination; provided such Termination occurs within 30 days after the end of such cure period.
(g) “Minimum Payments” shall mean, as applicable, the following amounts:
(k) “Termination” shall mean termination of Executive’s employment either:
(n) “Voting Securities” shall mean any securities which ordinarily possess the power to vote in the election of directors without the happening of any pre-condition or contingency.
6. Rights and Payments Upon Termination. Either party may terminate Executive’s employment under this Agreement pursuant to the terms and conditions of this Section 6. Subject to Section 7 below, Executive’s right to benefits and payments, if any, for periods after the Termination Date shall be determined in accordance with this Section 6:
(a) Minimum Payments. If the Termination Date occurs during the Employment Period for any reason, Executive shall be entitled to the Minimum Payments, in addition to any payments or benefits to which Executive may be entitled under the following provisions of this Section 5 (other than this Section 5(a)) or the express terms of any employee benefit plan or as required by law. Any payments to be made to Executive pursuant to this Section 5(a) shall be made within thirty (30) days after the Termination Date; provided that any benefits, incentives or awards payable as described in Section 6(f) shall be made in accordance with the provisions of the applicable plan, program or arrangement. Except as may be otherwise expressly provided to the contrary in this Agreement or as otherwise provided by law, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Employer following the Termination Date for purposes of any employee benefit plan or arrangement in which Executive may participate at such time.
(b) Termination for Cause, Death, Disability, Voluntary Resignation and Non-Renewal.
(c) Termination by the Company Other than for Cause; or Resignation by Executive for Good Reason. If Executive’s employment by the Employer, or any Affiliate or successor of the Employer, shall be subject to a Termination other than during a Covered Period, then, in addition to the Minimum Payments, the Employer shall provide Executive the following benefits:
(i) Commencing on the Termination Date, Executive shall receive the applicable Severance Amount (less any amount described in the next sentence) paid in accordance with the Company’s regular payroll schedule. To the extent any portion of the applicable Severance Amount exceeds the “safe harbor” amount described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), Executive shall receive such portion of the applicable Severance Amount that exceeds the “safe harbor” amount in a single lump sum payment payable within five (5) days after Executive’s Termination Date.
(d) Termination Upon a Change of Control. If Executive’s employment by the Employer, or any Affiliate or successor of the Employer, shall be subject to a Termination within a Covered Period, then, in addition to Minimum Payments, the Employer shall provide Executive the following benefits:
7. Release. Notwithstanding anything contained in this Agreement to the contrary, no payments or benefits (including without limitation, vesting of any and all stock options, shares of restricted stock, restricted stock units and other unvested incentive awards) payable to Executive under Section 6, 66(d) or 66(e) (except for payments and benefits described in Section 6(a)) shall be paid or provided to Executive unless he/she first executes (without subsequent revocation) and delivers to the Employer a Release. To the extent any of the payments and/or benefits due under Section 6(c), 6(d) or 6(e) are determined to be subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Release must be executed and become irrevocable on or before the 60th day following the Termination Date. Provided that an executed, irrevocable Release has been delivered on or before the 60th day following the Termination Date, any payments and benefits that are determined to be subject to Section 409A of the Code shall become payable, or shall otherwise commence, as of the 60th day following the Termination Date. If an executed, irrevocable Release is not delivered on or before the 60th day following the Termination Date, Executive shall forever forfeit any and all rights to any payment or benefit (to the extent such payment or benefit is determined to be subject to Section 409A of the Code) under Section 6(c), 6(d) or 6(e) or any payment or benefit in lieu thereof.
8. Restrictive Covenants.
If to the Employer (with a copy to the Company):
Midland States Bancorp, Inc.
Attention: Chief Executive Officer and Corporate Counsel
1201 Network Centre Drive
Effingham, Illinois 62401
If to Executive, to such home address or other address as Executive has most recently provided to the Employer.
or to such other address as either party may furnish to the other in writing, except that notices of changes of address shall be effective only upon receipt.
MIDLAND STATES BANKJAMES R. STEWART
By: /s/ Leon J. Holschbach /s/ James R. Stewart
Name: Leon J. Holschbach
Its: Chief Executive Officer
General Release and Waiver
IN WITNESS WHEREOF, the parties have executed this Release as of the date first stated above.
MIDLAND STATES BANKEXECUTIVE’S NAME