Exhibit 10.24
The Middlefield Banking Company
Amended Executive Deferred Compensation Agreement
     This Amended Executive Deferred Compensation Agreement (this “Agreement”)
is entered into as of this 8th day of May, 2008, by and between The Middlefield
Banking Company, an Ohio-chartered bank (the “Bank”), and James R. Heslop II,
Executive Vice President and Chief Operating Officer of the Bank (the
“Executive”).
     Whereas, to encourage the Executive to remain an employee of the Bank, the
Bank and the Executive entered into an Executive Deferred Compensation Agreement
dated as of December 28, 2006, with contributions made solely by the Bank and
benefits payable out of the Bank’s general assets,
     Whereas, the Bank and the Executive desire to amend the December 28, 2006
Executive Deferred Compensation Agreement to ensure that the agreement complies
in form and in operation with Internal Revenue Code section 409A,
     Whereas, the Bank and the Executive intend that this Agreement shall amend
and restate in its entirety the December 28, 2006 Executive Deferred
Compensation 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 and noncontributory arrangement maintained primarily to provide
supplemental retirement benefits for the Executive, and to be considered a
non-qualified benefit plan for purposes of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). The Executive 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 Executive and the Bank hereby agree as follows.
Article 1
Definitions
     1.1 “Account Balance” means the Bank’s accounting of Annual Contributions
made by the Bank, plus accrued interest.
     1.2 “Annual Contribution” means the amount credited to the Account Balance
after the end of each Plan Year for which the Performance Goals are achieved.
For the first Plan Year, the Executive shall receive an Annual Contribution
amount equal to 5% of the Executive’s Base Annual Salary. For every Plan Year
after the first Plan Year, the Annual Contribution will

 

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be conditional on achievement of the Performance Goals. The Annual Contribution
amount in any Plan Year shall not be less than 5% or more than 15% of the
Executive’s Base Annual Salary. In its discretion, the Bank’s board of directors
may increase or decrease the amount of the Annual Contribution, but the Annual
Contribution amount shall be changed no more frequently than annually.
     1.3 “Base Annual Salary” means compensation of the type required to be
reported as salary according to Securities and Exchange Commission
Rule 229.402(c) (17 CFR 229.402(c)), specifically column (c) of that rule’s
Summary Compensation Table (or any successor provision).
     1.4 “Beneficiary” means each designated person, or the estate of the
deceased Executive, entitled to benefits, if any, upon the death of the
Executive, determined according to Article 5.
     1.5 “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.
     1.6 “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.

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     1.7 “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.
     1.8 “Effective Date” means January 1, 2006.
     1.9 “Normal Retirement Age” means the Executive’s 65th birthday.
     1.10 “Performance Goals” means the performance criteria set forth in
Schedule A attached to this Agreement and incorporated herein by this reference,
which criteria have been established by the Bank’s board of directors. The
Performance Goals may be changed by the board of directors no more frequently
than annually. If the performance criteria are changed, a new Schedule A shall
be substituted for and shall supersede the old Schedule A, and the new
Schedule A shall be deemed to be incorporated by reference herein and to be a
part of this Agreement. A change in Performance Goals shall not become effective
for the Plan Year in which the change is made unless the change is made on or
before March 31 of the Plan Year. The Plan Administrator shall have sole
authority to determine whether the Performance Goals have been achieved for any
Plan Year. The Plan Administrator’s determination that the Performance Goals for
a Plan Year have or have not been achieved shall be conclusive and binding.
     1.11 “Plan Administrator” or “Administrator” means the plan administrator
described in Article 8.
     1.12 “Plan Year” means the calendar year. The first Plan Year shall begin
on the Effective Date and end on December 31, 2006.
     1.13 “Separation from Service” means the Executive’s service as an
executive or independent contractor to the Bank and any member of a controlled
group, as defined in Code section 414, terminates for any reason, other than
because of a leave of absence approved by the Bank or the Executive’s death. If
there is a dispute about the Executive’s status or the date of the Executive’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” and “Cause” shall have the same definition
specified in any effective severance or employment agreement existing on the
date hereof or hereafter entered into between the Executive and the Bank or
between the Executive and Middlefield Banc Corp. If the Executive is not a party
to a severance or employment agreement containing a definition, Termination with
Cause means the Bank terminates the Executive’s employment because of —
     (a) the Executive’s gross negligence or gross neglect of duties or
intentional and material failure to perform stated duties after written notice
thereof, or

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     (b) disloyalty or dishonesty by the Executive in the performance of duties
or breach of the Executive’s fiduciary duties for personal profit, in any case
whether in the Executive’s capacity as a director or officer, or
     (c) intentional wrongful damage by the Executive to the business or
property of the Bank or its affiliates, including without limitation the
reputation of the Bank, which in the judgement of the Bank causes material harm
to the Bank or affiliates, or
     (d) a willful violation by the Executive of any applicable law or
significant policy of the Bank or an affiliate that, in the Bank’s judgement,
results in an adverse effect on the Bank or the affiliate, regardless of whether
the violation leads to criminal prosecution or conviction. For purposes of this
Agreement applicable laws include any statute, rule, regulatory order, statement
of policy, or final cease-and-desist order of any governmental agency or body
having regulatory authority over the Bank, or
     (e) the occurrence of any event that results in the Executive being
excluded from coverage, or having coverage limited for the Executive as compared
to other executives of the Bank, under the Bank’s blanket bond or other fidelity
or insurance policy covering its directors, officers, or employees, or
     (f) the Executive is removed from office or permanently prohibited from
participating in the Bank’s affairs by an order issued under section 8(e)(4) or
section 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or
(g)(1), or
     (g) conviction of the Executive for or plea of no contest to a felony or
conviction of or plea of no contest to a misdemeanor involving moral turpitude,
or the actual incarceration of the Executive for 45 consecutive days or more.
Article 2
Deferral Account
     2.1 Annual Contribution. The Bank shall establish an Account Balance on its
books. Within three months after the end of each Plan Year the Bank shall credit
the Annual Contribution to the Account Balance provided the Performance Goals
were achieved for the Plan Year. Contributions to the Account Balance by the
Executive are prohibited. Discretionary contributions by the Bank are likewise
prohibited. The Annual Contribution shall not be made by the Bank for the Plan
Year in which the Executive attains Normal Retirement Age or for any year
thereafter. However, if the Performance Goals are achieved for the Plan Year in
which the Executive attains Normal Retirement Age (and if Separation from
Service does not occur before Normal Retirement Age), the Bank shall make a
final contribution in an amount equal to the Annual Contribution multiplied by a
percentage. The percentage shall equal the number of days in the Plan Year
before the Executive attained Normal Retirement Age divided by 365. No Annual
Contributions shall be made by the Bank for the Plan Year in which the
Executive’s death or Separation from Service occurs or for any year thereafter
(except for a final contribution for the year in which the Executive attains
Normal Retirement Age, unless Separation from Service occurs before Normal
Retirement Age).

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     2.2 Interest. At the end of each Plan Year and until the first to occur of
(x) Normal Retirement Age, (y) the Executive’s death, or (z) the Executive’s
Separation from Service, interest is to be credited on the Account Balance at an
annual rate of interest for that Plan Year, compounded monthly on the first day
of the month, equal to the prime interest rate as published in The Wall Street
Journal (the “Index”). After the first to occur of (x) Normal Retirement Age,
(y) the Executive’s death, or (z) the Executive’s Separation from Service,
interest shall be credited on the Account Balance at an annual rate equal to the
yield on a 20-year corporate bond rated Aa by Moody’s, rounded to the nearest
1/4%.
     2.3 Statement of Account. Within 120 days after the end of each Plan Year,
the Bank shall provide to the Executive a statement of the Account Balance at
the end of the Plan Year. Each annual statement of the Account Balance shall
supersede the previous year’s statement of the Account Balance.
     2.4 Accounting Device Only. The Account Balance is solely a device for
measuring amounts to be paid under this Agreement. The Account Balance is not a
trust fund of any kind. The Executive is a general unsecured creditor of the
Bank for the payment of benefits. The benefits represent the mere promise by the
Bank to pay benefits. The Executive’s rights are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by the Executive’s creditors.
Article 3
Benefits During Lifetime
     3.1 Normal Retirement Age. Unless Separation from Service or a Change in
Control occurs before Normal Retirement Age, when the Executive attains Normal
Retirement Age the Bank shall pay to the Executive the Account Balance as of the
end of the month in which the Executive attains Normal Retirement Age, instead
of any other benefit under this Agreement. Beginning on the first day of the
month after the month in which the Executive attains Normal Retirement Age, the
Account Balance shall be paid to the Executive in 180 substantially equal
monthly installments. The Bank shall credit interest according to the formula of
section 2.2, compounded monthly, until the Account Balance is paid in full. If
the Executive’s Separation from Service is a Termination with Cause, no further
benefits shall be paid under this Agreement and this Agreement shall terminate.
     3.2 Separation from Service. If Separation from Service occurs before
Normal Retirement Age for reasons other than death, instead of any other benefit
under this Agreement the Bank shall pay to the Executive the Account Balance as
of the end of the month immediately before the month in which payments commence,
unless the Change-in-Control benefit shall have been paid under section 3.3.
Beginning on the first day of the later of (x) the seventh month after the month
in which Separation from Service occurs or (y) the month after the month in
which the Executive attains Normal Retirement Age, the Bank shall pay the
Account Balance in 180 substantially equal monthly installments. The Bank shall
credit interest according to the formula of section 2.2, compounded monthly,
until the Account Balance is paid in full.

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     3.3 Change in Control. If a Change in Control occurs both before the
Executive attains Normal Retirement Age and before the Executive’s Separation
from Service, instead of any other benefit payable under this Agreement the Bank
shall pay to the Executive the entire Account Balance in a single lump sum
within three days after the Change in Control. Payment of the Change-in-Control
benefit shall fully discharge the Bank from all obligations under this
Agreement, except the legal fee reimbursement obligation under section 9.11.
     3.4 Payout of Normal Retirement Benefit or Separation from Service Benefit
after a Change in Control. If when a Change in Control occurs the Executive is
receiving the benefit under section 3.1, the Bank shall pay the remaining
benefits to the Executive in a single lump sum within three business days after
the Change in Control. If when a Change in Control occurs the Executive is
receiving or is entitled at Normal Retirement Age to receive the benefit under
section 3.2, the Bank shall pay the remaining benefits to the Executive in a
single lump sum within three business days after the later of (x) the date of
the Change in Control or (y) the first day of the seventh month after the month
in which the Executive’s Separation from Service occurs. The lump-sum payment
due to the Executive as a result of a Change in Control shall be an amount equal
to the Account Balance remaining unpaid.
     3.5 One Benefit Only. Despite anything to the contrary in this Agreement,
the Executive and Beneficiary are entitled to one benefit only under this
Agreement, which shall be determined by the first event to occur that is dealt
with by this Agreement. Except as provided in section 3.4, later occurrence of
events dealt with by this Agreement shall not entitle the Executive or
Beneficiary to other or additional benefits under this Agreement.
     3.6 Savings Clause Relating to Compliance with Code Section 409A. Despite
any contrary provision of this Agreement, if when the Executive’s employment
terminates the Executive is a specified employee, as defined in Code section
409A, and if any payments under Article 3 of this Agreement will result in
additional tax or interest to the Executive because of section 409A, the
Executive shall not be entitled to the payments under Article 3 until the
earliest of (x) the date that is at least six months after termination of the
Executive’s employment for reasons other than the Executive’s death, (y) the
date of the Executive’s death, or (z) any earlier date that does not result in
additional tax or interest to the Executive under section 409A. If any provision
of this Agreement would subject the Executive 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 Executive 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.
Article 4
Death Benefits
     After the Executive’s death, the Bank shall pay to the Executive’s
Beneficiary the Account Balance as of the date of the Executive’s death. The
Account Balance shall be paid to the Executive’s Beneficiary in a single lump
sum 90 days after the date of the Executive’s death. However, if the Executive
dies after termination of this Agreement under Article 6, the Executive’s
Beneficiary shall be entitled to no benefits under this Agreement.

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Article 5
Beneficiaries
     5.1 Beneficiary Designations. The Executive shall have the right to
designate at any time a Beneficiary to receive any benefits payable under this
Agreement after the Executive’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 Executive participates.
     5.2 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 before the Executive’s death.
     5.3 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.
     5.4 No Beneficiary Designation. If the Executive dies without a valid
beneficiary designation or if all designated Beneficiaries predecease the
Executive, the Executive’s spouse shall be the designated Beneficiary. If the
Executive has no surviving spouse, the benefits shall be paid to the Executive’s
estate.
     5.5 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 6
General Limitations
     6.1 Termination with Cause. 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.

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     6.2 Misstatement. No benefits shall be paid under this Agreement if the
Executive makes any material misstatement of fact on any application or resume
provided to the Bank, on any application for life insurance purchased by the
Bank, or on any application for benefits provided by the Bank.
     6.3 Removal. Despite any contrary provision of this Agreement, if the
Executive is removed from office 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.
     6.4 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 of
section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all
obligations under this Agreement shall terminate.
Article 7
Claims and Review Procedures
     7.1 Claims Procedure. Any person who has not received benefits under this
Agreement that he or she believes should be paid (the “claimant”) shall make a
claim for benefits as follows.

     
7.1.1
  Initiation — written claim. The claimant initiates a claim by submitting to
the Administrator a written claim for the benefits. If the claim relates to the
contents of a notice received by the claimant, the claim must be made within
60 days after the notice was received by the claimant. All other claims must be
made within 180 days after the date of the event that caused the claim to arise.
The claim must state with particularity the determination desired by the
claimant.
 
   
7.1.2
  Timing of Administrator response. The Administrator shall respond to the
claimant within 90 days after receiving the claim. If the Administrator
determines that special circumstances require additional time for processing the
claim, the
 
  Administrator can extend the response period by an additional 90 days by
notifying the claimant in writing, before the end of the initial 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 Administrator expects to
render its decision.
 
   
7.1.3
  Notice of decision. If the Administrator denies part or all of the claim, the
Administrator shall notify the claimant in writing of the denial. The
Administrator 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,
 
 
 
(b)     A reference to the specific provisions of this Agreement on which the
denial is based,

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(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) after an adverse benefit determination on review.

     7.2 Review Procedure. If the Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the
Administrator of the denial, as follows.

     
7.2.1
  Initiation — written request. To initiate the review, the claimant must file
with the Administrator a written request for review within 60 days after
receiving the Administrator’s notice of denial.
 
   
7.2.2
  Additional submissions — information access. The claimant shall then have the
opportunity to submit written comments, documents, records, and other
information relating to the claim. Upon request and free of charge, the
Administrator shall also provide the claimant 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.
 
   
7.2.3
  Considerations on review. In considering the review, the Administrator shall
take into account all materials and information the claimant submits relating to
the claim, without regard to whether the information was submitted or considered
in the initial benefit determination.
 
   
7.2.4
  Timing of Administrator response. The Administrator shall respond in writing
to the claimant within 60 days after receiving the request for review. If the
Administrator determines that special circumstances require additional time for
processing the claim, the Administrator can extend the response period by an
additional 60 days by notifying the claimant in writing before the end of the
initial 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
Administrator expects to render its decision.
 
   
7.2.5
  Notice of decision. The Administrator shall notify the claimant in writing of
its decision on review. The Administrator 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,
 
 
 
(b)   A reference to the specific provisions of the 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

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

Article 8
Administration of Agreement
     8.1 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 Executive may not 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.
     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 through a duly appointed representative) and may from time to
time consult with counsel, who may be counsel to the Bank.
     8.3 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. Neither the Executive nor any Beneficiary
shall be deemed to have any right, vested or unvested, regarding the continuing
effect of any decision or action of the Plan Administrator.
     8.4 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.
     8.5 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, death, or Separation from Service of the Executive and such other
pertinent information as the Plan Administrator may reasonably require.
Article 9
Miscellaneous
     9.1 Amendments and Termination. This Agreement may be amended solely by a
written agreement signed by the Bank and by the Executive. Except for the case
of Termination with Cause, this Agreement shall not be terminated unless the
Account Balance is first paid to the Executive or the Executive’s Beneficiary.
     9.2 Binding Effect. This Agreement shall bind the Executive and the Bank
and their beneficiaries, survivors, executors, successors, administrators, and
transferees.

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     9.3 Successors; Binding Agreement. By an assumption agreement in form and
substance satisfactory to the Executive, the Bank shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the Bank’s business or assets 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.
     9.4 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Bank nor does it interfere with the Bank’s right to discharge the Executive.
It also does not require the Executive to remain an employee or interfere with
the Executive’s right to terminate employment at any time.
     9.5 Non-Transferability. Benefits under this Agreement may not be sold,
transferred, assigned, pledged, attached, or encumbered.
     9.6 Tax Withholding. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.
     9.7 Applicable Law. This Agreement and all rights hereunder shall be
governed by the laws of the State of Ohio, except to the extent the laws of the
United States of America otherwise require.
     9.8 Unfunded Arrangement. The Executive and the Beneficiary are general
unsecured creditors 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 Executive’s life is a general asset of the Bank
to which the Executive and the Beneficiary have no preferred or secured claim.
     9.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Executive concerning the subject matter. No rights are
granted to the Executive under this Agreement other than those specifically set
forth. This Agreement amends and restates in its entirety the December 28, 2006
Executive Deferred Compensation Agreement between the Executive and the Bank.
     9.10 Tax Consequences. The Bank does not insure or guarantee the tax
consequences of payments provided hereunder for matters beyond its control. The
Executive certifies that the Executive’s decision to defer receipt of
compensation is not due to reliance on financial, tax, or legal advice given by
the Bank or any of its employees, agents, accountants, or legal advisors.
     9.11 Payment of Legal Fees. The Bank is aware that after a Change in
Control management of the Bank could cause or attempt to cause the Bank to
refuse to comply with its obligations under this Agreement, or could institute
or cause or attempt to cause the Bank to institute litigation seeking to have
this Agreement declared unenforceable, or could take or

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attempt to take other action to deny the Executive the benefits intended under
this Agreement. In these circumstances the purpose of this Agreement would be
frustrated. The Bank desires that the Executive not be required to incur the
expenses associated with the enforcement of rights under this Agreement, whether
by litigation or other legal action, because the cost and expense thereof would
substantially detract from the benefits intended to be granted to the Executive
hereunder. The Bank desires that the Executive not be forced to negotiate
settlement of rights under this Agreement under threat of incurring expenses.
Accordingly, if after a Change in Control occurs it appears to the Executive
that (x) the Bank has failed to comply with any of its obligations under this
Agreement, or (y) the Bank or any other person has taken any action to declare
this Agreement void or unenforceable, or instituted any litigation or other
legal action designed to deny, diminish, or to recover from the Executive the
benefits intended to be provided to the Executive hereunder, the Bank
irrevocably authorizes the Executive from time to time to retain counsel of the
Executive’s choice, at the Bank’s expense as provided in this section 9.11, to
represent the Executive in the initiation or defense of any litigation or other
legal action, whether by or against the Bank or any director, officer,
stockholder, or other person affiliated with the Bank, in any jurisdiction.
Despite any existing or previous attorney-client relationship between the Bank
and any counsel chosen by the Executive under this section 9.11, the Bank
irrevocably consents to the Executive entering into an attorney-client
relationship with that counsel, and the Bank and the Executive agree that a
confidential relationship shall exist between the Executive and that counsel.
The fees and expenses of counsel selected from time to time by the Executive as
provided in this section shall be paid or reimbursed to the Executive by the
Bank on a regular, periodic basis upon presentation by the Executive of a
statement or statements prepared by counsel in accordance with counsel’s
customary practices, up to a maximum aggregate amount of $500,000, whether suit
be brought or not, and whether or not incurred in trial, bankruptcy, or
appellate proceedings. The Bank’s obligation to pay the Executive’s legal fees
under this section 9.11 operates separately from and in addition to any legal
fee reimbursement obligation the Bank may have with the Executive under any
separate employment, severance, or other agreement between the Executive and the
Bank. Despite anything in this section 9.11 to the contrary however, the Bank
shall not be required to pay or reimburse the Executive’s legal expenses if
doing so would violate section 18(k) of the Federal Deposit Insurance Act [12
U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12
CFR 359.3].
     9.12 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 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 such provision together with
all other provisions of this Agreement shall continue in full force and effect
to the full extent consistent with law.
     9.13 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 a waiver of any subsequent breach. 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.

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     9.14 Captions and Counterparts. Captions in this Agreement are included for
convenience only and shall not affect the interpretation or construction of the
Agreement or any of its provisions. 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.
     9.15 Notice. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid. Unless otherwise changed by notice, notice
shall be properly addressed to the Executive if addressed to the address of the
Executive on the books and records of the Bank at the time of the delivery of
such 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.
     9.16 Termination or Modification of Agreement Because of Changes in Law,
Rules or Regulations. The Bank is entering into this Agreement on the assumption
that certain existing tax laws, rules, and regulations will continue in effect
in their current form. If that assumption materially changes and the change has
a material detrimental effect on this Agreement, the Bank reserves the right to
terminate or modify this Agreement accordingly, subject to the written consent
of the Executive, which shall not be unreasonably withheld. This section 9.16
shall become null and void effective immediately after a Change in Control.
     In Witness Whereof, the Executive and a duly authorized Bank officer have
executed this Amended Executive Deferred Compensation Agreement as of the date
first written above.

                  Executive:       Bank:             The Middlefield Banking    
Company
               
 
               
 
James R. Heslop II
               
 
      By:        
 
         
 
   
 
      Its:        
 
         
 
   

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The Middlefield Banking Company
Amended Executive Deferred Compensation Agreement
Beneficiary Designation
     I designate the following as beneficiary under this Amended Executive
Deferred Compensation Agreement of benefits payable after my death.

     
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:                              
 
          James R. Heslop II        
 
                        Date:  
                                                            , 2008    
 
                         Received by the Bank this       day of
                                        , 2008        
 
                   
 
  By:                                  
 
                   
 
  Title:                                  

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The Middlefield Banking Company
Amended Executive Deferred Compensation Agreement
Schedule A
Performance Goals
     The Bank’s board of directors shall establish Performance Goals, which may
be absolute performance targets taking the Bank’s performance only into account,
or relative targets taking the Bank’s performance into account relative to a
peer group of companies, or a combination of both. The measures of performance
used to establish Performance Goals shall not change from one Plan Year to the
next unless the board of directors concludes that compelling reasons exist to
use different or additional measures of performance. If performance relative to
a peer group is used, the peer group analysis selected by the board of directors
shall not be changed from one Plan Year to the next unless the board of
directors concludes that the peer group being employed is no longer
representative of the Bank’s actual peer group of companies, or alternatively,
the company preparing the peer group analysis ceases to exist or no longer
prepares peer group analyses.
     For the first Plan Year, the Executive will receive an Annual Contribution
amount equal to 5% of the Executive’s Base Annual Salary. For every Plan Year
after the first Plan Year unless changed by the board of directors under section
1.10 of the Agreement, the Performance Goals are -

                          Annual Contribution for Achievement of Performance
Target #1   Performance Goal #1   Performance Goal #1
Bank’s Target Net Income for Plan Year
  $ 3,902,000     2.5% of the Executive’s Base Annual Salary
 
           
Bank’s Net Income for Plan Year Is
Equal to or Greater than -
  $ 3,941,020 (101%)   3.5% of the Executive’s Base Annual Salary
 
           
Bank’s Net Income for Plan Year Is
Equal to or Greater than -
  $ 3,980,040 (102%)   4.5% of the Executive’s Base Annual Salary
 
           
Bank’s Net Income for Plan Year Is
Equal to or Greater than -
  $ 4,019,060 (103%)   5.5% of the Executive’s Base Annual Salary
 
           
Bank’s Net Income for Plan Year Is
Equal to or Greater than -
  $ 4,058,080 (104%)   6.5% of the Executive’s Base Annual Salary
 
           
Bank’s Net Income for Plan Year Is
Equal to or Greater than -
  $ 4,097,100 (105%)   7.5% of the Executive’s Base Annual Salary

The Bank’s target net income for Performance Goal #1 is $3,902,000. At a
minimum, the Executive is entitled to an Annual Contribution for Performance
Goal #1 equal to 2.5% of Base Annual Salary. For the Executive to receive a
greater Annual Contribution under Performance Goal #1, the Bank’s net income for
the Plan Year must meet or exceed 101% of the Bank’s target net income for the
Plan Year. For every additional 1% that the Bank’s target net income is met or
exceeded in any Plan Year, up to 105%, the Executive’s Annual Contribution
amount also increases by 1%. Thus, the maximum Annual Contribution for
achievement of Performance

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Goal #1 is 7.5% of the Executive’s Base Annual Salary. The Bank and the
Executive agree that the Bank’s net income for the Plan Year shall be derived
from the quarterly reports of condition filed with the FDIC under the Federal
Deposit Insurance Act section 7(a), 12 U.S.C. 1817(a), and FDIC rules, 12 CFR
Part 304.

                  Annual Contribution for Achievement Performance Target #2  
Performance Goal #2   of Performance Goal #2
Bank’s Target Peer Rank
  Overall Ranking in Top 50% of
Ohio-Headquartered
Commercial Banks as Reported
by Ryan Beck & Co.   2.5% of the Executive’s Base Annual Salary  
Bank Has An -
  Overall Ranking in Top 60% of
Ohio-Headquartered
Commercial Banks as Reported
by Ryan Beck & Co.   3.5% of the Executive’s Base Annual Salary  
Bank Has An -
  Overall Ranking in Top 70% of
Ohio-Headquartered
Commercial Banks as Reported
by Ryan Beck & Co.   4.5% of the Executive’s Base Annual Salary  
Bank Has An -
  Overall Ranking in Top 80% of
Ohio-Headquartered
Commercial Banks as Reported
by Ryan Beck & Co.   5.5% of the Executive’s Base Annual Salary  
Bank Has An -
  Overall Ranking in Top 90% of
Ohio-Headquartered
Commercial Banks as Reported
by Ryan Beck & Co.   6.5% of the Executive’s Base Annual Salary  
Bank Has An -
  Overall Ranking in Top 100% of
Ohio-Headquartered
Commercial Banks as Reported
by Ryan Beck & Co. [ranked #1]   7.5% of the Executive’s Base Annual Salary

The Bank’s target Peer Rank for Performance Goal #2 is an overall ranking in the
top 50% of all Ohio-headquartered publicly traded commercial banks as evaluated
in the Ryan Beck & Co. quarterly reports titled “The Midwest Manifesto” (the
“Reports”) for the applicable Plan Year. In the Reports, Ryan Beck & Co. ranks
publicly traded commercial banks headquartered in Ohio based on seven factors:
earnings per share growth, return on equity, return on assets, efficiency ratio,
net charge-offs as a percentage of average loans, and loan and deposit growth.
At a minimum, the Executive is entitled to an Annual Contribution for
Performance Goal #2 equal to 2.5% of Base Annual Salary. For the Executive to
receive a greater Annual Contribution under Performance Goal #2, the Bank must
have an overall ranking in the top 60% of Ohio-headquartered commercial banks as
reported by Ryan Beck & Co. for the Plan Year. For every additional 10% that the
Bank’s peer ranking improves in any Plan Year, up to being ranked first, the
Executive’s Annual Contribution amount also increases by 1%. Thus, the maximum
Annual Contribution for achievement of Performance Goal #2 is 7.5% of the
Executive’s Base Annual Salary.

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     If Ryan Beck & Co. ceases to exist or no longer prepares peer group
analyses, peer rank will be established using the Uniform Bank Performance
Report (“UBPR”) as reported on the Federal Financial Institutions Examination
Council’s website at www.ffiec.gov/UBPR.htm. The UBPR is an analytical tool
created for bank supervisory, examination, and management purposes. In a concise
format, the UPBR shows the impact of management decisions and economic
conditions on a bank’s performance and balance-sheet composition. The
performance and composition data contained in the report can be used as an aid
in evaluating the adequacy of earnings, liquidity, capital, asset and liability
management, and growth management.
     At a minimum, the Executive’s Annual Contribution in any Plan Year shall
not be less than 5% of the Executive’s Base Annual Salary (i.e., the 2.5% of
Base Annual Salary Annual Contribution under Performance Goal #1 plus the 2.5%
of Base Annual Salary Annual Contribution under Performance Goal #2). At a
maximum, the Executive’s Annual Contribution in any Plan Year shall not exceed
15% of the Executive’s Base Annual Salary (i.e., the 7.5% of Base Annual Salary
Annual Contribution under Performance Goal #1 plus the 7.5% of Base Annual
Salary Annual Contribution under Performance Goal #2).
     Changes in the Performance Goals approved by the board of directors shall
become effective no more frequently than annually. The Plan Administrator’s
determination that the Performance Goals for a Plan Year have or have not been
achieved shall be conclusive and binding.

17