Document:

exv10w2

 

Exhibit 10.2

THE STATE BANK

Supplemental Executive Retirement Agreement

Prepared 2-7-06

AMENDMENT AND RESTATEMENT OF

THE STATE BANK

INCENTIVE SUPPLEMENTAL EXECUTIVE RETIREMENT

FOR ROBERT SEWICK

     THIS SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (the “Agreement”) is adopted this
16th day of March, 2007, by and among WEST MICHIGAN COMMUNITY BANK, a state-chartered
commercial bank located in Hudsonville, Michigan (the “Bank”), FENTURA FINANCIAL, INC., a Michigan
corporation (the “Company”), and ROBERT SEWICK (the “Executive”).

BACKGROUND

     On August, 1999, the Bank (then known as “The State Bank”) and the Executive entered into the
Incentive Supplemental Executive Retirement Agreement, such agreement being amendment and restated
on March 10, 2006 and subsequently amended effective March 10, 2006 (the “Prior Agreement”). The
Bank and the Executive now wish to amend and restate the Prior Agreement for the purpose of
updating the terms and provisions contained therein. This new Agreement shall rescind and replace
the Prior Agreement.

     The parties intend this Amended and Restated Agreement to be a material modification of the
Prior Agreement such that all amounts earned and vested prior to December 31, 2004 shall be subject
to the provisions of Section 409A of the Code and the regulations promulgated thereunder.

INTRODUCTION

     The purpose of this Agreement is to provide specified benefits to the Executive, a member of a
select group of management or highly compensated employees who contribute materially to the
continued growth, development, and future business success of the Bank. This Agreement shall be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended from time to time.

Article 1

Definitions

     Whenever used in this Agreement, the following words and phrases shall have the meanings
specified:

 

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	1.1	 	“Accrual Balance” means the liability that should be accrued by the Bank, under
Generally Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to the Executive
under this Agreement, by applying Accounting Principles Board Opinion Number 12 (“APB 12”) as
amended by Statement of Financial Accounting Standards Number 106 (“FAS 106”) and the Discount
Rate. Any one of a variety of amortization methods may be used to determine the Accrual
Balance. However, once chosen, the method must be consistently applied. The Accrual Balance
shall be reported annually by the Bank to the Executive.

	1.2	 	“Base Salary” shall mean the annual cash compensation relating to services performed
during any calendar year, excluding distributions from nonqualified deferred compensation
plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses,
incentive payments, non-monetary awards, and other fees, and automobile and other allowances
paid to an Executive for employment services rendered (whether or not such allowances are
included in the Executive’s gross income). Base Salary shall be calculated before reduction
for compensation voluntarily deferred or contributed by the Executive pursuant to all
qualified or non-qualified plans of the Bank and shall be calculated to include amounts not
otherwise included in the Executive’s gross income under Code Sections 125, 402(e)(3), 402(h),
or 403(b) pursuant to plans established by the Bank; provided, however, that all such amounts
will be included in compensation only to the extent that had there been no such plan, the
amount would have been payable in cash to the Executive.

	1.3	 	“Beneficiary” means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the Executive determined pursuant to Article
4.

	1.4	 	Beneficiary Designation Form” means the form established from time to time by the
Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator
to designate one or more Beneficiaries.

	1.5	 	“Board” means the Board of Directors of the Bank as from time to time constituted.

	1.6	 	“Change in Control” means a change in the ownership or effective control of the
Company or Bank, or in the ownership of a substantial portion of the assets of the Company or
Bank, as such change is defined in Section 409A of the Code and regulations thereunder.

	1.7	 	“Code” means the Internal Revenue Code of 1986, as amended.

	1.8	 	“Company” means Fentura Bancorp, Inc., a registered bank holding company under the
Bank Holding Company Act of 1956, as amended.

	1.9	 	“Disability” means Executive (i) is unable to engage in any substantial gainful
activity by
reason of any medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental

1

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	impairment
which can be expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering employees of the Bank. Medical
determination of Disability may be made by either the Social Security Administration or by
the provider of an accident or health plan covering employees of the Bank. Upon the request
of the Plan Administrator, the Executive must submit proof to the Plan Administrator of
Social Security Administration’s or the provider’s determination.
	 
	1.10	 	“Discount Rate” means the rate used by the Plan Administrator for determining the
Accrual Balance. The initial Discount Rate is six percent (6%). However, the Plan
Administrator, in its discretion, may adjust the Discount Rate to maintain the rate within
reasonable standards according to GAAP and/or applicable bank regulatory guidance.

	1.11	 	“Early Termination” means Separation from Service before Normal Retirement Age for
reasons other than death, Disability, Termination for Cause, or within twelve (12) months
following a Change in Control.

	1.12	 	“Effective Date” means January 15, 1999.

	1.13	 	“Normal Retirement Age” means the Executive attaining age sixty five (65).

	1.14	 	“Normal Retirement Date” means the later of Normal Retirement Age or Separation from
Service.
	 
	1.15	 	“Plan Administrator” means the plan administrator described in Article 6.
	 
	1.16	 	“Plan Year” means the calendar year.

	1.17	 	“Separation from Service” means the termination of the Executive’s employment with
the Bank for reasons other than death or Disability. Whether a Separation from Service takes
place is determined by the Plan Administrator based on the facts and circumstances surrounding
the termination of the Executive’s employment and whether the Bank and the Executive intended
for the Executive to provide significant services for the Bank following such termination. A
termination of employment will not be considered a Separation from Service if:

	 	(a)	 	the Executive continues to provide services as an employee of the Bank in an
annualized amount that is twenty percent (20%) or more of the services rendered, on
average, during the immediately preceding three full calendar years of employment (or,
if employed less than three years, such lesser period) and the annual remuneration for
such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or, if less, such lesser period), or
	 
	 	(b)	 	the Executive continues to provide services to the Bank in a capacity other
than as

2

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	 	an employee of the Bank in an annualized amount that is fifty percent (50%) or
more of the services rendered, on average, during the immediately preceding three full
calendar years of employment (or if employed less than three years, such lesser period)
and the annual remuneration for such services is fifty percent (50%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or if less, such lesser period), or
	 
	 	(c)	 	immediately following the Executive’s termination of employment, the Executive
becomes an employee of (i) the Company, or (ii) any member of the Controlled Group.

	1.18	 	“Specified Employee” means a key employee (as defined in Section 416(i) of the Code
without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded
on an established securities market or otherwise.
	 
	1.19	 	“Termination for Cause” has that meaning set forth in Article 5.

	1.20	 	“Controlled Group” means the group consisting of each corporation that is a member of
a controlled group of corporations, as defined in Code Section 414(b), of which the Company is
a member; each trade or business, whether or not incorporated, under common control, as
defined in Code Section 414(c), of or with the Company; each member of an affiliated service
group, as defined in Code Section 414(m), of which the Company is a member; and any other
entity that is considered pursuant to Code Section 414(o) to be a member of a controlled group
of corporations of which the Company is a member.

Article 2

Distributions During Lifetime

	2.1	 	Normal Retirement Benefit. Upon the Normal Retirement Date, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Article.

	 	2.1.1	 	Amount of Benefit. The annual benefit under this Section 2.1 is
twenty percent (20%) of the Executive’s Base Salary at the Normal Retirement Date.
	 
	 	2.1.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on within thirty
(30) days following the Normal Retirement Date. The annual benefit shall be
distributed to the Executive for fifteen (15) years.

	2.2	 	Early Termination Benefit. Upon the Executive’s Early Termination, the Bank shall
distribute to the Executive the benefit described in this Section 2.2 in lieu of any other
benefit under this Article.

	 	2.2.1	 	Amount of Benefit. The benefit under this Section 2.2 is the Accrual
Balance

3

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	 	determined as of the month preceding Separation from Service, subject to the
following vesting schedule:

	 	 	 	 	 
	       Age	 	Vested Percentage
	Less than 55
	 	 	0	%
	55
	 	 	50	%
	56
	 	 	60	%
	57
	 	 	70	%
	58
	 	 	80	%
	59
	 	 	90	%
	60 or greater
	 	 	100	%

	 	2.2.2	 	Distribution of Benefit. The Bank shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive equal monthly installments commencing
within thirty (30) days following the Executive’s Separation from Service. On December
31 of each Plan Year during the applicable installment period, the Bank shall credit
interest on the unpaid Accrual Balance at an annual rate equal to the Merrill Lynch
High Grade Long Term Bond rate as published in the Wall Street Journal on the first
business day of that Plan Year, compounded monthly.

	2.3	 	Disability Benefit. If the Executive’s Disability results in Separation from Service
prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit
described in this Section 2.3 in lieu of any other benefit under this Article.

	 	2.3.1	 	Amount of Benefit. The benefit under this Section 2.3 is one hundred
percent (100%) of the Accrual Balance determined as of the end of the month preceding
Separation from Service.
	 
	 	2.3.2	 	Distribution of Benefit. The Bank shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive equal monthly installments commencing
within thirty (30) days following the Executive’s Separation from Service. On December
31 of each Plan Year during the applicable installment period, the Bank shall credit
interest on the unpaid Accrual Balance at an annual rate equal to the Merrill Lynch
High Grade Long Term Bond rate as published in the Wall Street Journal on the first
business day of that Plan Year, compounded monthly.

	2.4	 	Change in Control Benefit. Upon a Change in Control, followed within twelve (12)
months by the Executive’s Separation from Service for reasons other than death,
Disability, or Early Termination, the Bank shall distribute to the Executive the benefit
described in this Section 2.4 in lieu of any other benefit under this Article.

	 	2.4.1	 	Amount of Benefit. The benefit under this Section 2.4 is the Normal
Retirement Benefit described under Section 2.1, calculated as if the date of Separation
from Service following Change in Control was the Normal Retirement Date.

4

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	2.4.2	 	Distribution of Benefit. The Bank shall distribute the benefit to the
Executive in a lump sum within sixty (60) days following Separation from Service.
	 
	 	2.4.3	 	 Excess Parachute Payment Gross-up. If it is determined, in the
opinion of the Company’s independent accountants, in consultation, if necessary, with
the Company’s independent legal counsel, that any amount paid under this Agreement in
connection with a Termination Upon Change of Control, either separately or in
conjunction with any other payments, benefits and entitlements received by the
Executive in respect of a Change of Control hereunder or under any other plan or
agreement under which the Executive participates or to which he is a party, would
constitute an “Excess Parachute Payment” within the meaning of Section 280G of the
Internal Revenue of 1986, as amended (the “Code”), and would thereby be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then in such event,
the Company shall pay to the Executive a “grossing-up” amount equal to the amount of
such Excise Tax, plus all federal and state income or other taxes with respect to the
payment of the amount of such Excise Tax, including all such taxes with respect to any
such grossing-up amount. If, at a later date, the Internal Revenue Service assesses a
deficiency against the Executive for the Excise Tax which is greater than that which
was determined at the time such amounts were paid, then the Company shall pay to the
Executive the amount of such unreimbursed Excise Tax, plus any interest, penalties and
reasonable professional fees or expenses incurred by the Executive as a result of such
assessment, including all such taxes with respect to any such additional amount. The
highest marginal tax rate applicable to individuals at the time of the payment of such
amounts will be used for purposes of determining the federal and state income and other
taxes with respect thereto. The Company shall withhold from any amounts paid under
this Agreement the amount of any Excise Tax or other federal, state or local taxes then
required to be withheld. Computations of the amount of any grossing-up supplemental
compensation paid under this Section shall be conclusively made by the Company’s
independent accountants, or other independent accountants retained by the Company, in
consultation, if necessary, with the Company’s independent legal counsel. If, after
the Executive receives any gross-up payments or other amount pursuant to this Section,
the Executive receives any refund with respect to the Excise Tax, the Executive shall
promptly pay the Company the amount of such refund within ten (10) days of receipt by
the Executive, on a grossed-up basis. If the Company deems it necessary or advisable
to contest or appeal any assessment, or determination made by the Internal Revenue
Service relating to the imposition of an Excise Tax as described herein
(an “Excise Tax Contest/Appeal”), the Executive covenants and agrees to reasonably
cooperate with the Company in connection with the Excise Tax Contest/Appeal;
provided, however, that the Company shall be responsible for all professional costs
and expenses incurred by the Executive in connection with such Excise Tax
Contest/Appeal.

5

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	2.5	 	Restriction on Timing of Distribution. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee at Separation
from Service under such procedures as established by the Bank in accordance with Section 409A
of the Code, benefit distributions that are made upon Separation from Service may not, to the
extent required by Section 409A of the Code, commence earlier than six (6) months after the
date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable
to the Executive, any distribution or series of distributions to be made due to a Separation
from Service shall commence no earlier than the first day of the seventh month following the
Separation from Service, provided that to the extent permitted by Section 409A of the Code,
only payments scheduled to be paid during the first six (6) months after the date of such
Separation from Service shall be delayed and such delayed payments shall be paid in a single
sum on the first day of the seventh month following the date of such Separation from Service.

	2.6	 	Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the
inclusion of any portion of the vested Accrual Balance into the Executive’s income as a result
of the failure of this Agreement to comply with the requirements of Section 409A of the Code,
the Bank shall distribute such portion of the vested Accrual Balance to the Executive in a
single lump sum as soon as is administratively practicable following the discovery of such
failure.

Article 3

Distribution at Death

	3.1	 	Death During Active Service. If the Executive dies while in the active service of
the Bank, the Bank shall distribute to the Beneficiary the benefit described in this Section
3.1. This benefit shall be distributed in lieu of the benefits under Article 2.

	 	3.1.1	 	Amount of Benefit. The benefit under this Section 3.1 is the greater
of (i) the Accrual Balance at the Executive’s date of death, or (ii) three hundred
thirty five thousand three hundred fifty-six dollars ($335,356).
	 
	 	3.1.2	 	Distribution of Benefit. The Bank shall distribute the benefit to the
Beneficiary in one hundred eighty (180) consecutive equal monthly installments
commencing within thirty (30) days following receipt by the Bank of the Executive’s
death certificate. On December 31 of each Plan Year during the applicable installment
period, the Bank shall credit interest on the unpaid Accrual Balance at an annual rate
equal to the Merrill Lynch High Grade Long Term Bond rate as published in the Wall
Street Journal on the first business day of that Plan Year, compounded
monthly.

	3.2	 	Death During Distribution of a Benefit. If the Executive dies after any benefit
distributions have commenced under this Agreement but before receiving all such distributions,
the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in
the same amounts they would have been distributed to the Executive had the Executive survived.

6

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	3.3	 	Death After Separation from Service But Before Benefit Distributions Commence. If
the Executive is entitled to benefit distributions under this Agreement, but dies prior to the
commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the
same benefits that the Executive was entitled to prior to death except that the benefit
distributions shall commence within thirty (30) days following receipt by the Bank of the
Executive’s death certificate.

Article 4

Beneficiaries

	4.1	 	Beneficiary. The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefit distributions under this Agreement to a Beneficiary
upon the death of the Executive. The Beneficiary designated under this Agreement may be the
same as or different from the beneficiary designation under any other plan of the Bank in
which the Executive participates.

	4.2	 	Beneficiary Designation: Change. The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form, and delivering it to the Plan
Administrator or its designated agent. The Executive’s beneficiary designation shall be
deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive
names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall
have the right to change a Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures,
as in effect from time to time. Upon the acceptance by the Plan Administrator of a new
Beneficiary Designation Form, all Beneficiary designations previously filed shall be
cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary
Designation Form filed by the Executive and accepted by the Plan Administrator prior to the
Executive’s death.

	4.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received, accepted and acknowledged in writing by the Plan Administrator or
its designated agent.

	4.4	 	No Beneficiary Designation. If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s
spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the
benefits
shall be made to the personal representative of the Executive’s estate.

	4.5	 	Facility of Distribution. If the Plan Administrator determines in its discretion
that a benefit is to be distributed to a minor, to a person declared incompetent, or to a
person incapable of handling the disposition of that person’s property, the Plan Administrator
may direct distribution of such benefit to the guardian, legal representative or person having
the care or custody of such minor, incompetent person or incapable person. The

7

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	Plan
Administrator may require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a
distribution for the account of the Executive and the Executive’s Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Agreement for such
distribution amount.

Article 5

General Limitations

	5.1	 	Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this Agreement if Executive’s
service is terminated by the Board for:

	 	(a)	 	Gross negligence or gross neglect of duties to the Bank; or
	 
	 	(b)	 	Conviction of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Bank; or
	 
	 	(c)	 	Fraud, disloyalty, dishonesty or willful violation of any law or significant
Bank policy committed in connection with the Executive’s employment and resulting in a
material adverse effect on the Bank.

	5.2	 	Suicide or Misstatement. No benefits shall be distributed if the Executive commits
suicide within two years after the Effective Date of this Agreement, or if an insurance
company which issued a life insurance policy covering the Executive and owned by the Bank
denies coverage (i) for material misstatements of fact made by the Executive on an application
for such life insurance, or (ii) for any other reason.

	5.3	 	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank
shall not distribute any benefit under this Agreement if the Executive is subject to a final
removal or prohibition order issued by an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act.

Article 6

Administration of Agreement

	6.1	 	Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s) as the Board
shall appoint. The Plan Administrator shall also have the discretion and authority to (i)
make, amend, interpret and enforce all appropriate rules and regulations for the
administration of
this Agreement and (ii) decide or resolve any and all questions including interpretations of
this Agreement, as may arise in connection with the Agreement.

8

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	6.2	 	Agents. In the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as it sees fit, (including acting
through a duly appointed representative), and may from time to time consult with counsel who
may be counsel to the Bank.

	6.3	 	Binding Effect of Decisions. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the administration,
interpretation and application of the Agreement and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all persons having any interest in
the Agreement.

	6.4	 	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this Agreement, except
in the case of willful misconduct by the Plan Administrator or any of its members.

	6.5	 	Bank Information. To enable the Plan Administrator to perform its functions, the
Bank shall supply full and timely information to the Plan Administrator on all matters
relating to the date and circumstances of the retirement, Disability, death, or Separation
from Service of the Executive, and such other pertinent information as the Plan Administrator
may reasonably require.

	6.6	 	Annual Statement. The Plan Administrator shall provide to the Executive, within one
hundred twenty (120) days after the end of each Plan Year, a statement setting forth the
benefits to be distributed under this Agreement.

Article 7

Claims And Review Procedures

	7.1	 	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received
benefits under the Agreement that he or she believes should be distributed shall make a claim
for such benefits as follows:

	 	7.1.1	 	Initiation – Written Claim. The claimant initiates a claim by
submitting to the Plan Administrator a written claim for the benefits.
	 
	 	7.1.2	 	Timing of Plan Administrator Response. The Plan Administrator shall
respond to such claimant within 90 days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by an
additional 90 days by notifying the claimant in writing, prior to the end of the
initial 90-day period, that an additional period is required. The notice of extension
must set forth the special circumstances and the date by which the Plan Administrator
expects to render its decision.

9

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	7.1.3	 	Notice of Decision. If the Plan Administrator denies part or all of
the claim, the Plan Administrator shall notify the claimant in writing of such denial.
The Plan Administrator shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth:

	 	(a)	 	The specific reasons for the denial;
	 
	 	(b)	 	A reference to the specific provisions of the Agreement on
which the denial is based;
	 
	 	(c)	 	A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation of why it is
needed;
	 
	 	(d)	 	An explanation of the Agreement’s review procedures and the
time limits applicable to such procedures; and
	 
	 	(e)	 	A statement of the claimant’s right to bring a civil action
under ERISA Section 502(a) following an adverse benefit determination on
review.

	7.2	 	Review Procedure. If the Plan Administrator denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Plan Administrator of
the denial, as follows:

	 	7.2.1	 	Initiation – Written Request. To initiate the review, the claimant,
within 60 days after receiving the Plan Administrator’s notice of denial, must file
with the Plan Administrator a written request for review.
	 
	 	7.2.2	 	Additional Submissions – Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits.
	 
	 	7.2.3	 	Considerations on Review. In considering the review, the Plan
Administrator shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.
	 
	 	7.2.4	 	Timing of Plan Administrator Response. The Plan Administrator shall
respond in writing to such claimant within 60 days after receiving the request for
review. If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional 60 days by notifying the claimant in writing, prior to
the end of the initial 60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.
	 
	 	7.2.5	 	Notice of Decision. The Plan Administrator shall notify the claimant
in writing of its decision on review. The Plan Administrator shall write the
notification in a

10

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	 	manner calculated to be understood by the claimant. The notification
shall set forth:

	 	(a)	 	The specific reasons for the denial;
	 
	 	(b)	 	A reference to the specific provisions of the Agreement on
which the denial is based;
	 
	 	(c)	 	A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits; and
	 
	 	(d)	 	A statement of the claimant’s right to bring a civil action
under ERISA Section 502(a).

Article 8

Amendments and Termination

	8.1	 	Amendments. This Agreement may be amended only by a written agreement signed by the
Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform
with written directives to the Bank from its auditors or banking regulators or to comply with
legislative or tax law, including without limitation Section 409A of the Code and any and all
regulations and guidance promulgated thereunder.

	8.2	 	Plan Termination Generally. The Bank may unilaterally terminate this Agreement at
any time. The benefit shall be the Accrual Balance as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination of this Agreement shall not
cause a distribution of benefits under this Agreement. Rather, upon such termination benefit
distributions will be made at the earliest distribution event permitted under Article 2 or
Article 3.

	8.3	 	Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in
Section 8.2, if the Bank terminates this Agreement in the following circumstances:

	 	(a)	 	Within thirty (30) days before, or twelve (12) months after a Change in
Control, provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that all the Bank’s
arrangements which are substantially similar to the Agreement are terminated so the
Executive and all participants in the similar arrangements are required to receive all
amounts of compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the arrangements;
	 
	 	(b)	 	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 Executive’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
	 
	 	(c)	 	Upon the Bank’s termination of this and all other non-account balance plans (as

11

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	 	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
non-account balance plans for a minimum of five (5) years following the date of such
termination;

Article 9

Miscellaneous

	9.1	 	Binding Effect. This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, administrators and transferees.

	9.2	 	No Guarantee of Employment. This Agreement is not a contract for employment. It
does not give the Executive the right to remain as an employee of the Bank, nor does it
interfere with the Bank’s right to discharge the Executive. It also does not require the
Executive to remain an employee nor interfere with the Executive’s right to terminate
employment at any time.

	9.3	 	Non-Transferability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

	9.4	 	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required
to be withheld, including but not limited to taxes owed under Section 409A of the Code and
regulations thereunder, from the benefits provided under this Agreement. Executive
acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld
to the appropriate taxing authority(ies). Further, the Bank shall satisfy all applicable
reporting requirements, including those under Section 409A of the Code and regulations
thereunder.

	9.5	 	Applicable Law. The Agreement and all rights hereunder shall be governed by the laws
of the State of Michigan, except to the extent preempted by the laws of the United States of
America.

	9.6	 	Unfunded Arrangement. The Executive and Beneficiary are general unsecured creditors
of the Bank for the distribution of benefits under this Agreement. The benefits represent the
mere promise by the Bank to distribute such benefits. The rights to benefits are not subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive’s life or other
informal funding asset is a general asset of the Bank to which the Executive and Beneficiary
have no preferred or secured claim.

	9.7	 	Reorganization. The Bank shall not merge or consolidate into or with another bank,
or reorganize, or sell substantially all of its assets to another bank, firm, or person unless
such succeeding or continuing bank, firm, or person agrees to assume and discharge the
obligations of the Bank under this Agreement. Upon the occurrence of such event, the

12

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	term
“Bank” as used in this Agreement shall be deemed to refer to the successor or survivor bank.
	 
	9.8	 	Entire Agreement. This Agreement constitutes the entire agreement between the Bank
and the Executive as to the subject matter hereof. This Agreement is rescinds and replaces
the Prior Agreement. No rights are granted to the Executive by virtue of this Agreement other
than those specifically set forth herein.

	9.9	 	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement
requires, and the context will permit, the use of the masculine gender includes the feminine
and use of the singular includes the plural.

	9.10	 	Alternative Action. In the event it shall become impossible for the Bank or the Plan
Administrator to perform any act required by this Agreement, the Bank or Plan Administrator
may in its discretion perform such alternative act as most nearly carries out the intent and
purpose of this Agreement and is in the best interests of the Bank.

	9.11	 	Headings. Article and section headings are for convenient reference only and shall
not control or affect the meaning or construction of any of its provisions.

	9.12	 	Validity. In case any provision of this Agreement shall be illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining parts hereof, but
this Agreement shall be construed and enforced as if such illegal and invalid provision has
never been inserted herein.

	9.13	 	Notice. Any notice or filing required or permitted to be given to the Bank or Plan
Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or
sent by registered or certified mail, to the address below:

Fentura Financial, Inc.

175 North Leroy Street

Fenton, MI 48430

	 	 	Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.
	 
	 	 	Any notice or filing required or permitted to be given to the Executive under this Agreement
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Executive.
	 
	9.14	 	Compliance with Section 409A. This Agreement shall at all times be administered and
the provisions of this Agreement shall be interpreted consistent with the requirements of
Section 409A of the Code and any and all regulations thereunder, including such regulations as
may be promulgated after the Effective Date of this Agreement.

	9.15	 	Rescissions. Any modification to the terms of this Agreement that would
inadvertently

13

 

WEST MICHIGAN COMMUNITY BANK

Supplemental Executive Retirement Agreement

	 	 	result in an additional tax liability on the part of the Executive, shall have
no effect to the extent the change in the terms of the plan is rescinded by the earlier of a
date before the right is exercised (if the change grants a discretionary right) and the last
day of the calendar year during which such change occurred.
	 
	9.16	 	Transfer of Employment. Executive shall not transfer employment to the Company or
another member of the Controlled Group unless such successor employer of the Executive agrees
to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence
of such a transfer, the term “Bank” as used in this Agreement shall be deemed to refer to the
successor employer of the Executive.

     IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed
this Agreement.

	 	 	 	 	 	 	 	 	 
	EXECUTIVE:	 	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	FENTURA FINANCIAL, INC.	 	 
	/s/ Robert Sewick
 

Robert Sewick

	 	 	 	By

Title
	 	/s/ Forrest A. Shook
 

Chairman
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	BANK:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	WEST MICHIGAN COMMUNITY BANK.	 	 
	 

	 	 	 	By

Title
	 	/s/ James Wesseling
 

Chairman
	 	 

14

 

THE STATE
BANK

Supplemental Executive Retirement Agreement
BENEFICIARY DESIGNATION FORM

{     } New Designation

{     } Change in Designation

I,                                                             , designate the following as Beneficiary under the Agreement:

	 	 	 	 	 
	Primary:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	%	 
	 

	 	 

	 	 
	 

	 	 

	%	 
	 

	 	 

	 	 
	Contingent:
	 	 	 	 
	 

	 	 

	%	 
	 

	 	 

	 	 
	 

	 	 

	%	 
	 

	 	 

	 	 

Notes:

	 	•	 	Please PRINT CLEARLY or TYPE the names of the beneficiaries.
	 
	 	•	 	To name a trust as Beneficiary, please provide the name of the trustee(s) and the
exact name and date of the trust agreement.
	 
	 	•	 	To name your estate as Beneficiary, please write “Estate of _[your name]_”.
	 
	 	•	 	Be aware that none of the contingent beneficiaries will receive anything unless ALL of
the primary beneficiaries predecease you.

I understand that I may change these beneficiary designations by delivering a new written
designation to the Plan Administrator, which shall be effective only upon receipt and
acknowledgment by the Plan Administrator prior to my death. I further understand that the
designations will be automatically revoked if the Beneficiary predeceases me, or, if I have named
my spouse as Beneficiary and our marriage is subsequently dissolved.

	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 

Received by the Plan Administrator this                      day of                                         , 2___

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:exv10w3

 

Exhibit 10.3

Severance Compensation Agreement

     This Severance Compensation Agreement (the “Agreement”), has been made on March
16, 2007 by Fentura Financial, 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 in 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 in 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 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) consecutive months or more.

- 2 -

 

	 	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.
	 
	 	f)	 	“Separation from Service” the termination of the Executive’s employment
with the Bank for reasons other than death or Disability. Whether a Separation
from Service takes place is determined by the Plan Administrator based on the
facts and circumstances surrounding the termination of the Executive’s
employment and whether the Bank and the Executive intended for the Executive to
provide significant services for the Bank following such termination. A
termination of employment will not be considered a Separation from Service if:
	 
	 		 	(i) the Executive continues to provide services as an employee of the Bank
in an annualized amount that is twenty percent (20%) or more of the services
rendered, on average, during the immediately preceding three full calendar
years of employment (or, if employed less than three years, such lesser
period) and the annual remuneration for such services is twenty percent
(20%) or more of the average annual remuneration earned during the final
three full calendar years of employment (or, if less, such lesser period),
or
	 
	 		 	 (ii) the Executive continues to provide services to the Bank in a capacity
other than as an employee of the Bank in an annualized amount that is fifty
percent (50%) or more of the services rendered, on average, during the
immediately preceding three full calendar years of employment (or if
employed less than three years, such lesser period) and

- 3 -

 

	 	 	 	the annual
remuneration for such services is fifty percent
(50%) or more of the average annual remuneration earned during the final
three full calendar years of employment (or if less, such lesser period), or
	 
	 		 	(iii) immediately following the Executive’s termination of employment, the
Executive becomes an employee of (i) the Company, or (ii) any member of the
Controlled Group.
	 
	 	f)	 	“Specified Employee” means a key employee (as defined in Section
416(i) of the Internal Revenue Code of 1986 without regard to paragraph 5
thereof) of the Bank if any stock of the Bank is publicly traded on an
established securities market or otherwise.

     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 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.

- 4 -

 

	 	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.

     Notwithstanding the foregoing, if the Executive is considered a Specified Employee at
Separation from Service under such procedures as established by the Bank in accordance with Section
409A of the Internal Revenue Code of 1986 (the “Code”), benefit distributions that are made upon
Separation from Service may not, to the extent required by Section 409A of the Code, commence
earlier than six (6) months after the date of such Separation from Service. Therefore, in the
event this provision is applicable to the Executive, any distribution or series of distributions to
be made due to a Separation from Service shall commence no earlier than the first day of the
seventh month following the Separation from Service, provided that to the extent permitted by
Section 409A of the Code, only payments scheduled to be paid during the first six (6) months after
the date of such Separation from Service shall be delayed and such delayed payments shall be paid
in a single sum on the first day of the seventh month following the date of such Separation from
Service.

- 5 -

 

     3. Maximum Benefits Upon Change in Control. If it is determined, in the
opinion of the Company’s independent accountants, in consultation, if necessary, with the
Company’s independent legal counsel, that any amount paid under this Agreement in connection with a
Termination Upon Change in Control, either separately or in conjunction with any other payments,
benefits and entitlements received by the Executive in respect of a Change in Control hereunder or
under any other plan or agreement under which the Executive participates or to which he is a party,
would constitute an “Excess Parachute Payment” within the meaning of Section 280G of the Internal
Revenue of 1986, and would thereby be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then in such event, the Company shall pay to the Executive a “grossing-up”
amount equal to the amount of such Excise Tax, plus all federal and state income or other taxes
with respect to the payment of the amount of such Excise Tax, including all such taxes with respect
to any such grossing-up amount. If, at a later date, the Internal Revenue Service assesses a
deficiency against the Executive for the Excise Tax which is greater than that which was determined
at the time such amounts were paid, then the Company shall pay to the Executive the amount of such
unreimbursed Excise Tax, plus any interest, penalties and reasonable professional fees or expenses
incurred by the Executive as a result of such assessment, including all such taxes with respect to
any such additional amount. The highest marginal tax rate applicable to individuals at the time of
the payment of such amounts will be used for purposes of determining the federal and state income
and other taxes

- 6 -

 

with respect thereto. The Company shall withhold from any amounts paid under this
Agreement the amount of any Excise Tax or other federal, state or local taxes then
required to be withheld. Computations of the amount of any grossing-up supplemental
compensation paid under this Section shall be conclusively made by the Company’s independent
accountants, or other independent accountants retained by the Company, in consultation, if
necessary, with the Company’s independent legal counsel. If, after the Executive receives any
gross-up payments or other amount pursuant to this Section, the Executive receives any refund with
respect to the Excise Tax, the Executive shall promptly pay the Company the amount of such refund
within ten (10) days of receipt by the Executive, on a grossed-up basis. If the Company deems it
necessary or advisable to contest or appeal any assessment, or determination made by the Internal
Revenue Service relating to the imposition of an Excise Tax as described herein (an “Excise Tax
Contest/Appeal”), the Executive covenants and agrees to reasonably cooperate with the Company in
connection with the Excise Tax Contest/Appeal; provided, however, that the Company shall be
responsible for all professional costs and expenses incurred by the Executive in connection with
such Excise Tax Contest/Appeal.

     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.

- 7 -

 

     5. Termination Prior To Change in Control. Notwithstanding anything in this agreement to the
contrary, if a Change in Control occurs and (i) if the Executive’s employment with the Company or
the Bank is terminated prior to the date on which
Change in 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 Change in Control
or (b) otherwise arose in connection with or in anticipation of the Change in Control, or (ii)
Executive has terminated his employment with Company and/or Bank for Good Reason prior to Change in
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.

- 8 -

 

     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 Financial, 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.

- 9 -

 

	 	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)	 	Entire Agreement. This Agreement contains the entire understanding of the
parties concerning the Executive’s severance compensation opportunity. This Agreement
supersedes and controls over the Executive’s March 20, 1997 Severance Compensation
Agreement with the Company and the Bank. This Agreement does not supersede Executive’s
Fentura Financial, Inc. Confidentiality and Shareholder Protection Agreement dated July
9, 2003.

- 10 -

 

	 	c)	 	Governing Law. This Agreement shall be governed in all respects according to
the laws of the State of Michigan.

	 	 	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 	 	 
	 	 	Fentura Financial, Inc.,
	 	 	a Michigan corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Forrest A. Shook	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Forrest A. Shook, Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	BANK:
	 
	 	 	 	 	 	 
	 	 	The State Bank
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian P. Petty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Brian P. Petty, Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	 	 	 	 
	 	 	          /s/ Donald L. Grill	 	 
	 	 	 	 	 
	 	 	          Donald L. Grill	 	 

- 11 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}]]