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                                   IBT BANCORP

                              RETIREMENT BONUS PLAN

                                                                 January 1, 2007

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                                TABLE OF CONTENTS

SECTION 1.   PURPOSE..................................................        3
SECTION 2.   DEFINITIONS..............................................        3
SECTION 3.   PARTICIPATION/ESTABLISHMENT OF ACCOUNTS..................        5
SECTION 4.   ALLOCATIONS TO ACCOUNT...................................        5
SECTION 5.   VESTING..................................................        6
SECTION 6.   COMMENCEMENT OF DISTRIBUTION.............................        6
SECTION 7.   MANNER AND FORM OF DISTRIBUTION..........................        8
SECTION 8.   CONDITIONS...............................................        8
SECTION 9.   DEATH BENEFIT............................................        9
SECTION 10.  UNSECURED UNFUNDED PLAN..................................        9
SECTION 11.  PLAN AMENDMENT AND TERMINATION...........................       10
SECTION 12.  EXPENSES AND TAXES.......................................       10
SECTION 13.  NONASSIGNABILITY.........................................       10
SECTION 14.  EMPLOYMENT STATUS........................................       11
SECTION 15.  ADMINISTRATION...........................................       11
SECTION 16.  CLAIMS PROCEDURE.........................................       12
SECTION 17.  BINDING EFFECT...........................................       13
SECTION 18.  INCOMPETENCY.............................................       14
SECTION 19.  SEVERABILITY.............................................       14
SECTION 20.  CONSTRUCTION.............................................       14

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                                   IBT BANCORP

                              RETIREMENT BONUS PLAN

      IBT Bancorp, Inc. ("IBT") wants to establish a nonqualified plan of
deferred compensation benefits for its eligible employees. The Plan is intended
to postpone taxation of such deferred compensation benefits until those benefits
are paid to the employees as provided in the Plan. The provisions of this Plan
shall be effective on and after January 1, 2007.

SECTION 1. PURPOSE.

      The Plan is intended to provide eligible employees with additional
compensation, payable as set forth in the Plan, in order to reward the
individuals who contribute to the success of Company.

SECTION 2. DEFINITIONS.

      The following words and phrases shall, when used in this Plan, have the
meanings set forth below unless their context clearly indicates otherwise:

      2.01 ADMINISTRATOR OR PLAN ADMINISTRATOR means IBT which may, from time to
time in its sole discretion, appoint a person or persons to assist in the
administration of the Plan.

      2.02 ALLOCATION DATE means March 31, June 30, September 30 or December 31
of each Plan Year.

      2.03 BOARD OF DIRECTORS means Company's governing body according to law
and Company's governing documents.

      2.04 CHANGE OF CONTROL means a sale which results in a change in the
ownership of Company, a change in the effective control of Company, or a change
in the ownership of a substantial portion of Company's assets. The change shall
not be deemed a "Change of Control" for purposes of this Plan unless the change
(whether made in a single transaction or in successive multiple transactions)
effectively transfers the controlling interest of Company to an unrelated third
party(ies) (as defined under the attribution rules of Code Sections 318 and 414)
and said change results in the unrelated third party(ies) owning more than fifty
percent (50%) of the fair market value or the total voting power of the stock of
Company. In addition to the foregoing, the Change of Control must satisfy the
provisions of Q & A-11 through 14 of IRS Notice 2005-1 and IRS Prop. Reg.
1.409A-3(g)(5) and subsequent guidance.

      2.05 CODE means the Internal Revenue Code of 1986, as amended.

      2.06 COMMITTEE OR ADMINISTRATIVE COMMITTEE means the committee described
in Section 15.

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      2.07 COMPANY means IBT Bancorp, Inc. and Isabella Bank and Trust or their
respective successor or successors.

      2.08 DEFERRED COMPENSATION ACCOUNT OR ACCOUNT means the bookkeeping
account maintained on behalf of Participant to record Company contributions made
pursuant to Section 4.01.

      2.09 DISABILITY means Participant is:

            (a) unable to engage in any substantial gainful activity by reason
of any medically determinable or physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or

            (b) by reason of any medically determinable or physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering Employees of Company.

      2.10 EARLY RETIREMENT AGE means Participant's attainment of age 55.

      2.11 EFFECTIVE DATE means January 1, 2007, the date on which the
provisions of this Plan become effective.

      2.12 EMPLOYEE means an individual who is employed by Company on January 1,
2007, and who is a participant in Company's frozen Executive Supplemental Income
Agreement, provided the individual is an officer of Company and has completed at
least ten (10) years of service with Company as of December 31, 2006. Company
has sole and exclusive discretion to add new Participants to the Plan by
authorizing such participation pursuant to action of Company's Board of
Directors.

      2.13 JUST CAUSE means that Company has determined in its sole and
exclusive discretion that Participant has engaged in theft, fraud, embezzlement
or willful misconduct. In the event Participant is discharged for Just Cause,
Participant agrees to consent to the revocation of the benefit payable under the
Plan. In the event of such revocation, this Plan shall be null and void with
respect to the affected Participant, and the Participant shall not have a claim
under the Plan against Company.

      2.14 NORMAL RETIREMENT AGE means Participant's attainment of age 65.

      2.15 PARTICIPANT means an Employee who participates in the Plan.

      2.16 PLAN means the IBT Bancorp Retirement Bonus Plan, as amended from
time to time.

      2.17 PLAN YEAR means the consecutive 12-month period beginning on January
1 and ending on December 31.

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      2.18 RETIREMENT means, with respect to a Participant, separation from
service with Company for any reason on or after the attainment of Early
Retirement Age; provided, however, with respect to a Participant who is entitled
to a distribution on account of Participant's Disability or Separation From
Service, Retirement means the later of attainment of Early Retirement Age or
Participant's actual separation date.

      2.19 SEPARATION FROM SERVICE means Participant's severance of service with
Company either voluntarily or involuntarily without Just Cause, following a
Change of Control.

SECTION 3. PARTICIPATION/ESTABLISHMENT OF ACCOUNTS.

      3.01 INITIAL PARTICIPATION. Any individual who is an eligible Employee on
the Effective Date shall commence participation in the Plan on January 1, 2007.

      3.02 SUBSEQUENT PARTICIPATION. Any individual who becomes eligible to
participate in the Plan after the Effective Date shall commence participation in
the Plan on the date the Committee determines, in its sole discretion.

      3.03 ACCOUNTS. Company agrees to create a Deferred Compensation Account to
be maintained on the books of Company in the name of each Participant, as
described in Section 4 below.

SECTION 4. ALLOCATIONS TO ACCOUNT.

      4.01 COMPANY CONTRIBUTIONS. Each Participant shall have an initial amount
credited to his Deferred Compensation Account on January 1, 2007. Subsequent
amounts shall be credited to Participant's Deferred Compensation Account on each
Allocation Date thereafter. The amount of the initial allocation and
Participant's annual allocation shall be determined pursuant to a payment
schedule adopted in the sole and exclusive discretion of the Board of Directors,
as set forth in the Addendum to this Plan, as amended from time to time.
Following the initial allocation, one-fourth (1/4) of each annual allocation
shall be credited to Participant's Deferred Compensation Account on the
applicable Allocation Date, provided Participant is employed by Company on the
Allocation Date.

      4.02 EARNINGS ALLOCATION. Subject to Section 10, amounts credited to
Participant's Deferred Compensation Account shall be adjusted on each Allocation
Date for earnings or losses as described in this Section 4.02. Such adjustments
shall continue quarterly until the date when all benefits payable under the Plan
have been distributed to Participant.

            (a) If Company invests the amounts credited to Participant's
Deferred Compensation Account, the income (or loss) shall be based on the actual
rate of return on a predetermined actual investment selected by Company as
described in this Section 4.02(a). Before the beginning of each Plan Year,
Company may designate a specific investment on which the following year's
increase or decrease (and each subsequent year's increase or decrease) will be
based. Company may change investments; however, any such change in the
investment and

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the related rate of return shall be applied on a prospective basis only.
Accordingly, the quarterly adjustment to Participant's Deferred Compensation
Account shall be based on the actual return of the predetermined investments
specified for the period.

            (b) If Company does not invest the amounts credited, the income (or
loss) allocated to Participant's Deferred Compensation Account shall be the
mid-term applicable federal rate (as defined in Code Section 1274(d)) for
January 1 of the calendar year in which the income is credited, such interest to
be compounded annually.

            Company does not guarantee the preservation of the principal amount
credited to Participant's Account or a minimum rate of return on any such
investments.

SECTION 5. VESTING.

      Subject to satisfying the distribution events set forth in Section 6
below, Participant's interest in his Deferred Compensation Account shall be 100%
vested and nonforfeitable upon the first to occur of Participant's Retirement,
Separation From Service or experiencing a Disability. Notwithstanding the
provisions of Section 4.01, in the event of Participant's Separation From
Service or Disability, Participant's interest in his Deferred Compensation
Account balance shall be the amount he would have received at Early Retirement
Age had he continued to participate in the Plan and retired upon reaching Early
Retirement Age; provided, however, if the Participant elects a delayed
distribution date (not to exceed the Participant's attainment of Normal
Retirement Age), in accordance with Section 6.02, Participant's vested interest
in his Deferred Compensation Account shall be the amount he would have received
on the delayed distribution date had he continued to participate in the Plan and
retired on the delayed distribution date.

SECTION 6. COMMENCEMENT OF DISTRIBUTION.

      6.01 DISTRIBUTION DATES. The form and manner in which distributions will
be made from the Plan shall be determined in accordance with Section 7 below. No
amount standing from time to time to the credit of Participant in his Deferred
Compensation Account shall be assignable or alienable by Participant, nor may
any such payment be used as collateral or in any other fashion by Participant
prior to payment by Company. Subject to Section 6.03 below, no amount standing
from time to time to the credit of Participant in his Deferred Compensation
Account shall be payable to Participant until Participant's Retirement.

      6.02 TIME OF DISTRIBUTION. When the amounts credited to Participant's
Deferred Compensation Account become payable pursuant to Section 6.01 above,
distribution of such benefit shall begin on the first day of the sixth month
following the first Allocation Date immediately following the earliest
distribution date, or as soon as administratively practicable thereafter.

            Notwithstanding the foregoing, Participant may elect a delayed
distribution date. The delayed distribution date may be a specific future date
or the attainment of a specified age by the Participant (not to exceed the
Participant's attainment of age 75), so long as the delayed distribution date
is:

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            (a) requested at least twelve (12) months prior to the earliest
distribution date;

            (b) the election does not take effect until at least twelve (12)
months after the date on which the election is made; and

            (c) the payment is postponed for a period of not less than five (5)
years from the date the payment would otherwise have been made.

      6.03 ACCELERATING THE TIME OF PAYMENT. Notwithstanding the distribution
dates set forth in Section 6.01 above, an early distribution may be made as soon
as administratively possible in accordance with IRS Prop. Reg. 1.409A-3(h)(2)
and subsequent guidance following the occurrence of any of the following events
:

            (a) to fulfill the requirements of a domestic relations order;

            (b) as necessary to comply with a certificate of divestiture as
defined in Code Section 1043(b)(2);

            (c) to make payment of certain employment and/or income taxes;

            (d) de minimis cashout amounts not exceeding $10,000; or

            (e) certain arrangement terminations of the Plan as described in
Section 11 below.

      6.04 DELAYING PAYMENTS UNDER CERTAIN CIRCUMSTANCES. A payment may be
delayed in accordance with IRS Prop. Reg. 1.409A-2(b)(5) (and such other
guidance published after the Effective Date) under the following circumstances
as described in the Regulation:

            (a) Payments subject to Code Section 162(m) where the Company
reasonably anticipates that its deduction with respect to such payment would be
limited or eliminated by the application of Code Section 162(m).

            (b) Payments that would violate a loan covenant or similar
contractual requirement of the Company, where such violation would cause
material harm to the Company and the Company entered into the agreement or
covenant for legitimate business reasons and not to avoid restrictions under
Code Section 409A;

            (c) Payments that would violate Federal securities laws or other
applicable laws; or

            (d) Such other events and conditions as permitted by applicable law.

            Any missed or delayed payments (and the related earnings) shall be
made to Participant's Deferred Compensation Account at the earliest date on
which Company reasonably

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anticipates that the payment will not cause the harm to be avoided by the
application of this Section 6.04.

SECTION 7. MANNER AND FORM OF DISTRIBUTION.

      7.01 MANNER OF PAYMENT. Upon the occurrence of a distribution event set
forth in Section 6, Participant shall receive payment in cash of the balance in
his Deferred Compensation Account maintained with Company, if any, remaining
after the last Allocation Date occurring in the calendar year of the
distribution event, but after the date of the distribution event.

      7.02 FORM OF PAYMENT. Participant's benefit payable from his Deferred
Compensation Account shall be distributed in a single cash lump sum, unless an
election is made to change the form of payment to a joint and 100% survivor
annuity payment by submitting an election form to the Committee in accordance
with the following terms and conditions:

            (a) the election is requested at least twelve (12) months prior to
the earliest distribution date;

            (b) the election shall not take effect until at least twelve (12)
months after the date on which the election is made; and

            (c) the first benefit payment shall be delayed at least five (5)
years from Participant's originally scheduled benefit commencement date
described in Section 6.01.

            Notwithstanding the foregoing, the Committee shall interpret all
provisions relating to changing the form of benefit payment under this Section
7.02 in a manner that is consistent with Code Section 409A and other applicable
tax law, including but not limited to Treasury guidance or Regulations issued
after the Effective Date. Accordingly, if a Participant's subsequent benefit
distribution election would result in the changing of the length of the benefit
payment period (e.g., Participant elects to change an existing distribution
election from an annuity payment to a lump sum payment) and the Committee
determines such election to be inconsistent with Code Section 409A or other
applicable tax law, the election shall not be effective.

SECTION 8. CONDITIONS.

            (a) Normal Employment. The payment of benefits under this Plan to
Participant is conditioned upon Participant's continuous employment (periods of
temporary disability and authorized leaves of absence shall be considered as
periods of employment) with Company from the date of execution of this Plan
until the date Participant reaches Retirement. Payment is further conditioned
upon Participant's compliance with the terms of this Plan so long as Participant
lives and payments are due under the terms of this Plan. However, in the event
of a Change of Control, continuous employment of Participant shall be required
only until the date of Participant's voluntary termination or discharge without
Just Cause.

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            (b) Service. Payment of benefits is also conditioned upon
Participant rendering such reasonable business consulting and advisory services
as Company's Board of Directors may call upon Participant to provide, for a
period from Participant's Early or Normal Retirement Age (whichever is
applicable) until Participant's death, or until prior Disability.

                  (1) It is understood that such services shall not require
Participant to be active in Company's day-to-day activities, and that
Participant shall perform services as requested by management.

                  (2) It is further understood that Participant shall be
compensated for such services in an amount to the then agreed upon, and shall be
reimbursed for all expenses incurred in performing such services.

            (c) Noncompetition. Payment of benefits is further conditioned upon
Participant not acting in any similar employment capacity for any business
enterprise which competes to a substantial degree with Company, or any affiliate
of Company (as defined in Rule 144 under the Securities Act of 1933, as
amended), nor engaging in any activity involving substantial competition with
Company or any affiliate, during employment with Company or any affiliate, after
retirement from Company or any affiliate, or after prior Disability while
receiving benefits under this Plan. In the event of violation of this provision,
all future payments (if any) shall be cancelled and discontinued. The Board of
Directors may waive these conditions.

SECTION 9. DEATH BENEFIT.

      No death benefit shall be payable under the Plan; however, if Participant
has elected a joint and 100% survivor annuity form of payment, then a death
benefit shall be payable to the Participant's beneficiary as provided under the
annuity.

SECTION 10. UNSECURED UNFUNDED PLAN.

      Participant's Deferred Compensation Account shall be a bookkeeping account
only, and Company shall not be required in any way to fund the Account. Company
shall have no obligation to set aside, earmark, or entrust any fund, policy or
money with which to pay its obligation under this Plan. Participant, or any
successor in interest, shall be and remain a general creditor of Company with
respect to amounts deferred under this Plan in the same manner as any other
unsecured creditor who has a general claim for an unpaid liability. Company
shall be the sole owner and beneficiary of any assets acquired for its general
account under this Plan. Company shall not make any loans or extend credit to
Participant, or any successor in interest, which shall be offset by benefits
payable under this Plan.

      Notwithstanding the foregoing, Company may enter into a trust agreement
("Trust Agreement"), whereby Company may agree to contribute to a trust
("Trust") sums for the purpose of accumulating assets to fund benefit payments
to Participants under the Plan. Company may contribute amounts to the Trust from
time to time as determined by the Board of Directors of Company. Such Trust
Agreement shall be substantially in the form of the model trust agreement set
forth in Revenue Procedure 92-64, or any subsequent Internal Revenue

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Service Revenue Procedure, and shall include provisions required in such model
trust agreement that all assets of the Trust shall be subject to the creditors
of Company in the event of insolvency.

SECTION 11. PLAN AMENDMENT AND TERMINATION.

      Company may amend or terminate the Plan by action of its Board of
Directors at any time in its sole discretion without the consent of Participant.
No amendment or termination shall adversely affect the benefit to which
Participant is entitled under the Plan prior to the date of such amendment or
termination. In the event of Plan termination, all amounts credited to
Participant's Deferred Compensation Account shall be paid after said Plan
termination to Participant at the time and in the form set forth in Sections 6
and 7 above.

      Notwithstanding the foregoing termination distribution provisions, in the
event Company entirely terminates all account balance deferred compensation
plans that would be aggregated with this Plan under IRS Prop. Reg. 1.409A-1(c)
and subsequent guidance, with respect to all plan participants, all amounts
payable under this Plan on account of the termination shall be distributed in
accordance with IRS Prop. Reg. 1.409A(h)(2)(viii)(c) (and such other Treasury
guidance or Regulations issued after the Effective Date) not less than twelve
(12) months and not more than twenty-four (24) months following the termination
date. Furthermore, Company shall not establish or adopt any new arrangement that
would be aggregated under Prop. Reg. 1.409A-1(c) with this Plan for a period of
five (5) years following the termination date. In addition, to the extent
permissible under Code Section 409A and other applicable tax law, including but
not limited to Notice 2005-1 and such other Treasury guidance or Regulations
issued after the Effective Date, following a Change of Control Company shall be
permitted to (i) terminate the Plan by action of its Board of Directors, and
(ii) distribute the vested Account balances to Participants in a lump sum no
later than twelve (12) months after the date of the Change of Control.

SECTION 12. EXPENSES AND TAXES.

      Company shall pay all costs, charges and expenses relating to the
establishment and operation of the Plan. However, all taxes, with the exception
of Company's portion of social security and medicare taxes, shall be the
responsibility of Participant.

SECTION 13. NONASSIGNABILITY.

      The benefits payable under the Plan and the right to receive future
benefits under the Plan may not be anticipated, alienated, pledged, encumbered
or subject to any charge or legal process, and if any attempt is made to do so,
or if a person eligible for any benefits becomes bankrupt, the interests under
the Plan of the person affected may be terminated by the Administrator which, in
its sole discretion, may cause the same to be held or applied for the benefit of
one or more dependents of such person or make any other disposition of such
benefits that it deems appropriate.

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SECTION 14. EMPLOYMENT STATUS.

      The Plan does not, and will not, give any Participant the right to
continue as an Employee of Company, nor will the Plan confer any right to any
benefit under the Plan unless such right has specifically accrued under the
terms of the Plan.

SECTION 15. ADMINISTRATION.

      The Board of Directors shall appoint an impartial Administrative Committee
consisting of individuals who are not participants in the Plan. The
Administrative Committee shall have the sole and exclusive discretionary
authority to construe and interpret the terms and provisions of this Plan, make
factual determinations and decide all questions of eligibility and the amount
and time of any benefit payment. Benefits under the Plan shall be paid only if
the Committee decides in its discretion that the Participant is entitled to them
and all interpretations of the Committee shall be final and binding on all
persons. No member of the Administrative Committee shall, in any event, be
liable to any person for any action taken or omitted in connection with the
interpretation, construction or administration of this Plan, so long as such
action or omission to act be made in good faith. In no event, however, shall the
provisions of Section 10 or any other provisions in this Plan prevent
Participant from seeking legal recourse for any claim he may have under this
Plan.

      The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan as it shall,
from time to time, deem advisable. It may delegate such ministerial functions as
necessary for the operation of the Plan to its agents, including, but not
limited to:

            (a) maintenance of rules determining eligibility for participation
and benefits;

            (b) maintenance of records and bookkeeping, including but not
limited to the amount payable by Company to Participants;

            (c) calculation and payment of benefits;

            (d) making recommendations to the Administrator with respect to Plan
administration; and

            (e) establishing and carrying out a funding policy and method
consistent with the objectives of the Plan.

      The Committee's interpretations and determinations shall be final and
binding on all persons and parties concerned. The Committee may make such
provision to withhold any taxes which it is required to withhold from any
applicable benefit payment. Participant, however, shall be responsible for the
payment of all individual tax liabilities relating to any such payment.

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SECTION 16. CLAIMS PROCEDURE.

      16.01 PRESENTATION OF CLAIM. Any Participant (such Participant being
referred to below as a "Claimant") may deliver to the Committee a written claim
for a determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within sixty (60) days after such notice
was received by the Claimant. All other claims must be made within 180 days of
the date on which the event that caused the claim to arise occurred. The claim
must state with particularity the determination desired by the Claimant.

      16.02 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim within a reasonable time, but no later than ninety (90) days after
receiving the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the
extension shall be furnished to the Claimant prior to the termination of the
initial ninety (90) day period. In no event shall such extension exceed a period
of ninety (90) days from the end of the initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and the
date by which the Committee expects to render the benefit determination. The
Committee shall notify the Claimant in writing:

            (a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or

            (b) that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant's requested determination, and such notice must set
forth in a manner calculated to be understood by the Claimant:

                  (i) the specific reason(s) for the denial of the claim, or any
part of it;

                  (ii) specific reference(s) to pertinent provisions of the Plan
upon which such denial was based;

                  (iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;

                  (iv) an explanation of the claim review procedure set forth in
Section 16.03 below; and

                  (v) a statement of the Claimant's right to bring a civil
action following an adverse benefit determination on review.

      16.03 REVIEW OF A DENIED CLAIM. On or before sixty (60) days after
receiving a notice from the Committee that a claim has been denied, in whole or
in part, a Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the claim.
The Claimant (or the Claimant's duly authorized representative):

<PAGE>

            (a) may, upon request and free of charge, have reasonable access to,
and copies of, all documents, records and other information relevant to the
claim for benefits;

            (b) may submit written comments or other documents; and/or

            (c) may request a hearing, which the Committee, in its sole
discretion, may grant.

      16.04 DECISION ON REVIEW. The Committee shall render its decision on
review promptly, and no later than sixty (60) days after the Committee receives
the Claimant's written request for a review of the denial of the claim. If the
Committee determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial sixty (60) day period. In no
event shall such extension exceed a period of sixty (60) days from the end of
the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Committee
expects to render the benefit determination. In rendering its decision, the
Committee shall take into account all comments, documents, records and other
information submitted by the Claimant relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to be
understood by the Claimant, and it must contain:

            (a) specific reasons for the decision;

            (b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based;

            (c) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of, all documents,
records and other information relevant to the Claimant's claim for benefits; and

            (d) a statement of the Claimant's right to bring a civil action
following a final adverse decision.

      16.05 LEGAL ACTION. A Claimant's compliance with the foregoing provisions
of this Section 16 is a mandatory prerequisite to a Claimant's right to commence
any legal action with respect to any claim for benefits under this Plan.

SECTION 17. BINDING EFFECT.

      This Plan shall be binding upon and inure to the benefit of the parties to
the Plan and upon the successors and assigns of Company, and upon the heirs and
legal representatives of Participant.

<PAGE>

SECTION 18. INCOMPETENCY.

      If Company shall find that any person to whom any payment is payable under
this Plan is unable to care for his affairs because of illness or accident, any
payment due (unless a prior claim therefore shall have been made by a duly
appointed guardian, a committee or other legal representative) may be paid to
the spouse, a child, a parent, a brother or sister, or a custodian, or to any
person deemed by Company to have incurred expense for such person otherwise
entitled to payment, in such manner and proportions as Company may determine.
Any such payment shall be a complete discharge of the liabilities of Company
under this Plan.

SECTION 19. SEVERABILITY.

      In the event that any of the provisions of this Plan are held to be
inoperative or invalid by any court of competent jurisdiction, then: (1) insofar
as is reasonable, effect will be given to the intent manifested in the provision
held invalid or inoperative, and (2) the validity and enforceability of the
remaining provisions will not be affected thereby.

SECTION 20. CONSTRUCTION.

      This Plan shall be construed under the laws of the State of Michigan and
Code Section 409A and the Treasury guidance and Regulations promulgated
thereunder. The invalidity or unenforceability of any one or more provision of
the Plan shall not affect the validity or enforceability of the Plan, which
shall remain in full force and effect to the extent permitted by law.

      If any provisions of this Plan shall be held illegal or invalid for any
reason, said legality or invalidity shall not affect the remaining parts of this
Plan, and this Plan shall be construed and enforced as if said illegal and
invalid provision had not been included in the Plan.

                                            IBT BANCORP, INC.

Dated: December _____, 2006                 By: ________________________________
                                                  Dennis P. Angner, President

                                            ISABELLA BANK AND TRUST

Dated: December _____, 2006                 By: ________________________________