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EXHIBIT 10.5
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.
RECITALS
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
Exhibit A.
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
Affiliated Group.
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
Federal Government:
a. becomes
insolvent; or
b. has appointed
any conservator or receiver; or
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c. is determined
by an appropriate federal banking agency to be in a
troubled condition, as defined in the applicable law and
regulations; or
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
insurance; or
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
month thereafter.
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
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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
employment.
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 - AR
