Exhibit 10.7
The Middlefield Banking Company
Amended Director Retirement Agreement
     This Amended Director Retirement Agreement (this “Agreement”) is entered
into as of                     , 200                     by and between The
Middlefield Banking Company, an Ohio-chartered bank (the “Bank”), and Frances H.
Frank, a director of the Bank (the “Director”).
     Whereas, to encourage the Director to remain a member of the Bank’s board
of directors, the Bank entered into a Director Retirement Agreement dated as of
December 1, 2001 with the Director,
     Whereas, the Bank and the Director desire to amend the December 1, 2001
Director Retirement Agreement to ensure that the agreement complies in form and
in operation with Internal Revenue Code section 409A,
     Whereas, the Bank and the Director intend that this Agreement shall amend
and restate in its entirety the December 1, 2001 Director Retirement Agreement,
     Whereas, none of the conditions or events included in the definition of the
term “golden parachute payment” that is set forth in section 18(k)(4)(A)(ii) of
the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal
Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)]
exists or, to the best knowledge of the Bank, is contemplated insofar as the
Bank is concerned, and
     Whereas, the parties hereto intend that this Agreement shall be considered
an unfunded arrangement maintained primarily to provide supplemental retirement
benefits for the Director, and to be considered a non-qualified benefit plan for
purposes of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Director is fully advised of the Bank’s financial status.
     Now Therefore, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Director and the Bank hereby agree as follows.
Article 1
Definitions
     1.1 “Accrual Balance” means the liability that should be accrued by the
Bank under generally accepted accounting principles (“GAAP”) to account for the
Bank’s obligation to the Director under this Agreement, applying Accounting
Principles Board Opinion No. 12, as amended by Statement of Financial Accounting
Standards No. 106, and the calculation method and discount rate specified
hereinafter. The Accrual Balance shall be calculated such that when it is
credited with interest each month the Accrual Balance at Normal Retirement Age
equals the present value of the normal retirement benefit. The discount rate
means the rate used by the Plan Administrator for determining the Accrual
Balance. In its sole discretion the Plan Administrator may adjust the discount
rate to maintain the rate within reasonable standards according to GAAP.
     1.2 “Beneficiary” means each designated person, or the estate of the
deceased Executive, entitled to benefits, if any, upon the death of the
Director, determined according to Article 4.
     1.3 “Beneficiary Designation Form” means the form established from time to
time by the Plan Administrator that the Director completes, signs, and returns
to the Plan Administrator to designate one or more Beneficiaries.

 

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     1.4 “Change in Control” shall mean a change in control as defined in
Internal Revenue Code section 409A and rules, regulations, and guidance of
general application thereunder issued by the Department of the Treasury,
including –
     (a) Change in ownership: a change in ownership of Middlefield Banc Corp.,
an Ohio corporation of which the Bank is a wholly owned subsidiary, occurs on
the date any one person or group accumulates ownership of Middlefield Banc Corp.
stock constituting more than 50% of the total fair market value or total voting
power of Middlefield Banc Corp. stock,
     (b) Change in effective control: (x) any one person or more than one person
acting as a group acquires within a 12-month period ownership of Middlefield
Banc Corp. stock possessing 30% or more of the total voting power of Middlefield
Banc Corp., or (y) a majority of Middlefield Banc Corp.’s board of directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed in advance by a majority of Middlefield Banc Corp.’s board of
directors, or
     (c) Change in ownership of a substantial portion of assets: a change in
ownership of a substantial portion of Middlefield Banc Corp.’s assets occurs if
in a 12-month period any one person or more than one person acting as a group
acquires from Middlefield Banc Corp. assets having a total gross fair market
value equal to or exceeding 40% of the total gross fair market value of all of
Middlefield Banc Corp.’s assets immediately before the acquisition or
acquisitions. For this purpose, gross fair market value means the value of
Middlefield Banc Corp.’s assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the assets.
     1.5 “Code” means the Internal Revenue Code of 1986, as amended, and rules,
regulations, and guidance of general application issued thereunder by the
Department of the Treasury.
     1.6 “Disability” means, if the Director is covered by a Bank-sponsored
disability policy, total disability as defined in the policy, without regard to
any waiting period. If the Director is not covered by Bank-sponsored disability
policy, Disability means the Director suffers a sickness, accident, or injury
that, in the judgment of a physician satisfactory to the Bank, prevents the
Director from performing substantially all of the Director’s normal duties for
the Bank. As a condition to receiving any Disability benefits, the Bank may
require the Director to submit to such physical or mental evaluations and tests
as the Bank’s board of directors deems appropriate.
     1.7 “Early Termination” means Separation from Service before Normal
Retirement Age for reasons other than death, Disability, or Termination with
Cause.
     1.8 “Effective Date” means December 1, 2001.
     1.9 “Normal Retirement Age” means the Director’s 75th birthday.
     1.10 “Person” means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, or other entity.
     1.11 “Plan Administrator” or “Administrator” means the plan administrator
described in Article 7.
     1.12 “Plan Year” means each 12-month period from December 1 through
November 30.
     1.13 “Separation from Service” means the Director’s service as a director
and independent contractor to the Bank and any member of a controlled group, as
defined in Code section 414, terminates for

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any reason, other than because of a leave of absence approved by the Bank and
other than because of the Director’s death. If there is a dispute about the
Director’s status or the date of the Director’s Separation from Service, the
Bank shall have the sole and absolute right to decide the dispute unless a
Change in Control shall have occurred.
     1.14 “Termination with Cause” or “Cause” means the Director is not
nominated by the board or nominating committee for reelection as a director
after the expiration of the Director’s term, or the Director is removed from the
board of directors, in either case because of the Director’s –
     (a) gross negligence or gross neglect of duties, or
     (b) commission of a felony or commission of a misdemeanor involving moral
turpitude, or
     (c) fraud, disloyalty, dishonesty, or willful violation of any law or
significant policy of the Bank committed in connection with the Director’s
service and resulting in an adverse effect on the Bank, or
     (d) removal from service or permanent prohibition from participating in the
Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act [12 U.S.C. 1818(e)(4) or (g)(1)].
Article 2
Lifetime Benefits
     2.1 Normal Retirement. Unless Separation from Service or a Change in
Control occurs before Normal Retirement Age, when the Director attains Normal
Retirement Age the Bank shall pay to the Director the benefit described in this
section 2.1 instead of any other benefit under this Agreement. If the Director’s
Separation from Service thereafter is a Termination with Cause or if this
Agreement terminates under Article 5, no further benefits shall be paid to the
Director under this Agreement.
     2.1.1 Amount of benefit. The annual benefit under this section 2.1 is an
amount in cash equal to 25% of the final average annual board fees paid to the
Director by the Bank in the three years preceding the year in which the Director
attains Normal Retirement Age. For this purpose board fees include retainers and
other regular fees paid or payable in cash for the Director’s service on or
attendance at meetings of the board of directors of the Bank and committees of
the board of directors, including board fees that may be deferred under any plan
for elective deferrals that may be adopted by the Bank in the future. If the
Director is serving as Chairman of the Board at Normal Retirement Age, board
fees shall also include any additional cash compensation paid or payable for
service as Chairman of the Board. Board fees shall not include the value of
non-cash compensation, the value of life insurance benefits or other fringe
benefits, or expense reimbursement.
     2.1.2 Payment of benefit. Beginning with the month immediately after the
month in which the Director attains Normal Retirement Age, the Bank shall pay
the annual benefit to the Director in equal monthly installments on the first
day of each month. The annual benefit shall be paid to the Director for ten
years.
     2.2 Early Termination. Provided the Director has attained age 55 and has
served as a director for at least five years (including each year of board
service before the Effective Date) before Separation from Service occurs, for
Early Termination the Bank shall pay to the Director the benefit specified in
this section 2.2 instead of any other benefit under this Agreement, unless the
Director shall have received the benefit under section 2.4 after a Change in
Control. If the Director’s Separation from Service is a Termination with Cause
or

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if this Agreement terminates under Article 5, no benefits shall be paid to the
Director under this Agreement. In addition, the Director shall be entitled to no
benefits under this section 2.2 if Early Termination occurs before the Director
shall have attained age 55 and served as a director for at least five years
(including each year of board service before the Effective Date).
     2.2.1 Amount of benefit. The annual benefit under this section 2.2 is
calculated as the amount that fully amortizes the Accrual Balance existing at
the end of the month immediately before the month in which Separation from
Service occurs, amortizing that Accrual Balance over ten years and taking into
account interest at the discount rate or rates established by the Plan
Administrator.
     2.2.2 Payment of benefit. Beginning with the month immediately after the
month in which the Director attains Normal Retirement Age, the Bank shall pay
the annual benefit to the Director in equal monthly installments on the first
day of each month. The annual benefit shall be paid to the Director for ten
years.
     2.3 Disability. Unless the Director shall have received the benefit under
section 2.4 after a Change in Control, if the Director’s Separation from Service
occurs because of Disability before Normal Retirement Age the Bank shall pay to
the Director the benefit described in this section 2.3 instead of any other
benefit under this Agreement, regardless of whether the Director has accrued
five years of service or has attained age 55.
     2.3.1 Amount of benefit. The annual benefit under this section 2.3 is
calculated as the amount that fully amortizes the Accrual Balance existing at
the end of the month immediately before the month in which Separation from
Service occurs, amortizing that Accrual Balance over ten years and taking into
account interest at the discount rate or rates established by the Plan
Administrator.
     2.3.2 Payment of benefit. Beginning with the month immediately after the
month in which the Director attains Normal Retirement Age, the Bank shall pay
the annual benefit to the Director in equal monthly installments on the first
day of each month. The annual benefit shall be paid to the Director for ten
years.
     2.4 Change in Control. If a Change in Control occurs both before the
Director’s Normal Retirement Age and before the Director’s Separation from
Service, the Bank shall pay to the Director the benefit described in this
section 2.4 instead of any other benefit under this Agreement, regardless of
whether the Director has accrued five years of service or has attained age 55.
     2.4.1 Amount of benefit. The benefit under this section 2.4 is the Accrual
Balance at the end of the month immediately before the month in which the Change
in Control occurs.
     2.4.2 Payment of benefit. The Bank shall pay the benefit under this section
2.4 to the Director in a single lump sum within three days after the Change in
Control.
     2.5 Payout of Normal Retirement Benefit after a Change in Control. If a
Change in Control occurs while the Director is receiving the benefit provided by
section 2.1, the Bank shall pay the remaining benefits to the Director in a
single lump sum within three days after the Change in Control. If when a Change
in Control occurs the Director is receiving or is entitled at Normal Retirement
Age to receive the benefit under sections 2.2 or 2.3, the Bank shall pay the
remaining benefits to the Director in a single lump sum within three days after
the Change in Control. The lump-sum payment due to the Director as the result of
a Change in Control shall be an amount equal to the Accrual Balance amount
corresponding to the particular benefit when the Change in Control occurs.

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     2.6 Medical Benefits. Provided health insurance coverage can be obtained by
the Bank on terms it, in its sole judgment, considers commercially reasonable,
the Bank shall obtain and maintain health insurance coverage for the Director
after Separation from Service for the lifetime of the Director and the
Director’s surviving spouse.
     2.7 Annual Benefit Statement. Within 120 days after the end of each Plan
Year the Plan Administrator shall provide or cause to be provided to the
Director an annual benefit statement showing benefits payable or potentially
payable to the Director under this Agreement. Each annual benefit statement
shall supersede the previous year’s annual benefit statement. If there is a
contradiction between this Agreement and the annual benefit statement concerning
the amount of a particular benefit payable or potentially payable to the
Director, the amount of the benefit determined under this Agreement shall
control.
     2.8 One Benefit Only. Despite any contrary provision of this Agreement, the
Director is entitled to one benefit only under Article 2 of this Agreement,
which shall be determined by the first event to occur that is dealt with by
Article 2 of this Agreement. Except as provided in section 2.5, subsequent
occurrence of events dealt with by this Agreement shall not entitle the Director
to other or additional benefits under this Agreement.
Article 3
Death Benefit
     Unless this Agreement terminates under Article 5, at the Director’s death
the Bank shall pay to the Director’s Beneficiary in a single lump sum the
Accrual Balance remaining, if any, on the date of the Director’s death, unless
the Director shall have received the Change-in-Control benefit under section 2.4
or unless a Change-in-Control payout shall have occurred under section 2.5. The
Accrual Balance shall be paid to the Beneficiary 30 days after the Bank receives
notice of the Director’s death.
Article 4
Beneficiaries
     4.1 Beneficiary Designations. The Director shall have the right to
designate at any time a Beneficiary to receive any benefits payable under this
Agreement after the Director’s death. The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designation under
any other benefit plan of the Bank in which the Director participates.
     4.2 Beneficiary Designation: Change. The Director shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form and
delivering it to the Plan Administrator or its designated agent. The Director’s
Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Director or if the Executive names a spouse as Beneficiary and
the marriage is subsequently dissolved. The Director 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 before the Director’s death.
     4.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received, accepted, and acknowledged in
writing by the Plan Administrator or its designated agent.

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     4.4 No Beneficiary Designation. If the Director dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Director, the Director’s spouse shall be the designated Beneficiary. If the
Director has no surviving spouse, the benefits shall be paid to the Director’s
estate.
     4.5 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Bank may pay the benefit to the guardian, legal
representative, or person having the care or custody of the minor, incapacitated
person, or incapable person. The Bank may require proof of incapacity, minority,
or guardianship as it may deem appropriate before distribution of the benefit.
Distribution shall completely discharge the Bank from all liability for the
benefit.
Article 5
Agreement Termination
     5.1 Director Termination. Despite any contrary provision of this Agreement,
the Bank shall not pay any benefit under this Agreement and this Agreement shall
terminate if Separation from Service is a Termination with Cause or if
Separation from Service is an Early Termination occurring before the Director
has attained age 55 and served as a director for at least five years (including
each year of board service before the Effective Date). The board of directors or
a duly authorized committee of the board shall have the sole and absolute right
to determine whether the bases for denial of benefits for Cause exist. Benefits
may be denied for Cause regardless of whether the Director continued to serve as
a director after the board or committee made its determination not to nominate
the Director for reelection.
     5.2 Removal. If the Director is removed or permanently prohibited from
participating in the Bank’s affairs by an order issued under section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order.
     5.3 Default. Despite any contrary provision of this Agreement, if the Bank
is in “default” or “in danger of default,” as those terms are defined in section
3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations
under this Agreement shall terminate.
     5.4 FDIC Open-Bank Assistance. All obligations under this Agreement shall
terminate, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Bank, when the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in section 13(c) of the Federal
Deposit Insurance Act. 12 U.S.C. 1823(c). Any rights of the parties that have
already vested shall not be affected by such action, however.
Article 6
Claims and Review Procedures
     6.1 Claims Procedure. The Bank shall notify in writing any person or entity
making a claim for benefits under this Agreement (the “Claimant”) of his or her
eligibility or ineligibility for benefits under the Agreement. The Bank shall
send the written notice to the Claimant within 90 days after Claimant’s written
application for benefits. If the Bank determines that the Claimant is not
eligible for benefits or full benefits, the notice shall state (w) the specific
reasons for denial, (x) a specific reference to the provisions of the Agreement
on which the denial is based, (y) a description of any additional information or
material necessary for the Claimant to perfect his or her claim and a
description of why it is needed, and (z) an explanation of the Agreement’s
claims review procedure and other appropriate information concerning the steps
to be taken if the Claimant wishes to have the claim reviewed. If the Bank
determines that there are special circumstances

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requiring additional time to make a decision, the Bank shall notify the Claimant
of the special circumstances and the date by which a decision is expected to be
made, and the Bank may extend the time for up to an additional 90 days.
     6.2 Review Procedure. If the Bank determines that the Claimant is not
eligible for benefits or if the Claimant believes that he or she is entitled to
greater or different benefits, the Claimant shall have the opportunity to have
the claim reviewed by the Bank by filing a petition for review with the Bank
within 60 days after receipt of the notice issued by the Bank. The petition
shall state the specific reasons the Claimant believes entitle him or her to
benefits or to greater or different benefits. Within 60 days after receipt by
the Bank of the petition, the Bank shall give the Claimant (and counsel, if any)
an opportunity to present his or her position to the Bank verbally or in
writing, and the Claimant (or counsel) shall have the right to review the
pertinent documents. The Bank shall notify the Claimant of the Bank’s decision
in writing within the 60-day period, stating specifically the basis of its
decision and identifying the specific provision(s) of the Agreement on which the
decision is based. If because of the need for a hearing the 60-day period is not
sufficient, the decision may be deferred for up to another 60 days at the
election of the Bank, but notice of this deferral shall be given to the
Claimant.
Article 7
Plan Administration
     7.1 Plan Administrator Duties. This Agreement shall be administered by a
Plan Administrator consisting of the board or such committee or persons as the
board shall appoint. The Director may be a member of the Plan Administrator. The
Plan Administrator shall have the discretion and authority to (x) make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of this Agreement and (y) decide or resolve any and all questions
that may arise, including interpretations of this Agreement.
     7.2 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 through a duly appointed representative) and may from time to
time consult with counsel, who may be counsel to the Bank.
     7.3 Binding Effect of Decisions. The decision or action of the Plan
Administrator concerning any question arising out of 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. No Director shall be deemed to have any
right, vested or nonvested, regarding the continuing effect of any decision or
action of the Plan Administrator.
     7.4 Indemnity of Plan Administrator. The Bank 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.
     7.5 Bank Information. To enable the Plan Administrator to perform its
functions, the Bank shall supply full and timely information to the Plan
Administrator on all matters relating to the date and circumstances of the
retirement, Disability, death, or Separation from Service of the Director, and
such other pertinent information as the Plan Administrator may reasonably
require.

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Article 8
Miscellaneous
     8.1 Amendment. This Agreement may be amended solely by a written agreement
signed by the Bank and the Director, except that the Bank specifically reserves
the right to amend this Agreement as necessary to comply with Code section 409A.
     8.2 Termination. This Agreement shall terminate as provided in Article 5.
In addition, the Bank reserves the right to terminate this Agreement at any time
if, because of legislative, judicial or regulatory action, continuation of the
Agreement would (x) cause benefits to be taxable to the Director before actual
receipt or (y) in the Bank’s judgment, result in significant financial penalties
or other significantly detrimental consequences for the Bank (other than the
financial impact of paying benefits).
     8.3 Binding Effect. This Agreement shall bind the Director and the Bank and
their beneficiaries, successors, assigns, survivors, executors, administrators,
and transferees.
     8.4 No Guarantee of Service. This Agreement is not a contract for services.
This Agreement does not give the Director the right to remain a director of the
Bank or interfere with the Bank stockholder’s right to replace the Director.
This Agreement also does not require the Director to remain a director or
interfere with the Director’s right to terminate service at any time.
     8.5 Non-Transferability. Benefits under this Agreement may not be sold,
transferred, assigned, pledged, attached, or encumbered.
     8.6 Taxes. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Agreement.
     8.7 Successors; Binding Agreement. By an assumption agreement in form and
substance satisfactory to the Director, the Bank shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Bank or Middlefield
Banc Corp. to expressly assume and agree to perform this Agreement in the same
manner and to the same extent the Bank would be required to perform this
Agreement had no succession occurred.
     8.8 Applicable Law. The Agreement and all rights hereunder shall be
governed by the internal substantive laws of the State of Ohio, without regard
to principles of conflict of laws.
     8.9 Unfunded Arrangement. The Director is a general unsecured creditor of
the Bank for the payment of benefits under this Agreement. The benefits
represent the mere promise by the Bank to pay benefits. The rights to benefits
are not subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors. Any insurance on the
Director’s life is a general asset of the Bank to which the Director has no
preferred or secured claim.
     8.10 Severability. If any provision of this Agreement is held invalid, such
invalidity shall not affect any other provision of this Agreement not held
invalid, and each such other provision shall continue in full force and effect
to the full extent consistent with the law. If any provision of this Agreement
is held invalid in part, such invalidity shall not affect the remainder of the
provision not held invalid, and the remainder of the provision together with all
other provisions of this Agreement shall continue in full force and effect to
the full extent consistent with the law.

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     8.11 Captions and Counterparts. Section headings and subheadings are
included solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute a single agreement.
     8.12 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Director concerning the subject matter. No rights are
granted to the Director other than those specifically set forth. This Agreement
amends and restates in its entirety the December 1, 2001 Director Retirement
Agreement between the Bank and the Director, as the same may have been amended
or restated.
     8.13 Waiver. A waiver by either party of any of the terms or conditions of
this Agreement in any one instance shall not be considered a waiver of the terms
or conditions for the future, or of any subsequent breach thereof. All remedies,
rights, undertakings, obligations, and agreements contained in this Agreement
shall be cumulative and none of them shall be in limitation of any other remedy,
right, undertaking, obligation, or agreement of either party.
     8.14 Notices. Any notice under this Agreement shall be deemed to have been
effectively made or given if in writing and personally delivered, delivered by
mail properly addressed in a sealed envelope, postage prepaid by certified or
registered mail, delivered by a reputable overnight delivery service, or sent by
facsimile. Unless otherwise changed by notice, notice shall be properly
addressed to the Director if addressed to the address of the Director on the
books and records of the Bank at the time of the delivery of the notice, and
properly addressed to the Bank if addressed to the board of directors, The
Middlefield Banking Company, 15985 East High Street, Middlefield, Ohio,
44062-0035 Attention: Corporate Secretary.
     8.15 Internal Revenue Code Section 409A. The Bank and the Director intend
that their exercise of authority or discretion under this Agreement shall comply
with Code section 409A. If when the Director’s service terminates the Director
is a specified employee, as defined in Code section 409A, or if any payments or
benefits under this Agreement will result in additional tax or interest to the
Director because of section 409A(a)(1), then despite any provision of this
Agreement to the contrary the Director shall not be entitled to the payments or
benefits until the earliest of (x) the date that is at least six months after
termination of the Director’s service for reasons other than the Director’s
death, (y) the date of the Director’s death, or (z) any earlier date that does
not result in additional tax or interest to the Director under section 409A. As
promptly as possible after the end of the period during which payments or
benefits are delayed under this provision, the entire amount of the delayed
payments shall be paid to the Director in a single lump sum. If any provision of
this Agreement does not satisfy the requirements of section 409A, the provision
shall nevertheless be applied in a manner consistent with those requirements,
despite any contrary provision of this Agreement. If any provision of this
Agreement would subject the Director to additional tax or interest under section
409A, the Bank shall reform the provision. However, the Bank shall maintain to
the maximum extent practicable the original intent of the applicable provision
without subjecting the Director to additional tax or interest, and the Bank
shall not be required to incur any additional compensation expense as a result
of the reformed provision.
     In Witness Whereof, the Director and a duly authorized officer of the Bank
have executed this Amended Director Retirement Agreement as of the date first
written above.

                  Director       The Middlefield Banking Company    
 
               
 
Frances H. Frank
      By:        
 
                 
 
      Its:        
 
               

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The Middlefield Banking Company
Amended Director Retirement Agreement
Director Fee Analysis

                                                  Year   Coyne   Frank  
Halstead   Hasman   Hunter   Villers
1998    
  13,800   13,700   13,900   13,900   14,200   14,600
1999    
  13,650   14,150   14,050   14,750   16,250   13,650
2000    
  13,300   13,300   13,400   13,600   13,300   12,900
2001    
  13,600   14,000   13,800   14,200   13,200   13,100
2002    
  14,280   14,700   14,490   14,910   13,860   13,755
2003    
  15,100   15,200   15,700   15,500   15,300   15,000
2004    
  16,200   16,700   16,000   17,100   16,100   16,800
2005 *     
  17,600   17,750   17,250   18,700   17,800   18,500

                                               
2006    
  18,480   18,638   18,113       18,690   19,425
2007    
  19,404   19,569   19,018           20,396
2008    
  20,374   20,548               21,416
2009    
  21,393   21,575                
2010    
  22,463   22,654                
2011    
  23,586   23,787                
2012    
      24,976                
2013    
      26,225                
2014    
      27,536                
2015    
      28,913                
2016    
      30,359                
2017    
      31,876                
2018    
      33,470                
2019    
      35,144                
2020    
      36,901                
2021    
      38,746                
2022    
      40,683                  
Retire Date
  May 1, 2012   May 1, 2023   May 1, 2008   May 1, 2006   May 1, 2007   May 1,
2009  
Final 3 Year Average:
    22,480       38,777       18,127       17,100       17,530       20,412    
25% of Average:
                                               

 

*   actual fees for all Plan Years through December 31, 2005

10

--------------------------------------------------------------------------------

 

Beneficiary Designation
The Middlefield Banking Company
Amended Director Retirement Agreement
     I, Frances H. Frank, designate the following as beneficiary of any death
benefits under this Amended Director Retirement Agreement:

             
Primary:
                   
 
           
 
                 
 
            Contingent:            
 
 
   
 
                 

Note:   To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.

     I understand that I may change these beneficiary designations by filing a
new written designation with the Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me or
if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.

             
Signature:
           
 
       
 
  Frances H. Frank    
 
           
Date:
                                                                  
                , 200                         
 
                Received by the Bank this                     day of
                                        , 200                         
 
           
 
  By:        
 
     
 
   
 
  Title: