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                                                        EXHIBIT 10.20




                        SEVERANCE COMPENSATION AGREEMENT


     THIS SEVERANCE COMPENSATION AGREEMENT (the "Agreement"), has been made on
March 20, 1997 by FENTURA BANCORP, INC., a Michigan corporation (the
"Company"), THE STATE BANK, (the "Bank") and DONALD L. GRILL, an individual
(the "Executive").
                             BACKGROUND STATEMENT:

     The Executive is a principal officer of the Bank and the Company and his
continued services are important to the Bank, its depositors and customers, and
the Company's shareholders.  The Bank and the Company believe it is in their
best interests that the Executive continue to render services to the Bank and
the Company if a Change of Control is threatened or occurs, free from the
distractions and vexations which might result if his personal economic security
is made uncertain as a result of an impending Change of Control.

     1. DEFINITIONS.  The following words and phrases have the following
meanings:

     A)    "CAUSE" means (i) the willful and continuing failure
           by the Executive to substantially perform his duties with the
           Bank or the Company (other than any such failure resulting
           from the Executive's death or Disability) and which is not
           remedied in a reasonable period of time after receipt by
           Executive of written notice from the Bank specifying the
           duties the Executive has failed to perform, or (ii) the
           willful and continued engaging by Executive in gross
           misconduct that is materially injurious to the Bank or the
           Company and which is not ceased within a reasonable period of
           time after receipt by Executive of written notice from the
           Bank specifying the misconduct and the injury, or (iii) an
           adjudication of the Executive's guilt of any crime involving
           a serious and substantial breach of the Executive's fiduciary
           duties to the Bank.  No act or failure to act on the
           Executive's part shall be considered "willful" unless done,
           or omitted to be done, by him in bad faith 




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           and without reasonable belief that his action or omission was in the
           best interest of the Bank or the Company.

      B)   "CHANGE IN CONTROL" means (i) the acquisition,
           directly, indirectly and/or beneficially, by any person or
           group, of more than fifty percent (50%) of the voting
           securities of the Company or the Bank, (ii) the occurrence of
           any event at any time during any two (2) year period which
           results in a majority of the Board of Directors of the
           Company or the Bank being comprised of individuals who were
           not members of such Board at the commencement of that two (2)
           year period (the "Incumbent Board"); provided, however, that
           any individual becoming a director subsequent to the date
           hereof whose election, or nomination for election by the
           Company's or the Bank's shareholders, was approved by a vote
           of at least a majority of the directors then comprising the
           Incumbent Board shall be considered as though such individual
           were a member of the Incumbent Board, but excluding for this
           purpose any such individual whose initial assumption of the
           office occurs as a result of an actual or threatened election
           contest with respect to the election or removal of directors
           or other actual or threatened solicitation of proxies or
           consents by or on behalf of a person other than the Incumbent
           Board, (iii) a sale of all or substantially all of the assets
           of the Company or the Bank to another entity, or (iv) a
           merger or reorganization of the Company or the Bank with
           another entity.

      C)   "COMPENSATION" means with respect to the period under
           consideration, the aggregate of all amounts paid by the
           Company and the Bank to and includable in the Executive's
           earnings as base salary, bonuses, commissions, fees and any
           other compensation, but excluding contributions made to any
           welfare and pension benefit plans by the Bank and/or Company
           at its or their sole expense.

      D)   "DISABILITY" means any physical or mental impairment
           which meets the definition of disability found in the
           long-term or short-term disability policy insuring the
           Executive at the time disability is alleged or if no such
           policy is in effect at that time, any physical or mental
           impairment that, on the basis of qualified medical opinion of
           three (3) medical doctors, has rendered Executive wholly and
           permanently unable to engage in the regular and continuous
           occupation or employment for remuneration or profit of a
           nature similar to his employment with the Bank for a period
           of six (6)

           
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           consecutive months or more.

      E)   "GOOD REASON" means any of the following, as
           determined by the Executive in his discretion:  (i) the
           assignment to the Executive by the Bank or the Company of any
           duties inconsistent with his position, duties,
           responsibilities and status with the Bank or the Company
           immediately prior to a Change in Control, or a change adverse
           to Executive in Executive's reporting responsibilities,
           titles, terms of employment (including bonus, compensation,
           fringe benefits and vacation entitlement) or offices as in
           effect immediately prior to a Change in Control; or (ii) the
           Bank or the Company requiring Executive to be based anywhere
           other than within fifteen (15) miles of his present office
           location, or to travel on business of the Bank to an extent
           substantially greater than Executive's present business
           travel obligations; or (iii) the failure by the Company to
           obtain the assumption of this Agreement as contemplated in
           Section 6 hereof.  If any of the foregoing result from, or
           follow, a termination of employment for Cause, then Good
           Reason will not have occurred.

     2.    INCOME PROTECTION BENEFITS.  If the Executive is an employee of the
Bank or the Company when a Change in Control occurs, and the  Executive's
employment is thereafter terminated without Cause either by the Bank or the
Company, or by the Executive for Good Reason, or by any party because of the
Executive's death or Disability, then:

      a)   The Company and the Bank shall pay to the Executive,
           in a lump sum in cash within 30 days after the date of
           termination of employment the aggregate of the following
           amounts:

           i)   that portion of the Executive's annual
                base salary and director's fees through the date of
                termination not theretofore paid, and
           
           ii)  the product of (x) the sum of all
                commissions and bonuses of any kind paid or payable to
                Executive in the calendar year immediately preceding
                the year in which termination of employment occurs
                multiplied by (y) a fraction, the


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                numerator of which is the number of days in the current
                calendar year through the date of termination, and the
                denominator of which is 365, and

           iii) any compensation previously deferred by
                the Executive (together with any accrued interest o
                earnings thereon), and

           iv)  any accrued vacation pay.

      b)   The Executive shall have the right within 90 days
           following termination of employment to exercise any stock
           options awarded him prior to the termination of his
           employment.

      c)   The Bank and/or the Company shall thereafter pay to
           the Executive an annual amount equal to 50% of the highest
           amount of the Executive's annual Compensation in the five
           calendar years immediately preceding Executive's termination
           for a period of 5 years from and after the Executive's
           termination of employment, payable in equal monthly
           installments commencing the first day of the month coinciding
           with or immediately following the Executive's termination of
           employment.  If the Executive dies after the Bank's and the
           Company's obligation to make these payments is triggered, the
           Bank and the Company shall thereafter pay to the Executive's
           Beneficiary a lump sum amount equal to the present value of
           the unpaid monthly installments, discounted using a ten
           percent (10%) per annum interest rate.  In lieu of the
           foregoing installments, the Executive may elect by written
           notice to the Bank within ninety (90) days of the Executive's
           termination of employment to receive a lump sum amount equal
           to the present value of the monthly installments, discounted
           by using a ten percent (10%) per annum interest rate.

      d)   The Bank and/or the Company shall provide to the
           Executive, at its expense, hospital and medical insurance
           coverage of the same or equivalent scope as he was covered by
           immediately prior to termination of his employment for a
           period of 5 years after the Executive's termination of
           employment.

      3.   MAXIMUM BENEFITS UPON CHANGE OF CONTROL.  If the Bank's usual
certified public accountants determine that any payment by the Bank or the
Company to or for

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the benefit of the Executive (whether paid or payable pursuant to the terms of
this Agreement or otherwise) (the "Payment") would be nondeductible by the Bank
or the Company for Federal Income Tax purposes because of Section 280G of  the
Internal Revenue Code of 1986, as amended (the "Code), then the aggregate
present value of amounts payable to or for the benefit of the Executive
pursuant to this Agreement (the "Agreement Payments")   shall be reduced (but
not below zero) to the Reduced Amount.  The "Reduced Amount" means an amount
expressed in present value, determined in accordance with Section 280G(d)(4) of
the Code, which maximizes the present value of all Agreement Payments without
causing any Payment to be nondeductible by the Bank or the Company because of
Section 280G of the Code.


      4.   TERM.  Unless earlier terminated by mutual agreement of the Company
and the Executive, this Agreement shall terminate upon the earliest of (a) the
termination of the Executive's employment with the Bank and the Company for any
reason prior to a Change in Control; or (b) five (5) years from the date of a
Change in Control.  Obligations under Section 2 of this Agreement created prior
to termination shall survive termination.


      5.    TERMINATION PRIOR TO CHANGE IN CONTROL.  Notwithstanding anything in
this agreement to the contrary, if a Change of Control occurs and (i) if the
Executive's employment with the Company or the Bank is terminated prior to the
date on which Change of Control occurs, and if the termination of employment
(a) was at the request or suggestion of a 3rd party who has taken steps
reasonably calculated to effect the

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Change of Control or (b) otherwise arose in connection with or in anticipation
of the Change of Control, or (ii) Executive has terminated his employment with
Company and/or Bank for Good Cause prior to Change of Control, then
Executive shall be entitled to the Income Protection Benefits and all other
rights and privileges provided by this Agreement.

      6.   SUCCESSORS, BINDING AGREEMENTS.

      a)   Any purchaser, successor or assign (whether direct or
           indirect), to or of all, substantially all, or any material part of
           the business, properties and assets of the Bank and/or the Company
           shall be bound by the terms of this Agreement, and the Bank and the
           Company shall require any such purchaser, successor or assign, by
           agreement in form and substance satisfactory to Executive,
           expressly, absolutely and unconditionally to assume and agree to
           perform this Agreement in the same manner and to the same extent
           that the Bank and the Company would be required to perform if no
           such succession or assignment had taken place.

      b)   The Bank and the Company each hereby guarantee the timely
           payment and performance, when due, of the other's obligations under
           this Agreement.

      c)   This Agreement shall inure to the benefit of and be
           enforceable by the Executive's personal and legal representatives,
           executives, administrators, successors, heirs, distributees,
           devisees and legatees.


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     7.    NOTICES.  Notices under this Agreement shall be in writing and shall
be deemed given when hand delivered or three (3) days after being mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, as follows:


              If to the Company          Fentura Bancorp, Inc.
              or the Bank:               One Fenton Square
                                         PO Box 725
                                         Fenton, MI 48430-0725

              If to the Executive:       Mr. Donald L. Grill
                                         14655 S. Fowlerville Rd
                                         Perry, MI 48872-9594


      or   to such other address as either party may designate.

      8.    AT WILL PRESERVED.   This Agreement is intended only to provide an
economic benefit for Executive if his employment with the Bank or the Company
is terminated under the circumstances described herein.  Even though this
economic benefit may be payable, Executive's employment with the Bank and the
Company shall continue to be "at will," and the Bank, the Company or the
Executive may terminate Executive's employment with the Bank or the Company at
any time, with or without cause.  Further, the existence of this Agreement and
the economic benefits herein provided shall not contradict, override, supersede
or in any way detract from or affect the "at will" employment status of any
other employee of the Bank or the Company.  The employment terms set forth in
the Bank's employee handbook or employee manual, as they may be in effect from
time to time, shall control.


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     9. MISCELLANEOUS.

     A)   MODIFICATION; WAIVER.  This Agreement may be modified, waived
          or discharged only in, and limited to the extent specifically set
          forth in, a written document signed by the Executive and the
          Company.

     B)   VALIDITY.  The invalidity or unenforceability of any
          provision of this Agreement shall not affect the validity or
          enforceability of any other provision of this Agreement, which shall
          remain in full force and effect.

     C)   GOVERNING LAW.  This Agreement shall be governed in all
          respects according to the laws of the State of Michigan.




                                    COMPANY:

                                    FENTURA BANCORP, INC.,


                                    By: /s/Russell H. Van Gilder, Jr.
                                        ------------------------------
                                           Russell H. Van Gilder, Jr., Chairman

                                    BANK:

                                    THE STATE BANK

                                    By: /s/Russell H. Van Gilder, Jr.
                                        ------------------------------
                                           Russell H. Van Gilder, Jr., Chairman


                                    EXECUTIVE:

                                         /s/Donald L. Grill 
                                         ------------------
                                            Donald L. Grill
     



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