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IBT BANCORP
RETIREMENT BONUS PLAN
January 1, 2007
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TABLE OF CONTENTS
SECTION 1.
PURPOSE..................................................
3
SECTION 2.
DEFINITIONS..............................................
3
SECTION 3.
PARTICIPATION/ESTABLISHMENT OF ACCOUNTS..................
5
SECTION 4.
ALLOCATIONS TO ACCOUNT...................................
5
SECTION 5.
VESTING..................................................
6
SECTION 6.
COMMENCEMENT OF DISTRIBUTION.............................
6
SECTION 7.
MANNER AND FORM OF DISTRIBUTION..........................
8
SECTION 8.
CONDITIONS...............................................
8
SECTION 9. DEATH
BENEFIT............................................
9
SECTION 10. UNSECURED
UNFUNDED PLAN..................................
9
SECTION 11. PLAN
AMENDMENT AND TERMINATION...........................
10
SECTION 12. EXPENSES
AND TAXES.......................................
10
SECTION 13.
NONASSIGNABILITY.........................................
10
SECTION 14. EMPLOYMENT
STATUS........................................
11
SECTION 15.
ADMINISTRATION...........................................
11
SECTION 16. CLAIMS
PROCEDURE.........................................
12
SECTION 17. BINDING
EFFECT...........................................
13
SECTION 18.
INCOMPETENCY.............................................
14
SECTION 19.
SEVERABILITY.............................................
14
SECTION 20.
CONSTRUCTION.............................................
14
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IBT BANCORP
RETIREMENT BONUS PLAN
IBT
Bancorp, Inc. ("IBT") wants to establish a nonqualified plan of
deferred compensation benefits for its eligible employees. The Plan
is intended
to postpone taxation of such deferred compensation benefits until
those benefits
are paid to the employees as provided in the Plan. The provisions
of this Plan
shall be effective on and after January 1, 2007.
SECTION 1. PURPOSE.
The Plan
is intended to provide eligible employees with additional
compensation, payable as set forth in the Plan, in order to reward
the
individuals who contribute to the success of Company.
SECTION 2. DEFINITIONS.
The
following words and phrases shall, when used in this Plan, have
the
meanings set forth below unless their context clearly indicates
otherwise:
2.01
ADMINISTRATOR OR PLAN ADMINISTRATOR means IBT which may, from time
to
time in its sole discretion, appoint a person or persons to assist
in the
administration of the Plan.
2.02
ALLOCATION DATE means March 31, June 30, September 30 or December
31
of each Plan Year.
2.03 BOARD
OF DIRECTORS means Company's governing body according to law
and Company's governing documents.
2.04
CHANGE OF CONTROL means a sale which 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
Prop. Reg.
1.409A-3(g)(5) and subsequent guidance.
2.05 CODE
means the Internal Revenue Code of 1986, as amended.
2.06
COMMITTEE OR ADMINISTRATIVE COMMITTEE means the committee
described
in Section 15.
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2.07
COMPANY means IBT Bancorp, Inc. and Isabella Bank and Trust or
their
respective successor or successors.
2.08
DEFERRED COMPENSATION ACCOUNT OR ACCOUNT means the bookkeeping
account maintained on behalf of Participant to record Company
contributions made
pursuant to Section 4.01.
2.09
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
(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.
2.10 EARLY
RETIREMENT AGE means Participant's attainment of age 55.
2.11
EFFECTIVE DATE means January 1, 2007, the date on which the
provisions of this Plan become effective.
2.12
EMPLOYEE means an individual who is employed by Company on January
1,
2007, and who is a participant in Company's frozen Executive
Supplemental Income
Agreement, provided the individual is an officer of Company and has
completed at
least ten (10) years of service with Company as of December 31,
2006. Company
has sole and exclusive discretion to add new Participants to the
Plan by
authorizing such participation pursuant to action of Company's
Board of
Directors.
2.13 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.
2.14
NORMAL RETIREMENT AGE means Participant's attainment of age 65.
2.15
PARTICIPANT means an Employee who participates in the Plan.
2.16 PLAN
means the IBT Bancorp Retirement Bonus Plan, as amended from
time to time.
2.17 PLAN
YEAR means the consecutive 12-month period beginning on January
1 and ending on December 31.
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2.18
RETIREMENT means, with respect to a Participant, separation
from
service with Company for any reason on or after the attainment of
Early
Retirement Age; provided, however, with respect to a Participant
who is entitled
to a distribution on account of Participant's Disability or
Separation From
Service, Retirement means the later of attainment of Early
Retirement Age or
Participant's actual separation date.
2.19
SEPARATION FROM SERVICE means Participant's severance of service
with
Company either voluntarily or involuntarily without Just Cause,
following a
Change of Control.
SECTION 3. PARTICIPATION/ESTABLISHMENT OF ACCOUNTS.
3.01
INITIAL PARTICIPATION. Any individual who is an eligible Employee
on
the Effective Date shall commence participation in the Plan on
January 1, 2007.
3.02
SUBSEQUENT PARTICIPATION. Any individual who becomes eligible
to
participate in the Plan after the Effective Date shall commence
participation in
the Plan on the date the Committee determines, in its sole
discretion.
3.03
ACCOUNTS. Company agrees to create a Deferred Compensation Account
to
be maintained on the books of Company in the name of each
Participant, as
described in Section 4 below.
SECTION 4. ALLOCATIONS TO ACCOUNT.
4.01
COMPANY CONTRIBUTIONS. Each Participant shall have an initial
amount
credited to his Deferred Compensation Account on January 1, 2007.
Subsequent
amounts shall be credited to Participant's Deferred Compensation
Account on each
Allocation Date thereafter. The amount of the initial allocation
and
Participant's annual allocation shall be determined pursuant to a
payment
schedule adopted in the sole and exclusive discretion of the Board
of Directors,
as set forth in the Addendum to this Plan, as amended from time to
time.
Following the initial allocation, one-fourth (1/4) of each annual
allocation
shall be credited to Participant's Deferred Compensation Account on
the
applicable Allocation Date, provided Participant is employed by
Company on the
Allocation Date.
4.02
EARNINGS ALLOCATION. Subject to Section 10, amounts credited to
Participant's Deferred Compensation Account shall be adjusted on
each Allocation
Date for earnings or losses as described in this Section 4.02. Such
adjustments
shall continue quarterly until the date when all benefits payable
under the Plan
have been distributed to Participant.
(a) If Company invests the amounts credited to Participant's
Deferred Compensation Account, the income (or loss) shall be based
on the actual
rate of return on a predetermined actual investment selected by
Company as
described in this Section 4.02(a). Before the beginning of each
Plan Year,
Company may designate a specific investment on which the following
year's
increase or decrease (and each subsequent year's increase or
decrease) will be
based. Company may change investments; however, any such change in
the
investment and
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the related rate of return shall be applied on a prospective basis
only.
Accordingly, the quarterly adjustment to Participant's Deferred
Compensation
Account shall be based on the actual return of the predetermined
investments
specified for the period.
(b) If Company does not invest the amounts credited, the income
(or
loss) allocated to Participant's Deferred Compensation Account
shall be the
mid-term applicable federal rate (as defined in Code Section
1274(d)) for
January 1 of the calendar year in which the income is credited,
such interest to
be compounded annually.
Company does not guarantee the preservation of the principal
amount
credited to Participant's Account or a minimum rate of return on
any such
investments.
SECTION 5. VESTING.
Subject to
satisfying the distribution events set forth in Section 6
below, Participant's interest in his Deferred Compensation Account
shall be 100%
vested and nonforfeitable upon the first to occur of Participant's
Retirement,
Separation From Service or experiencing a Disability.
Notwithstanding the
provisions of Section 4.01, in the event of Participant's
Separation From
Service or Disability, Participant's interest in his Deferred
Compensation
Account balance shall be the amount he would have received at Early
Retirement
Age had he continued to participate in the Plan and retired upon
reaching Early
Retirement Age; provided, however, if the Participant elects a
delayed
distribution date (not to exceed the Participant's attainment of
Normal
Retirement Age), in accordance with Section 6.02, Participant's
vested interest
in his Deferred Compensation Account shall be the amount he would
have received
on the delayed distribution date had he continued to participate in
the Plan and
retired on the delayed distribution date.
SECTION 6. COMMENCEMENT OF DISTRIBUTION.
6.01
DISTRIBUTION DATES. The form and manner in which distributions
will
be made from the Plan shall be determined in accordance with
Section 7 below. No
amount standing from time to time to the credit of Participant in
his Deferred
Compensation Account shall be assignable or alienable by
Participant, nor may
any such payment be used as collateral or in any other fashion by
Participant
prior to payment by Company. Subject to Section 6.03 below, no
amount standing
from time to time to the credit of Participant in his Deferred
Compensation
Account shall be payable to Participant until Participant's
Retirement.
6.02 TIME
OF DISTRIBUTION. When the amounts credited to Participant's
Deferred Compensation Account become payable pursuant to Section
6.01 above,
distribution of such benefit shall begin on the first day of the
sixth month
following the first Allocation Date immediately following the
earliest
distribution date, or as soon as administratively practicable
thereafter.
Notwithstanding the foregoing, Participant may elect a delayed
distribution date. The delayed distribution date may be a specific
future date
or the attainment of a specified age by the Participant (not to
exceed the
Participant's attainment of age 75), so long as the delayed
distribution date
is:
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(a) requested at least twelve (12) months prior to the earliest
distribution date;
(b) the election does not take effect until at least twelve
(12)
months after the date on which the election is made; and
(c) the payment is postponed for a period of not less than five
(5)
years from the date the payment would otherwise have been made.
6.03
ACCELERATING THE TIME OF PAYMENT. Notwithstanding the
distribution
dates set forth in Section 6.01 above, an early distribution may be
made as soon
as administratively possible in accordance with IRS Prop. Reg.
1.409A-3(h)(2)
and subsequent guidance following the occurrence of any of the
following events
:
(a) to fulfill the requirements of a domestic relations order;
(b) as necessary to comply with a certificate of divestiture as
defined in Code Section 1043(b)(2);
(c) to make payment of certain employment and/or i
