Document:

exv10w42

 

Exhibit 10.42*

(Form 10-K)

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

     This Amended and Restated Change in Control Agreement (“Agreement”) is made by and between Citizens
Republic Bancorp, Inc., a Michigan corporation (“Corporation”), and

[                    ] (“Executive”).

     The Executive and the Corporation are parties to that certain Change of Control Agreement,
dated as of [               ] (the “Original Agreement”). The Corporation now desires to
make certain amendments to the Original Agreement as deemed advisable to prevent an inclusion of
income or imposition of penalties under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) or as deemed advisable to facilitate compliance with Code Section 409A.

     The Corporation anticipates the valuable services that the Executive will render on behalf of
the Corporation and its subsidiary banks and is desirous of having some assurance that the
Executive will continue as an employee and that, in the event of a possible Change in Control of
the Corporation, the Executive will be able to perform the Executive’s duties without undue concern
for the Executive’s personal financial well-being; and

     The Executive is willing to serve as an employee of the Corporation but desires assurance that
in the event of a Change in Control of the Corporation, the Executive will continue to have the
responsibility and status the Executive has earned.

     Accordingly, the Corporation and the Executive agree as follows:

     1. In order to protect the Executive against the possible consequences of a Change in Control
of the Corporation, as defined in paragraph 2 of this Agreement, and thereby to induce the
Executive to serve as an officer of the Corporation or a subsidiary bank the Corporation agrees
that if (a) there is such a Change in Control of the Corporation and (b) the Executive experiences
a “separation from service” from the Corporation or a subsidiary thereof within the meaning of Code
Section 409A (a “Separation from Service”) under the circumstances described in paragraph 3 of this
Agreement, then:

     A. The Corporation shall pay the Executive a lump sum amount in cash equal to the sum of (i)
three times the Executive’s annual base salary immediately prior to the Change in Control (or if
higher, the annual base salary on the date the Executive’s employment is terminated) and (ii) three
times the greater of (x) the anticipated bonus amount under the Citizens Banking Corporation
Management Incentive Plan to be earned in accordance with the plan in the year in which the
Separation from Service occurs or (y) the highest bonus paid to the Executive in the last three
full calendar years of such employment (such amount, the “Severance Payment”). The Severance
Payment shall be payable within 60 days following the date of the Executive’s Separation from
Service, provided that, except as provided with respect to an Anticipatory Termination (as defined
in paragraph 3 below), in the event that the Executive is a “specified employee” within the meaning
of Code Section 409A (with such classification to be determined in accordance with the methodology
established by the applicable employer) (a “Specified Employee”) as of the date of the Executive’s
Separation from Service, the Severance Payment shall instead be paid, with interest on any delayed
payment at the applicable federal rate provided for in Code Section 7872(f)(2)(A) (“Interest”), on
the first business day after the date that is six months following the Executive’s Separation from
Service (the “409A Payment Date”). Notwithstanding the foregoing, in the event of an Anticipatory
Termination, the Severance Payment shall be paid as follows: (i) if such Change in Control is a
“change in control 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 Employee as
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 Code Section 409A, (A)
except
as provided in clause (ii)(B), on the first business day following the three-month anniversary
of the date of such Anticipatory Termination, or (B) if the Executive 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 the Change in Control until the actual date of
payment shall be paid on the Severance Payment made in connection with an Anticipatory Termination.

     B. The Executive shall continue to be covered, at the Corporation’s cost, by the medical,
dental and life insurance benefit plans that are in effect on the date of the Executive’s
Separation from Service and that cover executive employees, for a period of thirty-six (36) months
(the “Benefit Continuation Period”) after the Executive’s Separation from Service; provided,
however, that such medical and dental benefits provided during the Benefit Continuation Period
shall be provided in such a manner that such benefits (and the costs and premiums thereof) are
excluded from the Executive’s income for federal income tax purposes and, if the Corporation
reasonably determines that providing continued coverage under one or more of its health care
benefit plans contemplated herein could be taxable to the Executive, the Corporation shall provide
such benefits at the level required hereby through the purchase of individual insurance coverage;
provided, however, that if during such time period the Executive should enter into other employment
providing comparable benefits, the Executive’s participation in such plans of the Corporation shall
cease to the extent of the Executive’s coverage by the Executive’s new employer’s plans. Any such
non-cash benefit that is tied to compensation shall be based on the Executive’s annual compensation
averaged over the same period as applicable under paragraph 1.A of this Agreement.

     C. If the Executive was furnished with a club membership, that membership will be transferred
by the Corporation to the Executive at no cost to the Executive on the date of the Executive’s
Separation from Service, in which case the Executive shall, immediately following the transfer,
become subject to the dues charges of the club. Notwithstanding the foregoing, if the Executive is
a Specified Employee as of the date of the Executive’s Separation from Service, the Corporation
shall continue to maintain the Executive’s club membership at the same level and rate as in effect
on the date of the Executive’s Separation from Service until, and shall transfer such membership at
no cost to the Executive on, the 409A Payment Date, in which case the Executive shall, during such
period of delay, pay the dues charges of the club on behalf of the Corporation and, immediately
following such delayed transfer, become subject to the dues charges of the club.

     D. All stock options and restricted stock previously granted by the Corporation to the
Executive, 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 Executive shall
be entitled to outplacement services provided by an outplacement service provider designated by the
Corporation. The cost of providing the outplacement services shall be borne solely by the
Corporation, and shall be equal to the lesser of (i) 10% of the Executive’s annual base salary
immediately prior to the Change in Control (or, if higher, the Executive’s annual base 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 other
payments or benefits provided to the Executive in the nature of compensation) will result in the
payment of an excess parachute payment as that term is defined in Code Section 280G, then in such
event, the Corporation shall pay the Executive an additional amount for each calendar year in which
an excess parachute payment is received by the Executive (the “Gross-Up Payment”). The Gross-Up
Payment is intended to cover the Executive’s liability for any excise tax imposed under Code
Section 4999, together with any interest or penalties imposed with respect to such excise tax (the
“Excise Tax”) on such excess parachute payment, as well as federal and state income taxes and
parachute tax on the additional amount, and shall be computed as follows:

	 	 	 	 	 
	 	 	A = Pt/(1 - T — t), where -

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	 	A
	 	is the additional amount for any calendar year;
	 
	 	 	 	 
	 

	 	P
	 	is the amount of the excess parachute payment for the calendar
year in excess of the allocable base amount as defined in Code Section
280G(b)(3);
	 
	 	 	 	 
	 

	 	T
	 	is the effective marginal rate of federal and state income tax
applicable to the Executive for the calendar year; and
	 
	 	 	 	 
	 

	 	t
	 	is the rate of parachute tax under Code Section 4999.
	 
	 	 	 	 
	 	 	The effective marginal rate of federal and state income tax shall be computed as
follows:
	 
	 	 	 	 
	 	 	T = F + S(l - 0.8F) + m, where -
	 
	 	 	 	 
	 

	 	F
	 	is the highest marginal rate of federal income tax applicable
to the Executive for the calendar year;
	 
	 	 	 	 
	 

	 	S
	 	is the highest aggregate marginal rate of state income tax
applicable to the Executive for the calendar year in the state or states and
municipalities to which the Executive is then required to pay income taxes as a
result of the Executive’s employment by the Corporation; and
	 
	 	 	 	 
	 

	 	m
	 	is the employee’s portion of the Medicare tax, currently 1.45%.

Payment of the Gross-Up Payment shall be made to the Executive on or before December 31 of each
calendar year for which an excess parachute payment is received by the Executive, provided, that in
the event the Executive is a Specified Employee as of the date of the Executive’s Separation from
Service, the Gross-Up Payment shall be made to the Executive on the 409A Payment Date, if later.

     G. Subject to the provisions of paragraph 1.G, all determinations required to be made under
these paragraphs 1.E, 1.F and 1.G, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Ernst & Young, LLP or such other certified public accounting firm
reasonably acceptable to the Corporation as may be designated by the Executive (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Corporation and the
Executive within 15 business days of the receipt of notice from the Executive that there has been
an excess parachute payment, or such earlier time as is requested by the Corporation. All fees and
expenses of the Accounting Firm shall be borne solely by the Corporation. Any determination by the
Accounting Firm shall be binding upon the Corporation and the Executive. As a result of the
uncertainty in the application of Code Section 4999 at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by
the Corporation should have been made (“Underpayment”), consistent with the calculations required
to be made hereunder. In the event that the Corporation exhausts its remedies pursuant to
paragraph 1.G and the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for the benefit of the Executive.

     H. The Executive shall notify the Corporation in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Corporation of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim and shall apprise the Corporation of the nature
of such claim and the date on which such claim is requested to be paid. The Executive shall not
pay such claim prior to the expiration of the 30-day period following the date on which it gives
such notice to the Corporation (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Corporation notifies the Executive in writing prior to
the expiration of such period that

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it desires to contest such claim, the Executive shall: (i) give the Corporation any
information reasonably requested by the Corporation relating to such claim, (ii) take such action
in connection with contesting such claim as the Corporation shall reasonably request in writing
from time to time, including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Corporation, (iii) cooperate with the
Corporation in good faith in order effectively to contest such claim, and (iv) permit the
Corporation to participate in any proceedings relating to such claim; provided,
however, that the Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this paragraph 1.H, the
Corporation shall control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
pay the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the
Executive to sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Corporation shall determine;
provided, however, that if the Corporation pays such claim and directs the
Executive to sue for a refund, the Corporation shall indemnify and hold the Executive harmless, on
an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such payment or with respect to any imputed income with respect to
such payment calculated as described in paragraph 1.F; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Corporation’s control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority. If, after the receipt by the Executive of a payment by the Corporation
of an amount on the Executive’s behalf pursuant to this paragraph 1.H, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall (subject to the
Corporation’s complying with the requirements of this paragraph 1.H) promptly pay to the
Corporation the amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after payment by the Corporation of an amount on the Executive’s
behalf pursuant to this paragraph 1.H, a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Corporation does not notify the Executive
in writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then the amount of such payment shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.

     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 Section 13(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 the Exchange Act) of
20% or more of either (1) the then outstanding shares of common stock of the Corporation (the
“Outstanding Corporation Common Stock”) or (2) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the election of directors (the
“Outstanding Corporation Voting Securities”); provided, however, that for purposes
of 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 the
Corporation or any corporation controlled by the Corporation, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (1), (2) and (3) of subparagraph
C of this paragraph 2; or

     B. Individuals who, as of the date hereof, constitute the Board of Directors of the
Corporation (the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of

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Directors; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the Corporation’s
shareholders, was approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement of the Corporation
in which such person is named as a nominee for director, without written objection to such
nomination) 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 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 contests by or on behalf of a
person other than the Board of Directors of the Corporation; or

     C. Consummation of a reorganization, merger, share exchange or consolidation or sale of other
disposition of all or substantially all of the assets of the Corporation (a “Business
Combination”), in each case, unless, following such Business Combination: (1) all or substantially
all of the individuals and entities who were the beneficial owners, respectively, of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately
prior to such Business 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
outstanding voting securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including, without limitation,
a corporation which as a result of such transaction owns the Corporation or all or substantially
all of the Corporation’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be; (2) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from the Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed prior to the
Business Combination; and (3) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board
immediately prior to the time of the execution of the initial agreement, or of the action of the
Board of Directors of the Corporation, providing for such Business Combination; or

     D. Approval by the stockholders of the Corporation of a complete liquidation or dissolution of
the Corporation.

     3. Executive’s Separation from Service shall be as described in this paragraph 3 if the
Separation from Service results from the Executive’s termination of employment at any time within 3
months prior to (such termination of employment, an “Anticipatory Termination”), on the date of, or
within 24 months after a Change in Control of the Corporation as defined in paragraph 2 of this
Agreement either by (a) involuntary dismissal by the Corporation; or (b) the Executive’s
constructive termination as described in the following sentences of this paragraph 3. If (i) there
is a significant reduction in the scope of the Executive’s authority or in the extent of the
Executive’s powers, functions, duties or responsibilities, or (ii) the Executive’s annual rate of
compensation is reduced or fringe benefits, including relocation benefits, are not provided to the
Executive on a basis commensurate with other executives of the Corporation and its subsidiary
banks, or (iii) there are changes in the Executive’s responsibilities for the Corporation which
require moving the Executive’s job location to a location outside of the State of Wisconsin, then
the Executive shall be entitled to give written notice thereof 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’s concerns to the satisfaction of the Executive (the
Executive’s satisfaction or dissatisfaction to 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 such 60-day period, provided that Executive in fact
experiences a Separation from Service.

     4. The specific arrangements referred to above are not intended to exclude the Executive’s
participation in other benefits available to executive personnel of the Corporation generally or to
preclude

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other compensation or benefits as may be authorized by the Corporation’s Board of
Directors from time to time provided however, Executive shall not be eligible to receive any
benefits under the Corporation’s Severance Pay Plan if Executive receives the severance amount and
other benefits under this Agreement.

     5. As partial consideration for the above, the Executive agrees not to disclose any
confidential information about the Corporation and its operation to which the Executive was privy
during the course of the Executive’s employment by the Corporation. Further, the Executive agrees
not to accept employment or consult for or otherwise assist any competitor of the Corporation for a
period of 24 months following the Executive’s Separation from Service. For purposes of the
foregoing, “competitor” means any financial institution that conducts business from any location
within 50 miles of any location at which the Corporation or any subsidiary bank had an office on
the day immediately prior to the day on which the Change in Control of the Corporation occurred.

     6. This Agreement shall be binding upon and shall inure to the benefit of the respective
successors, assigns, legal representatives and heirs to the parties.

     7. Any payment or delivery required under this agreement shall be subject to all requirements
of the law with regard to withholding, filing, making of reports and the like, and the Corporation
shall use its best efforts to satisfy promptly all such requirements.

     8. Notwithstanding anything contained herein to the contrary, this Agreement shall be
terminated and no benefits to the Executive shall be payable if, at any time, the Executive shall
resign voluntarily (other than as provided in paragraph 3), retire at or after normal retirement
age, become incapacitated, voluntarily take another position requiring a substantial portion of the
Executive’s time, or die. This Agreement also shall terminate upon termination for cause of the
Executive’s employment as an officer of the Corporation or any subsidiary 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 the Executive is guilty of sexual
harassment of another employee, the Executive’s proven embezzlement from the Corporation or a
subsidiary bank, the Executive’s gross misconduct or incompetence, the Executive’s disclosure of
confidential information of the Corporation or intentional assistance of a competitor of the
Corporation (as defined in paragraph 5), or any other activity of the Executive which has or may
have a material adverse effect on the finances or business reputation of the Corporation or a
subsidiary bank.

     9. Any and all disputes, controversies or claims arising out of or in connection with or
relating to this Agreement or any breach or alleged breach thereof shall, upon the request of
either party, be submitted to and settled by arbitration in the State of Michigan pursuant to the
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 parties
involved). The parties hereto specifically agree to arbitrate with the other party in a proceeding
with regard to all issues and disputes, and to permit pre-hearing discovery in the time and manner
provided by the then applicable Federal Rules of Civil Procedure. This agreement 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 this Agreement and with the
American Arbitration Association. The demand for arbitration shall be made within a reasonable
time after the claim, dispute, or other matter in question arose where the party asserting the
claim should reasonably have been aware of the same, but in no event later than the applicable
Michigan or federal statute of limitations. The arbitrator shall have no power to add to, subtract
from, or alter the terms of this Agreement, and shall render a written decision setting forth
findings and conclusions only as to the claims or disputes at issue. Any award by the arbitrator
shall be final and conclusive upon the parties, and a judgement thereon may be entered in the
highest court for the forum, state or federal, having jurisdiction. All expenses of the
arbitration process shall be borne by the Corporation. The Corporation 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 any time from the effective date of
this Agreement through the Executive’s remaining lifetime (or, if longer, through the
20th

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anniversary of the effective date of this Agreement) in connection with arbitrating the
enforcement of any of the Executive’s rights under this Agreement. However, in no event shall the
Executive be entitled to retain any fees so reimbursed if the claim brought by the Executive
against the Corporation is in the arbitrator’s sole determination frivolous or was brought in bad
faith, and the Corporation will be entitled to seek repayment from the Executive for such fees
after such determination by the arbitrator. In order to comply with Code Section 409A, in no event
shall the payments by the Corporation under this paragraph 9 be made later than the end of the
calendar year next following the calendar year in which such fees and expenses were incurred,
provided, that the Executive shall have submitted an invoice for such fees and expenses at least
ten days before the end of the calendar year next following the calendar year in which such fees
and expenses were incurred. The amount of such legal fees and expenses that the Corporation is
obligated to pay in any given calendar year shall not affect the legal fees and expenses that the
Corporation is obligated to pay in any other calendar year, and the Executive’s right to have the
Corporation pay such legal fees and expenses may not be liquidated or exchanged for any other
benefit.

     10. Within the time period permitted by the applicable Treasury Regulations, the Corporation
may, in consultation with the Executive, modify the Agreement, in the least restrictive manner
necessary and without any diminution in the value of the payments to the Executive, in order to
cause the provisions of the Agreement to comply with the requirements of Code Section 409A, so as
to avoid the imposition of taxes and penalties on the Executive pursuant to Code Section 409A.

     11. The invalidity or unenforceability of any provision of this Agreement shall not affect the
enforceability or validity of any other provision hereof.

     12. This Agreement constitutes the entire agreement of the parties with respect to the subject
matter addressed in this Agreement. This Agreement may be amended only in a written document
signed by both the Corporation and the Executive.

     13. This Agreement shall be governed by the laws of the State of Michigan. This Agreement has
been executed by the parties effective as of February 26, 2008.

	 	 	 	 	 	 	 	 	 
	CITIZENS REPUBLIC BANCORP, INC.	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date: February 26, 2008	 	 	 	Date: February 26, 2008	 	 

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Exhibit 10.43*

(Form 10-K)

CITIZENS REPUBLIC BANCORP, INC.

SUPPLEMENTAL RETIREMENT BENEFITS PLAN

FOR WILLIAM R. HARTMAN

     The Supplemental Retirement Benefits Plan for William R. Hartman (“Plan”) is amended and
restated, effective as of September 19, 2007 by Citizens Republic Bancorp, Inc. (“Corporation”) as
follows:

     1. COVERAGE. The coverage of the Plan shall be limited to William R. Hartman (“Participant”).

     2. SUPPLEMENTAL RETIREMENT BENEFIT. The Participant shall be entitled to the supplemental
retirement benefit (“Supplemental Retirement Benefit”) described below:

          (a) AMOUNT AT OR AFTER AGE 62-1/2. The
annual amount of the Supplemental Retirement Benefit,
when expressed in the form of a single life annuity commencing on or after age 62-1/2, shall be equal
to the excess of (i) over (ii), where:

     (i) is 60.0% of the highest average base salary paid and bonus earned during
any consecutive 36 months during the 60 month period ending on the earlier of (A)
January 1, 2011 and (B) the Participant’s Termination of Employment, and

     (ii) is the sum of the Participant’s normal retirement benefit under the
Citizens Republic Bancorp, Inc. Pension Plan for Employees (“Pension Plan”)
calculated as of his attainment of age 62-1/2, and the Participant’s Social Security
benefit also calculated as of age 62-1/2, in each case without regard to (A) any
changes in either benefit amount that may occur subsequent to that age due to
increases for cost-of-living or other factors and (B) whether the Participant
actually commences receiving Social Security benefits or benefits under the Pension
Plan.

          (b) AMOUNT AT AGE PRIOR TO AGE 62-1/2.
If the Participant’s Termination of Employment occurs
prior to his attainment of age 62-1/2, the annual amount of the Supplemental Retirement Benefit, when
expressed in the form of a single life annuity commencing at such early retirement date, shall be
equal to the excess of (i) over (ii), where:

     (i) is 60.0% of the highest average base salary paid and bonus earned during
any consecutive 36 months during the 60 month period ending on the earlier of (A)
January 1, 2011 and (B) the Participant’s Termination of Employment, reduced by
one-third
(1/3) of 1.0% for each complete calendar month that the Participant’s
retirement date precedes his attainment of age 62-1/2, and

     (ii) is the sum of the Participant’s early retirement benefit under the Pension
Plan calculated as of the Participant’s early retirement age, and the Participant’s
Social Security benefit also calculated as of the Participant’s early retirement age
(or, if later, the earliest age at which the Participant is entitled to receive a
Social Security benefit, but with that Social Security amount reduced by five-ninths
(5/9) of 1.0% for each complete calendar month that the Participant’s early
retirement date precedes his first eligibility for such benefit), in each case
without regard to any changes in either benefit amount that may occur subsequent to
such age due to increases for cost-of-living or other factors.

          (c) COMMENCEMENT AND FORM OF BENEFIT.

     (i) Supplemental Retirement Benefit payments shall be made in a single lump sum
payment upon the later of the Participant’s (A) Termination of Employment or (B)
attainment of age 61. The lump sum payment shall be computed using the same

 

 

actuarial factors set forth in the Pension Plan for the determination of a lump sum
form of
payment under such plan as of June 26, 2006 – an interest rate of 4.73% and the
mortality table prescribed under IRS Revenue Ruling 2001-62.

     (iii) In the event of the Participant’s death prior to the payment of his
Supplemental Retirement Benefit, the Participant’s Supplemental Retirement Benefit
shall be paid to the Participant’s Spouse in a single cash lump sum, within 90 days
following the Participant’s death.

     (iv) Notwithstanding any other provision of this Plan to the contrary as of the
Participant’s Termination of Employment, if the Participant is a “Specified
Employee,” within the meaning of Section 409A(2)(B)(i) of the Internal Revenue Code
of 1986, as amended (the “Code”) and as determined by the Corporation in accordance
with its adopted uniform policy for determining such individuals, his Supplemental
Retirement Benefit shall not be paid until the earlier of (A) the first day of the
seventh month following the date of the Participant’s Termination of Employment and
(B) the date of the Participant’s death.

     (v) For purposes of this Section, the Participant’s “Spouse” shall be
determined in accordance with the Pension Plan and “Termination of Employment” shall
mean the Participant’s separation from service with the Corporation for any reason
within the meaning of Code Section 409A and related Treasury guidance and
Regulations.

     3. VESTING. The Participant is fully vested in, and has a nonforfeitable right to, his
Supplemental Retirement Benefit.

     4. SPECIAL DISTRIBUTION. In accordance with Code Section 409A, the Committee (as defined in
Section 7) will immediately distribute to the Participant a lump sum amount equal to the amount of
taxes due as a result of participation in the Plan to reflect payment of state, local, or foreign
tax obligations (including to pay the income tax at source on wages imposed under Section 3401 of
the Code as a result of such payment and to pay the additional income tax at source on wages
imposed under Section 3401 of the Code attributable to such additional wages and taxes) arising
from participation in the Plan that apply to an amount deferred under the Plan before the amount is
paid or made available to the Participant (the state, local, or foreign tax amount). In no event
shall the total payment under this Section 4 exceed the aggregate of the state, local, and foreign
tax amount, and the income tax withholding related to such state, local, and foreign tax amount.
The Participant’s ultimate benefit under Section 2(a) shall be actuarially adjusted to account for
any special distributions under this Section 4.

     5. COST OF PLAN.

          (a) The entire cost of providing benefits under the Plan shall be paid by the Corporation out
of its current operating budget, and the Corporation’s obligations under the Plan shall be an
unfunded and unsecured promise to pay. The Corporation shall not be obligated under any
circumstances to fund its obligations under the Plan.

          (b) Notwithstanding paragraph (a), the Corporation may, at its sole option, or by agreement,
informally fund its obligations under the Plan in whole or in part, through a group or individual
rabbi or similar trust(s) (the “Trust”) established with a banking institution unaffiliated with
the Corporation; provided, however, in no event shall such informal funding be construed to create
any trust fund, escrow account or other security for the Participant with respect to the payment of
benefits under the Plan, other than as permitted under Internal Revenue Service and Department of
Labor rules and regulations for unfunded supplemental retirement plans. Notwithstanding any other
provision of this Plan to the contrary, no Trust shall be funded if the funding thereof would
result in taxable income to the Participant by reason of Section 409A(b) of the Code and, in no
event, shall any Trust assets at any time be located or

2

 

transferred outside of the United States,
within the meaning of Section 409A(b) of the Code. Any fees and expenses of the trustee shall be
paid by the Corporation.

          (c) If the Corporation decides to fund the Plan informally, in whole or in part, by procuring,
as owner, life insurance for its own benefit on the life of the Participant, the form of such
insurance and the amounts thereof shall be the sole decision of the Corporation, and in no event
shall the Participant or any beneficiary have any incidents of ownership in any such policies of
insurance. If a physical examination is required for the Corporation to obtain insurance for the
Participant under this paragraph, the Participant agrees to undergo such physical examinations as
may be required by the insurance carrier. Such physical examinations shall be conducted by a
physician approved by the Corporation, at the expense of the Corporation.

          (d) No contributions by the Participant are required or permitted under the Plan.

          (e) All taxes on benefits payable to the Participant under the Plan, except for the employer’s
share of applicable employment taxes, shall be the obligation of the Participant. To the extent
that benefits (or their present value) become taxable to the Participant at any time prior to
actual payment of those benefits, such as in the case of the Medicare tax, and to the extent that
the Corporation is required to withhold taxes, those taxes shall be withheld from other
compensation payable by the Corporation to the Participant.

     6. LIMITATION OF THE PARTICIPANT’S RIGHTS.

          (a) The Plan shall not be deemed to create a contract of employment between the Corporation
and the Participant and shall create no right in the Participant to continue in the Corporation’s
employment for any specific period of time, or to create any other rights in the Participant or
obligations on the part of the Corporation, except as are set forth herein or in any written
employment contract. Nor shall the Plan restrict the right of the Corporation to terminate the
Participant, or restrict the right of the Participant to terminate his employment, except as
otherwise provided by written employment contract.

          (b) The rights of the Participant or any person claiming through the Participant under the
Plan shall be solely those of an unsecured general creditor of the Corporation. The Participant,
or any person claiming through the Participant, shall have the right to receive from the
Corporation only those payments as specified herein. The Participant agrees that he or any person
claiming through him shall have no rights or interests in any asset of the Corporation.

          (c) Except to the extent provided by Section 5(b) and as permitted by applicable tax law, no
asset used or acquired by the Corporation in connection with the liabilities it has assumed under
the Plan shall be deemed to be held under any trust for the benefit of the Participant. Nor shall
it be considered security for the performance of the obligations of the Corporation, except as
provided by separate agreement and as permitted under Internal Revenue Service and Department of
Labor rules and regulations for unfunded supplemental retirement plans.

     7. PLAN ADMINISTRATOR AND CLAIMS PROCEDURE.

          (a) The Plan Administrator of the Plan for purposes of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), shall be the Compensation and Benefits Committee of the
Corporation’s Board of Directors (“Committee”). The Corporation’s Board of Directors shall have
the right to change the Plan Administrator of the Plan at any time. The Corporation shall give the
Participant written notice of any such change in the Plan Administrator.

          (b) Any denial by the Plan Administrator of a claim for benefits under the Plan by the
Participant or other person (collectively referred to as “Claimant”) shall be stated in writing by
the Plan Administrator and delivered or mailed to the Claimant within 90 days after receipt of the
claim unless special circumstances require an extension of time for processing the claim. If such
an extension of time is required, written notice of the extension shall be furnished to the
Claimant prior to the termination of the

3

 

initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of the initial period. The Committee shall notify the
Claimant in writing if the Committee denies, in whole or in part, the Claimant’s claim, and such notice must set forth in a manner calculated to be
understood by the Claimant:

     (i) the specific reason(s) for the denial of the claim, or any part of it;

     (ii) specific reference(s) to pertinent provisions of the Plan upon which such
denial was based;

     (iii) a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary;

     (iv) an explanation of the claim review procedure set forth below; and

     (v) a statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

          (c) A Claimant whose claim for benefits has been wholly or partially denied by the Plan
Administrator may request, within 90 days following the date of such denial, in a writing addressed
to the Plan Administrator, a review of such denial. The Claimant shall be entitled to submit such
issues or comments in writing or otherwise, as he shall consider relevant to a determination of his
claim, and may include a request for a hearing in person before the Plan Administrator. Prior to
submitting his request, the Claimant (or the Claimant’s duly authorized representative) may, upon
request and free of charge, have reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to the claim for benefits.
The Claimant (or the Claimant’s duly authorized representative) may submit written comments or
other documents; and/or may request a hearing, which the Committee, in its sole discretion, may
grant.

          The Claimant may, at all stages of review, be represented by counsel, legal or otherwise, of
his choice, provided that the fees and expenses of such counsel shall be borne by the Claimant.
All requests for review shall be promptly resolved. The Plan Administrator’s decision with respect
to any such review shall be set forth in writing and shall be mailed to the Claimant not later than
60 days following receipt by the Plan Administrator of the Claimant’s request unless special
circumstances, such as the need to hold a hearing, require an extension of time for processing, in
which case the Plan Administrator’s decision shall be so mailed not later than 120 days after
receipt of such request. If no decision or review is rendered within this 120 day period, the
Claimant’s appeal shall be deemed denied and the Plan Administrator’s original denial of the claim
affirmed.

          (d) Any claim under this claims procedure must be submitted within twelve months from the
earlier of (1) the date on which the Claimant learned of facts sufficient to enable him to
formulate such claim or (2) the date on which the Claimant reasonably should have been expected to
learn of facts sufficient to enable him to formulate such claim. Also, the Corporation may not
reduce any benefit under this Plan.

          (e) The decision of the Plan Administrator upon review of any claim shall be binding upon the
Claimant, his heirs and assigns and the Corporation, and all other persons claiming by, through or
under him. The Committee shall notify the Claimant in writing if the Committee denies, in whole or
in part, the Claimant’s claim, and such notice must set forth in a manner calculated to be
understood by the Claimant:

     (i) the specific reason(s) for the denial of the claim, or any part of it;

     (ii) specific reference(s) to pertinent provisions of the Plan upon which such
denial was based;

4

 

     (iii) a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary; and

     (iv) a statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

          (f) The timely filing of a request for review in the manner specified above shall be a
condition precedent to obtaining review before the Plan Administrator, and the Plan Administrator
shall have no jurisdiction to entertain a request for review unless so filed. A failure to file a
claim and a request for review in the manner and within the time limits set forth above shall be
deemed a failure by the aggrieved party to exhaust his administrative remedies and shall constitute
a waiver of the rights sought to be established under the Plan.

          (g) Any suit brought to contest or set aside a decision of the Plan Administrator shall be
filed in a court of competent jurisdiction within one year from the date of receipt of written
notice of the Plan Administrator’s final decision or from the date the appeal is deemed denied, if
later. No legal action to recover Plan benefits or to enforce or clarify rights under the Plan
shall be commenced until the Claimant first shall have exhausted the claims and review procedures
available to him hereunder.

          (h) Any claim filed under the Pension Plan relating to any matter that may affect benefits
under this Plan shall be treated as a claim filed under this section.

     7. INDEPENDENCE OF BENEFITS. Except as otherwise provided herein, the benefits payable under
the Plan shall be independent of, and in addition to, any other benefits or compensation, whether
by salary, or bonus or otherwise, payable under any employment agreements that now exist or may
hereafter exist from time to time between the Corporation and the Participant. The Plan does not
involve a reduction in salary or foregoing of an increase in future salary by the Participant. Nor
does the Plan in any way affect or reduce the existing and future compensation and other benefits
of the Participant.

     8. LEGAL FEES. The Corporation agrees to pay as incurred (within 10 days following the
Corporation’s receipt of an invoice from the Participant or beneficiary, if applicable) during the
period commencing on the Participant’s Termination of Employment or death and ending upon the later
of the death of the Participant or 15 years, to the full extent permitted by law, all legal fees
and expenses that the Participant (or beneficiary, if applicable) may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Corporation, the Participant or others of
the validity or enforceability of, or liability under, any provision of this Plan or any guarantee
of performance thereof (including as a result of any contest by the Participant (or beneficiary, if
applicable) about the amount of any payment pursuant to this Plan), plus, in each case, with
interest on any delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code (“Interest”). In order to comply with Section 409A of the Code, in no
event shall the payments by the Corporation under this Section 8 be made later than the end of the
calendar year next following the calendar year in which such fees and expenses were incurred,
provided, that the Participant (or beneficiary, if applicable) shall have submitted an invoice for
such fees and expenses at least 10 days before the end of the calendar year next following the
calendar year in which such fees and expenses were incurred. The amount of such legal fees and
expenses that the Corporation is obligated to pay in any given calendar year shall not affect the
legal fees and expenses that the Corporation is obligated to pay in any other calendar year, and
the Participant’s (or beneficiary’s, if applicable) right to have the Corporation pay such legal
fees and expenses may not be liquidated or exchanged for any other benefit. Notwithstanding the
provisions of this Section 8, in the event a claim brought by the Participant (or beneficiary, if
applicable), is determined by a court or arbitrator (or similar dispute resolution mechanism) to be
frivolous or brought in bad faith, then the Participant (or beneficiary, if applicable) shall not
be entitled to legal fees and expenses pursuant to this Section 8 and shall be required to
reimburse the Corporation for any such amounts previously advanced to the Participant (or
beneficiary, if applicable).

5

 

     9. NON-ALIENATION OF BENEFITS. Except in so far as this provision may be contrary to
applicable law, no sale, transfer, alienation, assignment, pledge, collateralization, or attachment
of any benefits under the Plan shall be valid.

     10. RIGHT TO AMEND OR TERMINATE PLAN.

          (a) The Corporation reserves the right to amend the Plan in any manner, and the Corporation
reserves the right to terminate the Plan at any time in whole or part. Amendment or termination of
the Plan shall be accomplished by resolution of the Corporation’s Board of Directors.

          (b) Notwithstanding paragraph (a), no such amendment or termination shall be effective without
the explicit written consent of the Participant (or beneficiary, if applicable).

          (c) Notwithstanding any other provision of the Plan to the contrary, the Corporation shall be
obligated to effect any termination of the Plan in accordance with Section 409A of the Code so that
the Participant is not, nor shall he become, subject to the taxes imposed under Section 409A(1)(B)
of the Code. This section shall be interpreted in accordance with Section 409A of the Code, and,
to the extent any provision herein conflicts with the terms of Section 409A of the Code, such
provision shall be deemed void.

          (d) The Plan is intended to conform to the requirements of Section 409A of the Code, and any
regulations promulgated thereunder. The Corporation may amend the Plan to cause the provisions of
the Plan to comply with the requirements of Section 409A of the Code, or a combination thereof, so
as to avoid the imposition of taxes and penalties on the Participant pursuant to Section 409A of
the Code provided that any such amendment shall not reduce the aggregate value to the Participant
of the Supplemental Retirement Benefit or otherwise adversely affect the rights of the Participant
under the Plan.

     11. CONSTRUCTION AND GOVERNING LAW.

          (a) Wherever any words are used in the Plan in the masculine gender, they shall be construed
as though they also were used in the feminine gender in all cases where they would so apply, and
wherever any words are used in the Plan in the singular form they shall be construed as though they
also were used in the plural form in all cases where they would so apply, and vice versa.

          (b) Headings of paragraphs herein are inserted for convenience of reference. They constitute
no part of the Plan and are not to be considered in the construction of the Plan.

          (c) If any provisions of the Plan shall be for any reason invalid or unenforceable, the
remaining provisions nevertheless shall be carried into effect.

          (d) Except in the case of preemption by applicable federal law, the Plan shall be governed by
the laws of the State of Michigan.

          (e) This Plan constitutes the entire arrangement between the Corporation and the Participant
with respect to the subject matter addressed herein. This Plan amends, restates, supercedes and
replaces in its entirety the Plan that was effective February 25, 2002.

          (f) It is intended that the Plan shall be unfunded and maintained by the Corporation primarily
for the purpose of providing deferred compensation for a select group of management or highly
compensated employees, so that the Plan is exempt from the requirements of Parts 2, 3 and 4 of
ERISA. All provisions shall be interpreted in accordance with such intentions.

6

 

          Citizens Republic Bancorp, Inc. has caused the Plan, as amended and restated herein, to be
executed as of September 19, 2007.

	 	 	 	 	 	 	 
	 	 	CITIZENS REPUBLIC BANCORP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Benjamin W. Laird	 	 
	 

	 	Title:
	 	Chairman of the Compensation and Human	 	 
	 

	 	 	 	Resource Committee	 	 

7

 

	 	 	 	 	 
	 

	 	PARTICIPANT
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	William R. Hartman	 	 

8

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