Exhibit 10.4

EMPLOYMENT AGREEMENT

This Agreement is made this 1st day of July , 2003, by and between Pavilion
Bancorp, Inc., a Michigan Corporation (herein referred to as the “Holding
Company”) and the Bank of Lenawee, a Michigan banking corporation (herein
referred to as the “Company”), and Richard J. DeVries (herein referred to as
“Executive”).

WHEREAS, the Company desires to employ Executive and Executive desires to
continue to be employed by the Company, upon the terms and subject to the
conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth below, the parties agree as follows:

1. Employment of Executive and Duties.

The Company agrees to appoint and to continue the employment of Executive as
President and Chief Executive Officer of the Bank of Lenawee and Executive
accepts such employment and agrees to serve as President in accordance with the
terms of this Agreement. Executive shall perform on a fill-time basis such
duties and responsibilities as are assigned to him from time to time by the
Board of Directors or by the Chair of the Board of Directors.

Executive shall faithfully devote all of his time, attention and energy to the
management, supervision, promotion and improvement of the business and affairs
of the Company and shall carry out all of his working duties in strict
observance of the interests of the Company.

2. Term.

The term of employment under this Agreement shall commence on July 1, 2003, and
shall continue to and include July 1, 2006, unless earlier terminated in
accordance with Section 3 of this Agreement. This Agreement supersedes and
cancels all prior agreements, oral, written or otherwise. This Agreement may be
extended only by mutual written agreement signed by both the Executive and the
Chair of the Board of Directors of the Company, and Executive shall have no
expectancy that his employment or this Agreement will be extended or renewed
without such mutual written extension. In the event the Company elects not to
extend this Employment Agreement beyond, its term, the Company agrees to provide
Executive with written notice of such, intent no later than April 1, 2006. In
the event either party desires to enter into negotiations for a new, successor
agreement, written notice of such a request must be provided to the other party
no later than January 1, 2006.

3. Duration of Contract and Termination.

  3.1 Termination without Cause.

  This Agreement may be terminated at any time by either party for any or no
cause, or for any or no reason, and the employment relationship between
Executive and the Company shall be regarded as an “employment at will.” The
Company shall not be required to provide Executive with any prior notice of
termination, written or otherwise, and may effect termination of this Agreement
and of Executive’s employment immediately upon giving oral or written notice.
Executive may terminate this Agreement upon providing the Company with thirty
(30) days’ written notice. Written notice shall be served by registered letter
or telegram, and the notice period shall commence and run from the date of
postmark of such letter or telegram.

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  In the event the Company terminates Executive’s employment and this Agreement
for any reason other than those provided in Paragraph 3.2 and 3.3 below, the
Company shall pay Executive a lump sum amount equal to Executive’s monthly
salary at the time of termination multiplied by 12, less applicable state,
federal and, local income tax and PICA withholdings.

  3.2 Termination for Cause.

  The Company shall have the right to terminate the employment and services of
Executive, effective immediately upon giving oral or written notice, if
Executive:

  3.2.1 Dies during the term of this Agreement (in which case no notice of
termination need be given);

  3.2.2 Ceases to render services to the Company as provided in this Agreement
(other than by reason of disability) or otherwise breaches any of the terms or
provisions of this Agreement on his part to be observed, performed or fulfilled;

  3.2.3 Is repeatedly absent from' work without cause acceptable to Company;

  3.2.4 Is intoxicated or under the influence of alcohol or controlled
substances while on the Company's business or the Company's premises;

  3.2.5 Is convicted of a felony or of any violation of law involving moral
turpitude;

  3.2.6 Embezzles any property belonging to the Company or willfully injures the
Company or any property of the Company; or

  3.2.7 Engages in gross negligence, fraud, dishonesty or behavior inimical to
the business or welfare of the Company.

  Termination of this Agreement by its Company for any of the acts or activities
of Executive specified in this paragraph 3.2 shall be deemed, for all purposes
of this’ Agreement, to be a “Termination for Cause.” In the event Company
terminates Executive’s employment for Cause, Executive shall be entitled to
receive only Executive’s salary as accrued pro rata through the effective date
of his termination of employment and any earned but unpaid time off, all in a
single lump sum, less applicable tax and PICA withholdings. Executive shall have
no rights to be paid salary or any other payment by the Company upon or after
Executive’s Termination for Cause.

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  3.3 Termination Due To Incapacity Or Inability To Perform Duties.

  In the event that Executive is unable to perform the functions of the
President, whether totally or partially, by reason of illness, accident or
incapacity for a period of more than three (3) months, the Company shall have
the right at any time subsequent to such period to terminate Executive’s
employment and this Employment Agreement by written notice to the Executive, and
all obligations of the Company shall thereupon cease, except as otherwise
required by any disability insurance policy provided by the Company to the
Executive and other executives. During the three-month period during which
Executive is unable to perform the functions of the President position due to
incapacity, Executive shall receive short-term disability benefits available to
other executive personnel and a supplemental monthly payment which, when added
to Executive’s monthly disability benefits, provides Executive with a sum equal
to his regular monthly salary. During this three-month period, Executive shall
not be paid the salary provided in Section 3 of this Agreement. All job
functions and performance responsibilities required for the position of
President shall be determined by the Board of Directors of the Bank of Lenawee.
The Board of Directors of the Bank of Lenawee shall also make the ultimate
determination as to whether Executive is performing those functions and
responsibilities. In the event that Executive’s employment is terminated
pursuant to this Paragraph 3.3 by reason of illness, accident or incapacity, the
Company shall pay Executive for a period not to exceed twelve (12) months a
supplement which, when added to all other disability and paid leave benefits
already provided by or through Company sponsored insurance or benefit programs,
will equal two-thirds (2/3) of Executive’s annual base salary be was receiving
as of the date of termination,

  3.4 Termination By Executive.

  Executive shall have the right to terminate this Agreement and his employment
provided he gives thirty (30) calendar days advance notice in writing to the
Chair of the Board of Directors. The employment relationship and this Agreement
shall terminate thirty (30) days after receipt of such notice, and the Company
shall be relieved of making any further salary payments to Executive, In the
event Executive terminates this Agreement or retires, he shall receive salary
which has been earned and accrued pro-rata through die effective date of the
termination and earned but unpaid leave but shall not be eligible for any
pro-rated bonus under the Company’s senior officer’s bonus plan. Notwithstanding
the foregoing, Executive will be paid a lump sum amount equal to Executive’s
monthly salary at the time of termination multiplied by 12, less applicable
state, federal and local income tax and PICA withholdings, if mid only if (a)
Executive’s duties and responsibilities are modified as a result of a “Change in
Control” as defined below; or (b) there is an assignment of responsibilities by
the Company to Executive which is a substantial diminution of Executive’s then
present functions and responsibilities.

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  For purposes of this Agreement, “Change in Control” shall mean the purchase or
other acquisition, after July 1, 2003, by any person, entity or group of
persons, within the meaning of section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (“Act”), or any comparable successor provisions, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 30
percent or more of either the outstanding shares of common stock or the combined
voting power of the Company’s or the Holding Company’s then outstanding voting
securities entitled to vote generally, or the approval by the stockholders of
the Company or of the Holding Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were stockholders
of the Company or of the Holding Company immediately prior to such
reorganization, merger or consolidation do not immediately thereafter own more
than 50 percent of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated Company’s or
the Holding Company’s then outstanding securities, or a liquidation or
dissolution of the Company or the Holding Company, or of the sale of all or
substantially all of the Company’s or the Holding Company’s assets.

  It is also understood and agreed that payment of any amounts under
:subparagraphs 3.1, 3.3 or 3.4 above is further conditioned upon Executive
signing a settlement agreement and general release attached hereto in the form
of Appendix A or as may be modified from time to time by Company with the
consent of Executive.

4. Compensation.

Effective July 1, 2003, the Company shall pay Executive a base salary at an
annual rate of $160,000 payable in accordance with the Company’s normal payroll
practices. The Company reserves the right to review and adjust the Executive’s
salary at any time during the term of this agreement. Such salary shall be paid
in periodic installments in accordance with the Company’s normal mode of
executive salary payment. All compensation referred to in this Section is stated
in. terms of gross amount. The Company will withhold from such gross amount
required deductions, such as federal, state and local income taxes and
unemployment taxes.

5. Benefits.

  5.1 During the term of this Agreement, Executive shall be eligible to receive
or participate in those benefits made available to the Company’s other
Executives, including, but not limited to group term life and disability
insurance programs, medical plan, 40 1(k) savings plan with up to a 2% match in
Pavilion Bancorp Inc. stock, defined benefit retirement plan, dental plan, paid
time off benefits, Bank observed paid holidays, free Bank services, educational
assistance and other reasonable and customary fringe benefits which may from
time-to-time be made available by the Company; provided, however, that the
availability of such benefits is subject to any applicable eligibility
requirement of each such program and to the terms of the plan documents which
govern the availability, eligibility and level of such benefits. Executive shall
also be eligible to participate in the Pavilion Bancorp, inc. Stock Option Plan,
the bonus plan for senior officers and the Section 125 plan. It is further
understood and agreed that compensation arrangements among the Executives of the
Company vary and, accordingly, a particular benefit may not be made available to
Executive even though it is made available to another Executive. Nothing herein
shall obligate the Company to continue any such fringe benefits for Executive if
discontinued for other Executives of the Company.

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  5.2 The Company will provide Executive with a four-door, full size automobile
or comparable vehicle for Executive’s business and personal use. The purchase
price of the vehicle shall not exceed $45,000, and the Company shall retain
title to the vehicle. The Company will maintain collision and liability
insurance coverage on such vehicle so long as the vehicle is driven by Executive
and will reimburse Executive for reasonable and customary expenses incurred in
the routine maintenance of the vehicle. Upon Executive’s termination from
employment or retirement, Executive has the option of either returning the
vehicle to the Company or purchasing the vehicle at used car book value.

  5.3 On termination of this Agreement and Executive’s employment for whatever
reason or upon Executive’s retirement (either early retirement or upon normal
retirement age), the Company will purchase Executive’s primary residence located
in the Company’s market area based upon two qualified estimates of the fair
market value of said home and property, The estimates must be submitted in
writing by certified appraisers, one of whom is selected by the Executive and
one of whom is selected by the Company. The average of these two estimates will
be deemed the purchase price. The Company shall pay all normal closing costs and
fees. In no event will the Company be obligated to pay a purchase price for
Executive’s residence and property which exceeds $400,000. The Company agrees to
effect said purchase no later than six (6) months following Executive’s
termination or retirement.

6. Resignation From Board Or Agency Appointments.

        To the extent that Executive serves, solely by virtue of and in
connection with his employment by the Company, as a member of any board of
directors, board of trustees, or advisory board, or In a capacity representing
Company, the Holding Company, or any Affiliate, effective with Executive’s
termination of employment from Company, Executive shall resign from any and all
positions Executive may have on die Board of Directors of the Bank of Lenawee or
its Holding Company or any other representative relationships, Company is hereby
appointed as Executive’s attorney-in-fact to tender any such ‘resignation from
the Board of Directors of the Bank of Lenawee or its Holding Company or any
other Affiliate Board. Executive agrees to cooperate with Company by signing a
resignation letter or submitting a written resignation as may be required by any
such board or organization to formally effectuate Executive’s resignation from
such service or capacity.

7. Expenses.

Traveling and living expenses on business trips and expenses for entertaining
customers will be reimbursed by the Company in accordance with the Company’s
prevailing rules and policies provided such expenses do not exceed reasonable
limits and are supported by complete documentation and receipts detailing the
amounts and description of each expenditure.

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8. Special Obligations of the Executive.

  The Executive shall:

  8.1 Refrain from gainful employment on behalf of a third party and shall not
engage in business on his/her own account unless he/she has been specifically
authorized in writing by the Company to do so in each and every case.

  8.2 Refrain from divulging any confidential information concerning the
Company, the Holding Company, and any affiliates (herein the “Companies”) during
and after the termination of employment for whatever reason, including
retirement. For purposes of this Agreement, “confidential information” means any
details of the business or affairs of the Companies (including, without
limitation, financial information, organizational structure, strategic planning,
sales, marketing strategies, compensation and incentive plans, data processing
and other systems, personnel policies and related compensation programs of the
Companies); any customer or client account information or customer lists owned
or used by the Companies; and information, knowledge or data of a technical
nature (including, without limitation, methods, know-how, formulae,
compositions, processes, discoveries, inventions or research methods) of or used
by the Companies; any information, knowledge or data relating to future
developments and marketing strategies (including, without limitation, research
and development) of or used by the Companies; and any and all trade secrets of
the Companies or used by the Companies which may be imparted to Executive, and
any other information pertaining to the Companies which has not been made
public, whether in Companies’ reports, at shareholders’ meetings, in handouts or
statements to the press and lectures or publications by authorized Executives or
by the Companies, or any of them, In the event there is any dispute or
uncertainty as to whether certain information constitutes “confidential
information,” the Chair of the Board of Directors of the Company shall determine
whether a given item of information is or is not confidential.

  Executive shall not impart confidential information to fellow Executives
except where necessary for the performance of his/her duties.

  Executive may disclose Confidential Information if required by any judicial or
governmental request, requirement or order; provided that Executive will take
reasonable steps to give the Companies sufficient prior notice in order to
contest such request, requirement or order. Executive may also disclose
Confidential Information if the information has become known to the general
public by means other than Executive’s breach of this Agreement.

  8.3   Of his own accord surrender all business documents and records to the
Company or its nominated representative upon termination of employment. The
Executive may also be required to surrender such documents and records at any
time during the term of this Agreement.

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9. Non-Competition.

  9.1 Non-Competition and Solicitation. Executive acknowledges and recognizes
the highly competitive nature of the business of the Company. In consideration
of the compensation described in this Agreement, Executive agrees that for a
period of time coextensive with the Term and for one year following Executive’s
termination of employment with the Company, for whatever reason and whether or
not pursuant to the terms of this Agreement (the “Non-Compete Period”),
Executive shall not, either directly or indirectly (and whether or not for
compensation), work for, be employed by, own, manage, operate, control, finance,
participate or engage in, or have any interest in, any person, firm, entity,
financial institution, partnership, limited partnership, limited liability
company, corporation or business (whether as an employee, owner, sole
proprietor, partner, venturer, member, shareholder; officer, director, agent,
creditor, consultant or in any capacity which calls for the rendering of
personal services, advice, acts of management, operation or control) which
engages in any activity substantially the same as or competitive with the
business of the Company as it is then conducted or planned to be conducted (the
“Business”), in Lenawee, Washtenaw, Jackson, and Monroe Counties of the State of
Michigan (the “Restricted Territory”). The foregoing shall not, however, be
deemed to prevent Executive from owning, for investment purposes only, up to 1%
of the securities of any corporation the shares of which are traded on a
securities exchange or in the over-the-counter market.

  Executive further agrees that Executive shall not, directly or indirectly, at
any time during the Non-Compete Period: (a) divert or attempt to divert from the
Companies any work within the definition of the Business, whether or not in the
Restricted Territory; (b) solicit, contact, call upon or attempt to solicit, or
provide services to, any of the Companies’ Business Customers, suppliers or
actively sought potential customers or suppliers for the purpose of doing
anything within the definition of the Business, or any work reasonably related
to the Business, whether or not in the Restricted Territory; or (c) induce or
attempt ~to induce any person who is an Executive or employee of the Companies
to leave the employ of the Companies or of any affiliate of the Companies
whether or not in the Restricted Territory. For the purposes of this Agreement,
“Business Customer” means any person or entity to, with or from whom the Company
has within a three (3) year period preceding the Executive’s termination:

  9.1.1 Provided banking, leading, credit, mortgage or other financial services;

  9.1.2 Submitted a bid for, or otherwise negotiated for, the providing of
products or the performance of services;

  9.1.3 Provided products or performed services;

  9.1.4 Entered into an agreement for the providing of products or performance
of services; or

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  9.1.5 Entered into any strategic research and development alliance, strategic
marketing alliance, or strategic promotional alliance.

  9.2 Remedies. Executive has had knowledge of the affairs, trade secrets,
customers, potential customers and other proprietary information with respect to
the Business, and Executive acknowledges and agrees that compliance with the
covenants set forth in Paragraphs 8.2 and 9 is necessary for the protection of
the Business, and the goodwill and other proprietary interests of the Companies
and that any violation of this Agreement will cause severe and irreparable
injury to the Business, and the goodwill and proprietary interests of the
Companies, which injury is not adequately compensable by money damages.
Accordingly, in the event of a breach (or threatened or attempted breach) of
Paragraph 8.2 and/or 9, any of the Companies, in addition to any other rights
and remedies, including disgorgement of all profits wrongfully derived by
Executive from such breach, shall be entitled to immediate appropriate
injunctive relief or a decree of specific performance, without the necessity of
showing any irreparable injury or special damages.

  Executive agrees that the remedy at law for breach of the obligations set
forth in Paragraphs. 8. and 9 of this Agreement is. inadequate and in the event
of a breach or threatened breach thereof Executive agrees that the Companies,
without posting any bond, shall be entitled to seek equitable relief in the form
of specific performance temporary restraining order, temporary, preliminary or
permanent injunction, or Other appropriate equitable remedy.

  If, in any judicial proceeding, a court shall refuse to enforce any of the
covenants included herein, then said unenforceable covenant(s) shall be deemed
modified so as to become enforceable to the maximum extent permitted, and if
such modification is not permitted, then such unenforceable covenants shall be
deemed eliminated from these provisions for the purpose of the proceeding to the
extent necessary to permit the remaining separate covenants to be enforced. It
is the intent and agreement of the Company and Executive that these covenants be
given the maximum force, effect and application permissible under law. The
provisions of Paragraphs 8.2 and 9 shall survive the termination of this
Agreement.

10. Assignment and Pledging of Salary.

The Executive shall neither assign nor pledge to third parties his/her salary or
any other indemnity which might be due to him from the Company. The duties and
obligations of Executive under this Agreement are personal unto the Executive
and may not be assigned, delegated or otherwise transferred.

11. Acceptance of Presents.

The Executive may not, in connection with his work for the Company, accept or
pledge himself to accept either directly or indirectly any presents, commission
or other favor of any kind whatsoever without the prior knowledge of the
Company.

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12. Retirement.

Upon retirement or termination of employment for whatever reason, the
confidentiality and non-competition obligations of this Agreement shall continue
in full force and effect and remain binding on the Executive.

13. Premature Discharge of Executive with Notice.

Without prejudice to the compensation set forth in paragraph 4 of this
Agreement, the Company may wholly or partially forego the services of the
Executive between the date when notice of termination was first given and the
date of contract expiration. In the event the Company decides to wholly or
partially forego the services of Executive, Company has the right to pay in cash
any remaining salary which the Executive has not yet been paid for the balance
of the one-month notice period set forth in paragraph 3.4 of this Agreement,

14. Entire Agreement.

This Agreement, together with the Executive Confidentiality Agreement, contains
the entire agreement of the parties hereto with respect to the subject matter
hereby referenced and may not be changed, altered or extended (including by
additions or deletions), orally or otherwise, except by an agreement or consent
in writing signed by both the Executive and the Chair of the Board of Directors
of the Company. Such writing may only be signed on behalf of the Company by the
Chair of the Board of Directors of the Company. This Agreement supersedes all
other agreements, written or otherwise and shall in no event be modified by any
oral statement, agreement, commitment, representation or understanding.

15. Severability.

If any term or provision of this Agreement or the application thereof to any
circumstance shall, to any extent and for any reason, be held invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to circumstances other than those as to which it is held to be
invalid or unenforceable, shall not be affected thereby and shall be construed
as if such invalid or unenforceable term or provision bad never been contained
herein, and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. If any portion of this
Agreement is held to be excessively broad as to time, duration, geographical
scope, activity or subject, it shall be construed by limiting or reducing the
provision as required so that the provision as limited or reduced is enforceable
under applicable law.

16. Successors.

The obligations of the Company under this Agreement, shall be binding upon, and
the rights of the Company hereunder shall inure to the benefit of, the Company
and its successors and assigns.

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17. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws
and judicial decisions of the State of Michigan.

18. Agreement To Arbitrate Employment Claims.

In the event Executive fails for whatever reason to execute the settlement
agreement and general release attached hereto as Appendix A, the Company, the
Holding Company and Executive agree to submit to final and binding arbitration
in accordance with the National Rules for the Resolution of Employment Disputes
issued by the American Arbitration Association, effective July 1, 2003, any
existing or future employment disputes, controversies or claims arising out of
Executive’s employment with the Company or the termination of that employment,
including but not limited to claims for breach of contract, common law tort
claims, claims for nonpayment of wages, commissions, or overtime pay, claims of
unlawful termination or retaliation, and claims of employment discrimination
based on race, se; age, national, origin, pregnancy, disability or other status
protected by state or federal law or any other bias prohibited by state or
federal law. Binding arbitration under the Federal Arbitration Act, 9 U. S.C.
Section’ 1, shall be the sole and exclusive means of resolving any dispute
arising out of Executive’s employment or the termination from employment by the
Company or by Executive, and no other suit or action can be brought by Executive
‘In any, court or in any other forum. In addition, any disputes arising during
Executive’s employment involving claims of unlawful discrimination or unlawful
harassment under federal or state statutes shall be submitted exclusively to
binding arbitration under the above provisions.

Executive understands and agrees that arbitration of such disputes and claims
shall be the sole and exclusive means for resolving any and all existing and
future disputes or controversies arising out of Executive’s employment with the
Company or the termination thereof; with the exception of claims for benefits
under the Michigan Workers’ Disability Compensation Act and the Michigan
Employment Security Act. Notwithstanding anything contained herein to the
contrary, this Agreement to arbitrate shall not be deemed to be a waiver of the
Company’s right to secure equitable relief including an injunction if and when
otherwise appropriate to enforce Sections 8 and 9 of this Agreement.

Executive understands that by signing this Agreement Executive is waiving any
right that he/she may have to a jury trial or a court trial of any
employment-related dispute. Executive further understands and agrees that by
accepting or continuing employment with the Company, Executive automatically
agrees that arbitration is the exclusive forum for all disputes arising out of
or related to Executive’s employment with the Company, and Executive agrees to
waive all rights to a civil court action regarding his/her employment and the
termination of that employment and Executive agrees that only an arbitrator, and
neither a Judge nor a jury, will decide the dispute.

If Executive decides to dispute his/her termination or any other alleged
incident during his/her employment, including but not limited to unlawful
discrimination or harassment, Executive must deliver a written request for
arbitration to the Company within one (1) year from the date of termination, or
one (1) year from the date on which the alleged incident(s) or conduct occurred,
and respond within fourteen (14) calendar days to each communication regarding
the selection of an arbitrator and the scheduling of a hearing. Executive
expressly waives any longer statute or other period of limitations to the
contrary.

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If the Company does not receive a written request for arbitration from Executive
within one (1) year, or if Executive does not respond to any communication from
the Company about the arbitration proceedings within fourteen (14) calendar
days, Executive will have waived any right to raise any claims arising out of
the termination of Executive’s employment with the Company, or involving claims
of unlawful discrimination or harassment, in arbitration and in any court or
other forum. Failure to initiate arbitration as provided herein will forever bar
any claim involving that dispute.

If Executive makes a timely request for arbitration, the Company agrees to pay
the case management administrative fee charged by the American Arbitration
Association. Executive shall have the right to be represented by counsel of
his/her own choosing. Executive and the Company shall each bear respective costs
for legal representation at any such arbitration. The Executive and the Company
shall be given clear notice of all hearing dates. The selected arbitrator shall
authorize and supervise pre-hearing discovery and shall be empowered to set a
hearing, bear testimony and examine whatever acceptable evidence the Company and
Executive may present. Executive’s liability for the costs and fees of
arbitration, other than attorney fees, however, shall be limited to $1000. The
arbitrator may grant any remedy or relief that a court having jurisdiction of
the matter could grant, including reinstatement of the Executive with or without
back pay or with partial back pay. If the arbitrator orders reinstatement, the
arbitrator shall also designate an alternative monetary award which the Company
may, at its option, elect to pay Executive in lieu of reinstatement. The
arbitrator is authorized to award a reasonable attorney’s fee in accordance with
applicable law. In the absence of an award, each party is responsible for its
own attorney fees.

Executive understands and agrees that the decision and award of the arbitrator
is final and binding on both the Executive, the Company, and the Holding Company
shall provide the exclusive remedy(ies) for resolving any and all disputes
between the Company, the Holding Company and Executive arising from the
employment relationship, and shall be enforceable in any court of competent
jurisdiction, In accordance with 9 U.S.C. § 1 et seq., MCL 600.5001-600.6035;
MSA 27A.5000-27A5035 and MCR 3.602, Executive agrees that upon issuance of the
arbitrator’s decision and award, judgment in any court of competent jurisdiction
shall be rendered on the award and entered so as to enforce its provisions.

EXECUTIVE VOLUNTARILY AND KNOWINGLY AGREES THAT HIS/HER EMPLOYMENT BY THE
COMPANY AS OF THIS DATE IS GOOD AND VALUABLE CONSIDERATION FOR THIS AGREEMENT.

EXECUTIVE HAS READ AND UNDERSTANDS THE FOREGOING AND VOLUNTARILY AND KNOWINGLY
AGREES TO TUE TERMS AND CONDITIONS OF THIS AGREEMENT.

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EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS AGREEMENT, THAT EXECUTIVE
UNDERSTANDS ITS TERMS AND THAT BY SIGNING if, EXECUTIVE IS WAIVING ALL RIGHTS TO
A TRIAL BEFORE A COURT OR JURY OF ANY AND ALL DISPUTES AND CLAIMS REGARDING
EXECUTIVE’S EMPLOYMENT WITH COMPANY OR TUE TERMINATION THEREOF, EXCEPT AS
OTHERWISE NOTED HEREIN, THAT. NOW EXIST OR MAY IN THE FUTURE EXIST OR BE KNOWN
OR SUSPECTED BY EXECUTIVE.

IN WITNESS WHEREOF, the parties date set forth in the first paragraph of this

Richard J. DeVries
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EXECUTIVE'S PRINTED NAME

/s/ Richard J. DeVries
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EXECUTIVE'S SIGNATURE

FOR PAVILION BANCORP BY:

/s/ Douglas L. Kapnick
——————————————
Douglas L. Kapnick, Chairman         President and CEO
——————————————
        POSITION

        July 14, 2003
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        DATE

        June 26, 2003
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        DATE

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APPENDIX A

SETTLEMENT AGREEMENT AND GENERAL RELEASE

        This Settlement Agreement and General Release ("Agreement") is made and
entered into this _____ day of ,__, 20_, by and between ___________________ (the
"Executive"), and_________________________ (the "Employer").

        WHEREAS, Executive and Employer desire to settle and resolve all issues
arising out of Executive’s employment with and termination from employment with
Employer without any disputes, proceedings or litigation, on the following terms
and conditions.

        NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and agreements contained herein, it is agreed by and between the
parties hereto that:

        1.        This Agreement does not constitute any admission by Employer
that any action it, its agents or employees took with respect to Executive was
wrongful, unlawful or In violation of any local, state or Federal act, statute,
or constitution, or susceptible of inflicting any damages or injury whatsoever
on Executive, and Employer specifically denies any such wrongdoing or violation.
It is further agreed that this Agreement is entered into solely in an effort to
resolve fully all matters related to or arising out of Executive’s employment
with Employer and his termination therefrom.

        2.        Employer shall pay Executive the sum of One Thousand Dollars
($1,000.00) fifteen (15) days after Executive and Employer execute this
Agreement. The aforementioned payment is understood by the parties to be paid in
consideration of Executive waiving and otherwise releasing ‘Employer, its
directors, officers, members, agents, employees, representatives, attorneys,
successors and assigns, of and from any and all claims, demands, rights,
liabilities, and causes of action of any kind or nature arising out of or in
connection with her employment with Employer or her termination from Employer,
It is also agreed and understood that this payment is for any alleged damages,
costs and attorney’s fees incurred by Executive and will be subject to payroll
taxes or deductions, income or withholding taxes, social security taxes,
unemployment taxes, disability taxes or any other taxes which customarily are
deducted and/or paid with respect to wages.

        3.        In return for the payment made to Executive pursuant to
paragraph 2 herein, Executive hereby generally releases and forever discharges
Employer, its Holding Company, subsidiaries, directors, officers, members,
agents, employees, representatives, attorneys, successors, and assigns of and
from any and all causes of action, claims or demands of any type, including,
without limiting the generality of the foregoing general release, claims or
causes arising or which could have arisen out of Executive’s employment
relationship with. Employer and the termination of his employment relationship
with Employer, any and all claims under the Fair Labor Standards Act, 29 U.S.C.
§ 201 et seq.; the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.
(1976); Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.;
the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Civil Rights Act of 1991,
Pub. L. No. 102-166; the National Labor Relations Act, 29 U.S.C. § 151 et seq.
(1976); the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq.; Federal
Executive Order 11246; the Family and Medical Leave Act, Pub. L. No. 103-3; the
Employee Retirement Income Security Act of 1974 (ERISA), the Older Workers’
Benefit Protection Act, the Elliot-Larsen Civil Rights Act, M.C.L. 37.2101 et
seq.; the Michigan Persons With Disabilities’ Civil Rights Act, M.C.L. 37.1101
et seq.; the Michigan Minimum Wage Law of 1964; the Michigan Act Regulating
Payment of Wages and Fringe Benefits, M.C.L. 408.471; the Whistleblowers’
Protection Act and/or any other similar federal, state or local statute, law,
ordinance, regulation or order, claims for breach of contract, defamation,
promissory estoppel or any tortious conduct. The foregoing provision shall not
apply to claims for benefits under any employee benefit plan as defined in
Section 3(3) of ERISA (exclusive of Executive’s SERA), irrespective of whether
the particular benefit plan is a church plan not subject to ERISA.

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        4.        Except as provided herein, the parties also release and
forever discharge each other, theft directors, officers, members, agents,
employees, representatives, attorneys, successors, assigns, heirs, executors and
administrators, of and from any and all other ‘demands, claims, causes of
action, obligations, agreements, promises, representations, damages, suits and
liabilities regarding Executive’s employment with or termination from Employer,
both known and unknown, in law or in equity, of a class or individual nature,
including but not limited to, attorneys’ fees and costs. Executive further
covenants and agrees never to institute (directly or indirectly) any action or
proceeding of any kind against Employer, its agents, employees, representatives,
attorneys, successors, assigns, heirs, executors and administrators, regarding
Executive’s employment with or termination of employment from Employer.

        5.        As a part of this Agreement, Executive agrees to waive
reinstatement and to not seek future employment in any position with Employer,
or in any company in which Employer has a substantial (more than twenty-five
percent 25%) ownership interest

        6.        Executive agrees that this document and any and all matters
concerning this settlement will be regarded as confidential communications
between the parties hereto and will not be disseminated by publication of any
sort or be released in any manner or means to any newspaper, magazine, radio
station, television station, to any future, current or former employee, vendor
or ‘customer of Employer or to anyone’ else except as provided for in this
Agreement. Except as provided for in this Agreement, if asked about such matters
by any ~individual whatsoever, Executive is to reply that “the matter has been
resolved” or words of similar effect. It is understood that Executive may, on a
limited basis, advise his attorney, accountant and tax preparers of this
Agreement, all of whom shall agree to follow the confidentiality provisions of
this paragraph.

        7.        It is further agreed that Executive will not encourage or
assist any present or past employee of Employer who litigates against or who
files administrative charges against Employer, its agents, officers, directors,
shareholders or employees, unless required to provide testimony or documents
pursuant to a lawful subpoena or as otherwise required by law.

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        8.        This instrument constitutes and contains the entire agreement
and understanding between the parties concerning the subject matter of this
Agreement, and supersedes all prior negotiations, proposed agreements and
understandings, if any, between the parties.

        9.        Executive specifically acknowledges that, at least twenty-one
(21) days prior to the required date for executing this document, Executive was
given a complete copy of this Agreement and by this Agreement was advised in
writing to consult with an attorney concerning its meaning and effect. Executive
understands that he may revoke this document in writing, addressed to
the.________________________, within seven (7) days after execution hereof, in
which event this Agreement will be of no effect and Executive will be entitled
to none of the benefits provided hereunder and Paragraph 18 of Executive’s
Employment Agreement shall then apply and be controlling.

        10.        Executive states that he has read and understands that this
Agreement is meant as a complete and final settlement and release, releasing
Employer, its directors, agents, employees, representatives, attorneys,
successors, assignees, heirs, executors and’ administrators, of and from any and
all claims he may have against them, that he voluntarily agrees to the terms set
forth herein, that he knowingly and willingly intends to be legally bound by the
same, that he was given adequate opportunity to consider the Agreement, that he
discussed it with his legal counsel, that lie has had ample time to study the
terms of this Agreement with his attorney and with members of his family, that
the terms and conditions hereof were determined by negotiation, and that be
executes this Agreement knowingly and of his own free will.

        [EXECUTIVE]

——————————————
Subscribed and Sworn to before me
this ____ day of ______________, 2006.

——————————————
        Notary Public

[EMPLOYER]

By: ________________________

Its: ________________________

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EMPLOYMENT AGREEMENT EXTENSION AGREEMENT

This EMPLOYMENT AGREEMENT Extension Agreement is made this 22nd day of February,
2007, by and between Pavilion Bancorp, Inc., a Michigan Corporation (herein
referred to as the “Holding Company”) and the Bank of Lenawee, a Michigan
banking corporation (herein referred to as the “Company”), and Richard J.
DeVries (herein referred to as “Executive).

WHEREAS, the Company desires to extend the EMPLOYMENT AGREEMENT between the
Company and Executive, dated July 1, 2003, for a period of three years beyond
the stated EMPLOYMENT AGREEMENT conclusion date of July 1, 2006

NOW, THEREFORE, the Holding Company, Company and Executive hereby agree to
extend the EMPLOYMENT AGREEMENT TO July 1, 2009 with the following amendments:

  - The “base salary” referred to in the• paragraph found in section 4, page 4,
titled “Compensation,” shall be amended to read $205,000, effective January 1,
2007.

  - Section 5.2, found on page 5 of the EMPLOYMENT AGREEMENT, which addresses
providing an automobile for Executive, will be amended to include the purchase
of a new car for the use of Executive every four years, or at the attainment of
90,000 miles, whichever event arrives first. The purchase price of the new car
will be approved by the executive committee of the Company.

IN WITNESS WHEREOF, the parties have caused this EMPLOYMENT AGREEMENT Extension
Agreement to be executed as of the date set forth in the first paragraph of this
Extension Agreement.

Richard J. DeVries
——————————————
EXECUTIVE'S PRINTED NAME

/s/ Richard J. DeVries
——————————————
EXECUTIVE'S SIGNATURE

FOR PAVILION BANCORP. INC., BY:

/s/ Douglas L. Kapnick
——————————————
Douglas L. Kapnick, Chairman         President & CEO
——————————————
        POSITION

        2/22/07
——————————————
        DATE

        2/22/07
——————————————
        DATE

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