EX-10.26



 Exhibit 10.26 

THE MIDDLEFIELD BANKING COMPANY 

EXECUTIVE VARIABLE BENEFIT DEFERRED COMPENSATION
AGREEMENT 
 This EXECUTIVE VARIABLE BENEFIT DEFERRED
COMPENSATION AGREEMENT (this “Agreement”) is entered into as of this 9th day of July, 2018, by and between The Middlefield Banking
Company, an Ohio-chartered bank (the “Bank”), and James R. Heslop, II, Executive Vice President and Chief Operating Officer of the Bank (the “Executive”). 

WHEREAS, the Bank and the Executive entered into an Amended Executive Deferred Compensation Agreement
dated as of May 8, 2008, with contributions made solely by the Bank and benefits payable out of the Bank’s general assets, 

WHEREAS, the Amended Executive Deferred Compensation Agreement does not provide for employer
contributions to continue after age 65 because Section 2.1 of the Amended Executive Deferred Compensation Agreement states “The Annual Contribution shall not be made by the Bank for the Plan Year in which the Executive attains Normal
Retirement Age or for any year thereafter.” 
 WHEREAS, this Agreement does not supersede the
May 8, 2008 Amended Executive Deferred Compensation Agreement, 
 WHEREAS, none of the conditions
or events included in the definition of the term “golden parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule
359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Bank, is contemplated insofar as the Bank is concerned, and 

WHEREAS, the parties hereto intend that this Agreement shall be considered an unfunded arrangement
maintained primarily to provide supplemental retirement benefits for the Executive (who is a key employee and member of a select group of management), and to be considered a top hat plan for purposes of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”). The Executive is fully advised of the Bank’s financial status. 
 NOW
THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the Bank hereby agree as follows. 

ARTICLE 1 

DEFINITIONS 

1.1    “Account Balance” means the Bank’s accounting of Annual Contributions made by the
Bank, plus accrued interest. 
 1.2    “Annual Contribution” means the amount credited to the
Account Balance after the end of each Plan Year for which the Performance Goals are achieved. The Annual Contribution will be conditional on achievement of the Performance Goals. The Annual Contribution amount in any Plan Year shall not be less than
5% or more than 15% of the Executive’s Base Annual Salary. The Annual Contribution amount shall be changed no more frequently than annually. 

  
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 1.3    “Base Annual Salary” means compensation of the
type required to be reported as salary according to Securities and Exchange Commission Rule 229.402(c) (17 CFR 229.402(c)), specifically column (c) of that rule’s Summary Compensation Table (or any successor provision), but excluding fees
or any other form of compensation payable on account of service as a director. Base Annual Salary shall be calculated before reduction for amounts voluntarily deferred or contributed by the Executive pursuant to qualified plans. 

1.4    “Beneficiary” means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the Executive, determined according to Article 5. 

1.5    “Beneficiary Designation Form” means the form established from time to time by the Plan
Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries. 

1.6    “Change in Control” shall mean a change in control as defined in Internal Revenue Code
section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, applying the percentage threshold specified in each of paragraphs (a) through (c) of this section 1.6 or the related
percentage threshold specified in section 409A and rules, regulations, and guidance of general application thereunder, whichever is greater – 

(a)    Change in ownership: a change in ownership of Middlefield Banc Corp. (“Banc Corp.”), an Ohio
corporation of which the Bank is a wholly owned subsidiary, occurs on the date any one person or group accumulates ownership of Banc Corp. stock constituting more than 50% of the total fair market value or total voting power of Banc Corp. stock,

 (b)    Change in effective control: (x) any one person or more than one person acting as a group
acquires within a 12-month period ownership of Banc Corp. stock possessing 30% or more of the total voting power of Banc Corp., or (y) a majority of Banc Corp.’s board of directors is replaced
during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of Banc Corp.’s board of directors, or 

(c)    Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of
Banc Corp.’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from Banc Corp. assets having a total gross fair market value equal to or exceeding 40%
of the total gross fair market value of all of Banc Corp.’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of Banc Corp.’s assets, or the value of the assets being
disposed of, determined without regard to any liabilities associated with the assets. 

1.7    “Code” means the Internal Revenue Code of 1986, as amended, and rules, regulations, and
guidance of general application issued thereunder by the Department of the Treasury. 
 1.8    “Effective
Date” means January 1, 2018. 

  
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 1.9    “Intentional” for purposes of this Agreement,
no act or failure to act on the Executive’s part will be considered intentional if it was due primarily to an error in judgment or negligence. An act or failure to act on the Executive’s part is intentional if it is not in good faith and
if it is without a reasonable belief that the action or failure to act is in the Bank’s best interests. Any act or failure to act based upon authority granted by resolutions duly adopted by the board of directors or based upon the advice of
counsel for the Bank is conclusively presumed to be in good faith and in the Bank’s best interests. 

1.10    “Performance Goals” means the performance criteria set forth in Schedule A attached to
this Agreement and incorporated herein by this reference, which criteria have been established by the Bank’s board of directors. The Performance Goals may be changed by the board of directors no more frequently than annually. If the performance
criteria are changed, a new Schedule A shall be substituted for and shall supersede the old Schedule A, and the new Schedule A shall be deemed to be incorporated by reference herein and to be a part of this Agreement. A change in Performance Goals
shall not become effective for the Plan Year in which the change is made unless the change is made on or before March 31 of the Plan Year. The Plan Administrator shall have sole authority to determine whether the Performance Goals have been
achieved for any Plan Year. The Plan Administrator’s determination that the Performance Goals for a Plan Year have or have not been achieved shall be conclusive and binding. 

1.11    “Plan Administrator” or “Administrator” means the plan administrator
described in Article 8. 
 1.12    “Plan Year” means the calendar year. The first Plan Year
shall begin on the Effective Date and end on December 31, 2018. 
 1.13    “Separation from
Service” means separation from service as defined in Treasury Regulation 1.409A-1(h), other than because of the Executive’s death. 

1.14    “Termination with Cause” and “Cause” shall have the same definition
specified in any effective severance or employment agreement existing on the date hereof or hereafter entered into between the Executive and the Bank or between the Executive and Banc Corp. If the Executive is not a party to a severance or
employment agreement containing a definition, Termination with Cause means the Bank terminates the Executive’s employment because of – 

(a)    the Executive’s gross negligence or gross neglect of duties or intentional and material failure to perform
stated duties after written notice thereof, or 
 (b)    disloyalty or dishonesty by the Executive in the performance of
duties or breach of the Executive’s fiduciary duties for personal profit, in any case whether in the Executive’s capacity as a director or officer, or 

(c)    intentional wrongful damage by the Executive to the business or property of the Bank or its affiliates, including
without limitation the reputation of the Bank, which in the judgement of the Bank causes material harm to the Bank or affiliates, or 

(d)    a willful violation by the Executive of any applicable law or significant policy of the Bank or an affiliate that,
in the Bank’s judgement, results in an adverse effect on the Bank or the affiliate, regardless of whether the violation leads to criminal prosecution or conviction. For purposes of this Agreement applicable 

laws include any statute, rule, regulatory order, statement of policy, or final
cease-and-desist order of any governmental agency or body having regulatory authority over the Bank, or 

  
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 (e)    the occurrence of any event that results in the Executive being
excluded from coverage, or having coverage limited for the Executive as compared to other executives of the Bank, under the Bank’s blanket bond or other fidelity or insurance policy covering its directors, officers, or employees, or 

(f)    the Executive is removed from office or permanently prohibited from participating in the Bank’s affairs by an
order issued under section 8(e)(4) or section 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or 

(g)    conviction of the Executive for or plea of no contest to a felony or conviction of or plea of no contest to a
misdemeanor involving moral turpitude, or the actual incarceration of the Executive for 45 consecutive days or more. 

ARTICLE 2 

DEFERRAL ACCOUNT 

2.1    Annual Contribution. The Bank shall establish an Account Balance on its books. Within three months
after the end of each Plan Year the Bank shall credit the Annual Contribution to the Account Balance provided the Performance Goals were achieved for the Plan Year. Contributions to the Account Balance by the Executive are prohibited. Discretionary
contributions by the Bank are likewise prohibited.    However, if the Performance Goals are achieved for the Plan Year in which the Executive has a Separation from Service or dies, the Bank shall make a final contribution in an
amount equal to the Annual Contribution multiplied by a percentage. The percentage shall equal the number of days in the Plan Year before the Executive’s Separation from Service or death divided by 365. 

2.2    Interest. At the end of each Plan Year and until the first to occur of (x) the
Executive’s death, or (y) the Executive’s Separation from Service, interest is to be credited on the Account Balance at an annual rate of interest for that Plan Year, compounded monthly on the first day of the month, equal to
the prime interest rate as published in The Wall Street Journal. After the Executive’s Separation from Service, interest shall be credited on the Account Balance at an annual rate equal to the yield on a
10-year corporate bond rated Aa by Moody’s, rounded to the nearest  1⁄4%. 

2.3    Statement of Account. Within 120 days after the end of each Plan Year, the Bank shall provide to the
Executive a statement of the Account Balance at the end of the Plan Year. Each annual statement of the Account Balance shall supersede the previous year’s statement of the Account Balance. 

2.4    Accounting Device Only. The Account Balance is solely a device for measuring amounts to be paid under
this Agreement. The Account Balance is not a trust fund of any kind. The Executive is a general unsecured creditor of the Bank for the payment of benefits. The benefits represent the mere promise by the Bank to pay benefits. The Executive’s
rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Executive’s creditors. 

  
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 ARTICLE 3 

BENEFITS DURING LIFETIME 

3.1    Separation from Service. Unless the Executive dies or a Change in Control occurs before Separation
from Service, when the Executive has a Separation from Service the Bank shall pay to the Executive the Account Balance as of the end of the month in which the Executive has a Separation from Service. Beginning on the first day of the seventh month
after the Executive has a Separation from Service, the Account Balance shall be paid to the Executive in 120 substantially equal monthly installments with each subsequent payment to be made on the first day of each subsequent month. The Bank shall
credit interest according to the formula of section 2.2, compounded monthly, until the Account Balance is paid in full. If the Executive’s Separation from Service is a Termination with Cause, no benefits shall be paid under this Agreement and
this Agreement shall terminate. 
 3.2    Change in Control. If a Change in Control occurs before the
Executive’s Separation from Service, instead of any other benefit payable under this Agreement the Bank shall pay to the Executive the entire Account Balance in a single lump sum on the date of the Change in Control. Payment of the Change-in-Control benefit shall fully discharge the Bank from all obligations under this Agreement, except the legal fee reimbursement obligation under section 9.11. 

3.3    Payout of Separation from Service Benefit after a Change in Control. If when a Change in Control
occurs the Executive is receiving or is entitled to receive the benefit under section 3.1, the Bank shall pay the remaining benefits to the Executive in a single lump sum on the later of (x) the date of the Change in Control or
(y) the first day of the seventh month after the month in which the Executive’s Separation from Service occurs. The lump-sum payment due to the Executive as a result of a Change in Control
shall be an amount equal to the Account Balance remaining unpaid. 
 3.4    One Benefit Only. Despite
anything to the contrary in this Agreement, the Executive and Beneficiary are entitled to one benefit only under this Agreement, which shall be determined by the first event to occur that is dealt with by this Agreement. Except as provided in
section 3.3, later occurrence of events dealt with by this Agreement shall not entitle the Executive or Beneficiary to other or additional benefits under this Agreement. 

3.5    Savings Clause Relating to Compliance with Code Section 409A. Despite any contrary
provision of this Agreement, if when the Executive’s employment terminates the Executive is a specified employee, as defined in Code section 409A, and if any payments under Article 3 of this Agreement will result in additional tax or interest
to the Executive because of section 409A, the Executive shall not be entitled to the payments under Article 3 until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons
other than the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the Executive under section 409A. 

ARTICLE 4 

DEATH BENEFITS 

After the Executive’s death, the Bank shall pay to the Executive’s Beneficiary the Account Balance as of the date of the
Executive’s death. The Account Balance shall be paid to the Executive’s Beneficiary in a single lump sum, 90 days after the date of the Executive’s death. However, if the Executive dies after termination of this Agreement under
Article 6, the Executive’s Beneficiary shall be entitled to no benefits under this Agreement. 

  
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 ARTICLE 5 

BENEFICIARIES 

5.1    Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary
to receive any benefits payable under this Agreement after the Executive’s death. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other benefit plan of the Bank in which
the Executive participates. 
 5.2    Beneficiary Designation Change. The Executive shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the
Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed
shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death. 

5.3    Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until
received, accepted, and acknowledged in writing by the Plan Administrator or its designated agent. 

5.4    No Beneficiary Designation. If the Executive dies without a valid beneficiary designation or if all
designated Beneficiaries predecease the Executive, the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be paid to the Executive’s estate. 

5.5    Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a
person incapable of handling the disposition of his or her property, the Bank may pay the benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Bank may
require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Bank from all liability for the benefit. 

ARTICLE 6 

GENERAL LIMITATIONS 

6.1    Termination with Cause. Despite any contrary provision of this Agreement, the Bank shall not pay any
benefit under this Agreement and this Agreement shall terminate if Separation from Service is a Termination with Cause. 

6.2     Removal. Despite any contrary provision of this Agreement, if the Executive is removed from office
or permanently prohibited from participating in the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order. 

  
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 6.3    Default. Despite any contrary provision of this
Agreement, if the Bank is in “default” or “in danger of default”, as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate. 

ARTICLE 7 

CLAIMS AND REVIEW PROCEDURES 

7.1    Claims Procedure. The Bank will notify any person or entity that makes a claim for benefits under
this Agreement (the “Claimant”) in writing, within 90 days after receiving Claimant’s written application for benefits, of his or her eligibility or noneligibility for benefits under the Agreement. If the Plan Administrator determines
that the Claimant is not eligible for benefits or full benefits, the notice will state (w) the specific reasons for denial, (x) a specific reference to the provisions of the Agreement on which the denial is based,
(y) a description of any additional information or material necessary for the Claimant to perfect his or her claim, and a description of why it is needed, and (z) an explanation of the Agreement’s claims review procedure
and other appropriate information concerning steps to be taken if the Claimant wishes to have the claim reviewed. If the Plan Administrator determines that there are special circumstances requiring additional time to make a decision, the Bank will
notify the Claimant of the special circumstances and the date by which a decision is expected to be made and may extend the time for up to an additional 90 days. 

7.2    Review Procedure. If the Claimant is determined by the Plan Administrator not to be eligible for
benefits, or if the Claimant believes that he or she is entitled to greater or different benefits, the Claimant will have the opportunity to have his or her claim reviewed by the Bank by filing a petition for review with the Bank within 60 days
after receipt of the notice issued by the Bank. The Claimant’s petition must state the specific reasons the Claimant believes entitle him or her to benefits or to greater or different benefits. Within 60 days after receipt by the Bank of the
petition, the Plan Administrator will give the Claimant (and counsel, if any) an opportunity to present his or her position verbally or in writing, and the Claimant (or counsel) will have the right to review the pertinent documents. The Plan
Administrator will notify the Claimant of the Plan Administrator’s decision in writing within the 60-day period, stating specifically the basis of its decision, written in a manner to be understood by the
Claimant, and the specific provisions of the Agreement on which the decision is based. If, because of the need for a hearing, the 60-day period is not sufficient, the decision may be deferred for up to another
60 days at the election of the Plan Administrator but notice of this deferral will be given to the Claimant. 
 ARTICLE 8

 ADMINISTRATION OF AGREEMENT 

8.1    Plan Administrator Duties. This Agreement shall be administered by a Plan Administrator consisting of
the board or such committee or persons as the board shall appoint. The Executive may not be a member of the Plan Administrator. The Plan Administrator shall have the discretion and authority to (x) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Agreement and (y) decide or resolve any and all questions that may arise, including interpretations of this Agreement. 

8.2    Agents. In the administration of this Agreement, the Plan Administrator may employ agents and
delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank. 

  
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 8.3    Binding Effect of Decisions. The decision or action of
the Plan Administrator concerning any question arising out of the administration, interpretation, and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having
any interest in the Agreement. Neither the Executive nor any Beneficiary shall be deemed to have any right, vested or unvested, regarding the continuing effect of any decision or action of the Plan Administrator. 

8.4    Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the members of the Plan
Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

 8.5    Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall
supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, death, or Separation from Service of the Executive and such other pertinent information as the Plan Administrator
may reasonably require. 
 ARTICLE 9 

MISCELLANEOUS 

9.1    Amendments and Termination. This Agreement may be amended solely by a written agreement signed by the
Bank and by the Executive, except that the Bank’s Plan Administrator may on its own change the financial condition or conditions constituting the Performance Goals, which change shall constitute an amendment of this Agreement, provided that
written notice of the change is given to the Executive as promptly as practicable after the change is adopted by the Plan Administrator. This Agreement may be terminated by the Bank without the Executive’s consent. Unless Article 6 provides
that the Executive is not entitled to payment or unless when termination occurs the Executive has already received payment of benefits under this Agreement, the Bank must pay the Account Balance in a single lump sum to the Executive if the Bank
terminates this Agreement. The lump-sum termination payment will be made to the Executive consistent with the terms of the Code section 409A plan-termination exception to the prohibition against accelerated
payment [Rule 1.409A-3(j)(4)(ix)]. 
 9.2    Binding Effect. This
Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, successors, administrators, and transferees. 

9.3    Successors; Binding Agreement. By an assumption agreement in form and substance satisfactory
to the Executive, the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the Bank’s business or assets to expressly assume and agree to perform this
Agreement in the same manner and to the same extent the Bank would be required to perform this Agreement had no succession occurred. 

9.4    No Guarantee of Employment. This Agreement is not an employment policy or contract. It does not give
the Executive the right to remain an employee of the Bank nor does it interfere with the Bank’s right to discharge the Executive. It also does not require the Executive to remain an employee or interfere with the Executive’s right to
terminate employment at any time. 

  
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9.5    Non-Transferability. Benefits under this Agreement may not be
sold, transferred, assigned, pledged, attached, or encumbered. 
 9.6    Tax Withholding. The Bank shall
withhold any taxes that are required to be withheld from the benefits provided under this Agreement. 

9.7    Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of the State of
Ohio, except to the extent the laws of the United States of America otherwise require. 
 9.8    Unfunded
Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay benefits. The rights to benefits are not
subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life is a general asset of the Bank to which the Executive and the Beneficiary have
no preferred or secured claim. 
 9.9    Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement other than those specifically set forth. This Agreement does not supersede or modify the May 8, 2008 Amended Executive
Deferred Compensation Agreement. This Agreement and the May 8, 2008 Amended Executive Deferred Compensation Agreement are entirely independent of each other. 

9.10    Tax Consequences. The Bank does not insure or guarantee the tax consequences of payments provided
hereunder for matters beyond its control. The Bank shall not be liable in any way to Executive if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Code section 409A
otherwise fails to comply with, or be exempt from, the requirements of Code section 409A. 
 9.11    Payment
of Legal Fees. The Bank is aware that after a Change in Control management of the Bank could cause or attempt to cause the Bank to refuse to comply with its obligations under this Agreement or could institute or cause or attempt to cause the
Bank to institute litigation seeking to have this Agreement declared unenforceable or could take or attempt to take other action to deny the Executive the benefits intended under this Agreement. In these circumstances the purpose of this Agreement
would be frustrated. The Bank desires that the Executive not be required to incur the expenses associated with the enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would
substantially detract from the benefits intended to be granted to the Executive hereunder. The Bank desires that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses. Accordingly, if
after a Change in Control occurs it appears to the Executive that (x) the Bank has failed to comply with any of its obligations under this Agreement, or (y) the Bank or any other person has taken any action to declare this
Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, the Bank irrevocably authorizes the
Executive from time to time to retain counsel of the Executive’s choice, at the Bank’s expense as provided in this section 9.11, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or
against the Bank or any director, officer, stockholder, or other person affiliated with the Bank, in any jurisdiction. Despite any existing or previous attorney-client relationship between the Bank and any counsel chosen by the Executive under this
section 9.11, the Bank irrevocably consents to the Executive entering into an attorney-client relationship with 

  
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that counsel, and the Bank and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time
by the Executive as provided in this section shall be paid or reimbursed to the Executive by the Bank on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by counsel in accordance with counsel’s
customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. The Bank’s obligation to pay the Executive’s legal fees under
this section 9.11 operates separately from and in addition to any legal fee reimbursement obligation the Bank may have with the Executive under any separate employment, severance, or other agreement between the Executive and the Bank. Despite
anything in this section 9.11 to the contrary however, the Bank shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule
359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3]. 
 9.12    Severability. If any
provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held invalid, and each such other provision shall continue in full force and effect to the full extent consistent with law. If
any provision of this Agreement is held invalid in part, such invalidity shall not affect the remainder of the provision not held invalid, and the remainder of such provision together with all other provisions of this Agreement shall continue in
full force and effect to the full extent consistent with law. 
 9.13    Waiver. A waiver by either party
of any of the terms or conditions of this Agreement in any one instance shall not be considered a waiver of the terms or conditions for the future or a waiver of any subsequent breach. All remedies, rights, undertakings, obligations, and agreements
contained in this Agreement shall be cumulative, and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party. 

9.14    Captions and Counterparts. Captions in this Agreement are included for convenience only and shall
not affect the interpretation or construction of the Agreement or any of its provisions. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute a
single agreement. 
 9.15    Notice. All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to
the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the Board of Directors, The Middlefield Banking Company,
15985 East High Street, Middlefield, Ohio 44062-0035. 

  
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 IN WITNESS WHEREOF, the
Executive and a duly authorized Bank officer have executed this Executive Deferred Variable Benefit Compensation Agreement as of the date first written above. 
  

									
	EXECUTIVE:	 		 	 BANK:
 The
Middlefield Banking Company

				
	 	 		 	By:	 	 
	James R. Heslop, II	 		 		 	Thomas G. Caldwell
		 		 	Its:	 	President and Chief Executive Officer


  
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 THE MIDDLEFIELD BANKING COMPANY

 EXECUTIVE VARIABLE BENEFIT DEFERRED COMPENSATION
AGREEMENT 
 Beneficiary Designation 

I designate the following as beneficiary under this Executive Variable Benefit Deferred Compensation Agreement of benefits payable after my
death. 

Primary:                       
                                         
                                         
                                         
                                         
                
  

 
 Contingent:
                                         
                                         
                                         
                                         
                                 

 
  
  

	Note:	To name a trust as beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement. 


I understand that I may change these beneficiary designations by filing a new written designation with the Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved. 

 

			
		
	Signature:	 	 
		 	James R. Heslop, II


  

			
	Date:	 	July 9, 2018


 Received by the Bank this 9th day of July, 2018 

 

			
		
	By:	 	 
		 	Thomas G. Caldwell
	Title:	 	President and Chief Executive Officer



  
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 THE MIDDLEFIELD BANKING COMPANY

 EXECUTIVE VARIABLE BENEFIT DEFERRED COMPENSATION
AGREEMENT 
 Schedule A 

Performance Goals 
 The
Bank’s board of directors shall establish Performance Goals, which may be absolute performance targets taking the Bank’s performance only into account, or relative targets taking the Bank’s performance into account relative to a peer
group of companies, or a combination of both. The measures of performance used to establish Performance Goals shall not change from one Plan Year to the next unless the board of directors concludes that compelling reasons exist to use different or
additional measures of performance. If performance relative to a peer group is used, the peer group analysis selected by the board of directors shall not be changed from one Plan Year to the next unless the board of directors concludes that the peer
group being employed is no longer representative of the Bank’s actual peer group of companies. 
 For the first Plan Year, the
Performance Goals are – 
  

					
	 Performance Target #1
	  	Performance Goal #1	  	 Annual Contribution for Achievement of

Performance Goal #1

			
	 Bank’s Target Net Income for Plan Year
	  	$7,662,833	  	 2.5% of the Executive’s Base Annual Salary

			
	 Bank’s Net Income for Plan Year Is

Equal to or Greater than –
	  	$7,739,461 (101%)	  	 3.5% of the Executive’s Base Annual Salary

			
	 Bank’s Net Income for Plan Year Is

Equal to or Greater than –
	  	$7,816,090 (102%)	  	 4.5% of the Executive’s Base Annual Salary

			
	 Bank’s Net Income for Plan Year Is

Equal to or Greater than –
	  	$7,892,718 (103%)	  	 5.5% of the Executive’s Base Annual Salary

			
	 Bank’s Net Income for Plan Year Is

Equal to or Greater than –
	  	$7,969,346 (104%)	  	 6.5% of the Executive’s Base Annual Salary

			
	 Bank’s Net Income for Plan Year Is

Equal to or Greater than –
	  	$8,045,975 (105%)	  	 7.5% of the Executive’s Base Annual Salary


 The Bank’s target net income for Performance Goal #1 is $7,662,833. At a minimum, the Executive is entitled to an Annual
Contribution for Performance Goal #1 equal to 2.5% of Base Annual Salary. For the Executive to receive a greater Annual Contribution under Performance Goal #1, the Bank’s net income for the Plan Year must meet or exceed 101% of the Bank’s
target net income for the Plan Year. For every additional 1% that the Bank’s target net income is met or exceeded in any Plan Year, up to 105%, the Executive’s Annual Contribution amount also increases by 1%. Thus, the maximum Annual
Contribution for achievement of Performance Goal #1 is 7.5% of the Executive’s Base Annual Salary. The Bank and the Executive agree that the Bank’s net income for the Plan Year shall be derived from the quarterly reports of condition filed
with the FDIC under the Federal Deposit Insurance Act section 7(a), 12 U.S.C. 1817(a), and FDIC rules, 12 CFR Part 304. 

  
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	 Performance Target #2
	  	 Performance Goal #2
	  	 Annual Contribution for Achievement of

Performance Goal #2

			
	 Bank’s Target Peer Rank
	  	 Overall Ranking in Top 50% of
 FDIC-insured
commercial banks having assets between $1 billion and $3 billion
	  	2.5% of the Executive’s Base Annual Salary
			
	 Bank Has An –
	  	 Overall Ranking in Top 60% of
 FDIC-insured
commercial banks having assets between $1 billion and $3 billion
	  	3.5% of the Executive’s Base Annual Salary
			
	 Bank Has An –
	  	 Overall Ranking in Top 70% of
 FDIC-insured
commercial banks having assets between $1 billion and $3 billion
	  	4.5% of the Executive’s Base Annual Salary
			
	 Bank Has An –
	  	 Overall Ranking in Top 80% of
 FDIC-insured
commercial banks having assets between $1 billion and $3 billion
	  	5.5% of the Executive’s Base Annual Salary
			
	 Bank Has An –
	  	 Overall Ranking in Top 90% of
 FDIC-insured
commercial banks having assets between $1 billion and $3 billion
	  	6.5% of the Executive’s Base Annual Salary
			
	 Bank Has An –
	  	 Overall Ranking in Top 100% of
 FDIC-insured
commercial banks having assets between $1 billion and $3 billion [ranked #1]
	  	7.5% of the Executive’s Base Annual Salary

 The Bank’s target Peer Rank for Performance Goal #2 is an overall ranking in the top 50% of all FDIC-insured commercial
banks having assets between $1 billion and $3 billion as reported on the Uniform Bank Performance Report (“UBPR”) as reported on the Federal Financial Institutions Examination Council’s website at www.ffiec.gov/UBPR.htm. The
UBPR is an analytical tool created for bank supervisory, examination, and management purposes. In a concise format, the UPBR shows the impact of management decisions and economic conditions on a bank’s performance and balance-sheet composition.
The performance and composition data contained in the report can be used as an aid in evaluating the adequacy of earnings, liquidity, capital, asset and liability management, and growth management. 

At a minimum, the Executive is entitled to an Annual Contribution for Performance Goal #2 equal to 2.5% of Base Annual Salary. For the
Executive to receive a greater Annual Contribution under Performance Goal #2, the Bank must have an overall ranking in the top 60% of FDIC-insured commercial banks having assets between $1 billion and $3 billion as reported on the UBPR for
the Plan Year. For every additional 10% that the Bank’s peer ranking improves in any Plan Year, up to being ranked first, the Executive’s Annual Contribution amount also increases by 1%. Thus, the maximum Annual Contribution for
achievement of Performance Goal #2 is 7.5% of the Executive’s Base Annual Salary. 
 At a minimum, the Executive’s Annual
Contribution in any Plan Year shall not be less than 5% of the Executive’s Base Annual Salary (i.e., the 2.5% of Base Annual Salary Annual Contribution under Performance 

  
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Goal #1 plus the 2.5% of Base Annual Salary Annual Contribution under Performance Goal #2). At a maximum, the Executive’s Annual Contribution in any Plan Year shall not exceed 15% of the
Executive’s Base Annual Salary (i.e., the 7.5% of Base Annual Salary Annual Contribution under Performance Goal #1 plus the 7.5% of Base Annual Salary Annual Contribution under Performance Goal #2). 

Changes in the Performance Goals approved by the board of directors shall become effective no more frequently than annually. The Plan
Administrator’s determination that the Performance Goals for a Plan Year have or have not been achieved shall be conclusive and binding. 

  
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