**CHANGE IN CONTROL SEVERANCE AGREEMENT**

As            Amended and Restated

 

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (“Agreement”)            entered into this 17th day of December 2007 (“Effective Date”), by and            between Irwin Bank, Irwin, Pennsylvania (the “Bank”), including its parent            holding company, IBT Bancorp, Inc. (the “Parent”) and Charles G. Urtin (the            “Employee”).

 

WHEREAS, the Employee is currently employed by the Bank as President and            Chief Executive Officer and by the Parent as President and Chief Executive Officer and            is experienced in all phases of the business of the Bank; and

 

WHEREAS, the parties desire by this writing to set forth the continuing            rights and responsibilities of the Bank and Employee if the Bank should undergo a            change in control (as defined hereinafter in the Agreement) after the Effective            Date.

 

NOW, THEREFORE, it is AGREED as follows:

 

1.         Employment. The Employee is employed in the            capacity as the President of the Bank and of the Parent. The Employee shall render such            administrative and management services to the Bank and Parent as are currently rendered            and as are customarily performed by persons situated in a similar executive capacity.            The Employee’s other duties shall be such as the Board of Directors for the Bank            and Parent (the “Board of Directors” or “Board”) may from time            to time reasonably direct, including normal duties as an officer of the Bank and            Parent.

 

2.         Term of Agreement. The term of this            Agreement shall be for the period commencing on the Effective Date and ending three            years thereafter (“Term”). Additionally, on, or before, each annual            anniversary date from the Effective Date, the Term of this Agreement may be extended            for up to an additional one year period beyond the then effective expiration date upon            a determination and resolution of the Board of Directors that the performance of the            Employee has met the requirements and standards of the Board, and that the Term of such            Agreement shall be extended.

 

|   | 3. | Termination of Employment in Connection with or                            Subsequent to a Change in Control. |
|--------|----|---------------------------------------------------------------------------------------------------------------|

 

(a)       Notwithstanding any            provision herein to the contrary, in the event of the termination of Employee’s            employment during the Term of this Agreement, absent Just Cause, in connection with, or            within twenty-four (24) months after any Change in Control of the Bank or Parent,            Employee shall be paid an amount equal to the product of 2.99 times the            Employee’s “base amount” as defined in Section 280G(b)(3) of the            Internal Revenue Code of 1986, as amended (the “Code”) and regulations            promulgated thereunder. Said sum shall be paid in one (1) lump sum as of or immediately            prior to such date of termination of employment, and such payments shall be in lieu of            any other severance payments which the Employee would be otherwise entitled to receive            from the Bank or Parent. Notwithstanding the forgoing, all sums payable hereunder shall            be reduced in such manner and to such extent so that no such payments

 

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made            hereunder when aggregated with all other payments to be made to the Employee by the            Bank or the Parent shall be deemed an “excess parachute payment” in            accordance with Section 280G of the Code and would subject the Employee to the excise            tax provided at Section 4999(a) of the Code. The term “control” shall refer            to the ownership, holding or power to vote more than 25% of the Bank’s or            Parent(s outstanding voting stock by any person, the control of the election of a            majority of the Bank’s or Parent(s directors, or the exercise of a controlling            influence over the management or policies of the Bank or Parent by any person or by            persons acting as a group within the meaning of Section 13(d) of the Securities            Exchange Act of 1934 (“Exchange Act”). The term “person” means            an individual other than the Employee, or a corporation, partnership, trust,            association, joint venture, pool, syndicate, sole proprietorship, unincorporated            organization or any other form of entity not specifically listed herein, other than the            Employer or Parent. The provisions of this Section 3(a) shall survive the expiration of            this Agreement occurring after a Change in Control.

 

(b)       Notwithstanding any other            provision of this Agreement to the contrary, except as provided at Sections 4(b), 4(c),            4(d) and 5, Employee may voluntary terminate his employment during the Term of this            Agreement following a Change in Control of the Bank or Parent, and Employee (or his            estate in the event of death after a Change in Control but prior to payment) shall            thereupon be entitled to receive the payment described in Section 3(a) of this            Agreement, upon the occurrence, or within ninety (90) days thereafter, of any of the            following events, which have not been consented to in advance by the Employee in            writing: (i) if Employee would be required to move his personal residence or perform            his principal executive functions more than thirty-five (35) miles from the            Employee’s primary office as of the signing of this Agreement; (ii) if in            the organizational structure of the Bank, Employee would be required to report to a            person or persons other than the Board of Directors of the Bank; (iii) if the Bank            should fail to maintain the Employee’s base compensation as in effect as of the            date of the Change in Control and existing employee benefits plans, including material            fringe benefit, and retirement plans, except to the extent that such reduction in            benefit programs is part of an overall adjustment in benefits for all employees of the            Bank and does not disproportionately adversely impact the Employee; (iv) if Employee            would be assigned duties and responsibilities other than those normally associated with            his position as referenced at Section 1, herein; (v) if Employee would not be elected            or reelected to the Board of Directors of the Bank or Parent or (vi) if            Employee’s responsibilities or authority have in any way been materially            diminished or reduced.

             

Notwithstanding the foregoing, in the event of the Employee’s            Termination of Employment under this Section 3(b), the Bank will have a period of 30            calendar days following notice from the Employee during which period the Bank may            remedy the condition, and thereby not be required to pay the amount due to the Employee            under Section 3(a) and such Termination of Employment shall not be deemed            effective.

             

The provisions of this Section 3(b) shall survive the expiration of this            Agreement occurring after a Change in Control.

             

             

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|   | 4. | Other Changes in Employment                            Status. |
|--------|----|----------------------------------------------------------------|

 

(a)       Except as provided for at            Section 3, herein, the Board of Directors may terminate the Employee’s employment            at any time with or without Just Cause within its sole discretion. This Agreement shall            not be deemed to give the Employee any right to be retained in the employment or            service of the Bank or to interfere with the right of the Bank to terminate the            employment of the Employee at any time. Except as detailed at Section 3, herein, the            Employee shall have no right under this Agreement to receive compensation or other            benefits for any period after Termination of Employment with or without Just Cause.            Termination for “Just Cause” shall include termination because of the            Employee’s personal dishonesty, incompetence, willful misconduct, breach of            fiduciary duty involving personal profit, intentional failure to perform stated duties,            willful violation of any law, rule or regulation (other than traffic violations or            similar offenses) or final cease-and-desist order, or material breach of any provision            of the Agreement.

 

(b)       If the Employee is removed            and/or permanently prohibited from participating in the conduct of the Bank’s            affairs by an order issued under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit            Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations            of the Bank under this Agreement shall terminate, as of the effective date of the            order, but the vested rights of the parties shall not be affected.

 

(c)       If the Bank is in default            (as defined in Section 3(x)(1) of FDIA) all obligations under this Agreement shall            terminate as of the date of default, but this paragraph shall not affect any vested            rights of the contracting parties.

 

(d)       Notwithstanding anything            herein to the contrary, any payments made to the Employee pursuant to the Agreement, or            otherwise, shall be subject to and conditioned upon compliance with 12 USC            ‘1828(k) and any regulations promulgated thereunder.

 

5.         Suspension of Employment. If the Employee            is suspended and/or temporarily prohibited from participating in the conduct of the            Bank’s affairs by a notice served under Section 8(e)(3) or (g)(1) of the            FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), the Bank’s obligations under the            Agreement shall be suspended as of the date of service, unless stayed by appropriate            proceedings. If the charges in the notice are dismissed, the Bank may within its            discretion (i) pay the Employee all or part of the compensation withheld while its            contract obligations were suspended and (ii) reinstate any of its obligations            which were suspended.

 

|   | 6. | Successors and                            Assigns. |
|--------|----|----------------------------------------------------|

 

(a)       This Agreement shall inure            to the benefit of and be binding upon any corporate or other successor of the Bank            which shall acquire, directly or indirectly, by merger, consolidation, purchase or            otherwise, all or substantially all of the assets or stock of the Bank.

 

(b)       The Employee shall be            precluded from assigning or delegating his rights or duties hereunder without first            obtaining the written consent of the Bank.

 

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7.         Amendments. No amendments or additions to            this Agreement shall be binding upon the parties hereto unless made in writing and            signed by both parties, except as herein otherwise specifically provided.

 

8.         Applicable Law. This agreement shall be            governed by all respects whether as to validity, construction, capacity, performance or            otherwise, by the laws of the Commonwealth of Pennsylvania, except to the extent that            Federal law shall be deemed to apply.

 

9.         Severability. The provisions of this            Agreement shall be deemed severable and the invalidity or unenforceability of any            provision shall not affect the validity or enforceability of the other provisions            hereof.

             

10.       Arbitration. Any controversy or claim            arising out of or relating to this Agreement, or the breach thereof, shall be settled            exclusively by arbitration in accordance with the rules then in effect of the district            office of the American Arbitration Association (“AAA”) or other mutually            agreeable alternative dispute resolution entity nearest to the home office of the Bank            and judgment upon the award rendered may be entered in any court having jurisdiction            thereof, except to the extent that the parties may otherwise reach a mutual settlement            of such issue. The Bank shall reimburse Employee for all reasonable costs and expenses,            including reasonable attorneys’ fees, arising from such dispute, proceedings or            actions, following the delivery of the decision of the arbitrator finding in favor of            the Employee. Further, the settlement of the dispute to be approved by the Board of the            Bank or the Parent may include a provision for the reimbursement by the Bank to the            Employee for all reasonable costs and expenses, including reasonable attorneys’            fees, arising from such dispute, proceedings or actions, or the Board of the Bank or            the Parent may authorize such reimbursement of such reasonable costs and expenses by            separate action upon a written action and determination of the Board following            settlement of the dispute. The provisions of this Section 10 shall survive the            expiration of this Agreement.

 

11.       Entire Agreement. This Agreement together            with any understanding or modifications thereof as agreed to in writing by the parties,            shall constitute the entire agreement between the parties hereto and shall supercede            all prior agreements with respect to the matters set forth herein. Notwithstanding            anything herein to the contrary, the provisions of the Medical Insurance Continuation            Agreement between the Employee and the Bank, dated February 21, 2006, shall remain in            full force and effect without regard to this Agreement.

 

|   | 12. | Compliance With Section                            409A. |
|--------|-----|----------------------------------------------------------|

             

(a)       Notwithstanding anything            herein to the contrary, if it is determined by the Bank or the Parent in good faith            that such Employee shall be a (specified employee( in accordance with Section 409A of            the Code and regulations promulgated thereunder, and if the payment under Section 3(a)            does not qualify as a short-term deferral under Code Section 409A and Treas. Reg.            §1.409A-1(b)(4) (or any similar or successor provisions), and that such payments            to be made to such Employee are subject to such limitations at Section 409A of the Code            and regulations promulgated thereunder, any payments to be made in accordance with this            Agreement shall not be made prior to the date that is 184 calendar days from the date            of the

 

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Employee(s Termination of Employment, or such later date as may be            necessary, so that such payments, when made, will not result in the requirement for the            Employee to pay additional interest and taxes to be imposed in accordance with Section            409A(a)(1)(B) of the Code. The provisions of this Section 12 shall survive the            expiration of this Agreement.

 

(b)       “Termination of            Employment” shall have the same meaning as “separation from service”,            as that phrase is defined in Code Section 409A (taking into account all rules and            presumptions provided for in the Code Section 409A regulations).

 

|   | (c) | Notwithstanding the six-month delay rule set forth in                            Section 12(a) above: |
|--------|-----|-------------------------------------------------------------------------------------------------------|

 

(i)        To the maximum extent            permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or any            similar or successor provisions), the Bank will pay the Employee an amount equal to the            lesser of (1) the maximum amount that may be taken into account under a qualified plan            pursuant to Code Section 401(a)(17) for the year in which the Employee’s            Termination of Employment occurs, and (2) the sum of the Employee’s annualized            compensation based upon the annual rate of pay for services provided to the Bank for            the taxable year of the Employee preceding the taxable year of the Employee in which            his Termination of Employment occurs (adjusted for any increase during that year that            was expected to continue indefinitely if the Employee had not had a Termination of            Employment); provided that amounts paid under this Section 12(c) must be paid no later            than the last day of the second taxable year of the Employee following the taxable year            of the Employee in which occurs the Termination of Employment and such amounts paid            will count toward, and will not be in addition to, the total payment amount required to            be made to the Employee by the Bank under Section 3(a); and

 

(ii)       To the maximum extent            permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(v)(D) (or any            similar or successor provisions), within ten (10) days of the Termination of            Employment, the Bank will pay the Employee an amount equal to the applicable dollar            amount under Code Section 402(g)(1)(B) for the year of the Employee’s Termination            of Employment; provided that the amount paid under this Section12(c) will count toward,            and will not be in addition to, the total payment amount required to be made to the            Employee by the Bank under Section 3(a).

 

(d)       Upon a termination of the            Agreement, the Employee may receive a lump sum payment immediately paid to the Employee            (without regard to any actual Termination of Employment), provided, however, any such            distributions to be made in accordance with this Section 12(d) shall comply with the            requirements and limitation under Section 409A of the Code, including that such            lump-sum distribution shall only be made: (1) within thirty (30) days before, or twelve            (12) months after a change in the ownership or effective control of the Bank or Parent,            or change in the ownership of a substantial portion of the assets of the Bank or Parent            as described in Section 409A(a) (2)(A)(v) of the Code and Treas. Reg.            §1.409A-3(i)(5) (or any

 

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similar or successor provisions), provided that all distributions are            made no later than twelve (12) months following such termination of the Agreement and            further provided that all of the Bank’s arrangements which are substantially            similar to the Agreement are terminated so the Employee and all participants under            similar arrangements shall receive all amounts of deferred compensation under such            terminated agreements within twelve (12) months of the termination of the arrangements;            (2) Upon the Bank’s dissolution or with the approval of a bankruptcy court            provided that the amounts deferred under the Agreement are included in the            Employee’s gross income in the latest of (i) the calendar year in which the            Agreement terminates; (ii) the calendar year in which the amount is no longer subject            to a substantial risk of forfeiture; or (iii) the first calendar year in which the            distribution is administratively practical; or (3) Upon the Bank’s termination of            this and all other separation pay plans (as referenced in Section 409A of the Code or            the regulations thereunder), provided that all distributions are made no earlier than            twelve (12) months and no later than twenty-four (24) months following such            termination, and the Bank does not adopt any new separation pay plans for a minimum of            three (3) years following the date of such termination.

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date            first hereinabove written.

 

| ATTEST:                      |   | IBT BANCORP, INC. |
|------------------------------|--------|-------------------|
|                         |   | IRWIN BANK        |
| /s/ Margaret P. O’Neal |   |              |   |
|                         |   |              |   |
|                         |   |              |   |
|                         |   | By:               | /s/ Robert Rebich, Jr. |
|                         |   |              | Robert Rebich, Jr.Chairman of the Board |
|                         |   |              |   |
| WITNESS:                     |   |              |   |
|                         |   |              |   |
| /s/ Margaret P. O’Neal |   |              | /s/ Charles G. Urtin |
|                         |   |              | Charles G. UrtinEmployee |