Exhibit 10.2

 

IRREVOCABLE TRUST FOR THE

DIRECTOR DEFERRED COMPENSATION PLAN

(A Rabbi Trust with model language of IRS Rev. Proc. 92-64)

 

THIS IRREVOCABLE TRUST FOR THE DIRECTOR DEFERRED COMPENSATION PLAN ("TRUST") is
made this 28th day of September, 2012, by and between MBT Financial Corp.
(“MBT”), Grantor and the Wealth Management Group of Monroe Bank & Trust,
(“Trustee”), Trustee.

 

WHEREAS, MBT has adopted a nonqualified deferred compensation plan, titled the
"Director Deferred Compensation Plan" ("Plan"), for its directors, and;

 

WHEREAS, MBT has incurred or expects to incur liability under the terms of such
Plan with respect to the individual(s) participating in such Plan; and

 

WHEREAS, MBT wishes to establish a Trust and to contribute to the Trust assets
that shall be held therein, subject to the claims of MBT’s creditors in the
event of MBT’s insolvency, as herein defined, until paid to Plan participants
and their beneficiaries in such manner and at such times as specified in the
Plan; and

 

WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for such of
MBT’s directors who participate for purposes of Title I of the Employee
Retirement Income Security Act of 1974; and

 

WHEREAS, it is the intention of MBT to make contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;

 

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:

 

Section 1. Establishment of Trust

 

A. MBT hereby deposits with Trustee in trust, shares of MBT Financial Corp.
common stock and/or cash, which shall become the principal of the Trust to be
held, administered and disposed of by Trustee as provided in this Trust
Agreement.

 

B. The Trust hereby established shall be irrevocable.

 

C. The Trust is intended to be a grantor trust, of which MBT is the grantor,
within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of
the Internal Revenue Code of 1986, as amended, and shall be construed
accordingly.

 

D. The principal of the Trust and any earnings thereon shall be held separate
and apart from other funds of MBT and shall be used exclusively for the uses and
purposes of Plan participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Plan and this Trust Agreement shall be mere unsecured contractual
rights of Plan participants and their beneficiaries against MBT. Any assets held
by the Trust will be subject to the claims of MBT’s general creditors under
federal and state law in the event of Insolvency, as defined in Section 3, A
herein.

 

 

 

 

 

E. MBT, in its sole discretion, may at any time, or from time to time, make
additional deposits of cash or other property in trust with Trustee to augment
the principal to be held, administered and disposed of by Trustee as provided in
this Trust Agreement. Neither Trustee nor any Plan participant or beneficiary
shall have any right to compel such additional deposit.

 

 

Section 2. Payments to Plan Participants and Their Beneficiaries.

 

A. MBT shall deliver to Trustee a schedule (the “Payment Schedule”) that
indicates the amounts payable in respect to each Plan participant (and his or
her beneficiaries), that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which such amount is
to be paid (as provided for or available under the Plan), and the time of
commencement for payment of such amounts. Except as otherwise provided herein,
Trustee shall make payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and paid
by MBT.

 

B. The entitlement of a Plan participant or his or her beneficiaries to benefits
under the Plan shall be determined by MBT or such party as it shall designate
under the Plan, and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan.

 

C. MBT may make payment of benefits directly to Plan participants or their
beneficiaries as they become due under the terms of the Plan. MBT shall notify
Trustee of its decision to make payment of benefits directly prior to the time
amounts are payable to participants or their beneficiaries. In addition, if the
principal of the Trust and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan, MBT shall make
the balance of each such payment as it falls due. Trustee shall notify MBT where
principal and earnings are not sufficient.

 

Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When
MBT Is Insolvent.

 

A. Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if MBT is Insolvent. MBT shall be considered “Insolvent” for
purposes of this Trust Agreement if (i) MBT is unable to pay its debts as they
become due, or (ii) MBT is subject to a pending proceeding as a debtor under the
United States Bankruptcy Code.

 

B. At all times during the continuance of this Trust, as provided in Section 1,
D hereof, the principal and income of the Trust shall be subject to claims of
general creditors of MBT under federal and state law as set forth below.

 

1. The Board of Directors and Chief Executive Officer of MBT shall have the duty
to inform Trustee in writing of MBT’s insolvency. If a person claiming to be a
creditor of MBT alleges in writing to Trustee that MBT has become Insolvent,
Trustee shall determine whether MBT is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits to Plan
participants or their beneficiaries.

 

 

 

 

 

2. Unless Trustee has actual knowledge of MBT’s Insolvency, or has received
notice from MBT or a person claiming to be a creditor alleging that MBT is
Insolvent, Trustee shall have no duty to inquire whether MBT is Insolvent.
Trustee may in all events rely on such evidence concerning MBT’s solvency as may
be furnished to Trustee and that provides Trustee with a reasonable basis for
making a determination concerning MBT’s solvency.

 

3. If at any time Trustee has determined that MBT is Insolvent, Trustee shall
discontinue payments to Plan participants or their beneficiaries and shall hold
the assets of the Trust for the benefit of MBT’s general creditors. Nothing in
this Trust Agreement shall in any way diminish any rights of Plan participants
or their beneficiaries to pursue their rights as general creditors of MBT with
respect to benefits due under the Plan or otherwise.

 

4. Trustee shall resume the payment of benefits to Plan participants or their
beneficiaries in accordance with Section 2 of this Trust only after Trustee has
determined that the Company is not Insolvent (or is no longer insolvent).

 

C. Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3, B hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by MBT in lieu of payments provided for
hereunder during any such period of discontinuance.

 

Section 4. Investment Authority.

 

A. MBT shall execute an Investment Policy Statement which shall set forth the
parameters of Trustee’s authority and investment options.

 

B. Trustee may invest in securities (including common stock) or obligations
issued by MBT. All rights associated with assets of the Trust shall be exercised
by Trustee or the person designated by Trustee, and shall in no event be
exercisable by or rest with Plan participants.

 

C. MBT shall have the right at anytime, and from time to time in its sole
discretion, to substitute assets of equal fair market value for any asset held
by the Trust. This right is exercisable by MBT in a nonfiduciary capacity
without approval or consent of any person in a fiduciary capacity.

 

 

Section 5. Disposition of Income.

 

During the term of this Trust, all income received by the Trust, net of expenses
and taxes, shall be accumulated and reinvested.

 

 

 

 

Section 6. Resignation or Removal of Trustee.

 

A. The Trustee may resign at any time by written notice to the Company, which
shall be effective 30 days after receipt of such notice unless the Company and
the Trustee agree otherwise. The Company may remove the Trustee on 10 days
notice or upon shorter notice accepted by the Trustee.

 

B. Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 30 days after receipt of notice of
resignation, removal or transfer, unless MBT extends the time limit.

 

C. If Trustee resigns or is removed, a successor shall be appointed, in
accordance with paragraph D, hereof, by the effective date of resignation or
removal under paragraph D, of this section. If no such appointment has been
made, Trustee may apply to a court of competent jurisdiction for appointment of
a successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.

 

D. If Trustee resigns or is removed, MBT may appoint any third party, such as a
bank trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by MBT or the successor Trustee
to evidence transfer.

 

 

Section 7. Amendment or Termination.

 

A. This Trust may be amended by a written instrument executed by Trustee and
MBT. Notwithstanding the foregoing, no such amendment shall conflict with the
terms of the Plan or shall make the Trust revocable.

 

B. The Trust shall not terminate until the date on which Plan participants and
their beneficiaries are no longer entitled to benefits pursuant to the terms of
the Plan. Upon termination of the Trust any assets remaining in the Trust shall
be returned to MBT.

 

 

Section 8. Miscellaneous.

 

A. Any provision of this Trust Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating the remaining
provisions hereof.

 

B. Benefits payable to Plan participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment , garnishment, levy,
execution or other legal or equitable process.

 

C. This Trust Agreement shall be governed by and construed in accordance with
the laws of the state of Michigan.

 

 

 

 

 

This Trust Agreement shall be effective as of the date first above written.

 

MBT Financial Corp.     Monroe Bank & Trust                       /s/ H. Douglas
Chaffin     /s/ Scott E. McKelvey   By: H. Douglas Chaffin     By: Scott E.
McKelvey   Its: President and
       Chief Executive Officer     Its: Executive Vice President,
       Senior Wealth Management Officer