Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of the 10th
day of August, 2012 (the “Commencement Date”), by and between MACKINAC FINANCIAL
CORPORATION, a Michigan corporation (the “Company”) and PAUL D. TOBIAS (the
“Executive”).

 

BACKGROUND

 

The Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to employ the Executive
as an officer of the Company and its subsidiary mBank (“mBank”).  The Company
and the Executive established an employment relationship pursuant to an
Employment Agreement dated May 7, 2007, as amended (the “Prior Employment
Agreement”).  In connection with the sale of certain securities to Steinhardt
Capital Investors, LLLP pursuant to the terms and conditions of that certain
Securities Purchase Agreement dated March 27, 2012, the Company and the
Executive desire to enter into this Agreement to amend and restate the terms and
conditions of such employment relationship and the Prior Employment Agreement in
their entireties.  This Agreement shall represent the entire understanding and
agreement between the parties with respect to the Executive’s employment with
the Company.

 

NOW, THEREFORE, in consideration of the foregoing and the terms and conditions
set forth herein, the parties agree as follows:

 

TERMS AND CONDITIONS

 

1.                                      EMPLOYMENT PERIOD.  The Company hereby
agrees to continue the Executive in its employ, and the Executive hereby agrees
to remain in the employ of the Company, subject to the terms and conditions of
this Agreement, for the period commencing on the Commencement Date and ending on
the third anniversary of the Commencement Date (the “Initial Term”).  The term
of this Agreement will automatically be renewed for a term of one (1) year
(each, a “Renewal Term”) at the end of the Initial Term and at the end of each
Renewal Term thereafter, provided that (a) the Executive notifies the Board of
such renewal at least one hundred eighty (180) days prior (the “Renewal Date”)
to the expiration of the Initial Term or any Renewal Term and (b) the Board does
not notify the Executive of its intention not to renew this Agreement on or
prior to the Renewal Date.  For purposes of this Agreement, “Employment Period”
includes the Initial Term and any Renewal Term(s) thereafter.  Notwithstanding
the foregoing, in the event of a Change in Control, the date the Change in
Control occurs shall become the Commencement Date for all purposes thereafter,
and each Change in Control thereafter shall result in a new Commencement Date on
the date of the latest Change in Control.

 

2.                                      TERMS OF EMPLOYMENT.

 

(a)                                  Position and Duties.

 

(i)                                    During the Employment Period, the
Executive shall serve as Chairman of the Board and Chief Executive Officer of
the Company and Chairman of the Board

 

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of Directors of mBank, and in such other position or positions with the Company
and its subsidiaries as are consistent with the Executive’s positions as
Chairman of the Board and Chief Executive Officer of the Company and Chairman of
the Board of Directors of mBank, and shall have such duties and responsibilities
as are assigned to the Executive by the Board.  The Executive agrees to serve as
a member of the Board, if elected to serve in such position during the
Employment Period.

 

(ii)                                During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full business time, energy, skills and attention to
the business and affairs of the Company, to discharge the responsibilities
assigned to the Executive hereunder, and to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities.  During the
Employment Period it shall not be a violation of this Agreement for the
Executive to: (A) serve on corporate, civic or charitable boards or committees;
(B) deliver lectures, fulfill speaking engagements or teach at educational
institutions; and (C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement.  The Executive may own, operate and manage investments or businesses
other than banking institutions, so long as such activities do not interfere
with the performance of the Executive’s primary responsibilities as an executive
of the Company in accordance with this Agreement.  It is expressly understood
and agreed that, to the extent that any such activities have been conducted by
the Executive prior to the Commencement Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Commencement Date shall not thereafter be deemed to interfere
with the performance of the Executive’s responsibilities to the Company.

 

(b)                                  Compensation.

 

(i)                                    Base Salary.  During the Employment
Period, the Executive shall receive an annual base salary at least equal to Two
Hundred Sixty-Seven Thousand Dollars ($267,000) (the “Annual Base Salary”),
which shall be paid in accordance with the Company’s normal payroll practices
for senior executive officers of the Company as in effect from time to time. 
During the Employment Period, the Compensation Committee of the Board (the
“Compensation Committee”) will review the Annual Base Salary at least annually. 
Any increase in the Annual Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement.  The Annual Base Salary
shall not be reduced after any such increase (unless otherwise agreed to by the
Executive) and the term “Annual Base Salary” as utilized in this Agreement shall
refer to the Annual Base Salary as so increased or adjusted.

 

(ii)                                Annual Bonus.  In addition to the Annual
Base Salary, for each fiscal year ending during the Employment Period, the
Executive shall be eligible for an annual cash bonus, as determined by the
Compensation Committee (the “Annual Bonus”).  Each such Annual Bonus awarded to
the Executive shall be paid, unless the Company’s audit has been delayed, on the
date the Company’s independent registered public accounting firm signs its audit
report on the Company’s financial statements for the year for which the Annual
Bonus is awarded.

 

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(iii)                            Long-Term Incentive Compensation.  During the
Employment Period, the Executive shall be entitled to participate in any stock
option, performance share, performance unit or other equity based long-term
incentive compensation plan, program or arrangement (the “Plans”) generally made
available to senior executive officers of the Company, on substantially the same
terms and conditions as generally apply to such other officers, except that the
size of the awards made to the Executive shall reflect the Executive’s position
with the Company and the Board’s views.  Notwithstanding the foregoing, the
Executive will not participate in the Company’s stock equity plans during the
period in which the Company is subject to compensation limitations by virtue of
the Company’s participation in the Troubled Asset Relief Program’s Capital
Purchase Program (the “CPP”), except to the extent permitted thereunder. 
Further, no cash bonuses will be awarded to the Executive during the period in
which the Company is subject to compensation limitations by virtue of the CPP,
except to the extent permitted thereunder.

 

(iv)                               Welfare Benefit Plans.  During the Employment
Period, the Executive and/or the Executive’s family, as the case may be, shall
be eligible for participation in, and shall receive all benefits under, welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent available generally or to
other senior executive officers of the Company.

 

(v)                                   Expenses.  During the Employment Period,
the Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with the plans,
practices, policies and programs of the Company, as approved by the Board.

 

(vi)                               Vacation.  During the Employment Period, the
Executive shall be eligible for participation in, and shall receive all benefits
under, vacation programs provided by the Company and its affiliated companies to
the extent available generally or to other senior executive officers of the
Company.

 

(c)                                  Recoupment of Unearned Incentive
Compensation.  Unless otherwise waived by the Company, if the Board, or an
appropriate committee thereof, determines that any fraud, gross negligence, or
intentional misconduct by the Executive is a significant contributing factor to
the Company having to restate all or a portion of its financial statements, the
Board or committee may require reimbursement of any bonus or incentive
compensation paid to the Executive if and to the extent that (i) the amount of
incentive compensation was calculated based upon the achievement of certain
financial results that were subsequently reduced due to a restatement, (ii) the
Executive engaged in any fraud or misconduct that caused or significantly
contributed to the need for the restatement, and (iii) the amount of the bonus
or incentive compensation that would have been awarded to the Executive had the
financial results been properly reported would have been lower than the amount
actually awarded.

 

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3.                                      TERMINATION OF EMPLOYMENT.

 

(a)                                  Notwithstanding Section 1, the Employment
Period shall end upon the earliest to occur of (i) the Executive’s death, (ii) a
Termination due to Disability, (iii) a Termination for Cause, (iv) the
Termination Date specified in connection with any exercise by the Company of its
Termination Right or (v) a Termination for Good Reason.  If the Employment
Period terminates as of a date specified under this Section 3, the Executive
agrees that, upon written request from the Company, the Executive shall resign
from any and all positions the Executive holds with the Company and any of its
subsidiaries and affiliates, effective immediately following receipt of such
request from the Company (or at such later date as the Company may specify).

 

(b)                                  This Agreement may be terminated by the
Executive at any time upon sixty (60) days prior written notice to the Company
or upon such shorter period as may be agreed upon between the Executive and the
Board.  In the event of such termination, the Company shall be obligated only to
continue to pay the Executive’s salary and provide other benefits provided by
this Agreement up to the date of such termination.

 

(c)                                  Benefits Payable Under Termination.

 

(i)                                    In the event of the Executive’s death
during the Employment Period or a Termination due to Disability, the Company
shall provide the Executive or the Executive’s beneficiaries or legal
representatives with the Unconditional Entitlements, including, but not limited
to, any such Unconditional Entitlements that are or become payable under any
Company plan, policy, practice or program or any contract or agreement with the
Company by reason of the Executive’s death or Termination due to Disability.

 

(ii)                                In the event of the Executive’s Termination
for Cause, the Company shall provide the Executive with the Unconditional
Entitlements.

 

(iii)                            In the event of a Termination for Good Reason
or the exercise by the Company of its Termination Right, the Company shall
provide the Executive with: (A) the Unconditional Entitlements; and (B) the
Conditional Benefits, provided that the Executive delivers to the Company and
does not revoke a general release of claims in favor of the Company, mBank and
certain related parties in substantially the form attached hereto as EXHIBIT A.
Such release shall be executed and delivered by the Executive within thirty
(30) days following the Termination Date, and may be revoked by the Executive
within seven (7) days following delivery of such release (the “Effective Release
Date”). In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, nor shall the amount of
any payment hereunder be reduced by any compensation earned by the Executive as
a result of employment by a subsequent employer.

 

(d)                                  Unconditional Entitlements.  For purposes
of this Agreement, the “Unconditional Entitlements” to which the Executive may
become entitled under Section 3(c) are as follows:

 

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(i)                                    Earned Amounts.  The Earned Compensation
shall be paid within thirty (30) days following the termination of the
Executive’s employment hereunder, or if any part thereof constitutes a bonus
which is subject to or conditioned upon any performance conditions, within
thirty (30) days following the determination that such conditions have been met,
provided that in no event shall the bonus be paid later than ninety (90) days
following the Executive’s termination of employment.

 

(ii)                                Benefits.  All benefits payable to the
Executive under any employee benefit plans (including, without limitation any
pension plans or 401(k) plans) of the Company or any of its affiliates
applicable to the Executive at the time of termination of the Executive’s
employment with the Company and all amounts and benefits (other than the
Conditional Benefits) which are vested or which the Executive is otherwise
entitled to receive under the terms of or in accordance with any plan, policy,
practice or program of, or any contract or agreement with, the Company, at or
subsequent to the date of the Executive’s termination without regard to the
performance by the Executive of further services or the resolution of a
contingency, shall be paid or provided in accordance with and subject to the
terms and provisions of such plans, it being understood that all such benefits
shall be determined on the basis of the actual date of termination of the
Executive’s employment with the Company.

 

(iii)                            Indemnities.  Any right which the Executive may
have to claim a defense and/or indemnity for liabilities to or claims asserted
by third parties in connection with the Executive’s activities as an officer,
director or employee of the Company shall be unaffected by the Executive’s
termination of employment and shall remain in effect in accordance with its
terms.

 

(iv)                               Medical Coverage.  The Executive shall be
entitled to such continuation of health care coverage as is required under, and
in accordance with, applicable law or otherwise provided in accordance with the
Company’s policies.  The Executive shall be notified in writing of the
Executive’s rights to continue such coverage after the termination of the
Executive’s employment pursuant to this Section 3(d)(iv), provided that the
Executive timely complies with the conditions to continue such coverage.  The
Executive understands and acknowledges that the Executive is responsible to make
all payments required for any such continued health care coverage that the
Executive may choose to receive.

 

(v)                                   Business Expenses.  The Executive shall be
entitled to reimbursement, in accordance with the Company’s policies regarding
expense reimbursement as in effect from time to time, for all business expenses
incurred by the Executive prior to the date of termination of the Executive’s
employment.

 

(vi)                               Stock Options/Equity Awards.  Except to the
extent additional rights are provided upon the Executive’s qualifying to receive
the Conditional Benefits, the Executive’s rights with respect to any stock
options and/or other equity awards granted to the Executive by the Company shall
be governed by the terms and provisions of the plans (including plan rules) and
award agreements pursuant to which such stock options and equity awards were
awarded, as in effect at the date of termination of the Executive’s employment.

 

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(e)                                  Conditional Benefits.  For purposes of this
Agreement, the “Conditional Benefits” to which the Executive may become entitled
are as follows:

 

(i)                                    Severance Amount.  The Company shall pay
the Executive a lump sum amount equal to the Severance Amount on the Effective
Release Date.

 

(ii)                                Stock Options.  All of the Executive’s stock
options shall fully and immediately vest and become exercisable.  Once
exercisable, all stock options shall remain exercisable until the stock option
termination date.  All of the Executive’s stock options that were vested and
exercisable or become vested and exercisable at the Termination Date shall
remain exercisable until the expiration date of such stock options.  Except as
otherwise expressly provided herein, all stock options shall continue to be
subject to the Original Stock Option Award Documents.

 

(iii)                            Equity Awards.  Any restrictive stock or other
equity award subject to vesting shall fully and immediately vest to the extent
not already vested.  Except as otherwise expressly provided herein, all such
restricted stock or other equity awards shall be subject to, and administered in
accordance with, the Original Award Documents.

 

(iv)                               Pro-Rated Current Year Bonus.  The Company
shall pay the Executive a pro rata annual bonus for the year in which the
Termination Date occurs, determined on the basis of an assumed full-year target
bonus (as determined by the Compensation Committee of the Board) and the number
of days in the applicable fiscal year occurring on or before the Termination
Date.  Such pro-rata current year bonus shall be paid no later than the later of
(A) two and a half (2 ½) months after the end of the Executive’s tax year in
which the Termination Date occurs and (B) two and a half (2 ½) months after the
end of the Company’s tax year in which the Termination Date occurs.

 

(v)                                   Health Benefit Coverage.  The Executive
and/or the Executive’s family, as the case may be, shall be entitled to
participate in the Company’s health care benefit plan at the Company’s expense
for an eighteen (18)-month period after the Termination Date or, in the event
such participation is not permitted, a cash payment equal to the value of the
benefit excluded payable in monthly installments over such eighteen (18)-month
period; provided, however, that in the event the Executive obtains other
employment and is eligible to participate in the health plan of the Executive’s
new employer, any benefits provided under the Company’s health benefit plan
shall be secondary to the benefits provided under the health benefit plan of the
Executive’s new employer.

 

(vi)                               Additional Distribution Rules. 
Notwithstanding any other payment date or schedule provided in this Agreement to
the contrary, if the Executive is deemed on the date of termination of the
Executive’s employment to be a “specified employee” within the meaning of that
term under Section 409A of the Code and the regulations thereunder
(“Section 409A”), then each of the following shall apply:

 

(A)                               With regard to any payment that is considered
“nonqualified deferred compensation” under Section 409A payable on account of
and within six (6) months after a “separation from service” (within the meaning
of Section 409A and as

 

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provided in Section 3(h) of this Agreement), such payment shall instead be made
on the date which is the earlier of (1) the expiration of the six (6)-month
period measured from the date of the Executive’s “separation from service,” and
(2) the date of the Executive’s death (the “Delay Period”) to the extent
required under Section 409A.  Upon the expiration of the Delay Period, all
payments delayed pursuant to this Section 3(e)(vi) (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid to the Executive in a lump sum, and all remaining payments
due under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein; and

 

(B)                               To the extent that benefits to be provided
during the Delay Period are considered “nonqualified deferred compensation”
under Section 409A provided on account of a “separation from service,” the
Executive shall pay the cost of such benefits during the Delay Period, and the
Company shall reimburse the Executive, to the extent that such costs would
otherwise have been paid or reimbursed by the Company or to the extent that such
benefits would otherwise have been provided by the Company at no cost to the
Executive, for the Company’s share of the cost of such benefits upon expiration
of the Delay Period, and any remaining benefits shall be paid, reimbursed or
provided by the Company in accordance with the procedures specified herein.

 

The foregoing provisions of this Section 3(e)(vi) shall not apply to any
payments or benefits that are excluded from the definition of “nonqualified
deferred compensation” under Section 409A, including, without limitation,
payments excluded from the definition of “nonqualified deferred compensation” on
account of being separation pay due to an involuntary separation from service
under Treasury Regulation 1.409A-1(b)(9)(iii).

 

(f)                                    Definitions.  For purposes of this
Agreement, the following terms shall have the meanings ascribed to them below:

 

(i)                                    “Affiliate” means any corporation,
partnership, limited liability company, trust or other entity which directly, or
indirectly through one or more intermediaries, controls, is under common control
with, or is controlled by, the Company.

 

(ii)                                “Change in Control” means the first
occurrence of any of the following:

 

(A)                               any Person acquires “beneficial ownership”
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), directly or indirectly, of securities of the
Company representing forty percent (40%) or more of the combined Voting Power of
the Company’s securities;

 

(B)                               within any twenty-four (24)-month period, the
persons who were directors of the Company at the beginning of such period (the
“Incumbent Directors”) cease to constitute at least a majority of the Board or
the board of directors of any successor to the Company; provided that any
director elected or nominated for election to the Board by a majority of the
Incumbent Directors still in office shall be deemed to be an Incumbent Director
for purposes of this subclause 3(f)(ii)(B);

 

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(C)                               the effective date of the consummation of any
merger, consolidation, share exchange, division, sale or other disposition of
all or substantially all of the assets of the Company (a “Corporate Event”), if
immediately following the consummation of such Corporate Event those Persons who
were shareholders of the Company immediately prior to such Corporate Event do
not hold, directly or indirectly, a majority of the Voting Power, in
substantially the same proportion as prior to such Corporate Event, of (1) in
the case of a merger or consolidation, the surviving or resulting corporation or
(2) in the case of a division or a sale or other disposition of assets, each
surviving, resulting or acquiring corporation which, immediately following the
relevant Corporate Event, holds more than forty percent (40%) of the
consolidated assets of the Company immediately prior to such Corporate Event;

 

(D)                               the approval by the shareholders of the
Company of a plan of liquidation with respect to the Company; or

 

(E)                                 the occurrence of any other event which the
Board declares to be a Change in Control.

 

(iii)                            “Code” means the Internal Revenue Code of 1986,
as amended.

 

(iv)                               “Earned Compensation” means the sum of:
(A) any Annual Base Salary earned, but unpaid, for services rendered to the
Company on or prior to the date on which the Employment Period ends pursuant to
Section 3(a) (but excluding any salary and interest accrued thereon, the payment
of which has been deferred); and (B) if the Executive’s employment terminates
due to the Executive’s death or in a Termination due to Disability or a
Termination for Good Reason or due to the Company’s exercise of its Termination
Right, in any case, after the end of a fiscal year, but before the Annual Bonus
payable for services rendered in such fiscal year has been paid, the Annual
Bonus that would have been payable to the Executive for such completed fiscal
year in accordance with Section 2(b)(ii).

 

(v)                                   “Original Stock Option Award Documents”
means, with respect to any stock option, the terms and provisions of the award
agreement and plan pursuant to which such stock option was granted, each as in
effect on the Termination Date.

 

(vi)                               “Original Award Documents” means, with
respect to any restricted stock or other equity award, the terms and provisions
of the award agreement related to, and the plan governing, such restricted stock
or other equity award, each as in effect on the Termination Date.

 

(vii)                           “Person” shall have the same meaning as ascribed
to such term in Section 3(a)(9) of the Exchange Act, as supplemented by
Section 13(d)(3) of the Exchange Act, and shall include any group (within the
meaning of Rule 13d-5(b) under the Exchange Act); provided that Person shall not
include (A) the Company or any of its Affiliates, or (B) any employee benefit
plan (including an employee stock ownership plan) sponsored by the Company or
any of its Affiliates.

 

(viii)                       “Severance Amount” means an amount equal to the
aggregate Annual Base Salary which would have been earned by the Executive under
this Agreement

 

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(including any scheduled increase therein) for the eighteen (18)-month period
commencing on the day after the Termination Date.

 

(ix)                              “Termination for Cause” means a termination of
the Executive’s employment by the Company due to the Executive’s (A) gross
negligence, (B) gross misconduct, (C) willful nonfeasance or (D) willful
material breach of this Agreement (each of (A), (B), (C) and (D), “Cause”),
which termination may be effected (y) immediately upon notice from the Company
if the Company shall reasonably and in good faith determine that the conduct or
cause specified in such notice is not curable (it being understood that such
notice shall describe in reasonable detail the conduct or cause giving rise to
such notice and shall state the reason(s) why the Company has determined that
such conduct or cause is not curable); or (z) upon twenty (20) business days
notice from the Company, if the Company shall reasonably and in good faith
determine that the conduct or cause specified in such notice is curable (it
being understood that such notice shall describe in reasonable detail the
conduct or cause giving rise to such notice and shall state the reason(s) why
the Company has determined that such conduct or cause is curable and what steps
the Company believes should or could be taken to cure such conduct or cause).

 

(x)                                  “Termination Date” means the earlier to
occur of (A) the date the Company specifies in writing to the Executive in
connection with the exercise of its Termination Right or (B) the date the
Executive specifies in writing to the Company in connection with any notice to
effect a Termination for Good Reason.

 

(xi)                              “Termination due to Disability” means a
termination of the Executive’s employment by the Company because the Executive
has been incapable, after reasonable accommodation, of substantially fulfilling
the positions, duties, responsibilities and obligations set forth in this
Agreement because of physical, mental or emotional incapacity resulting from
injury, sickness or disease for a period of (A) six (6) consecutive months or
(B) an aggregate of nine (9) months (whether or not consecutive) in any twelve
(12)-month period.  Any question as to the existence, extent or potentiality of
the Executive’s disability shall be determined by a qualified physician selected
by the Company with the consent of the Executive, which consent shall not be
unreasonably withheld.  The Executive or the Executive’s legal representatives
or any adult member of the Executive’s immediate family shall have the right to
present to such physician such information and arguments as to the Executive’s
disability as he, she or they deem appropriate, including the opinion of the
Executive’s personal physician.

 

(xii)                          “Termination for Good Reason” means a termination
of the Executive’s employment by the Executive within thirty (30) days of the
Company’s failure to cure, in accordance with the procedures set forth below,
any of the following events (each, “Good Reason”): (A) a reduction in any of the
Executive’s compensation rights hereunder (that is, the Annual Base Salary), it
being understood that any reduction in the Annual Base Salary agreed to by the
Executive would not be a reduction in such compensation rights; (B) the removal
of the Executive by the Company from the position of Chairman of the Board and
Chief Executive Officer of the Company, or Chairman of the Board of Directors of
mBank; (C) a material reduction in the Executive’s duties and responsibilities
as in effect immediately prior to such reduction; (D) the relocation of the
Executive’s principal office to a location that is more than fifty (50) miles
outside of Birmingham, Michigan; or (E) a material breach of any material
provision of this Agreement by the Company.  Notwithstanding the foregoing, a
termination

 

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shall not be treated as a Termination for Good Reason (y) if the Executive shall
have consented in writing to the occurrence of the event giving rise to the
claim of Termination for Good Reason, or (z) unless the Executive shall have
delivered a written notice to the Board within forty-five (45) days of the
Executive’s having actual knowledge of the occurrence of one of such events
stating that the Executive intends to terminate the Executive’s employment for
Good Reason and specifying the factual basis for such termination, and such
event, if capable of being cured, shall not have been cured within twenty-one
(21) days of the Company’s receipt of such notice.

 

(xiii)                      “Termination Right” means the right of the Company,
in its sole, absolute and unfettered discretion, to terminate the Executive’s
employment under this Agreement for any reason or no reason whatsoever.  For the
avoidance of doubt, any Termination for Cause effected by the Company shall not
constitute exercise of its Termination Right.

 

(xiv)                         “Voting Power” means such number of Voting
Securities as shall enable the holders thereof to cast all the votes which could
be cast in an annual election of directors of a company.

 

(xv)                             “Voting Securities” means all securities
entitling the holders thereof to vote in an annual election of directors of a
company.

 

(g)                                 Conflict with Plans.  As permitted under the
terms of the applicable Plans, the Company and the Executive agree that the
definitions of Termination for Cause or Termination for Good Reason set forth in
this Section 3 shall apply in place of any similar definition or comparable
concept applicable under either of the Plans (or any similar definition in any
successor plan).

 

(h)                                 Section 409A.  It is intended that payments
and benefits under this Agreement either be excluded from or comply with the
requirements of Section 409A and the guidance issued thereunder and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted consistent with such intent.  In the event that any provision of
this Agreement is subject to but fails to comply with Section 409A, the Company
may revise the terms of the provision to correct such noncompliance to the
extent permitted under any guidance, procedure or other method promulgated by
the Internal Revenue Service now or in the future or otherwise available that
provides for such correction as a means to avoid or mitigate any taxes, interest
or penalties that would otherwise be incurred by the Executive on account of
such noncompliance.  Provided, however, that in no event whatsoever shall the
Company be liable for any additional tax, interest or penalty imposed upon or
other detriment suffered by the Executive under Section 409A or damages for
failing to comply with Section 409A.  Solely for purposes of determining the
time and form of payments due the Executive under this Agreement (including any
payments due under Sections 3(c) or 5) or otherwise in connection with the
Executive’s termination of employment with the Company, the Executive shall not
be deemed to have incurred a termination of employment unless and until the
Executive shall incur a “separation from service” within the meaning of
Section 409A.  The parties agree, as permitted in accordance with the final
regulations thereunder, a “separation from service” shall occur when the
Executive and the Company reasonably anticipate that the Executive’s level of
bona fide services for the Company

 

10

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(whether as an employee or an independent contractor) will permanently decrease
to no more than forty percent (40%) of the average level of bona fide services
performed by the Executive for the Company over the immediately preceding
thirty-six (36) months.  The determination of whether and when a separation from
service has occurred shall be made in accordance with this subparagraph and in a
manner consistent with Treasury Regulation Section 1.409A-1(h).  All
reimbursements and in-kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of Section 409A to the extent
that such reimbursements or in-kind benefits are subject to Section 409A,
including, where applicable, the requirements that: (i) any reimbursement is for
expenses incurred during the Executive’s lifetime (or during a shorter period of
time specified in this Agreement); (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year; (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred; and (iv) the right to reimbursement
is not subject to set off or liquidation or exchange for any other benefit.  For
purposes of Section 409A, the Executive’s right to any installment payment under
this Agreement shall be treated as a right to receive a series of separate and
distinct payments.  Whenever a payment under this Agreement specifies a payment
period with reference to a number of days (e.g., “payment shall be made within
ninety (90) days following the date of termination”), the actual date of payment
within the specified period shall be within the sole discretion of the Company.

 

4.                                      EXECUTIVE REMEDY.  The Executive shall
be under no obligation to seek other employment or other engagement of the
Executive’s services.  The Executive acknowledges and agrees that the payment
and rights provided under Section 3 are fair and reasonable, and are the
Executive’s sole and exclusive remedy, in lieu of all other remedies at law or
in equity, for termination of the Executive’s employment by the Company upon
exercise of its Termination Right pursuant to this Agreement or upon a
Termination for Good Reason.

 

5.                                      ADDITIONAL PAYMENTS FOLLOWING A CHANGE
IN CONTROL.

 

(a)                                  If, during the Employment Period, the
Company shall terminate the Executive’s employment other than due to the
Executive’s death, a Termination for Cause, a Termination due to Disability or
if the Executive shall effect a Termination for Good Reason in any case either
(x) within two (2) years after a Change in Control or (y) within six (6) months
before a Change in Control in contemplation of such Change in Control and with
the purpose of avoiding the effect of this Agreement had such termination
occurred after such Change in Control:

 

(i)                                    the Company shall pay to the Executive,
in a lump sum in cash within thirty (30) days after the date of termination, the
aggregate of the following amounts:

 

(A)                               the Unconditional Entitlements; and

 

(B)                               an amount equal to the product of two and
ninety-nine hundredths (2.99) times the Annual Base Salary.

 

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(ii)                                the Company shall provide the Executive the
Conditional Benefits minus the Severance Amount and the pro-rated current year
bonus.

 

(b)                                  In the event that the aggregate of all
payments or benefits made or provided to the Executive under this Agreement and
under all other plans, programs or arrangements of the Company (the “Aggregate
Payment”) constitutes a parachute payment, as such term is defined in
Section 280G(b)(2) of the Code (a “Parachute Payment”), such payments and
benefits shall be reduced or eliminated, as determined by the Company, in the
following order:  (i) any cash payments, (ii) any taxable benefits, (iii) any
nontaxable benefits, and (iv) any vesting or accelerated delivery of equity
awards, in each case in reverse order beginning with the payments or benefits
that are to be paid the farthest in time from the date that triggers the
applicable excise tax, until the amount of the remaining Aggregate Payment is
one dollar less than the amount that would constitute a Parachute Payment.  The
determination of whether the Aggregate Payment constitutes a Parachute Payment
and, if so, the amount to be paid to the Executive and the time of payment
pursuant to this Section 5(b) shall be made by an independent accounting firm
(the “Accounting Firm”) selected by the Company prior to the Change in Control. 
The Accounting Firm shall be a nationally recognized United States public
accounting firm which has not, during the two (2) years preceding the date of
its selection, acted in any way on behalf of (y) the Company or any affiliate
thereof or (z) the Executive.  The covenants set forth in Sections 6 through 8
have substantial value to the Company and a portion of the Aggregate Payment
made to the Executive under this Agreement is in consideration of such
services.  For purposes of calculating any Parachute Payment, the Accounting
Firm will consider the fair market value of such covenants in determining the
amount of the Aggregate Payment that shall not be considered part of a Parachute
Payment.

 

(c)                                  The Company’s obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment.  The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus, in each case, interest on any delayed payment at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

 

6.                                      CONFIDENTIALITY.

 

(a)                                  Confidentiality.  Without the prior written
consent of the Company, except (y) as reasonably necessary in the course of
carrying out the Executive’s duties hereunder or (z) to the extent required by
an order of a court having competent jurisdiction or under subpoena from an
appropriate government agency, the Executive shall not disclose any Confidential
Information unless such Confidential Information has been previously disclosed
to

 

12

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the public by the Company or has otherwise become available to the public (other
than by reason of the Executive’s breach of this Section 6(a)).  The term
“Confidential Information” shall include, but shall not be limited to: (i) the
identities of the existing and prospective customers or clients of the Company
and its Affiliates, including names, addresses, credit status, and pricing
levels; (ii) the buying and selling habits and customs of existing and
prospective customers or clients of the Company and its Affiliates;
(iii) financial information about the Company and its Affiliates; (iv) product
and systems specifications, concepts for new or improved products and other
product or systems data; (v) the identities of, and special skills possessed by,
employees of the Company and its Affiliates; (vi) the identities of and pricing
information about the suppliers and vendors of the Company and its Affiliates;
(vii) training programs developed by the Company or its Affiliates;
(viii) pricing studies, information and analyses; (ix) current and prospective
products and inventories; (x) financial models, business projections and market
studies; (xi) the financial results and business conditions of the Company and
its Affiliates; (xii) business plans and strategies of the Company and its
Affiliates; (xiii) special processes, procedures, and services of suppliers and
vendors of the Company and its Affiliates; and (xiv) computer programs and
software developed by the Company or its Affiliates.

 

(b)                                  Company Property.  Promptly following the
Executive’s termination of employment, the Executive shall return to the Company
all property of the Company, and all copies thereof in the Executive’s
possession or under the Executive’s control, except that the Executive may
retain the Executive’s personal notes, diaries, rolodexes, mobile devices,
calendars and correspondence of a personal nature.

 

7.                                      NONCOMPETITION.  Notwithstanding
anything to the contrary contained elsewhere in this Agreement, in view of the
Executive’s importance to the success of the Company and mBank, the Executive
and the Company agree that the Company and mBank would likely suffer significant
harm from the Executive’s competing with the Company or mBank during the
Executive’s term of employment and for some period of time thereafter.
Accordingly, the Executive agrees that the Executive shall not engage in
competitive activities while employed by the Company or mBank and, in the event
the Executive’s employment is terminated without Good Reason by the Executive or
with or without Cause by the Company pursuant to this Agreement, during the
Restricted Period.  The Executive shall be deemed to engage in competitive
activities if the Executive shall, without the prior written consent of the
Company, (a) within a twenty-five (25) mile radius of the main office or any
branch office of mBank, render services directly or indirectly, as an employee,
officer, director, partner, or otherwise, for any organization or enterprise
which competes directly or indirectly with the business of the Company or any of
its affiliates in providing financial products or services (including, without
limitation, banking, insurance or securities products or services) to consumers
and businesses, or (b) directly or indirectly acquire any financial or
beneficial interest in (except as provided in the next sentence) any
organization which conducts or is otherwise engaged in a business or enterprise
within a twenty-five (25) mile radius of the main office or any branch office of
mBank, which competes directly or indirectly with the business of the Company or
mBank or any of their affiliates in providing financial products or services to
consumers and businesses. Notwithstanding the preceding sentence, the Executive
shall not be prohibited from owning less than five percent (5%) of any publicly
traded corporation whether or not such corporation is in competition with the
Company. For purposes hereof, the term “Restricted Period” shall equal eighteen
(18) months from the date of termination.

 

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8.                                      NON-SOLICITATION.  For a period of
eighteen (18) months following the date of termination of employment, the
Executive shall not, directly or indirectly, for or on behalf of either the
Executive or any other financial institution:  (a) induce or attempt to induce
any employee of the Company or mBank to leave the employ of the Company or
mBank; (b) in any way interfere with the relationship between the Company or
mBank and any employee of the Company or mBank; (c) employ, or otherwise engage
as an employee, independent contractor or otherwise, any employee of the Company
or mBank; or (d) induce or attempt to induce any customer, supplier, licensee,
or business relation of the Company or mBank to cease doing business with the
Company or mBank or in any way interfere with a relationship between the Company
or mBank and any customer, supplier, licensee or business relation of the
Company or mBank.

 

9.                                      SUCCESSORS.

 

(a)                                  This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution. 
This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.

 

(b)                                  This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns and any party
acting in the form of a receiver or trustee capacity.

 

(c)                                  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  As used in this Agreement, the “Company” shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

 

10.                               REGULATORY PROVISIONS.

 

(a)                                  If the Executive is suspended from office
and/or temporarily prohibited from participating in the conduct of the Company’s
or mBank’s affairs pursuant to notice (the “FDIA Notice”) served under
Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (12
U.S.C. §§1818(e)(3) and 1818(g)(1)) (the “FDIA”), the Company’s obligations
under this Agreement will be suspended as of the date of service of the FDIA
Notice, unless stayed by appropriate proceedings.

 

(b)                                  If the charges in the FDIA Notice are
dismissed, the Company may, in its discretion:  (i) pay the Executive all or
part of the compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.

 

(c)                                  If the Executive is removed from office
and/or permanently prohibited from participating in the conduct of the Company’s
or mBank’s affairs by an order issued under Section 8(e)(4) or
Section 8(g)(1) of the FDIA (12 U.S.C. §§1818(e)(4) and (g)(1)), all

 

14

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obligations of the Company under this Agreement will terminate as of the
effective date of the order, but vested rights of the Executive and the Company
as of the date of termination will not be affected.

 

(d)                                  If the Company or mBank is in default, as
defined in Section 3(x)(1) of the FDIA (12 U.S.C. §1813(x)(1)), all obligations
under this Agreement will terminate as of the date of default, but vested rights
of the Executive and the Company as of the date of default will not be affected.

 

(e)                                  Any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon such
payments’ compliance with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and 12
C.F.R. Part 359.

 

11.                               MISCELLANEOUS.

 

(a)                                  This Agreement shall be construed in
accordance with, and governed by, the laws of the State of Michigan, without
regard to the conflicts of law rules of such state. Each of the parties hereto
(i) consents to submit itself to the personal jurisdiction of the courts of the
State of Michigan or any federal court with subject matter jurisdiction located
in the Western District of Michigan (and any appeals court therefrom) in the
event any dispute arises out of this Agreement or any transaction contemplated
hereby, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and
(iii) agrees that it will not bring any action relating to this Agreement or any
transaction contemplated hereby in any court other than such courts.

 

(b)                                  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.

 

(c)                                  All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

 

If to the Executive:

Paul D. Tobias

 

130 S Cedar Street

 

Manistique, MI 49854-0369

 

 

If to the Company:

Mackinac Financial Corporation

 

Attention: Lead Director of the Board of Directors

 

130 S Cedar Street

 

Manistique, MI 49854-0369

 

 

with a copy to:

Honigman Miller Schwartz and Cohn LLP

 

Attention: Phillip D. Torrence, Esq.

 

350 East Michigan Avenue, Suite 300

 

Kalamazoo, MI 49007-3800

 

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or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

 

(d)                                  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

 

(e)                                  The Company hereby agrees to indemnify the
Executive and hold the Executive harmless to the extent provided under the
Articles of Incorporation and the By-Laws of the Company, as each may be amended
from time to time, and the Indemnification Agreement between the Company and the
Executive, as it may be amended from time to time, against and in respect of any
and all actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including reasonable attorney’s fees), losses, and damages resulting from the
Executive’s good faith performance of the Executive’s duties and obligations
with the Company. This obligation shall survive the Employment Period.
Notwithstanding the foregoing, the Executive’s right to indemnification pursuant
to this Section 11(e) shall be made ineffective as necessary to ensure
compliance with 12 C.F.R. Part 359.

 

(f)                                    From and after the Commencement Date, the
Company shall cover the Executive under directors’ and officers’ liability
insurance both during and, while potential liability exists, after the
Employment Period in the same amount and to the same extent as the Company
covers its other executive officers and directors.

 

(g)                                 The Company may withhold from any amounts
payable under this Agreement such Federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.

 

(h)                                 The Executive’s or the Company’s failure to
insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the executive to effect a
Termination for Good Reason shall not be deemed to be a waiver of such provision
of right or any other provision or right of this Agreement.

 

(i)                                    This Agreement, and all agreements,
documents, instruments, schedules, exhibits or certificates prepared in
connection herewith, represent the entire understanding and agreement between
the parties with respect to the subject matter hereof, supersede all prior
agreements or negotiations between such parties, including, without limitation,
the Prior Employment Agreement, and may be amended, supplemented or changed only
by an agreement in writing which makes specific reference to this Agreement or
the agreement or document delivered pursuant hereto, as the case may be, and
which is signed by the party against whom enforcement of any such amendment,
supplement or modification is sought.

 

SIGNATURES ON THE FOLLOWING PAGE

 

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as of the date first above written.

 

 

THE EXECUTIVE:

 

THE COMPANY:

 

 

 

 

 

MACKINAC FINANCIAL CORPORATION

 

 

 

/s/ Paul D. Tobias

 

By:

/s/ Walter J. Aspatore

PAUL D. TOBIAS

 

Name: Walter J. Aspatore

 

 

Title: Lead Director

 

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

 

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EXHIBIT A

 

FORM OF WAIVER AND RELEASE

 

PLEASE READ THIS WAIVER AND RELEASE CAREFULLY. IT INCLUDES A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS UP TO AND INCLUDING THE DATE THAT THIS AGREEMENT AND
RELEASE IS EXECUTED BY THE COMPANY AND THE EXECUTIVE.

 

1.                                      For and in consideration of the payments
and other benefits due to [Name] (the “Executive”) pursuant to that certain
Employment Agreement (the “Employment Agreement”) dated August 10, 2012 (the
“Effective Date”), by and between MACKINAC FINANCIAL CORPORATION, a Michigan
corporation (the “Company”), and the Executive, and for other good and valuable
consideration, including the mutual promises made herein, the Executive and the
Company irrevocably and unconditionally release and forever discharge each other
and each and all of their present and former officers, agents, directors,
managers, employees, representatives, affiliates, shareholders, members, and
each of their successors and assigns, and all persons acting by, through, under
or in concert with it, and in each case individually and in their official
capacities (collectively, the “Released Parties”), from any and all charges,
complaints, grievances, claims and liabilities of any kind or nature whatsoever,
known or unknown, suspected or unsuspected (hereinafter referred to as “claim”
or “claims”) which either party at any time heretofore had or claimed to have or
which either party may have or claim to have regarding events that have occurred
up to and including the date of the execution of this Release, including,
without limitation, any and all claims related, in any manner, to the
Executive’s employment or the termination thereof. In particular, each party
understands and agrees that the parties’ release includes, without limitation,
all matters arising under any federal, state, or local law, including civil
rights laws and regulations prohibiting employment discrimination on the basis
of race, color, religion, age, sex, national origin, ancestry, disability,
medical condition, veteran status, marital status and sexual orientation, or any
other characteristic protected by federal, state or local law including, but not
limited to, claims under Title VII of the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment Act of 1967, as amended, the Older Workers
Benefit Protection Act of 1990, as amended, the Americans with Disabilities Act,
the Rehabilitation Act, the Occupational Safety and Health Act, the Family and
Medical Leave Act, the Employee Retirement Income Security Act of 1974, as
amended (except as to vested retirement benefits, if any), the Worker Adjustment
and Retraining Notification Act, federal and state wage and hour laws, or any
common law, public policy, contract (whether oral or written, express or
implied) or tort law, or any other federal, state or local law, regulation,
ordinance or rule having any bearing whatsoever.

 

2.                                      The Executive must sign and return this
Release to the Company on or before the thirtieth (30th) day following the
Termination Date (as defined in the Employment Agreement). The Executive can
revoke this Release on or before the seventh (7th) day following the date of
delivery of this Release to the Company, by sending written notification of the
Executive’s intent to revoke this Release to the Company.  This Release shall
not become effective or enforceable until the seven (7)-day revocation period
has expired.  All correspondence pursuant to this Section 2 must be sent to the
attention of the

 

EXHIBIT A - 1

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Corporate Secretary at 130 S Cedar Street, Manistique, MI 49854-0369 by personal
delivery or guaranteed overnight delivery.

 

3.                                      The Executive and the Company
acknowledge that they may have sustained losses that are currently unknown or
unsuspected, and that such damages or losses could give rise to additional
causes of action, claims, demands and debts in the future. Nevertheless, the
Executive and the Company each acknowledge that this Release has been agreed
upon in light of this realization and, being fully aware of this situation, the
Executive and the Company nevertheless intend to release each other from any and
all such unknown claims, including damages which are unknown or unanticipated.
The parties understand the word “claims” to include all actions, claims, and
grievances, whether actual or potential, known or unknown, and specifically but
not exclusively all claims arising out of the Executive’s employment and the
termination thereof. All such “claims” (including related attorneys’ fees and
costs) are forever barred by this Release and without regard to whether those
claims are based on any alleged breach of a duty arising in a statute, contract,
or tort; any alleged unlawful act, including, without limitation, age
discrimination; any other claim or cause of action; and regardless of the forum
in which it might be brought.

 

4.                                      Notwithstanding anything else herein to
the contrary, this Release shall not affect, and the Executive and the Company,
as applicable, do not waive or release: (a) rights to indemnification the
Executive may have under (i) applicable law, (ii) any other agreement between
the Executive and a Released Party and (iii) as an insured under any director’s
and officer’s liability or other insurance policy now or previously in force;
(b) any right the Executive may have to obtain contribution in the event of the
entry of judgment against the Executive as a result of any act or failure to act
for which both the Executive and any of the Company or its affiliates or
subsidiaries (collectively, the “Affiliated Entities”) are or may be jointly
responsible; (c) the Executive’s rights to benefits and payments under any stock
options, restricted stock, restricted stock units or other incentive plans or
under any retirement plan, welfare benefit plan or other benefit or deferred
compensation plan, all of which shall remain in effect in accordance with the
terms and provisions of such benefit and/or incentive plans and any agreements
under which such stock options, restricted shares, restricted stock units or
other awards or incentives were granted or benefits were made available; (d) the
Executive’s rights as a shareholder of any of the Affiliated Entities; (e) any
obligations of the Affiliated Entities under the Employment Agreement; (f) any
clawback required pursuant to restrictions on compensation for employees of
financial institutions; (g) any claims brought by the Federal Deposit Insurance
Corporation as receiver or conservator of the Company or its subsidiary mBank
that have not been released or waived by the Company; (h) claims for improper
self-dealing; improper distributions and other limitations imposed by applicable
law; (i) any finally and judicially determined, knowing violation of the law by
the Executive that has a material and adverse impact on the Company; (j) any
fraud or other intentional misconduct by the Executive that has a material and
adverse impact on the Company; (k) any material violation of any
confidentiality, nonsolicitation or noncompetition agreement or provision
executed by the Executive; or (l) any other claim not subject to release by
operation of law.

 

5.                                      The Executive acknowledges and agrees
that the Executive: (a) has been given at least twenty-one (21) days within
which to consider this Release and its ramifications and discuss the terms of
this Release with the Company before executing it (and that any

 

EXHIBIT A - 2

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modification of this Release, whether material or immaterial, will not restart
or change the original twenty-one (21)-day consideration period) and the
Executive fully understands that by signing below the Executive is voluntarily
giving up any right which the Executive may have to sue or bring any other
claims against the Released Parties; (b) has been given seven (7) days after
delivering this Release to the Company to revoke this Release; (c) has been
advised to consult legal counsel regarding the terms of this Release; (d) has
carefully read and fully understands all of the provisions of this Release;
(e) knowingly and voluntarily agrees to all of the terms set forth in this
Release; and (f) knowingly and voluntarily intends to be legally bound by the
same. The Executive also understands that, notwithstanding anything in this
Release to the contrary, nothing in this Release shall be construed to prohibit
the Executive from (y) filing a charge or complaint with the Equal Employment
Opportunity Commission or any other federal, state or local administrative or
regulatory agency, or (z) participating in any investigation or proceedings
conducted by the Equal Employment Opportunity Commission or any other federal,
state or local administrative or regulatory agency; however, the Executive
expressly waives the right to any relief of any kind in the event that the Equal
Employment Opportunity Commission or any other federal, state or local
administrative or regulatory agency pursues any claim on the Executive’s behalf.

 

6.                                      This Release is final and binding and
may not be changed or modified except in a writing signed by both parties.

 

SIGNATURE ON THE FOLLOWING PAGE

 

EXHIBIT A - 3

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IN WITNESS WHEREOF, the Executive has executed this Release as of the date set
forth below.

 

 

 

 

 

Date

 

PAUL D. TOBIAS

 

EXHIBIT A - 4

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