Exhibit 10.9


 


MBT Financial Corp.


Executive Officer Annual Incentive
Pay Plan


Policy Document


Updated 2014


 


General Purpose of Plan


The purpose of
this Plan is to enable MBT Financial Corp. to: (i) Attract and retain key executive leadership talent; (ii) deliver competitive
total direct compensation; and (iii) reward Executive Officers for both the Company’s annual financial performance and individual
performance relating to strategic goals that drive financial performance and growth.


 


Effective
Date


This plan is effective
beginning with the 2015 Performance Period, and will remain in effect until modified or terminated by the Board.


 


Certain
Plan Definitions


Unless the context
otherwise indicates, the following words used herein shall have the following meanings whenever used in this policy document:


 


		(a)	"Award" means a cash award paid to a Plan Participant in accordance with the terms and
conditions of this Plan



 


		(b)	"Board" means the Board of Directors of the Company



 


		(c)	"Committee" means the Compensation Committee of the Board



 


		(d)	"Company" means MBT Financial Corp., a corporation organized under the laws of the State
of Michigan.



 


		(e)	"Director" means a member of the Board of Directors.



 


		(f)	“Executive Officer” means a named executive officer as defined under SEC disclosure
rules, and any other management employee of the Company designated as a participant by the CEO and the Committee.



 


		(g)	“Funding Factor” means the percent of target awards that is payable under the plan
based on Net Operating Income results. The Funding Factor may be represented by a formula or funding schedule as set forth in Appendix
A of this Plan. The funding formula or schedule is subject to modification by the Committee for each Performance Period, and
is to be defined no later than 60 days after the beginning of the Performance Period.



 


		(h)	“Net Operating Income” means before tax operating income, excluding bonus accrual for
executive officers and officers.



 


		(i)	"Participant" means an employee of the Company who is designated as a Plan Participant
by the Committee.



 




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		(j)	"Performance Period" means the fiscal year of the Company over which Awards may be earned
contingent on satisfying specified performance conditions.



 


		(k)	"Plan" means this MBT Financial Corp. Executive Officer Annual Incentive Pay Plan.



 


		(l)	“Target Award %” means a defined percent of a Participant’s annual base salary
for the applicable Performance Period, as set forth on Appendix B hereto.



 


Plan Administration


The Plan shall
be administered jointly by the Compensation Committee and the CEO of the Company


 


The Committee
has the authority and responsibility for:


 


		(a)	Establishing the design structure and terms and conditions of Awards made under the Plan in collaboration
with the CEO
	 	 	 



		(b)	Referring matters or decisions relating to the Plan to the Board as deemed appropriate by the Committee.
	 	 	 



		(c)	Seeking outside advice from legal counsel or consultants on matters relating to the design and
administration of the Plan
	 	 	 



		(d)	Setting annual Target Award levels for all Plan Participants
	 	 	 



		(e)	Establishing and approving the annual formula and/or schedule that defines the level of Awards
funded under the plan based upon the financial performance of the Company
	 	 	 



		(f)	Determining and approving the level of annual Awards funded each Performance Period in accordance
with the established funding formula or schedule
	 	 	 



		(g)	Reviewing individual performance goals set by the CEO for Participants to assure alignment with
the financial and strategic goals of the Company
	 	 	 



		(h)	Interpreting and applying the terms and conditions of the Plan



 


The CEO of the
Company has the authority and responsibility for:


 


		(a)	Establishing individual performance goals for each Executive Officer and informing the Committee
of such goals
	 	 	 



		(b)	Evaluating individual performance
	 	 	 



		(c)	Providing feedback and recommendations to the Committee on the design structure of the Plan; level
of annual Target Awards; and the specific terms and conditions for earning an Award under the Plan



 




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Plan Participation


Executive Officers
of the Company are eligible to participate in this Plan upon the recommendation of the CEO and approval of the Committee.


 


Incentive Award structure and Determination


General Structure


This Plan is structured
to deliver an objectively defined incentive pay opportunity based on both Company financial performance and individual performance
for the Performance Period. The two principal components or award factors that determine Awards payable under the plan are:


 


		·	The Funding Factor; and
	 	 	 



		·	Participant’s Target Award %



 


Setting Annual
Target Award %


Before the beginning
of each Performance Period, Target Awards are to be established for each Plan Participant by the Committee. Such Target Awards
will be expressed as a percent of the Participant’s annual base salary for the Performance Period, and will be set at levels
consistent with the executive compensation philosophies and objectives of the Board. Target Award % for 2015 is set forth on Appendix
B hereto.


 


Determination
of Awards


At the end of
each Performance Period, the Award paid under the Plan for the Performance Period shall be determined as follows:


 


Step 1: The Compensation
Committee, in its absolute discretion, sets the aggregate size of the award pool.


 


Step 2: Determine
the Funding Factor based upon Net Operation Income performance (refer to the funding schedule under Appendix A)


 


Step 3: The Award
will be calculated as follows:


 


(Funding
Factor) X (Participant’s Target Award %) X (Base Salary)


  


The Committee
reserves the sole discretion to adjust the total Award pool resulting from the above process to reconcile to the total Award pool
funded.


 


Adjustment
of Performance Conditions


The Committee
may modify or adjust the determination of corporate financial performance under the Plan to account for unusual or extraordinary
events that occur during the Performance Period such as:


 


		·	Corporate reorganizations, acquisitions, including spin-offs and other distributions of property;
or
	 	 	 



		·	Changes in applicable laws or regulations that impact financial performance; or
	 	 	 



		·	Accounting changes mandated by FASB that affect financial performance; or
	 	 	 



		·	Material financial transactions that result in performance that in the judgment of the Committee
does not fairly reflect outcomes normally expected to be under the control of management.



 




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Payment of Awards


Payment of
Awards


Awards earned
and payable as determined by the Committee shall be paid to the Participant in cash no later than March 15 of the year immediately
following the Performance Period. In the event of a Participant’s death after the end of the Performance Period, but before
payment of the Award, such Award shall be paid to the beneficiary or beneficiaries designated in writing by the Participant and
filed with the Company or, in the absence of and such designation, or if no such designated beneficiary survives the Participant,
to the Participant’s estate.


 


Termination
of Employment 


A Participant
must be employed in an Executive Officer capacity at the end of the Performance Period to receive payment of Awards earned under
this Plan for such Performance Period.


 


General Provisions


Amendment or
Discontinuation of this Plan 


The Board may
amend, alter, or discontinue this Plan at any time, provided that no amendment, alteration, or discontinuance may be made, which
would materially and adversely affect the rights of a Participant under any Award opportunity in effect for the Performance Period
during which such Board action is taken. Notwithstanding the foregoing, this Plan may be amended at any time to: (i) comply with
any law; (ii) preserve any intended favorable tax effects for the Company, the Plan or Participants; or (iii) avoid any unintended
unfavorable tax effects for the Company, the Plan or Participants.


 


Tax Withholding



 


The Company shall
withhold any taxes which the Committee determines the Company is required by law or by the terms of this Plan to withhold in connection
with any Awards made under the Plan. The Company may withhold cash, in an amount equal to the amount which the Committee determines
is necessary to satisfy the obligation of the Company to withhold federal, state and local income taxes.


 


No Implied
Rights to Employment 


 


Neither this Plan
nor any award hereunder shall be construed as giving any individual any right to continued employment with the Company. The Plan
does not constitute a contract of employment, and the Company expressly reserves the right at any time to terminate employees free
from liability, or any claim, under this Plan, except as may be specifically provided for under this Plan.


 




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Appendix A


2015
Bonus Funding Schedule 


 


This funding schedule
is intended as an illustration of how the Funding Factor is determined for any given Plan Year, subject to modification by the
Committee.


 


	Percentage of MBT 
2015 NOI 
performance against 
the 2015 MBT NOI 
budget goal	 	 	Award pool will 
be funded at:	 	 	Size of 2015 
award pool	 
	 	120	%	 	 	150	%	 	 	1,623,600	 
	 	118	%	 	 	145	%	 	 	1,569,480	 
	 	116	%	 	 	140	%	 	 	1,515,360	 
	 	114	%	 	 	135	%	 	 	1,461,240	 
	 	112	%	 	 	130	%	 	 	1,407,120	 
	 	110	%	 	 	125	%	 	 	1,353,000	 
	 	108	%	 	 	120	%	 	 	1,298,880	 
	 	106	%	 	 	115	%	 	 	1,244,760	 
	 	104	%	 	 	110	%	 	 	1,190,640	 
	 	102	%	 	 	105	%	 	 	1,136,520	 
	 	100	%	 	 	100	%	 	 	1,082,400	 
	 	98	%	 	 	97	%	 	 	1,049,928	 
	 	96	%	 	 	94	%	 	 	1,017,456	 
	 	94	%	 	 	91	%	 	 	984,984	 
	 	92	%	 	 	88	%	 	 	952,512	 
	 	90	%	 	 	85	%	 	 	920,040	 
	 	88	%	 	 	82	%	 	 	887,568	 
	 	86	%	 	 	79	%	 	 	855,096	 
	 	84	%	 	 	76	%	 	 	822,624	 
	 	82	%	 	 	73	%	 	 	790,152	 
	 	80	%	 	 	70	%	 	 	757,680	 
	 	78	%	 	 	67	%	 	 	725,208	 
	 	76	%	 	 	64	%	 	 	692,736	 
	 	74	%	 	 	61	%	 	 	660,264	 
	 	72	%	 	 	58	%	 	 	627,792	 
	 	70	%	 	 	55	%	 	 	595,320	 
	 	68	%	 	 	52	%	 	 	562,848	 
	 	66.7	%	 	 	50	%	 	 	541,200	 



 




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Appendix B


2015 MBT Officer’s
Incentive Plan 


STRUCTURE AND GUIDELINES


 


Officer’s Incentive Plan (OIP)


 


Officer Bonus Target Award Percentage
Structure


 


	Level	Possible Payout
	14	35%
	13	25%
	12	18%
	11	18%
	10	12%
	9	12%
	8	8%
	7	8%
	6	8%
	5	5%
	4	5%
	3	3%
	2	3%


 


Guidelines for 2015






		§	We have also established the minimum earnings threshold for non-executive officer payout to equal 66.7%. Please refer to the
funding table in the Officer Bonus Template.







		§	The upper limit is 120% of the net operating income budget, which will result in a maximum incentive payout of
150%, as indicated by the attached schedule.


	 	 	 



		§	The minimum threshold for the Executive Officer Group will remain at the traditional 85% of budget as in the past.







 




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Appendix C


Award
Determination


2015
Performance Period


 


Assumptions applied:


 


	Base Salary	 	$	150,000	 
	Target Award %	 	 	25	%
	Target Award	 	$	37,500	 
	Actual NOI performance as a percent of NOI Goal	 	 	90	%
	Funding Factor	 	 	85	%



 


	Incentive Award Equals
	(Funding Factor)  X  (Participant’s Target Award %) X (Base Salary)


 


	Incentive Award Equals
	(85%)  X (25%) X ($150,000) = $31,875
	Award = $31,875


 




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