AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
JANUARY 3, 2006
This is an amended and restated agreement (the "Agreement") of that certain
agreement by and between MBT Financial Corp., a Michigan Corporation ("MBT") and
H. Douglas Chaffin ("Executive") dated July 30, 2001.
WHEREAS, MBT is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental thereto.
WHEREAS, Executive possesses unique skills, knowledge and experience
relating to the business of MBT.
WHEREAS, MBT desires to retain the future services of Executive, and, in
that connection, Executive desires to be assured that, in the event of a change
in the control of MBT, Executive will be provided with an adequate severance
payment for termination without cause or as compensation for Executive's
severance because of a material change in his duties and functions.
WHEREAS, MBT desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or not a potential
change of control is in the best interest of MBT and its shareholders.
WHEREAS, MBT desires to induce Executive to remain in the employ of the
Company following a change of control to provide for continuity of management.
NOW, THEREFORE, in consideration of the premises and of their mutual
covenants expressed in this Agreement, the parties hereto make the following
agreement, intending to be legally bound thereby:
SECTION 1 - DEFINITIONS.
A. Board - "Board" shall mean the Board of Directors of MBT.
B. MBT -"MBT" means MBT Financial Corp., a Michigan corporation and the parent
corporation of Monroe Bank & Trust.
C. Cause - "Cause" shall mean and be limited to Executive's (a) criminal
dishonesty, (b) refusal to perform his duties on an exclusive and
substantially full-time basis, (c) refusal to act in accordance with any
specific substantive instructions given by Company with respect to
Executive's performance of duties normally associated with his position
prior to the Change in Control, or (d) engaging in conduct which could be
materially damaging to Company without a reasonable good faith belief that
such conduct was in the best interest of Company.
D. Change in Control - "Change in Control" shall have the meaning set forth on
E. Code - "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
F. Company - "Company" means MBT, Monroe Bank & Trust and all other members of
MBT's Affiliated Group, over which Executive has managerial control, as the
term "Affiliated Group" is defined in Section 1504 of the Code, and shall
include any predecessor or successor corporations of the Company and its
G. Compensation - "Compensation" shall mean Executive's then current annual
base salary plus any cash bonuses for the last whole calendar year
preceding Executive's termination of employment. Compensation shall not
include any amount, other than base salary and cash bonuses, included in
Executive's taxable compensation for federal income tax purposes and
reported to Executive and Internal Revenue Service ("IRS") such as the
reporting of previously deferred compensation or gain realized upon
exercise of any non qualified stock options.
H. Exchange Act - "Exchange Act" means the Securities Exchange Act of 1934.
SECTION 2 - TERM OF AGREEMENT.
This Agreement shall terminate on the date which is the latest of: (i) Company's
payment of any amounts due under Section's 4 and 6, (ii) the performance of
Executive's obligations under Section 9 hereof, and (iii) the earliest of:
1. The date this Agreement is mutually rescinded;
2. The date which is two (2) years after the date of a Change in Control.
3. Before a Change in Control, on the date which Monroe Bank & Trust, or
any other member of the Company's Affiliated Group, and over which
Executive has managerial control, which is a depository institution
which is insured by an agency of any state or the United States
a. becomes insolvent; or
b. has appointed any conservator or receiver; or
c. is determined by an appropriate federal banking agency to be in a
troubled condition, as defined in the applicable law and
d. is assigned a composite rating of 4 or 5 by the appropriate
federal banking agency or is informed in writing by the Federal
Deposit Insurance Corporation that it is rated a 4 or 5 under the
Uniform Financial Institution's Rating System of the Federal
Financial Institutions Examination Council; or
e. has initiated against it by the Federal Deposit Insurance
Corporation a proceeding to terminate or suspend deposit
f. reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided,
however, if such law or regulations apply prospectively only, or
for some other reason do not apply to this Agreement, then this
Agreement shall not be deemed by Company to be proscribed.
SECTION 3 - REDUCTION IN COMPENSATION PROSCRIBED AFTER A CHANGE IN CONTROL.
From the date of a Change in Control to the date of termination of this
Agreement Executive shall receive as compensation, while still employed by
Company, a salary at a rate no less than the highest rate in effect during the
one-year period before the Change in Control, and shall, in addition, be
entitled to receive a bonus equal to at least the average of the last three
years bonuses paid before the Change in Control. In addition, during such
period, the Company shall pay and provide for Executive at no cost to Executive,
all of his then-current fringe benefits, including but not limited to health,
disability, dental, life insurance and club memberships, all of which shall be
at levels and amounts no less favorable than levels and amounts in effect as of
the Change in Control.
SECTION 4 - PAYMENTS DUE AFTER A CHANGE IN CONTROL.
A. If during the term of this Agreement and after the date of a Change in
Control, Executive is discharged without Cause or Executive resigns because
he has: (i) been demoted, (ii) had his compensation reduced, (iii) had his
principal place of employment transferred away from Monroe County,
Michigan, or a county contiguous thereto, or (iv) had his job title, status
or responsibility materially reduced, then the Company shall make the
payments to Executive set forth in subsection D of this Section 4.
B. If Executive voluntarily terminates employment not earlier than six (6)
months and not later than nine (9) months following a Change in Control,
then the Company shall make the payments to Executive set forth in
subsection D of this Section 4.
C. If Executive is discharged by Company other than for Cause and there is a
Change in Control within two years following the discharge, then the
Company shall make the payments to Executive set forth in subsection D of
this Section 4.
D. In the event of the termination of Executive's employment as described in
A, B or C above, Executive shall be entitled to receive a cash payment
equal to one (1) times his Compensation. The payment required shall be paid
at the end of the first month commencing after the Executive's termination
of employment in the case of a benefit entitlement under Subsection A, or B
above. In the event of termination of employment as described in C above,
payment shall be made immediately upon the Change in Control. If
Executive's employment is terminated as described in Subsection A or
Subsection B above, then in addition to the above cash payment, Company
shall make an additional cash payment equal to twelve months of the then
current cost of any club memberships provided by the Company for the
benefit of Executive and continue at no cost to Executive for the term of
the Benefit Period as defined below, Executive's coverage in Company's
health, disability, dental, and life insurance at the same levels that had
been provided immediately prior to his termination of employment. The
Benefit Period shall commence on the date of termination of the Executive's
employment and shall end on the last day of the 12th consecutive whole
In the event Executive dies before collecting all amounts and benefits due
under this Section, any payments owing shall be paid to the person or
persons as stated in the last designation of beneficiary concerning this
Agreement signed by Executive and filed with Company, and if not, then to
the personal representative of Executive.
The payments and benefits provided for herein are in lieu of compensation,
benefits or amounts the Executive might otherwise be entitled to under the
Company's severance policy or otherwise payable by the Company be reason of
termination of employment.
E. In the event the payments required under this Agreement, when added
together with any other amounts required to be included by Executive under
the provisions of the Code, result in an "Excess Parachute Payment," as
that term is defined in Section 280G of the Code, then the amount of the
payments provided for in this agreement
shall be increased in an amount equal to 250% of any excise tax imposed
under Section 4999 (or any successor thereto) of the Code and otherwise
payable by the Executive.
F. Any subsequent employment by Executive shall not reduce the obligation of
the Company to make the full payments and provide the full benefits
specified herein and Executive shall have no obligation to seek other
employment or otherwise mitigate the effect of his discharge from
G. Notwithstanding the provisions of this agreement providing for payment of
benefits, if at the time a benefit would otherwise be payable, Employee is
a "specified employee" [as defined below], and the payment provided for
would be deferred compensation with the meaning of the Internal Revenue
Code (the "Code"), section 409A, the distribution of the Employee's benefit
may not be made until six months after the date of the Employee's
separation from service with the Company [as that term may be defined in
Section 409A(a)(2)(A)(i) of the Code and regulations promulgated
thereunder], or, if earlier the date of death of the Employee. This
requirement shall remain in effect only for periods in which the stock of
the Company is publicly traded on an established securities market. For
purposes of this subparagraph a "specified employee" shall mean any
Employee of the Company who is a "key employee" of the Company within the
meaning of Code section 416(i). This shall include any Employee who is (i)
a 5-percent owner of the Company's common stock, or (ii) an officer of the
Company with annual compensation from the Company of $130,000.00 or more,
or (iii) a 1-percent owner of Company's common stock with annual
compensation from the Company of $150,000.00 or more (or such higher annual
limit as may be in effect for years subsequent to 2005 pursuant to indexing
section 416(i) of the Code). The provisions of this subparagraph have been
adopted only in order to comply with the requirements added by Code section
409A. These provisions shall be interpreted and administered in a manner
consistent with the requirements of Code section 409A, together with any
regulations or other guidance which may be published by the Treasury
Department or Internal Revenue Service interpreting such Code section 409A.
SECTION 5 - QUALIFIED AND NON-QUALIFIED RETIREMENT PENSION PLANS.
Nothing in this Agreement shall reduce any pension benefits or benefits from
other qualified or non-qualified retirement plans maintained by Company to which
Executive is otherwise entitled without regard to this Agreement.
SECTION 6 - PROVISION FOR OUTPLACEMENT SERVICES.
In the event of the termination of employment of Executive requiring the
payments specified in Section 4 of this Agreement, Executive shall be entitled
to six months of out-placement services following termination of employment.
Such services shall include employment counseling, resume services, executive
placement services and similar services generally provided to executives by
professional executive out placement service providers. All costs of such out
placement services shall be paid for by the Company.
SECTION 7 - ARBITRATION.
Subject to the Company's right to seek injunctive relief under Section 9 of this
Agreement, the parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this Agreement
in accordance with the Rules of the American Arbitration Association, before one
arbitrator mutually agreeable to the parties. If either party determines that
the parties have been unable to agree upon one arbitrator, then such party may
appoint one arbitrator and require the other party to appoint a second
arbitrator. Whereupon, the two appointed arbitrators shall appoint a third
neutral arbitrator. If the arbitrators selected by the parties are unable or
fail to agree upon the third arbitrator, the American Arbitration Association
shall select the third arbitrator. Failure by a party to either (i) accept as
mutually agreeable, or (ii) appoint an arbitrator, within 30 days of receipt of
notice of the appointment of an arbitrator by the other party, shall be deemed
as acceptance of arbitration by such single arbitrator. The arbitration shall
occur in Monroe, Michigan, or such other place as mutually agreed upon. The
prevailing party shall be entitled to recover any and all costs associated with
any arbitration proceeding (and any subsequent proceeding to enforce rights
thereunder) including the recovery of reasonable attorneys fees. Judgement on
the award rendered by the arbitrator(s) may be entered in any court having
SECTION 8 - RIGHT TO OTHER BENEFITS.
Except as otherwise specified herein, nothing in this Agreement shall abridge,
eliminate, or cause Executive to lose Executive's right or entitlement to any
other Company benefit to which Executive may be entitled due to his status as an
employee under any plan or policy of Company on such terms and conditions as are
required of any employee under any plan or policy of Company. Further, nothing
in this Agreement shall create in Executive any greater rights or entitlements,
except as specified in this Agreement. The plans and policies referred to in
this Section 8 include, but are
not limited to, life insurance plans, dental, disability or health insurance
benefits, severance policies, club memberships, and accrued vacation pay.
SECTION 9 - NONCOMPETITION AND NONSOLICITATION AGREEMENT AND BUSINESS
Notwithstanding anything to the contrary contained elsewhere in this Agreement:
A. Noncompetition Agreement and Nonsolicitation Agreement
1. In view of Executive's importance to the success of the Company,
Executive and Company agree that the Company would likely suffer
significant harm from Executive's competing with Company during
Executive's term of employment with Company and for some period of
time thereafter. Accordingly, Executive agrees that Executive shall
not engage in competitive activities while employed by Company and
during the Restricted Period. Executive shall be deemed to engage in
competitive activities if he shall, without the prior written consent
of the Company, (i) in Monroe County, Michigan and counties contiguous
thereto (including the municipalities therein), render services
directly or indirectly, as an employee, officer, director, consultant,
advisor, partner or otherwise, for any organization or enterprise
which competes directly or indirectly with the business of Company or
any of its affiliates in providing financial products or services
(including, without limitation, banking, insurance, or securities
products or services) to consumers and businesses, or (ii) directly or
indirectly acquires any financial or beneficial interest in (except as
provided in the next sentence) any organization which conducts or is
otherwise engaged in a business or enterprise in Monroe County,
Michigan, and counties contiguous thereto (including all
municipalities therein) which competes directly or indirectly with the
business of Company or any of its affiliates in providing financial
products or services (including, without limitation, banking,
insurance or securities products or services) to consumers and
businesses. Notwithstanding the preceding sentence, Executive shall
not be prohibited from owning less that 1 percent of any publicly
traded corporation, whether or not such corporation is in competition
with Company. For purposes of this paragraph 9 the term "Restricted
Period" shall equal one year, commencing as of the date of Executive's
termination of employment.
2. While employed by Company and for a period of one (1) year following
Executive's termination of employment with Company, Executive agrees
that Executive shall not, in any manner, directly or indirectly, (i)
solicit by mail, by telephone, by personal meeting, or by any other
means, either directly or indirectly, any customer or prospective
customer of Company to whom Executive provided services, or for whom
Executive transacted business, or whose identity become known to
Executive in connection with Executive's services to Company
(including employment with or services to any predecessor or successor
entities), to transact business with a person or an entity other than
the Company or its affiliates or reduce or refrain from doing any
business with the Company or its affiliates or (ii) interfere with or
damage (or attempt to interfere with or damage) any relationship
between Company or its affiliates and any such customer or prospective
customer. The term "solicit" as used in this Agreement means any
communication of any kind whatsoever, inviting, encouraging or
requesting any person to take or refrain from taking any action with
respect to the business of Company and its subsidiaries.
3. While employed by Company and for a period of one (1) year following
Executive's termination of employment with Company, Executive agrees
that Executive shall not, in any manner, directly or indirectly,
solicit any person who is an employee of Company or any of its
affiliates to apply for or accept employment or a business opportunity
with any other person or entity.
4. The parties agree that nothing herein shall be construed to limit or
negate the common law of torts or trade secrets where it provides
broader protection than that provided herein.
B. Confidential Information
Executive has obtained and may obtain confidential information concerning the
businesses, operations, financial affairs, organizational and personnel matters,
policies, procedures and other non-public matters of Company and its affiliates,
and those of third-parties that is not generally disclosed to persons not
employed by Company or its subsidiaries. Such information (referred to herein as
the "Confidential Information") may have been or may be provided in written form
or orally. Executive shall not disclose to any other person the Confidential
Information at any time during his employment with Company or after the
termination of his employment, provided that Executive may disclose such
Confidential Information only to a person who is then a director, officer,
employee, partner, attorney or agent of Company who, in Executive's reasonable
good faith judgment, has a need to know the Confidential Information.
1. Executive acknowledges that a violation on Executive's part of this
Section 9 would cause immeasurable and irreparable damage to Company.
Accordingly, Executive agrees that notwithstanding Section 7 hereof,
Company shall be entitled to injunctive relief in any court of
competent jurisdiction for any actual or threatened violation of any
of the provisions of this Section 9, in addition to any other remedies
it may have.
2. In addition to Company's right to seek injunctive relief as set forth
in subparagraph 1 above of this Section 9.C, in the event that
Executive shall violate the terms and conditions of this Section 9,
Company may: (i) make a general claim for damages and (ii) terminate
any payments or benefits payable by Company, if applicable, to
3. The Board shall be responsible for determining whether Executive shall
have violated this Section 9, and in the absence of Executive's
ability to show that the Board has acted in bad faith and without fair
dealing, such decision will be final and binding. Upon the request of
Executive, the Company shall provide an advance opinion as to whether
a proposed activity would violate the provisions of this Agreement.
SECTION 10 - NOTICE AND PAYMENTS.
All payments required or permitted to be made under the provisions of this
Agreement, and all notices and other communications required or permitted to be
given or delivered under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be deemed to have been given
if delivered by hand, or mailed by first-class mail, addressed as follows:
A. If to Company:
MBT Financial Corp
102 E. Front Street
Monroe, MI 48161
Attn: Chairman, Compensation Committee
B. If to Executive:
H. Douglas Chaffin
c/o MBT Financial Corp
102 E. Front Street
Monroe, MI 48161
Company or Executive may, by notice given to the other from time to time and at
any time, designate a different address for making payments required to be made,
and for the giving of notices or other communications required or permitted to
be given, to the party designating such new address.
SECTION 11 - PAYROLL TAXES.
Any payment required or permitted to be made or given to Executive under this
Agreement shall be subject to the withholding and other requirements of
applicable laws, and to the deduction requirements of any benefit plan
maintained by Company in which Executive is a participant, and to all reporting,
filing and other requirements in respect of such payments, and Company shall use
it best efforts promptly to satisfy all such requirements.
SECTION 12 - GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Michigan.
SECTION 13 - DUPLICATE ORIGINALS.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be a duplicate original, but all of which, taken together, shall
constitute a single instrument.
SECTION 14 - CAPTIONS.
The captions contained in this Agreement are included only for convenience of
reference and do not define, limit, explain or modify this Agreement or its
interpretations, construction or meaning and are in no way to be construed as a
part of this Agreement.
SECTION 15 - SEVERABILITY.
If any provision of this Agreement or the application of any provision to any
person or any circumstances shall be determined to be invalid or unenforceable,
such provision or portion thereof shall nevertheless be effective and
enforceable to the extent determined reasonable. Such determination shall not
affect any other provision of this Agreement or the application of said
provision to any other person or circumstance, all of which other provisions
shall remain in full force and effect, and it is the intention of Company and
Executive that if any provision of this Agreement is susceptible of two or more
constructions, one of which would render the provision enforceable and the other
or others of which would render the provisions unenforceable, then the
provisions shall have the meaning which renders it enforceable.
SECTION 16 - NUMBER AND GENDER.
When used in this Agreement, the number and gender of each pronoun shall be
construed to be such number and gender as the context, circumstances or its
antecedent may require.
SECTION 17 - SUCCESSOR AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the successors
and assigns (including successive, as well as immediate, successors and assigns)
of Company; provided, however, that Company may not assign this Agreement or any
of its rights or obligations hereunder to any party other than a corporation
which succeeds to substantially all of the business and assets of Company by
merger, consolidation, sale of assets or otherwise. This Agreement shall inure
to the benefit of and be binding upon the successor and assigns (including
successive, as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this Agreement may be
assigned only to his personal representative or trustee or by will or pursuant
to applicable laws of descent and distribution.
SECTION 18 -PRIOR AGREEMENT SUPERCEDED.
This Agreement supersedes the previous agreement dated July 30, 2001.
IN WITNESS WHEREOF, the parties hereto have caused this Amended Agreement to be
executed on and to be effective on January 18, 2006.
In the Presence of: EXECUTIVE
/s/ H. Douglas Chaffin
/s/ Bonnie S. Snyder H. Douglas Chaffin
/s/ Donald M. Lieto
In the Presence of: MBT FINANCIAL CORP.
/s/ William D. McIntyre, Jr.
/s/ Bonnie S. Snyder By: William D. McIntyre, Jr.
/s/ Donald M. Lieto Its: Chairman
Change in Control Definition
A "Change in Control" shall mean a "Change in Ownership" as
defined in (a) hereof; a "Change in Effective Control" as defined in (b),
hereof; or a "Change in Ownership of a Substantial Portion of Assets" as
defined in (c) hereof.
(a) Change in Ownership. For purposes of this Agreement, a "change in the
ownership" of the Company occurs on the date that any one person, or
more than one person acting as a group (as defined in subsection (d)
hereof, acquires ownership of stock of the Company that, together with
stock held by such person or group, constitutes more than 50 percent
of the total fair market value or total voting power of the stock of
the Company. However, if any one person, or more than one person
acting as a group, is considered to own more than 50 percent of the
total fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same person or
persons is not
considered to cause a change in the ownership of the Company (or to
cause a change in the effective control of the Company (within the
meaning of subsection (b) hereof. An increase in the percentage of
stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock for
purposes of this section.
(b) Change in the Effective Control. For purposes of this Agreement, a
change in the effective control of the Company occurs on the date that
(i) Any one person, or more than one person acting as a group (as
determined under subsection (d) hereof, acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the
Company possessing 35 percent or more of the total voting power
of the stock of the Company; or
(ii) a majority of members of the Company's board of directors is
replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members of the Company's board of directors prior to the date of
the appointment or election.
In the absence of an event described in subsection (b)(i) or
(ii) above, a change in the effective control of a Company will not
(c) Change in the Ownership of a Substantial Portion of the Company's
Assets. For purposes of this Agreement, a change in the ownership of a
substantial portion of the Company's assets occurs on the date that
any one person, or more than one person acting as a group (as
determined in subsection(d) hereof, acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition
by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 40 percent of the total
gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.
There is no Change in Control Event under this subsection
(c) when there is a transfer to an entity that is controlled by the
shareholders of the Company immediately after the transfer, as
provided in this paragraph. A transfer of assets by the Company is not
treated as a change in the ownership of such assets if the assets are
transferred to --
(i) A shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to its stock;
(ii) An entity, 50 percent or more of the total value or voting power
of which is owned, directly or indirectly, by the Company;
(iii) A person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the Company; or
(iv) An entity, at least 50 percent of the total value or voting power
of which is owned, directly or indirectly, by a person described
in subsection (iii) hereof.
For purposes of this subsection(c) and except as otherwise
provided, a person's status is determined immediately after the
transfer of the assets. For example, a transfer to a corporation in
which the transferor corporation has no ownership interest before the
transaction, but which is a majority-owned subsidiary of the
transferor corporation after the transaction is not treated as a
change in the ownership of the assets of the transferor corporation.
(d) Persons Acting as a Group. Persons will not be considered to be acting
as a group solely because they purchase assets or purchase or own
stock of the same corporation at the same time, or as a result of the
same public offering. However, persons will be considered to be acting
as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of stock, purchase or
acquisition of assets, or similar business transaction with the
Company. If a person, including an entity shareholder, owns stock in
both corporations that enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a
corporation only to the extent of the ownership in that corporation
prior to the transaction giving rise to the change and not with the
ownership interest in the other corporation.
Exhibit 10.6 Monroe Bank & Trust Amended and Restated Supplemental Executive Retirement Agreement THIS AMENDED AND RESTATED AGREEMENT is adopted this 4th day of June, 2007, by and between MONROE BANK & TRUST, a state-chartered commercial bank located in Monroe, Michigan (the "Company"), and H. DOUGLAS CHAFFIN (the "Executive"). INTRODUCTION On the 1st day of July, 2003, the Company and the Executive entered into the Monroe Bank & Trust Supplemental Executive Retirement Agreement to encourage the Executive to remain an employee of the Company by providing supplemental retirement benefits to the Executive. In order to provide for certain amendments to the Agreement to bring it into compliance the Section 409A of the Internal Revenue Code and to make certain other changes to the Agreement, the Company and the Executive are amending the Agreement through this amendment and restatement. AGREEMENT The Company and the Executive agree as follows: ARTICLE 1 DEFINITIONS Whenever used in this Agreement, the following words and phrases shall have the meanings specified: 1.1 "Code" means the Internal Revenue Code of 1986, as amended. 1.2 "Disability" means that the Executive (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering Executives of the participant's employer, or (c) has been determined to be totally disabled by the United States Social Security Administration. 1.3 "Early Termination" means the Termination of Employment before Normal Retirement Age for reasons other than death, Disability, or Termination for Cause. 1.4 "Early Termination Date" means the month, day and year in which Early Termination occurs. 1.5 "Effective Date" means July 1, 2003. 1.6 "Final Pay" means the total annual base salary payable to the Executive at the rate in effect at Termination of Employment. Final Pay shall not be reduced for any salary reduction contributions to: (i) cash or deferred arrangements under Section 401(k) of the Code; (ii) a cafeteria plan under Section 125 of the Code; or (iii) a deferred compensation plan that is not qualified under Section 401(a) of the Code. 1.7 "Normal Retirement Age" means the Executive's 65th birthday. 1.8 "Normal Retirement Date" means the later of the Normal Retirement Age or Termination of Employment. 1.9 "Plan Year" means the calendar year ending on December 31. 1.10 "Specified Employee" means at any time at which any stock of the Company is publicly traded on an established securities market or otherwise, a person who is determined to be a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Company as of the preceding December 31. 1.11 "Termination for Cause" See Article 5. 1.12 "Termination of Employment" means the termination of the Executive's employment with the Company for reasons other than death or Disability. Whether a Termination of Employment takes place is determined based on the facts and circumstances surrounding the termination of the Executive's employment and whether the Company and the Executive intend for the Executive to provide significant services for the Company following such termination. A change in the Executive's employment status will not be considered a Termination of Employment if the Executive continues to provide service to the Company at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of 55 <PAGE> employment (or if employed less than three years, such lesser period) and the annual remuneration for such service is fifty percent (50%) or more of the average annual remuneration earned during the final three years of employment (or if less, such lesser period). A change in the Executive's employment status will be considered a Termination of Employment if as a result of such change the level of bona fide services the Executive continues to provide to the Company decreases to an annual rate that is twenty percent (20%) or less of the service rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period). ARTICLE 2 BENEFITS DURING LIFETIME 2.1 Normal Retirement Benefit. Upon Termination of Employment on or after the Normal Retirement Age for reasons other than death, the Company shall pay to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Agreement. 2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is sixty-five percent (65%) of the Executive's Final Pay, reduced by: (a) fifty percent (50%) of the primary federal Social Security benefit payable (before earnings reduction) to the Executive or which would be payable if applied for by the Executive upon his Normal Retirement Age; and (b) the annual amount of benefits payable to the Executive upon his Normal Retirement Age, on a single life annuity basis, attributable to the portion of the Executive's account balances arising from employer contributions (but excluding the portion of such balances arising from employee salary reduction contributions) from the MBT Retirement Plan. 2.1.2 Payment of Benefit. The Company shall pay the Normal Retirement Benefit in 120 equal monthly installments commencing the month following Executive's Normal Retirement Age. 2.2 Early Termination Benefit. Upon Early Termination, and subject to the completion of the service vesting period provided for in section 2.2.2 hereof by the Executive, the Company shall pay to the Executive the benefit described in this section 2.2 in lieu of any other benefit under this agreement. 2.2.1 Amount of Benefit. a) The Early Termination Benefit is a monthly benefit payable in 120 equal monthly installments commencing on the first of the month following the Executive's attainment of age 60 if termination occurs prior to age 60, or in the event of termination after age 60, on the first of the month following termination of employment. The monthly amount of the Early Termination Benefit shall be calculated according to the methodology set forth on Addendum A, using such actuarial assumptions (which shall include those set forth on Addendum B) as are reasonably determined from time to time by the Company. In determining the Early Termination Benefit the Early Termination Accrual Balance shall be adjusted for earnings from the December 31 preceding the Executive's date of early termination to the Early Termination Benefit commencement date as specified in the preceding sentence. b) The Early Termination Accrual Balance is an amount as of the December 31 preceding the Executive's date of Early Termination that is equal to what would have been accumulated with earnings had there been one annual contribution at the end of each calendar year prior to the Executive's date of Early Termination. Each such annual contribution amount shall be equal to a level annual contribution necessary to create a fund at the Executive's Normal Retirement Date sufficient to pay the Executive's Projected Normal Retirement Benefit and shall be calculated assuming that the Executive's Projected Normal Retirement Benefit is funded ratably over the period from July 1, 2003 to the Executive's Normal Retirement Date. The level annual contribution amount for the short period of July 1, 2003 to December 31, 2003 shall be prorated for that six month period which is less than a full year. (i) The Projected Normal Retirement Benefit is the Normal Retirement Benefit determined under section 2.1 as of the December 31 preceding the Executive's date of Early Termination using: 56 <PAGE> 1. The Executive's annual base salary at the end of the calendar year preceding the Executive's date of Early Termination; 2. An estimate as of that calendar year-end of the Executive's Social Security PIA offset at age 65; 3. A projection of the retirement plan offset using the MBT Retirement Plan account balance attributed to Company contributions as of that December 31; and 4. The interest rate and actuarial assumptions set forth in Addendum A of the Plan. (ii) For purposes of determining the Early Termination Accrual Balance, the level annual contribution amount shall be treated as if it had been credited at the end of each calendar year and the earnings values shall be calculated on that basis. After the Executive has terminated employment, the Early Termination Accrual Balance shall only be adjusted for earnings at the interest rate specified in Addendum A and no contributions or other contribution-like additions shall be credited to the Early Termination Accrual Balance. Any subsequent change in the Executive's Social Security PIA or MBT Retirement Plan account balance attributed to Company contributions after the Executive has terminated employment shall not retroactively change the amount of the Projected Normal Retirement Benefit and the Early Termination Accrual Balance as previously determined. (iii) Addendum A of the Plan sets forth the interest rate to be applied and illustrates the calculation of the Early Termination Accrual Balance. 2.2.2 Vesting of Benefit. The Early Termination benefit payable under section 2.2 shall be one hundred percent (100%) vested upon the Executive's continued service in the capacity of President and CEO to April 4, 2009. 2.2.3 Executive Distribution Election. Notwithstanding the above, in the event of termination prior to age 60, the Executive may elect no later than one year prior to attainment of age 60, to defer commencement of the Early Termination Benefit to age 65. 2.3 Disability Benefit. If the Executive terminates employment due to Disability prior to his Normal Retirement Age, the Executive shall become one hundred percent (100%) vested in the benefit payable under Section 2.2. 2.3.1 Payment of Benefit. The Disability Benefit in an amount equal to the Early Termination Accrual Balance shall be paid to the Executive in 120 equal monthly installments as determined under 2.2.1 commencing with the month following termination of Employment resulting from Disability. 2.4 Restriction on Timing of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Termination of Employment under such procedures as established by the Company in accordance with Section 409A of the Code, benefit distributions that are made upon Termination of Employment may not commence earlier than six (6) months after the date of such Termination of Employment. Therefore, in the event this Section 2.4 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Termination of Employment shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Termination of Employment. All subsequent distributions shall be paid in the manner specified. 2.5 Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the inclusion of any amount into the Executive's income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the entire amount accrued by the Company with respect to the Company's obligations hereunder, a distribution shall be made as soon as is administratively practicable following the assertion by the Internal Revenue Service of the plan failure. 2.6 Change in Form or Timing of Distributions. All changes in the form or timing of distributions hereunder must comply with the following requirements. The changes: (a) may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder; (b) must, for benefits distributable, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and (c) must take effect not less than twelve (12) months after the election is made. 57 <PAGE> ARTICLE 3 DEATH BENEFITS 3.1 Death During Active Service. Upon Termination of Employment of the Executive by reason of death, no benefit shall be payable under this Agreement. It is acknowledged by the Company and the Executive that while Executive is employed by the Company provision has been made for a death benefit to be payable to the Executive's beneficiary pursuant to that certain "Monroe Bank & Trust Split Dollar Agreement" dated July 1, 2003, and as amended of even date with this amendment and restatement. 3.2 Death During Payment of a Benefit. If the Executive dies after any benefit payments have commenced under Article 2 of this Agreement but before receiving all such payments, the Company shall pay the remaining benefits to the Executive's beneficiary at the same time and in the same amounts they would have been paid to the Executive had the Executive survived. 3.3 Death After Termination of Employment But Before Payment of a Benefit Commences. If the Executive is entitled to a benefit under Article 2 of this Agreement, but dies prior to the commencement of said benefit payments, the Company shall pay the same benefit payments to the Executive's beneficiary that the Executive was entitled to prior to death except that the benefit payments shall commence on the first day of the month following the date of the Executive's death. ARTICLE 4 BENEFICIARIES 4.1 Beneficiary Designations. The Executive shall designate a beneficiary by filing a written designation with the Company. The Executive may revoke or modify the designation at any time by filing a new designation. However, designations will only be effective if signed by the Executive and received by the Company during the Executive's lifetime. The Executive's beneficiary designation shall be deemed automatically revoked if the beneficiary predeceases the Executive, or if the Executive names a spouse as beneficiary and the marriage is subsequently dissolved. If the Executive dies without a valid beneficiary designation, all payments shall be made to the Executive's estate. 4.2 Facility of Payment. If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Company may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Company may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Company from all liability with respect to such benefit. ARTICLE 5 GENERAL LIMITATIONS 5.1 Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the Company shall not pay any benefit under this Agreement if the Company terminates the Executive's employment for: (a) gross negligence or gross neglect of duties; (b) commission of a felony or of a gross misdemeanor involving moral turpitude; or (c) fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Executive's employment and resulting in an adverse effect on the Company. 5.2 Suicide or Misstatement. The Company shall not pay any benefit under this Agreement if the Executive commits suicide within three years after the date of this Agreement. In addition, the Company shall not pay any benefit under this Agreement if the Executive has made any material misstatement of fact on an employment application or resume provided to the Company, or on any application for any benefits provided by the Company to the Executive. 5.3 Competition After Termination of Employment. The Company shall not pay any benefit under this Agreement if the Executive, within 12 months following Termination of Employment, without the prior written consent of the Company, engages in, becomes interested in, directly or indirectly, as a sole proprietor, as a partner in a partnership, or as a substantial shareholder in a corporation, or becomes associated with, in the capacity of employee, director, officer, principal, agent, trustee or in any other capacity whatsoever, any 58 <PAGE> enterprise conducted in the trading area (a 50 mile radius) of the business of the Company, which enterprise is, or may deemed to be, competitive with any business carried on by the Company as of the date of termination of the Executive's employment or retirement. This section shall not apply following a Change of Control as defined by 7.3(a) hereof. ARTICLE 6 CLAIMS AND REVIEW PROCEDURES 6.1 Claims Procedure. An Executive or beneficiary ("claimant") who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows: 6.1.1 Initiation - Written Claim. The claimant initiates a claim by submitting to the Company a written claim for the benefits. 6.1.2 Timing of Company Response. The Company shall respond to such claimant within 90 days after receiving the claim. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision. 6.1.3 Notice of Decision. If the Company denies part or all of the claim, the Company shall notify the claimant in writing of such denial. The Company shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: (a) The specific reasons for the denial; (b) A reference to the specific provisions of the Agreement on which the denial is based; (c) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; (d) An explanation of the Agreement's review procedures and the time limits applicable to such procedures; and (e) A statement of the claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. 6.2 Review Procedure. If the Company denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Company of the denial, as follows: 6.2.1 Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Company's notice of denial, must file with the Company a written request for review. 6.2.2 Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Company shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant's claim for benefits. 6.2.3 Considerations on Review. In considering the review, the Company shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. 6.2.4 Timing of Company Response. The Company shall respond in writing to such claimant within 60 days after receiving the request for review. If the Company determines that special circumstances require additional time for processing the claim, the Company can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Company expects to render its decision. 6.2.5 Notice of Decision. The Company shall notify the claimant in writing of its decision on review. The Company shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: (a) The specific reasons for the denial; (b) A reference to the specific provisions of the Agreement on which the denial is based; (c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant's claim for benefits; and 59 <PAGE> (d) A statement of the claimant's right to bring a civil action under ERISA Section 502(a). ARTICLE 7 AMENDMENTS AND TERMINATION 7.1 Amendments. This Agreement may be amended only by a written agreement signed by the Company and the Executive. However, the Company may unilaterally amend this Agreement to conform with written directives to the Company from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Section 409A of the Code and any and all Treasury regulations and guidance promulgated thereunder. 7.2 Plan Termination Generally. The Company and Executive may by mutual agreement terminate this Agreement at any time. The benefit hereunder shall be the entire amount accrued by the Company with respect to the Company's obligations hereunder. Except as provided in Section 7.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, after such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3. 7.3 Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in Section 7.2, this Agreement may be terminated by the Company, without the consent of the Executive, in the following circumstances, as provided by and subject to the limitations and requirements of IRC 409A and section 1.409A-3(j)(4)(ix) of the IRS Regulations, as now in effect and hereinafter amended. (a) Within thirty (30) days before or twelve (12) months after a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as described in Section 409A(a)(2)(A)(v) of the Code (collectively a "Change in Control"), provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Company's arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements; or (b) Upon the Company's termination and liquidation of this Agreement within 12 months of a corporate dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are paid and included in the Executive's gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical. In connection with termination as provided in this Section 7.3, the Company shall distribute the Early Termination Accrual Balance by the Company with respect to the Company's obligations hereunder, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms. ARTICLE 8 MISCELLANEOUS 8.1 Binding Effect. This Agreement shall bind the Executive and the Company, and their beneficiaries, survivors, executors, successors, administrators and transferees. 8.2 No Guarantee of Employment. This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Company, nor does it interfere with the Company's right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time. 8.3 Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 8.4 Reorganization. The Company shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of the Company under this Agreement. Upon the occurrence of such event, the term "Company" as used in this Agreement shall be deemed to refer to the successor or survivor company. 8.5 Tax Withholding. The Company shall withhold any taxes that are required to be withheld from the 60 <PAGE> benefits provided under this Agreement. 8.6 Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the State of Michigan, except to the extent preempted by the laws of the United States of America. 8.7 Unfunded Arrangement. The Executive and beneficiary are general unsecured creditors of the Company for the payment of benefits under this Agreement. The benefits represent the mere promise by the Company to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive's life is a general asset of the Company to which the Executive and beneficiary have no preferred or secured claim. 8.8 Entire Agreement. This Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. 8.9 Administration. The Company shall have powers which are necessary to administer this Agreement, including but not limited to: (a) Establishing and revising the method of accounting for the Agreement; (b) Maintaining a record of benefit payments; (c) Establishing rules and prescribing any forms necessary or desirable to administer the Agreement; and (d) Interpreting the provisions of the Agreement. IN WITNESS WHEREOF, the Executive and the Company have signed this Amended and Restated Agreement. EXECUTIVE: COMPANY: /s/ H. Douglas Chaffin /s/ William D. McIntyre, Jr. ------------------------------------- ---------------------------- H. Douglas Chaffin By: William D. McIntyre, Jr. Title: Chairman of the Board of Directors 61 <PAGE> ADDENDUM A - EARLY TERMINATION BENEFIT (REFER TO SECTION 2.2) Illustration of benefit calculation (All assumptions are for purposes of illustrating benefit calculation only) Date of Early Termination: JULY 1, 2011 STEP 1 - CALCULATE PROJECTED NORMAL RETIREMENT BENEFIT AS OF 12/31/2010 $ 312,309 12/31/10 Base Salary X 65% Benefit Percent $ 203,000 Base Annual Benefit Minus Offset amounts 17,676 50% of Projected Social Security PIA at age 65 41,678 Projected life annuity value of 12/31/10 employer contribution balance under MBT Retirement Plan $ 143,647 Projected Normal Retirement Benefit $1,086,023 Present Value at age 65 of Projected Normal Retirement Benefit STEP 2 DEVELOP AMORTIZATION SCHEDULE OVER EXECUTIVE CAREER <TABLE> <CAPTION> Benefit Accrual Beginning-Year End-of-Year End-of-Year End-of-Year Periods Balance Contribution Credit Interest Credit Accrual Balance --------------- -------------- ------------------- --------------- --------------- <S> <C> <C> <C> <C> 2003 0 17,978 0 17,978 2004 17,978 36,487 1,079 55,544 2005 55,544 36,487 3,333 95,363 2006 95,363 36,487 5,722 137,572 2007 137,572 36,487 8,254 182,314 2008 182,314 36,487 10,939 229,740 2009 229,740 36,487 13,784 280,011 2010 280,011 36,487 16,801 333,299 2011 333,299 36,487 19,998 389,784 2012 389,784 36,487 23,387 449,658 2013 449,658 36,487 26,979 513,125 2014 513,125 36,487 30,787 580,399 2015 580,399 36,487 34,824 651,711 2016 651,711 36,487 39,103 727,300 2017 727,300 36,487 43,638 807,426 2018 807,426 36,487 48,446 892,358 2019 892,358 36,487 53,541 982,387 2020 982,387 36,487 58,943 1,077,817 2021 1,077,817 2,960 5,246 1,086,023 </TABLE> 62 <PAGE> STEP 3 DETERMINE ACCRUAL BALANCE AT YEAR- END PRECEDING TERMINATION <TABLE> <CAPTION> Benefit Accrual Beginning-Year End-of-Year End-of-Year End-of-Year Periods Balance Contribution Credit Interest Credit Accrual Balance --------------- -------------- ------------------- --------------- --------------- <S> <C> <C> <C> <C> 2003 0 17,978 0 17,978 2004 17,978 36,487 1,079 55,544 2005 55,544 36,487 3,333 95,363 2006 95,363 36,487 5,722 137,572 2007 137,572 36,487 8,254 182,314 2008 182,314 36,487 10,939 229,740 2009 229,740 36,487 13,784 280,011 2010 280,011 36,487 16,801 333,299 </TABLE> STEP 4 DETERMINE MONTHLY BENEFIT AMOUNT PAID AT BENEFIT COMMENCEMENT - AGE 60 12/31/2010 accrual balance of $333,299 grows to $472,791 at age 60 based on stated interest rate in addendum A. $472,791 is equal in value to $4,940.25 payable each month, beginning at age 60, over a 120 month period. 63 <PAGE> ADDENDUM B The following factors will be applied in calculating the participant's benefit accrual, and will be subject to review and modification by the Compensation Committee of the Board: <TABLE> <S> <C> Interest Rate 6.00% Rate of return on 401(k) account balance 6.00% Mortality Assumptions 1994 GAR Table as defined in Rev. Ruling 2001-62 Social Security law In effect at termination For purposes of estimating the Social Security PIA: Wage Base Increases 3.00% Average Wage Index 2.75% CPI 2.50% Executive's historical wages based on historical national average wage index Executive assumed to continue to earn level future wages after termination until age 65 </TABLE> 64 </TEXT> </DOCUMENT>