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earlier of the first business day (a) of the seventh month following the Executive’sSeparation from Service, or (b) the Executive’s death following Separation from Service (the“409A Payment Date”).               (3) Notwithstanding the foregoing, in the event of an Anticipatory Termination, theSeverance Payment shall be paid as follows: (i) if such Change in Control is a “change incontrol event” within the meaning of Code Section 409A, (A) except as provided in clause(i)(B), on the date of such Change in Control, or (B) if the Executive is a Specified Employeeas of the date of the Executive’s Separation from Service, on the 409A Payment Date, and (ii)if such Change in Control is not a “change in control event” within the meaning of CodeSection 409A, (A) except as provided in clause (ii)(B), on the first business day followingthe three-month anniversary of the date of such Anticipatory Termination, or (B) if theExecutive is a Specified Employee as of the date of the Executive’s Separation from Service,on the 409A Payment Date. Interest with respect to the period, if any, from the date of theChange in Control until the actual date of payment shall be paid on the Severance Payment madein connection with an Anticipatory Termination.               (4) Notwithstanding the foregoing, on the first anniversary of the effective date of thisAgreement, the Severance Payment provided for in paragraph 1.A(1) shall be reduced from twotimes base salary plus two times bonus to one times base salary and one times bonus.               B. The Executive shall continue to be covered, at the Corporation’s cost, by the medical anddental benefit plans that are in effect on the date of the Executive’s Separation from Serviceand that cover executive employees, for a period of _________ (___) months **(the “BenefitContinuation Period”) after the Executive’s Separation from Service; provided, however, that suchmedical and dental benefits provided during the Benefit Continuation Period shall be provided insuch a manner that such benefits (and the costs and premiums thereof) are excluded from theExecutive’s income for federal income tax purposes and, if the Corporation reasonably determinesthat providing continued coverage under one or more of its health care benefit plans contemplatedherein could be taxable to the Executive, the Corporation shall provide such benefits at thelevel required hereby through the purchase of individual insurance coverage;**provided, however,that if during such time period the Executive should enter into other employment providingcomparable benefits, the Executive’s participation in such plans of the Corporation shall cease.               C. If the Executive was furnished with a club membership, that membership (as it relates tothe Executive) shall terminate as of the Executive’s Separation from Service, and the Corporationeither shall transfer or terminate the membership in accordance with the by-laws and/or rules andprocedures of the applicable club; provided, however, that the Executive shall incur no new clubfees following Separation from Service and also shall have no further financial liability for newobligations thereunder.               D. All stock options and restricted stock previously granted by the Corporation to theExecutive, whether or not then exercisable, shall become immediately vested and exercisable.               E. For a period of one year following Executive’s Separation from Service, the Executiveshall be entitled to outplacement services provided by an outplacement service providerdesignated by the Corporation. The cost of providing the outplacement services shall be bornesolely by the Corporation, and shall be equal to the lesser of (i) 10% of the Executive’s annualbase salary immediately prior to the Change in Control (or, if higher, the Executive’s annualbase salary as of the date of the Executive’s Separation from Service) and (ii) $20,000.               F. If the payment of any of the foregoing amounts or benefits (when added to any otherpayments or benefits provided to the Executive in the nature of compensation) will result in thepayment of an excess parachute payment as that term is defined in Code Section 280G, then in suchevent, the amount of the payment shall be decreased to the maximum amount that could be paidwithout the payment being deemed an excess parachute payment.2. For purposes of this Agreement, a “Change in Control” shall mean:               A. The acquisition by any individual, entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a“Person”) of beneficial ownership (within the meaning of Rule l3d-3 promulgated under theExchange Act) of 20% or more of either (1) the then outstanding shares of common stock of theCorporation (the “Outstanding Corporation Common Stock”) or (2) the combined voting power of thethen outstanding voting securities of the Corporation entitled to vote generally in the electionof directors (the “Outstanding Corporation Voting Securities”); provided,however, that for purposes of
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this subparagraph A, the following acquisitions shall not constitute a Change in Control:(i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii)any acquisition by any employee benefit plan (or related trust) sponsored or maintained by theCorporation or any corporation controlled by the Corporation, or (iv) any acquisition by anycorporation pursuant to a transaction which complies with clauses (1), (2) and (3) ofsubparagraph C of this paragraph 2; or          B. Individuals who, as of the date hereof, constitute the Board of Directors of theCorporation (the “Incumbent Board”) cease for any reason to constitute at least a majority of theBoard of Directors; provided, however, that any individual becoming a directorsubsequent to the date hereof whose election, or nomination for election by the Corporation’sshareholders, was approved by a vote of at least a majority of the directors then comprising theIncumbent Board (either by a specific vote or by approval of the proxy statement of theCorporation in which such person is named as a nominee for director, without written objection tosuch nomination) shall be considered as though such individual were a member of the IncumbentBoard, but excluding, for this purpose, any such individual whose initial assumption of officeoccurs as a result of an actual or threatened election contest with respect to the election orremoval of directors or other actual or threatened solicitation of proxies or contests by or onbehalf of a person other than the Board of Directors of the Corporation; or          C. Consummation of a reorganization, merger, share exchange with another corporationpursuant to Michigan Compiled Laws Section 450.1702, or consolidation, sale or other dispositionof all or substantially all of the assets of the Corporation (a “Business Combination”), in eachcase, unless, following such Business Combination: (1) all or substantially all of theindividuals and entities who were the beneficial owners, respectively, of the OutstandingCorporation Common Stock and Outstanding Corporation Voting Securities immediately prior to suchBusiness Combination beneficially own, directly or indirectly, more than 65% of, respectively,the then outstanding shares of common stock and the combined voting power of the then outstandingvoting securities entitled to vote generally in the election of directors, as the case may be, ofthe corporation resulting from such Business Combination (including, without limitation, acorporation which as a result of such transaction owns the Corporation or all or substantiallyall of the Corporation’s assets either directly or through one or more subsidiaries) insubstantially the same proportions as their ownership, immediately prior to such BusinessCombination of the Outstanding Corporation Common Stock and Outstanding Corporation VotingSecurities, as the case may be; (2) no Person (excluding any corporation resulting from suchBusiness Combination or any employee benefit plan (or related trust) of the Corporation or suchcorporation resulting from the Business Combination) beneficially owns, directly or indirectly,20% or more of, respectively, the then outstanding shares of common stock of the corporationresulting from such Business Combination or the combined voting power of the then outstandingvoting securities of such corporation except to the extent that such ownership existed prior tothe Business Combination; and (3) at least a majority of the members of the board of directors ofthe corporation resulting from such Business Combination were members of the Incumbent Boardimmediately prior to the time of the execution of the initial agreement, or of the action of theBoard of Directors of the Corporation, providing for such Business Combination; or          D. Approval by the stockholders of the Corporation of a complete liquidation or dissolutionof the Corporation.3. Executive’s Separation from Service shall be as described in this paragraph 3 ifthe Separation from Service results from the Executive’s termination of employment at any timewithin 3 months prior to (such termination of employment, an “Anticipatory Termination”), on thedate of, or within 24 months after a Change in Control of the Corporation as defined inparagraph 2 of this Agreement either by (a) involuntary dismissal by the Corporation; or (b) theExecutive’s constructive termination as described in the following sentences of this paragraph3. If (i) there is a significant reduction in the scope of the Executive’s authority or in theextent of the Executive’s powers, functions, duties or responsibilities, or (ii) the Executive’sannual rate of compensation is reduced or fringe benefits, including relocation benefits, arenot provided to the Executive on a basis commensurate with other executives of the Corporationand its subsidiary banks, or (iii) there are changes in the Executive’s responsibilities for theCorporation which require moving the Executive’s job location to a location outside of the lowerpeninsula of the State of Michigan, then the Executive shall be entitled to give written noticethereof to the Board of Directors of the Corporation. If within 60 days following such notice,the Executive and the Board of Directors of the Corporation do not resolve the Executive’sconcerns to the satisfaction of the Executive (the Executive’s satisfaction or dissatisfactionto be communicated to the Board of Directors of the Corporation in writing within such 60 days),the Executive’s employment shall be deemed to be constructively terminated at the end of such60-day period, provided that Executive in fact experiences a Separation from Service.
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4. The specific arrangements referred to above are not intended to exclude theExecutive’s participation in other benefits available to executive personnel of the Corporationgenerally or to preclude other compensation or benefits as may be authorized by theCorporation’s Board of Directors from time to time provided however, Executive shall not beeligible to receive any benefits under the Corporation’s Severance Pay Plan if Executivereceives the severance amount and other benefits under this Agreement.5. As partial consideration for the above, the Executive agrees not to disclose anyconfidential information about the Corporation and its operation to which the Executive wasprivy during the course of the Executive’s employment by the Corporation. Further, theExecutive agrees not to accept employment or consult for or otherwise assist any competitor ofthe Corporation for a period of _____ months following the Executive’s Separation from Service.For purposes of the foregoing, “competitor” means any financial institution that conductsbusiness from any location within 50 miles of any location at which the Corporation or anysubsidiary bank had an office on the day immediately prior to the day on which the Change inControl of the Corporation occurred.6. This Agreement shall be binding upon and shall inure to the benefit of therespective successors, assigns, legal representatives and heirs to the parties.7. Any payment or delivery required under this agreement shall be subject to allrequirements of the law with regard to withholding, filing, making of reports and the like, andthe Corporation shall use its best efforts to satisfy promptly all such requirements.8. Notwithstanding anything contained herein to the contrary, this Agreement shall beterminated and no benefits to the Executive shall be payable if, subsequent to the effectivedate of this Agreement, the Executive accepts a new position within the Corporation that is noteligible to participate in the Corporation’s change in control program at the time Executiveaccepts such position or if, at any time, the Executive shall resign voluntarily (other than asprovided in paragraph 3), become incapacitated, voluntarily take another position requiring asubstantial portion of the Executive’s time, or die. This Agreement also shall terminate upontermination for cause of the Executive’s employment as an officer of the Corporation or anysubsidiary bank by the Incumbent Board. For purposes of the foregoing, “termination for cause”means termination due to the Executive’s conviction of a felony, a determination that theExecutive is guilty of sexual harassment of another employee, the Executive’s provenembezzlement from the Corporation or a subsidiary bank, the Executive’s gross misconduct orincompetence, the Executive’s disclosure of confidential information of the Corporation orintentional assistance of a competitor of the Corporation (as defined in paragraph 5), or anyother activity of the Executive which has or may have a material adverse effect on the financesor business reputation of the Corporation or a subsidiary bank.9. Any and all disputes, controversies or claims arising out of or in connection withor relating to this Agreement or any breach or alleged breach thereof shall, upon the request ofeither party, be submitted to and settled by arbitration in the State of Michigan pursuant tothe Voluntary Labor Arbitration Rules, then in effect, of the American Arbitration Association(or at any other place or under any other form of arbitration mutually acceptable to the partiesinvolved). The parties hereto specifically agree to arbitrate with the other party in aproceeding with regard to all issues and disputes, and to permit pre-hearing discovery in thetime and manner provided by the then applicable Federal Rules of Civil Procedure. Thisagreement to arbitrate shall be specifically enforceable under the prevailing arbitration law.Notice of the demand for arbitration shall be filed, in writing, with the other party to thisAgreement and with the American Arbitration Association. The demand for arbitration shall bemade within a reasonable time after the claim, dispute, or other matter in question arose wherethe party asserting the claim should reasonably have been aware of the same, but in no eventlater than the applicable Michigan or federal statute of limitations. The arbitrator shall haveno power to add to, subtract from, or alter the terms of this Agreement, and shall render awritten decision setting forth findings and conclusions only as to the claims or disputes atissue. Any award by the arbitrator shall be final and conclusive upon the parties, and ajudgement thereon may be entered in the highest court for the forum, state or federal, havingjurisdiction. All expenses of the arbitration process shall be borne by the Corporation. TheCorporation shall reimburse the Executive for the reasonable fees of legal counsel as incurred(within ten days following the Corporation’s receipt of an invoice from the Executive), at anytime from the effective date of this Agreement through the Executive’s remaining lifetime (or,if longer, through the 20th anniversary of the effective date of this Agreement) inconnection with arbitrating the enforcement of any of the Executive’s rights under thisAgreement. However, in no event shall the Executive be entitled to retain any fees soreimbursed if the claim brought by the Executive against the Corporation is in the arbitrator’ssole determination frivolous or was brought in bad faith, and the Corporation willbe entitled to seek repayment from the Executive for such fees after such determination by thearbitrator. In order
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to comply with Code Section 409A, in no event shall the payments by theCorporation under this paragraph 9 be made later than the end of the calendar year nextfollowing the calendar year in which such fees and expenses were incurred, *provided*, that theExecutive shall have submitted an invoice for such fees and expenses at least ten days beforethe end of the calendar year next following the calendar year in which such fees and expenseswere incurred. The amount of such legal fees and expenses that the Corporation is obligated topay in any given calendar year shall not affect the legal fees and expenses that the Corporationis obligated to pay in any other calendar year, and the Executive’s right to have theCorporation pay such legal fees and expenses may not be liquidated or exchanged for any otherbenefit.10. The Corporation may, in consultation with the Executive, modify the Agreement, inthe least restrictive manner necessary and without any diminution in the value of the paymentsto the Executive, in order to cause the provisions of the Agreement to comply with or be exemptfrom the requirements of Code Section 409A, so as to avoid the imposition of taxes and penaltieson the Executive pursuant to Code Section 409A. If benefits or payments under this Agreementmust be delayed or reduced to comply with the Emerging Economic Stabilization Act of 2008, asamended (the “Act”), the Corporation, in consultation with the Executive, shall modify theAgreement in the least restrictive manner necessary to comply with the Act.11. The invalidity or unenforceability of any provision of this Agreement shall notaffect the enforceability or validity of any other provision hereof.12. This Agreement constitutes the entire agreement of the parties with respect to thesubject matter addressed in this Agreement. This Agreement replaces and supercedes in theentirety any previous change in control agreement between Executive and the Corporation,including the Prior Agreement. This Agreement may be amended only in a written document signedby both the Corporation and the Executive.13. This Agreement shall be governed by the laws of the State of Michigan.       **CITIZENS REPUBLIC BANCORP, INC.**   **EXECUTIVE** By:             
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