ISABELLA BANK CORPORATION DEATH BENEFIT PLAN

Exhibit 10.3 ISABELLA BANK CORPORATION
DEATH BENEFIT PLAN January 1, 2008

TABLE OF CONTENTS

ISABELLA BANK CORPORATION
DEATH BENEFIT PLAN INTRODUCTION      Isabella Bank Corporation would like to attract and retain highly qualified employees. To further this objective, the Company is willing to divide the death proceeds of certain life insurance policies that are owned by the Company on the lives of the participating employees with the employee’s respective designated beneficiaries. The Company previously adopted the Death Benefit Only Agreement on February 25, 2002, to accomplish this objective. That plan is hereby restated effective January 1, 2008 as the Isabella Bank Corporation Death Benefit Plan as set forth below. The Plan shall accompany a Split Dollar Policy Endorsement entered into by and between the Company and the Participant. Article 1
Definitions      Whenever used in this Plan, the following terms shall have the meanings specified unless the context clearly indicates otherwise.       1.1 " Base Annual Salary" means the Participant’s current base annual salary (as set forth by the Company’s Board of Directors) on the Participant’s last day of employment with the Company.       1.2 " Change of Control " means a sale that results in a change in the ownership of Company, a change in the effective control of Company, or a change in the ownership of a substantial portion of Company’s assets. The change shall not be deemed a "Change of Control" for purposes of this Plan unless the change (whether made in a single transaction or in successive multiple transactions) effectively transfers the controlling interest of Company to an unrelated third party(ies) (as defined under the attribution rules of Code Sections 318 and 414) and said change results in the unrelated third party(ies) owning more than fifty percent (50%) of the fair market value or the total voting power of the stock of Company. In addition to the foregoing, the Change of Control must satisfy the provisions of Q & A-11 through 14 of IRS Notice 2005-1 and IRS. Reg. 1.409A-3(i)(5) and subsequent guidance.       1.3 " Company " means Isabella Bank Corporation, Isabella Bank, their successor or successors, and any other entity whose Board of Directors authorizes participation in this Plan where Isabella by its Board has approved such participation.       1.4 " Disability " means Participant is:           (a) unable to engage in any substantial gainful activity by reason of any medically determinable or 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, or

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          (b) by reason of any medically determinable or 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 three months under an accident and health plan covering employees of Company.       1.5 " Early Retirement Age " means the date the Participant reaches age fifty-five (55).       1.6 " Insured " means the individual whose life is insured.       1.7 " Insurer " means the insurance company issuing life insurance policy(ies) on the life of the Insured.       1.8 " Isabella " means Isabella Bank Corporation.       1.9 " Just Cause " means that Company has determined in its sole and exclusive discretion that Participant has engaged in theft, fraud, embezzlement or willful misconduct. In the event Participant is discharged for Just Cause, Participant agrees to consent to the revocation of the benefit payable under the Plan. In the event of such revocation, this Plan shall be null and void with respect to the affected Participant, and the Participant shall not have a claim under the Plan against Company.       1.10 " Normal Retirement Age " means the date the Participant reaches age sixty-five (65).       1.11 " Participant " means an employee of the Company who (1) is selected by the Company’s Board of Directors to participate in the Plan and (2) signs a Split Dollar Policy Endorsement for the Policy(ies) under which he or she is the Insured. The initial Participants are identified in Appendix A to the Plan.       1.12 " Policy " or " Policies " means the individual insurance policy or policies acquired by the Company for purposes of insuring a Participant’s life under this Plan.       1.13 " Plan " means the Isabella Bank Corporation Death Benefit Plan, as amended from time to time.       1.14 " Severance From Service " means Participant’s severance of employment with Company either voluntarily or involuntarily without Just Cause, within the consecutive 30-day period preceding or the consecutive 12-month period following a Change of Control.       1.15 " Termination of Employment " means the Participant’s severance of employment with the Company prior to reaching Early Retirement Age for any reason whatsoever, other than the Participant’s Disability or Severance From Service; but including voluntary or involuntary termination. For purposes of this Plan, if there is a dispute over the employment status of the Participant or the date of the Participant’s Termination of Employment, the Company shall have the sole and absolute discretion to determine the Participant’s termination date.

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Article 2
Policy Ownership/Interests       2.1 Company Ownership . The Company is the sole owner of the Policy(ies) and shall have the sole right to exercise all incidents of ownership. The Company shall be the beneficiary of any death benefit payable under the Plan, less the Participant’s interest determined in accordance with Section 2.2 below.       2.2 Participant’s Interest . Subject to Section 2.6 below, the benefit payable on behalf of the Participant is the benefit described in this Section 2.2.           (a) Pre-Retirement Benefit. If the Participant dies prior to his or her Termination of Employment with the Company, the Participant’s designated beneficiary shall have the right to receive a death benefit equal to the lesser of (i) two times (2x) the Participant’s Base Annual Salary on the date of death, or (ii) $750,000.           (b) Post-Retirement Benefit. If the Participant dies on or after the date of his or her Termination of Employment, subject to Sections 2.2(c) and 2.3 below, the Participant’s designated beneficiary shall have the right to receive a death benefit equal to the lesser of (i) one times (1x) the Participant’s Base Annual Salary on the date of his or her Termination of Employment, or (ii) $500,000.           Notwithstanding the foregoing, if the Participant’s Termination of Employment occurs prior to the Participant’s attainment of Normal Retirement Age, the death benefit otherwise payable to the beneficiary under Sections 2.2(b)(i) or (ii) above, shall be reduced by ten percent (10%) for each consecutive 12-month period that the Participant’s severance date precedes the Participant’s attainment of Normal Retirement Age.           (c) Excluded Employees. The death benefit described in Sections 2.2(a) and (b) above shall not be provided to employees of Isabella Bank (or the beneficiaries of said employees) who are employed by Isabella Bank as a result of the Bank’s acquisition of Farwell State Savings Bank, to the extent the former Farwell State Savings Bank employees receive pre and post-retirement benefits under the Farwell State Savings Bank Executive Supplemental Income Agreements. With respect to any employee of the Farwell State Savings Bank division of Isabella Bank who is covered by the Plan (the "Farwell Participants"), the pre and/or post-retirement death benefits described in Sections 2.2(a) and (b) above shall be provided to the beneficiaries of the Farwell Participants in the amounts and to the individuals identified in attached Appendix B to the Plan.       2.3 Termination of Participation Upon Termination of Employment Prior to Early Retirement Age . In the event of the Participant’s Termination of Employment prior to the Participant’s attainment of his or her Early