Exhibit 10.10

 

Sterling Bank & Trust, Fsb

Executive Incentive Retirement Plan

 

STERLING BANK & TRUST, FSB
EXECUTIVE INCENTIVE RETIREMENT PLAN

 

THIS AMENDED & RESTATED EXECUTIV ,WNCENT VE RETIREMENT PLAN (the “Agreement”) is
adopted this 8th day of May, 2007, by and between Sterling Bank & Trust, Fsb,
headquartered in Southfield, Michigan, (the “Company”) and Michael Montemayor
(the “Executive”), and is effective as of the 1st day of January, 2007.

 

This Agreement amends and restates the prior Executive Incentive Retirement Plan
between the Company and the Executive dated October 1, 1999 (the “Prior
Agreement”).

 

The parties intend this Amended and Restated Agreement to be a material
modification of the Prior Agreement such that all amounts earned and vested
prior to December 31, 2004 shall be subject to the provisions of Section 409A of
the Code and the regulations promulgated thereunder.

 

The purpose of this Agreement is to provide specified benefits to the Executive,
a member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development and future business
success of the Company.  This Agreement shall be unfunded for tax purposes and
for purposes of Title I of the Employee Retirement Income Security Act
(“ERISA”).

 

Article 1
Definitions

 

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

 

1.1                               “Annual Crediting Rate” means eight percent
(8%).

 

1.2                               “Beneficiary” means each designated person (in
conformity with the Beneficiary Designation Form process detailed at Section 1.3
below), or the estate of a deceased Executive, entitled to benefits, if any,
upon the death of the Executive determined pursuant to Article 5.

 

1.3                               “Beneficiary Designation Form” means the form
established from time to time by the Plan Administrator that the Executive
completes, signs and returns to the Plan Administrator to designate one or more
beneficiaries.  See for example, Exhibit A attached to this Agreement.

 

1.4                               “Board” means the Board of Directors of the
Company as from time to time constituted.

 

1.1                               “Change of Control Event” shall have occurred
upon (a) a Change of Ownership of the Company, (b) a Change in Effective Control
of the Company, or (c) a Change in Ownership of a Substantial Portion of the
Company; provided that, to constitute a Change of Control Event as to the
Executive, the Change of Control Event must relate to: (i) the

 

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Company, (ii) the corporation(s) liable for the payment of deferred compensation
to the participant, or (iii) a corporation that is a Majority Shareholder of a
corporation identified in (i) or (ii), or any corporation in a chain of
corporations in which each corporation is a Majority Shareholder of another
corporation in the chain, ending in a corporation identified in (i) or (ii).  A
transfer from an existing shareholder of the Company to a Disregarded Member as
described in (d) below shall not constitute a Change in Control Event.

 

(a)                                 “Change in Effective Control” of the Company
shall have occurred on the date that any one person, or more than one person
acting as a group, 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.  However, if any one person, or more than one
person acting as a group, is considered to effectively control the Company, the
acquisition of additional control of the Company by the same person or group is
not considered to cause a change in the effective control of the Company.

 

(b)                                 “Change in Ownership” of the Company shall
have occurred on the date that any one person, or more than one person acting as
a group, 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 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 group is
not considered to cause a change in ownership of the Company.  For purposes of
this definition, persons will not be considered to be acting as a group solely
because they purchase or own stock of the Company 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, or similar business transaction
with the Company.  If a person, including an entity, owns stock in both a
corporation and the Company which enter into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction, such shareholder is
considered to be acting as a group with other shareholders in the Company and
not with respect to the ownership interest in the other corporation.  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 corporation acquires its
stock in exchange for property will be treated as acquisition of stock for
purposes of this definition.  However, if any one person, or more than one
person acting as a group, is considered to effectively control the Company, the
acquisition of additional control of the Company by the same person or group is
not considered to cause a change in the ownership of the Company.

 

(c)                                  “Change in Ownership of a Substantial
Portion” of the Company shall have occurred on the date that any one person, or
more than one person acting as a

 

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group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or group) 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 purposes of this
definition, 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.  However, there is no Change in
Ownership of a Substantial Portion of the Company when there is a transfer to an
entity that is controlled by shareholders of the Company immediately after the
transfer.  Moreover, a transfer of assets by the Company is not treated as a
Change in Ownership of a Substantial Portion of the Company 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 iii).

 

(d)                                 A Disregarded Member for purposes of a
Change in Control Event shall be: (i) any parent, child spouse, or lineal
descendant of a current shareholder of the Company; (ii) any affiliated entity
created by a current shareholder of the Company in anticipation of their death,
e.g., revocable or irrevocable trusts of which such shareholder is the grantor,
and (iii) any person described in (d)(i) or (d)(ii) above that becomes a
shareholder of the Company as a result of a transfer from a person described in
(d)(i) or (d)(ii) above.  For purposes of the Definition of Disregarded Member,
parent shall include step parent and child or grandchild shall include step
child or grandchildren.

 

1.5                               “Code” means the Internal Revenue Code of
1986, as amended.

 

1.6                               “Compensation Committee” means the Board or
such committee or persons as the Board shall appoint.

 

1.7                               “Contributions” means the amounts credited to
the Incentive Award Account as set forth in Section 3.1.

 

1.8                               “Distribution Election Form” means the form
established from time to time by the Plan Administrator that the Executive
completes, signs and returns to the Plan Administrator to designate the time and
form of distribution.  See for example, Exhibit B attached to this Agreement.

 

1.9                               “Effective Date” means January 1, 2007.

 

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1.10                        “Early Termination” means Separation from Service
before the Vesting Date except when such Separation from Service occurs: (i)
following a Change in Control Event; or (ii) due to death, Permanent Disability,
or Termination for Cause.

 

1.11                        “Incentive Award Account” means the Company’s
accounting of the Contributions, plus accrued interest.

 

1.12                        “Majority Shareholder” means a shareholder of the
Company owning greater than 50% of the total fair market value of the Company
and/or greater than 50% of the total voting power of the Company.

 

1.13                        “Monthly Crediting Rate” means the Annual Crediting
Rate adjusted to take into account monthly compounding.

 

1.14                        “Normal Retirement Age” means the Executive
attaining age sixty-five (65).

 

1.15                        “Permanent Disability” or “Disabled” means “Totally
Disabled” within the meaning of such term as set forth in the Long-Term
Disability Plan of the Company (the provisions of which are incorporated herein
by reference).

 

1.16                        “Plan Administrator” means the plan administrator
described in Article 8.

 

1.17                        “Plan Year” means each twelve-month period
commencing on January 1 and ending on December 31 of each year.

 

1.18                        “Separation from Service” means the Executive’s
ceasing to be an employee of the Company subject to the following qualification
below:

 

Where the Executive continues to provide services to the Company in a capacity
other than as an employee (for example, as a member of the Board), a Separation
from Service will not be deemed to have occurred if the Executive is providing
services at an annual rate that is 50 percent or more of the services 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 50 percent or more of the average
annual remuneration earned during the final three full calendar years of
employment (or if less, such lesser period).  For this purpose, the annual rate
of providing services is determined based upon the measurement used to determine
the Executive’s base compensation (for example, amounts of time required to earn
salary, hourly wages, or payments for specific projects).

 

1.19                        “Specified Employee” means a key employee (as
defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of
the Company if any stock of the Company is publicly traded on an established
securities market or otherwise.

 

1.20                        “Termination for Cause” means a Separation from
Service for:

 

(a)                                 Gross negligence or gross neglect of duties
to the Company; or

 

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(b)                                 Conviction of a felony; or, of a gross
misdemeanor involving moral turpitude in connection with the Executive’s
employment with the Company; or

 

(c)                                  Fraud, dishonesty or willful violation of
any law or significant Company policy committed in connection with the
Executive’s employment and resulting in a material adverse effect on the
Company.

 

1.21                        “Vesting” means the process by which the Executive
becomes entitled to distribution of the Incentive Award Account by virtue of the
Executive having performed services for the Company during Plan Years, or upon
the occurrence of a Change in Control Event of the Company each as appropriate.

 

Article 2
Company Contributions

 

For each Plan Year prior to Normal Retirement Age, the Company, upon
recommendation of the Compensation Committee, shall determine the Incentive
Award, if any, payable to the Executive during the following Plan Year.  The
Incentive Award shall be based on the terms and conditions of the Incentive
Compensation Plan.  For each month of the Plan Year, the Incentive Award Account
shall be credited with a prorated portion of the Incentive Award declared during
the prior Plan Year.

 

Article 3
Incentive Award Account

 

3.1                               Establishing and Crediting.  The Company shall
establish an Incentive Award Account on its books for the Executive and shall
credit to the Incentive Award Account the following amounts:

 

(a)                                 Any Contributions hereunder; and

(b)                                 Prior to Normal Retirement Age, interest as
follows:

 

(i)            Each month and immediately prior to the distribution of any
benefits, but only until commencement of benefit distributions under this
Agreement, interest shall be credited on the Incentive Award Account at a rate
equal to the Monthly Crediting Rate; and

(ii)           Each month during any applicable installment period, interest
shall be credited on the unpaid Incentive Award Account balance at the Monthly
Crediting Rate.  Prior to the commencement of any distributions hereunder, the
Board, in its sole discretion, may change the rate used to calculate interest in
this Section 3.1(b)(ii).

 

3.2                               Accounting Device Only.  The Incentive Award
Account is solely a device for measuring amounts to be paid under this
Agreement.  The Incentive Award Account is not a trust fund of any kind.  The
Executive is a general unsecured creditor of the Company for the distribution of
benefits.  The benefits represent the mere Company promise to distribute such
benefits.  The Executive’s rights are not subject in any manner to anticipation,

 

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alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by the Executive’s creditors.

 

3.3                               Vesting in Incentive Award Account.  The
Executive shall become Vested in his or her Incentive Award Account in
accordance with the vesting schedule described in Section 4.2.1.

 

Article 4
Distributions During Lifetime

 

4.1                               Benefit Upon Vesting.  Upon Separation from
Service after having attained ten (10) Plan Years of service, the Company shall
distribute to the Executive the benefit described in this Section 4.1 in lieu of
any other benefit under this Article.

 

4.1.1                     Amount of Benefit.  The benefit under this Section 4.1
is the Incentive Award Account balance at Separation from Service adjusted in
accordance with Section 3.1(b)(i) as appropriate.

 

4.1.2                     Distribution of Benefit.  The Company shall distribute
the benefit to the Executive as elected by the Executive on the Distribution
Election Form commencing within thirty (30) days following Separation from
Service.

 

4.2                               Early Termination Benefit.  Upon Separation
from Service prior to having attained ten (10) Plan Years of service, the
Company shall distribute to the Executive the benefit described in this Section
4.2 in lieu of any other benefit under this Article.

 

4.2.1                     Amount of Benefit.  The benefit under this Section 4.2
is determined by vesting the Executive in ten percent (10%) of the Incentive
Award Account balance adjusted in accordance with Section 3.1(b)(i) as
appropriate for the first Plan Year of service attained by the Executive, and an
additional ten percent (10%) of Incentive Award Account balance adjusted in
accordance with Section 3.1(b)(i) as appropriate for each succeeding full Plan
Year of service attained thereafter.

 

4.2.2                     Distribution of Benefit.  The Company shall distribute
the benefit to the Executive as elected by the Executive on the Distribution
Election Form commencing within thirty (30) days following Separation from
Service.

 

4.3                               Change in Control Event Benefit.  Upon a
Change in Control Event, the Company shall distribute to the Executive the
benefit described in this Section 4.3 in lieu of any other benefit under this
Article.

 

4.3.1                     Amount of Benefit.  The benefit under this Section 4.3
is the Incentive Award Account balance as of the date of the Change in Control
Event adjusted in accordance with Section 3.1(b)(i) as appropriate.

 

4.3.2                     Distribution of Benefit.  The Company shall distribute
the benefit to the Executive as elected by the Executive on the Distribution
Election Form commencing within thirty (30) days following the occurrence of the
Change in Control Event.

 

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4.4                               Restriction on Timing of Distribution. 
Notwithstanding any provision of this Agreement to the contrary, if the
Executive is considered a Specified Employee at Separation from Service under
such procedures as established by the Company in accordance with Section 409A of
the Code, benefit distributions that are made upon Separation from Service may
not commence earlier than six (6) months after the date of such Separation from
Service.  Therefore, in the event this Section 4.4 is applicable to the
Executive, any distribution which would otherwise be paid to the Executive
within the first six months following the Separation from Service shall be
accumulated and paid to the Executive in a lump sum on the first day of the
seventh month following the Separation from Service.  All subsequent
distributions shall be paid in the manner specified.

 

4.5                               Distributions Upon Income Inclusion Under
Section 409A of the Code.  Upon the inclusion of any portion of the Incentive
Award Account balance 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
Incentive Award Account balance, a distribution shall be made as soon as is
administratively practicable following the discovery of the plan failure.

 

4.6                               Change in Form or Timing of Distributions. 
For distribution of benefits under this Article 4, the Executive may elect to
delay the timing or change the form of distributions by submitting a
Distribution Election Form to the Plan Administrator.  Any such elections:

 

(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 under
Sections 4.1, 4.2, and 4.3, delay the commencement of distributions for a
minimum of five (5) years from the date the first distribution was originally
scheduled to be made;

(c)                                  must take effect not less than twelve (12)
months after the election is made; and

(d)                                 must be made twelve (12) months prior to the
date the distributions are scheduled to be paid.

 

Article 5
Distributions at Death

 

5.1                               Death During Active Service.  If the Executive
dies while in active service to the Company, the Company shall distribute to the
Beneficiary the benefit described in this Section 5.1.  This benefit shall be
distributed in lieu of the benefits under Article 4.

 

5.1.1                     Amount of Benefit.  The benefit under this Section 5.1
is One Million Three Hundred Eighty-Nine Thousand Eight Hundred Nine Dollars
($1,389,809.00).

 

5.1.2                     Distribution of Benefit.  The Company shall distribute
the benefit to the Executive as elected by the Executive on the Distribution
Election Form commencing within

 

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thirty (30) days following receipt by the Company of the Executive’s death
certificate.

 

5.2                               Death During Distribution of a Benefit.  If
the Executive dies after any benefit distributions have commenced under this
Agreement but before receiving all such distributions, the Company shall
distribute to the Beneficiary the remaining benefits at the same time and in the
same amounts that would have been distributed to the Executive had the Executive
survived.

 

5.3                               Death After Separation from Service But Before
Benefit Distributions Commence.  If the Executive is entitled to benefit
distributions under this Agreement, but dies prior to the commencement of said
benefit distributions, the Company shall distribute to the Beneficiary the same
benefits and in the same manner that the Executive was entitled to prior to
death except that the benefit distributions shall commence within ninety (90)
days following the date of the Executive’s death.  Evidence of the Executive’s
death shall be demonstrated by the receipt by the Company of the Executive’s
death certificate.

 

Article 6
Beneficiaries

 

6.1                               Beneficiary.  The Executive shall have the
right, at any time, to designate a Beneficiary to receive any benefits
distributable under the Agreement to a Beneficiary upon the death of the
Executive.  The Beneficiary designated under this Agreement may be the same as
or different from the beneficiary designated under any other plan of the Company
in which the Executive participates.

 

6.2                               Beneficiary Designation Change.  The Executive
shall designate a Beneficiary by completing and signing the Beneficiary
Designation Form, and delivering it to the Plan Administrator or its designated
agent.  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.  The Executive
shall have the right to change a Beneficiary by completing, signing and
otherwise complying with the terms of the Beneficiary Designation Form and the
Plan Administrator’s rules and procedures, as in effect from time to time.  Upon
the acceptance by the Plan Administrator of a new Beneficiary Designation Form,
all Beneficiary designations previously filed shall be cancelled.  The Plan
Administrator shall be entitled to rely on the last Beneficiary Designation Form
filed by the Executive and accepted by the Plan Administrator prior to the
Executive’s death.

 

6.3                               Acknowledgment.  No designation or change in
designation of a Beneficiary shall be effective until received, accepted and
acknowledged by the Plan Administrator or its designated agent.

 

6.4                               No Beneficiary Designation.  If the Executive
dies without a valid Beneficiary designation, or if all designated Beneficiaries
predecease the Executive, then the Executive’s spouse shall be the designated
Beneficiary.  If the Executive has no

 

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surviving spouse, the benefits shall be paid to the personal representative of
the Executive’s estate.

 

6.5                               Facility of Distribution.  If the Plan
Administrator determines in its discretion that a benefit is to be paid to a
minor, to a person declared incompetent, or to a person incapable of handling
the disposition of that person’s property, the Plan Administrator may direct
distribution of such benefit to the guardian, legal representative or person
having the care or custody of such minor, incompetent person or incapable
person.  The Plan Administrator may require proof of incompetence, minority or
guardianship as it may deem appropriate prior to distribution of the benefit. 
Any distribution of a benefit shall be a distribution for the account of the
Executive and the Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Agreement for such distribution amount.

 

Article 7
General Limitations

 

7.1                               Termination for Cause.  Notwithstanding any
provision of this Agreement to the contrary, the Company shall not distribute
any benefit under this Agreement if the Executive’s employment with the Company
is terminated due to a Termination for Cause.

 

7.2                               Misstatement.  Notwithstanding any provision
of this Agreement to the contrary, the Company shall not distribute any benefit
under this Agreement if an insurance company which issued a life insurance
policy covering the Executive and owned by the Company denies coverage (i) for
material misstatements of fact made by the Executive on an application for such
life insurance, or (ii) for any other reason.

 

7.3                               Removal.  Notwithstanding any provision of
this Agreement to the contrary, the Company shall not distribute any benefit
under this Agreement if the Executive is subject to a final removal or
prohibition order issued by an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act.

 

Article 8
Administration of Agreement

 

8.1                               Plan Administrator Duties.  This Agreement
shall be administered by a Plan Administrator which shall consist of the Board,
or such committee or persons as the Board shall appoint.  The Plan Administrator
shall administer this Agreement according to its express terms and shall also
have the discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this Agreement and
(ii) decide or resolve any and all questions including interpretations of this
Agreement, as may arise in connection with the Agreement to the extent the
exercise of such discretion and authority does not conflict with Section 409A of
the Code and regulations thereunder.

 

8.2                               Agents.  In the administration of this
Agreement, the Plan Administrator may employ agents and delegate to them such
administrative duties as it sees fit, (including acting

 

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through a duly appointed representative), and may from time to time consult with
counsel who may be counsel to the Company.

 

8.3                               Binding Effect of Decisions.  The decision or
action of the Plan Administrator with respect to any question arising out of or
in connection with the administration, interpretation and application of the
Agreement and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Agreement.

 

8.4                               Indemnity of Plan Administrator.  The Company
shall indemnify and hold harmless the members of the Plan Administrator against
any and all claims, losses, damages, expenses or liabilities arising from any
action or failure to act with respect to this Agreement, except in the case of
willful misconduct by the Plan Administrator or any of its members.

 

8.5                               Company Information.  To enable the Plan
Administrator to perform its functions, the Company shall supply full and timely
information to the Plan Administrator on all matters relating to the
compensation of the Executive, the date and circumstances of the Permanent
Disability, death or Separation from Service of the Executive, and such other
pertinent information as the Plan Administrator may reasonably require.

 

8.6                               Statement of Accounts.  The Plan Administrator
shall provide to the Executive, within one-hundred twenty (120) days after the
end of each Plan Year, a statement setting forth the Incentive Award Account
balance.

 

Article 9
Claims and Review Procedures

 

9.1                               Claims Procedure.  The 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:

 

9.1.1                     Initiation — Written Claim.  The claimant initiates a
claim by submitting to the Company a written claim for the benefits.  If such a
claim relates to the contents of a notice received by the claimant, the claim
must be made within sixty (60) days after such notice was received by the
claimant.  All other claims must be made within one-hundred eighty (180) days of
the date on which the event that caused the claim to arise occurred.  The claim
must state with particularity the determination desired by the claimant.

 

9.1.2                     Timing of Company Response.  The Company shall respond
to such claimant within ninety (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 ninety (90) days by notifying the claimant in writing, prior to the
end of the initial ninety (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.

 

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9.1.3                     Notice of Decision.  Upon reaching a decision with
respect to a claim, the Company shall notify the claimant in writing of such
decision.  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 or
approval,

(b)                                 A reference to the specific provisions of
this 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.

 

9.2                               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:

 

9.2.1                     Initiation — Written Request.  To initiate the review,
the claimant, within sixty (60) days after receiving the Company’s notice of
denial, must file with the Company a written request for review.

 

9.2.2                     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.

 

9.2.3                     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.

 

9.2.4                     Timing of Company Response.  The Company shall respond
in writing to such claimant within sixty (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 sixty (60) days by notifying the claimant in writing,
prior to the end of the initial sixty (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.

 

9.2.5                     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:

 

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(a)                                 The specific reasons for the denial,

(b)                                 A reference to the specific provisions of
this 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

(d)                                 A statement of the claimant’s right to bring
a civil action under ERISA Section 502(a).

 

Article 10
Amendments and Termination

 

10.1                        Amendments.  The Company may amend this Agreement
unilaterally.  However, no amendment to the Agreement may be made by the Company
after a Change in Control Event, unless approved by the Executive.

 

10.2                        Plan Termination Generally.  The Company may
unilaterally terminate this Agreement at any time.  Except as provided in
Section 10.3, the termination of this Agreement shall not cause a distribution
of benefits under this Agreement.  Rather, upon such termination benefit
distributions will be made at the earliest distribution event permitted under
Article 4 or Article 5.

 

10.3                        Plan Terminations Under Section 409A. 
Notwithstanding anything to the contrary in Section 10.2, if this Agreement is
terminated in the following circumstances:

 

(a)                                 Within thirty (30) days before, or twelve
(12) months after the occurrence of a Change in Control Event, 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 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;

 

(b)                                 Upon the Company’s dissolution pursuant to
Section 331 of the Code or with the approval of a bankruptcy court pursuant to
11 U. S. C. Section 503(b)(l)(A) provided that the amounts deferred under the
Agreement are 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;
or

 

(c)                                  Upon the Company’s termination of this and
all other account balance plans (as referenced in Section 409A of the Code or
the regulations thereunder), provided that all distributions are made no earlier
than twelve (12) months and no later than twenty-four (24) months following such

 

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termination, and the Company does not adopt any new account balance plans for a
minimum of five (5) years following the date of such termination;

 

the Company may distribute the Incentive Award Account balance, determined as of
the date of the termination of the Agreement, to the Executive in a lump sum
subject to the above terms.

 

Article 11
Miscellaneous

 

11.1                        Binding Effect.  This Agreement shall bind the
Executive and the Company and their beneficiaries, survivors, executors,
administrators and transferees.

 

11.2                        No Guarantee of Employment.  This Agreement is not a
contract for employment.  It does not give the Executive the right to remain as
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.

 

11.3                        Non-Transferability.  Benefits under this Agreement
cannot be sold, transferred, assigned, pledged, attached or encumbered in any
manner.

 

11.4                        Tax Withholding and Reporting.  The Company shall
withhold any taxes that are required to be withheld, including but not limited
to taxes owed under Section 409A of the Code and regulations thereunder, from
the benefits provided under this Agreement.  Executive acknowledges that the
Company’s sole liability regarding taxes is to forward any amounts withheld to
the appropriate taxing authority.  Further, the Company shall satisfy all
applicable reporting requirements, including those under Section 409A of the
Code and regulations thereunder.

 

11.5                        Applicable Law.  This 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.

 

11.6                        Unfunded Arrangement.  The Executive and the
Beneficiary are general unsecured creditors of the Company for the distribution
of benefits under this Agreement.  The benefits represent the mere promise by
the Company to distribute such benefits.  The rights to benefits are not subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Executive’s creditors.  Insurance
on the Executive’s life which is used to pay benefits to the Executive in
accordance with the terms of this Agreement (as for example, the benefit
referred to in Section 5.1 above) or other informal funding asset is a general
asset of the Company to which the Executive and the Beneficiary have no
preferred or secured claim.

 

11.7                        Reorganization.  The Company shall not merge or
consolidate into or with another Company, or reorganize, or sell substantially
all of its assets to another bank, firm, or person unless such succeeding or
continuing bank, firm, or person agrees to assume and

 

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discharge the obligations of the Company under this Agreement.  Upon the
occurrence of such event, for purposes of payments due pursuant to this
Agreement the term “Company” as used in this Agreement shall be deemed to refer
to the successor or survivor Company.

 

11.8                        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.

 

11.9                        Interpretation.  Wherever the fulfillment of the
intent and purpose of this Agreement requires, and the context will permit, the
use of the masculine gender includes the feminine and use of the singular
includes the plural

 

11.10                 Alternative Action.  In the event it shall become
impossible for the Company or the Plan Administrator to perform any act required
by this Agreement, the Company or Plan Administrator may in its discretion
perform such alternative act as most nearly carries out the intent and purpose
of this Agreement and is in the best interests of the Company, provided that
such alternative acts do not violate Section 409A of the Code.

 

11.11                 Headings.  Article and section headings are for convenient
reference only and shall not control or affect the meaning or construction of
any of its provisions.

 

11.12                 Validity.  In case any provision of this Agreement shall
be illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Agreement shall be construed and
enforced as if such illegal and invalid provision has never been inserted
herein.

 

11.13                 Notice.  Any notice or filing required or permitted to be
given to the Plan Administrator under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, to the
address below:

 

STERLING BANK & TRUST

ONE TOWNE SQUARE

17TH FLOOR

SOUTHFIELD, MI 48076

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or the receipt for
registration or certification.  Any notice or filing required or permitted to be
given to the Executive under this Agreement shall be sufficient if in writing
and hand-delivered, or sent by mail, to the last known address of the Executive.

 

11.14                 Compliance with Section 409A.  This Agreement shall at all
times be administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and any and all
regulations thereunder, including such regulations as may be promulgated after
the Effective Date of this Agreement.

 

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11.15                 Arbitration.  Executive agrees that if Executive has any
dispute arising out of or in connection with any aspect of this Agreement, such
dispute shall be exclusively subject to final and binding arbitration, pursuant
to The Federal Arbitration Act, 9 U.S.C. § 1 et seq., and applicable state
statutes relating to arbitration, under the national rules for resolution of
employment disputes of the American Arbitration Association (“AAA”) or Judicial
Arbitration and Mediation Inc., (“JAMS”), provided that all substantive rights
and remedies (including any applicable damages provided under any pertinent
statute(s) relating to such claims), the right to representation by counsel, a
neutral arbitrator, a reasonable opportunity for discovery, a fair arbitral
hearing, a written arbitral award containing findings of fact and conclusions of
law, and any other provision required by law, shall be available in the AAA or
JAMS forum.  Any decision of the neutral arbitrator shall be final and binding
as to both parties and enforceable by any court of competent jurisdiction,
including the circuit courts of the State of Michigan.  Executive agrees that
submission of any such dispute to arbitration is a condition precedent to
invoking the jurisdiction of any court over the subject matter of Executive’s
dispute, except for any suit Executive may file in aid of arbitration.  Nothing
contained in this arbitration provision shall prohibit Executive from filing any
claims or charges with an appropriate governmental agency.  Executive
understands that this Agreement constitutes a waiver of Executive’s right, if
any, to adjudicate claims against the Company in a judicial forum.

 

IN WITNESS WHEREOF, the Executive and an authorized representative of the
Company have signed this Agreement as of May 8, 2007.

 

EXECUTIVE:

 

COMPANY:

 

 

 

 

 

Sterling Bank & Trust, Fsb

 

 

 

 

/s/ Michael Montemayor

 

By:

/s/ Tom Lopp

Steve Huber

 

Title:

COO

 

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