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                                                                   EXHIBIT 10.20

                       NONQUALIFIED STOCK OPTION AGREEMENT
                         (NON-EMPLOYEE DIRECTOR VERSION)


         THIS AGREEMENT is entered into as of ___________________ by and between
Citizens Banking Corporation ("Company") and the undersigned ("Optionee"),
pursuant to the Citizens Banking Corporation Stock Compensation Plan ("Plan").
The Company hereby grants to Optionee a Nonqualified Stock Option to purchase
________ shares of Common Stock, subject to the terms and conditions contained
in the Plan and as hereinafter provided (the "Option"). Capitalized terms not
defined in this Agreement shall have the meanings respectively ascribed to them
in the Plan.

         1. EXERCISE PRICE. The Option shall be exercisable at $_________ per
share.

         2. OPTION EXERCISE.

                  (a) Vesting. The Option shall become exercisable in equal
annual installments of 20% per year beginning on the first anniversary of the
Grant Date and shall be fully exercisable at the close of business on the fifth
anniversary of the Grant Date. In the event Optionee's term of office as a
non-employee director is terminated due to Retirement, the Option shall continue
to vest for five years after termination as if Optionee's term of office had not
terminated. In the event Optionee's employment is terminated due to death or
Disability, the Option shall continue to vest for one year after termination as
if Optionee's term of office had not terminated. If Company is a party to any
merger, consolidation, reorganization, or sale of substantially all of its
assets, Optionee shall, in connection with such transaction, to the extent that
the Option is not cancelled, cashed-out or previously exercised, be entitled to
receive upon exercise of the Option, in lieu of shares of Common Stock to which
Optionee would otherwise be entitled, the securities or property which a
shareholder owning the number of shares of Common Stock for which the Option is
then exercisable would be entitled to receive pursuant to such transaction. Any
provision of this Agreement to the contrary notwithstanding, the Option shall
expire and no longer be exercisable after close of business on the date which is
the tenth anniversary of the date of this Agreement (the "Expiration Date"). As
used in this Agreement, notwithstanding the definition of such term in the Plan,
"Retirement" shall mean Optionee's voluntary cessation of status as a
non-employee director following the Optionee's 65th birthday.

                  (b) Notice. The Option may be exercised only by delivery to
the Secretary of Company of a written and duly executed notice in the form
attached hereto accompanied by payment in the form or forms permitted by Section
2(c) below.

                  (c) Payment Terms. The purchase price for shares of Common
Stock to be acquired upon exercise of the Option shall be paid in full at the
time of exercise (1) in cash, (2) by personal check, bank draft or money order,
(3) by tendering shares of Common Stock that have been held at least six months
and which are freely owned and held by Optionee independent of any restrictions,
hypothecations or other encumbrances, duly endorsed for transfer (or with duly
executed stock powers attached), (4) through the Cashless Exercise Procedure by
delivery to Company of a properly executed exercise notice, acceptable to
Company, together with irrevocable instructions to Optionee's broker to deliver
to Company sufficient cash to pay the exercise price in accordance with a
written agreement between Company and the applicable brokerage firm, or (5) any
combination of the above.


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         3. TERMINATION OF DIRECTORSHIP.

            (a) Prior to Option Becoming Exercisable.

                           (i) If, prior to the date that the Option first
becomes exercisable, Optionee's term of office as a non-employee director is
terminated for any reason other than Retirement, death, or Disability,
Optionee's right to exercise the Option shall terminate and all rights
thereunder shall cease as of the close of business on the date of such
termination.

                           (ii) If prior to the date that the Option first
becomes exercisable, Optionee's term of office as a non-employee director is
terminated due to Retirement, Optionee's right to exercise the Option shall
continue to vest and become exercisable for up to five years after such
termination in accordance with Section 2(a) of this Agreement as if Optionee's
term of office as a non-employee director had not been terminated.

                           (iii) If prior to the date that the Option first
becomes exercisable, Optionee's term of office as a non-employee director is
terminated due to death or Disability, Optionee's right to exercise the Option
shall continue to vest and become exercisable for up to one year after such
termination in accordance with Section 2(a) of this Agreement as if Optionee's
term of office as a non-employee director had not been terminated.

            (b) After Option Becomes Exercisable. If, on or after the date that
the Option first becomes exercisable, Optionee's term of office as a
non-employee director is terminated (1) for Cause, any unexercised portion of
the Option (whether then exercisable or not) shall, as of the time of the Cause
determination, immediately terminate, (2) due to death or Disability, then the
Option, to the extent that it is otherwise exercisable on the date of exercise
(as set forth in Sections 2(a) and 3(a)(iii)), shall be exercisable only until
the earlier of the one year anniversary of such termination or the Expiration
Date, (3) due to Retirement, then the Option, to the extent that it is otherwise
exercisable on the date of exercise (as set forth in Sections 2(a) and
3(a)(ii)), shall be exercisable only until the earlier of the five year
anniversary of such termination or the Expiration Date, or (4) for any other
reason, then the Option, to the extent that it is exercisable on the date of
termination, shall be exercisable only until the earlier of the three month
anniversary of such termination or the Expiration Date.

         4. RESTRICTIVE COVENANTS.

         As consideration for the grant of this Award, Optionee agrees to comply
with and be bound by the following restrictive covenants:

                  (a) Non-Disclosure of Confidential Information. All
"confidential information" concerning Company and its customers will be kept
strictly confidential and will not be disclosed by Optionee to any third parties
or used by Optionee in a manner contrary to Company's interests at any time
without the prior consent of Company, except as required by law. "Confidential
information" includes customer and client lists and all customer, technical,
business, marketing, financial, systems and personnel information from whatever
source, the disclosure of which might be contrary to the interests of Company,
excluding information which is or becomes publicly available other than by
Optionee's acts or omissions. All confidential information and all other
property of Company will be returned to Company on or before the date Optionee's
active status terminates, and Optionee will not retain any copies in any form.



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                  (b) Non-Solicitation of Employees and Customers. During
Optionee's term of office as a non-employee director and for a period of one
year following Termination of such office for any reason, including Retirement,
Optionee will not, without the prior written consent of Company:

                           (i) on his/her own behalf or on behalf of any third
party, whether directly or indirectly, hire or employ, attempt to hire or
employ, or solicit, encourage or induce to leave employment with Company or to
accept employment elsewhere than Company, any person who was employed by Company
at any time during the 18-month period beginning six months prior to the
termination of Optionee's office as a non-employee director and ending one year
after such termination.

                           (ii) on his/her own behalf or on behalf of any third
party, whether directly or indirectly, provide, sell, market or endeavor to
provide, sell or market any Competing Services to any Restricted Customers (as
such terms are defined below), or otherwise solicit or communicate with any
Restricted Customers for the purpose of selling or providing any Competing
Services. "Competing Services" means any products or services that are similar
to or competitive with the products and services sold or offered by Company.
"Restricted Customers" means any of Company's current, former, or prospective
customers to whom Optionee provided services, with whom Optionee had business
contact on behalf of Company, with respect to whom Optionee has confidential
information, or with whom Optionee had any responsibilities during the last two
years of Optionee's term of office as a non-employee director with Company.

                  (c) Non-disparagement. During Optionee's term of office as a
non-employee director and for a, period of five years following Optionee's
termination of such office for any reason including Retirement, Optionee will
not publicly or privately make disparaging comments with respect to Company or
it's directorate or management in general and specifically with respect to any
of Company's personnel, operations, products, policies or practices.

                  (d) Non-Competition. During Optionee's term of office as a
non-employee director and for a period of one year following termination of such
office for any reason, including Retirement, Optionee will not, without the
prior written consent of Company, become employed by (including self-employment)
or otherwise provide services to (including as a director or advisory director)
or on behalf of any person or entity whose business competes with Company where
both:

                           (i) Optionee will be called to perform the same or
substantially similar functions to those which Optionee performed while serving
as a non-employee director of Company during the one-year period prior to the
termination of Optionee's office as a non-employee director, and

                           (ii) Optionee will, by virtue of the new business
relationship, be acting in a manner which is or may reasonably be expected to be
prejudicial to or in conflict with the interests of Company, as determined in
the reasonable discretion of the chief executive officer of Company or his
designee.

                  (e) Subsequent assistance. Following Optionee's termination of
office as a non-employee director for any reason, (other than death and in
certain instances, Disability) Optionee shall



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furnish such reasonable subsequent assistance requested by Company that is
deemed material to the transition of responsibilities from Optionee to his or
her successor.

                  (f) Reformation. If any portion of these restrictive covenants
is found to be unenforceable, any court of competent jurisdiction may reform the
restrictions as to time, geographical area or scope to the extent required to
make the provision enforceable under applicable law.

                  (g) Disclosure of Information. Optionee hereby agrees that
he/she will provide Company with any information reasonably requested to
determine compliance with these restrictive covenants and authorizes Company to
disclose the covenants and the remedies for their violation to any third party
who might be affected thereby, including Optionee's prospective employer.

                  (h) Cancellation and Other Remedies. If Optionee violates the
restrictive covenants described in paragraphs 4 (a) through 4 (e) above:

                           (i) all stock options outstanding to Optionee covered
by this award will be canceled immediately, and

                           (ii) Optionee will be required to reimburse Company
in an amount equal to any gain realized by Optionee (determined as of the
exercise date) with respect to the exercise of the options covered by this Award
within the period beginning one year prior to the termination of Optionees'
office as a non-employee director and ending six (6) months after the
termination of such office, net of any taxes withheld. Optionee agrees that this
payment will be liquidated damages and is not to be construed in any manner as a
penalty.

Optionee acknowledges that a violation or attempted violation on his or her part
of the restrictive covenants set forth in Paragraphs 4.(a) relating to
disclosure of confidential information, 4.(b) relating to solicitation of
Company's employees and customers and 4.(c) relating to the making of
disparaging comments concerning Company will cause immediate and irreparable
damage to Company, and therefore agrees that Company will be entitled as a
matter of right to an injunction from any court of competent jurisdiction
restraining any violation or further violation of such terms, such right to an
injunction, however, will be cumulative and in addition to whatever other
remedies Company may have under law or equity. With respect to any violation of
the restrictive covenants set forth in Paragraph 4(d) relating to noncompetition
and 4(e) relating to subsequent assistance, the right to injunctive relief shall
not apply and only the remedies set forth in subparagraphs 4(h)(i) and (ii)
shall be available to Company. In any action or proceeding by Company to enforce
these restrictive covenants where Company is the prevailing party, Company shall
be entitled to recover from Optionee its reasonable attorneys' fees and expenses
incurred in such action or proceeding.

         5. TERMINATION FOR CAUSE. Notwithstanding any other provision of this
non-qualified stock option agreement, if Optionee's termination of office as a
non-employee director is initiated by Company for Cause, all stock options
outstanding to Optionee at the close of business on the day employment
terminates will be cancelled, and Optionee will be required to repay any gains
realized as a result of exercising an option within the one-year period prior to
termination.

         6. OPTIONEE'S AGREEMENT. Optionee agrees to all the terms stated in
this Agreement, as well as to the terms of the Plan, a copy of which is attached
hereto and of which Optionee acknowledges receipt. To the extent any provision
of this Agreement conflicts with the terms of the



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Plan, the terms of the Plan shall control. Pursuant to the Plan, the Committee
is vested with conclusive authority to administer the Plan (which includes,
among other things, the authority to determine the terms and conditions of this
Agreement and the Option).

         7. RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a
shareholder of Company with respect to any of the shares covered by the Option
until the issuance of such shares. No adjustment shall be made for dividends or
other rights with respect to such shares for which the record date is prior to
the date such shares are issued.

         8. NON-TRANSFERABILITY OF OPTION. The Option shall not be transferred
in any manner other than by will, the laws of descent and distribution or any
other manner permitted by the Plan at the time of such purported transfer. No
transfer of the Option shall be effective to bind Company unless Company shall
have been furnished with written notice thereof and such evidence as Company may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee of the terms and conditions of the Option.

         9. ADJUSTMENTS. The number of shares of Common Stock to which the
Option is subject and the exercise price are subject to adjustment in accordance
with Section 6.01 of the Plan. Such adjustment will be determined by the
Committee, in its sole discretion.

         10. AMENDMENT AND TERMINATION OF OPTION. Except as otherwise provided
in this Agreement or in the Plan, Company may not, without the consent of
Optionee, amend, modify or terminate this Agreement if such amendment,
modification or termination would adversely affect the Option in any material
way.

         11. NOTICES. Every notice relating to this Agreement shall be in
writing and if given by mail shall be given by registered or certified mail with
return receipt requested. All notices to Company or the Committee shall be sent
or delivered to the Secretary of Company at Company's headquarters. All notices
by Company to Optionee shall be delivered to Optionee personally or addressed to
Optionee at Optionee's last residence address as then contained in the records
of Company or such other address as Optionee may designate. Either party by
notice to the other may designate a different address to which notices shall be
addressed. Any notice given by Company to Optionee at Optionee's last designated
address shall be effective to bind any other person who shall acquire rights
hereunder.

         12. APPLICABLE LAW. This Agreement (a) shall be governed by and
construed in accordance with the laws of the State of Michigan without giving
effect to conflict of laws, and (b) is not valid unless it has been manually
signed by Optionee and Company.







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         IN WITNESS WHEREOF, this Agreement has been executed as of
_______________ by the parties set forth below.


                                     CITIZENS BANKING CORPORATION


                                     By:
                                           -------------------------------------
                                           William R. Hartman
                                     Its:  Chairman, President and Chief
                                           Executive Officer



                                     OPTIONEE:



                                     -------------------------------------------
                                     (signature)



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                               NOTICE OF EXERCISE


Secretary
Citizens Banking Corporation
328 South Saginaw St.
Flint, Michigan 48502

         An Option was granted to me on __________, ____ to purchase _______
shares of Citizens Banking Corporation common stock at a price of $_____ per
share (the "Option"). I hereby elect to exercise the Option with respect to
______ shares. Payment of the exercise price is being made as follows (check all
that apply):

         o        Cash delivered with this notice.

         o        Certified check, bank draft or money order delivered with this
                  notice.

         o        I am tendering shares of Common Stock that I currently own. I
                  certify that I have owned such shares for at least the six
                  months prior to the date of this notice.

         o        Subject to Section 2.04 of the Stock Compensation Plan, I am
                  making a "cashless exercise" and have given the designated
                  broker the irrevocable instructions required by the applicable
                  agreement between the broker and Citizens Banking Corporation.

         The stock certificate for the shares acquired upon exercise should be
issued to:

                           (name)
                                        ----------------------------------------
                           (address)
                                        ----------------------------------------

                                        ----------------------------------------
                  (Social Security No.)
                                        ----------------------------------------



Dated:                   ,                (signature)
       ------------------  ---------                  --------------------------

                                         (print name)
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