Document:

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                                                                    Exhibit 10.4
                               SEVERANCE AGREEMENT

         This SEVERANCE AGREEMENT (this "Agreement") is entered into as of this
12th day of August, 2003, by and between Middlefield Banc Corp., an Ohio
corporation ("Middlefield"), and Jay P. Giles, Senior Vice President (the
"Executive") of The Middlefield Banking Company, an Ohio-chartered, FDIC-insured
nonmember bank and wholly owned subsidiary of Middlefield.

         WHEREAS, the Executive is employed by The Middlefield Banking Company
and the Executive has made and is expected to continue to make major
contributions to the profitability, growth, and financial strength of
Middlefield and its subsidiaries,

         WHEREAS, Middlefield recognizes that, as is the case for most
companies, the possibility of a Change in Control (as defined in Section 1(c))
exists,

         WHEREAS, Middlefield desires to assure itself of the current and future
continuity of management and desires to establish minimum severance benefits for
certain of its officers and other key employees, including the Executive, if a
Change in Control occurs,

         WHEREAS, Middlefield wishes to ensure that officers and other key
employees are not practically disabled from discharging their duties if a
proposed or actual transaction involving a Change in Control arises,

         WHEREAS, Middlefield desires to provide additional inducement for the
Executive to continue to remain in the ongoing employ of Middlefield and
subsidiary, and

         WHEREAS, none of the conditions or events included in the definition of
the term "golden parachute payment" that is set forth in Section 18(k)(4)(A)(ii)
of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in
Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR
359.1(f)(1)(ii)] exists or, to the best knowledge of Middlefield, is
contemplated insofar as either of Middlefield or any of its subsidiaries is
concerned,

         NOW THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.       CHANGE IN CONTROL COMBINED WITH EMPLOYMENT TERMINATION

         (a) TERMINATION OF EXECUTIVE WITHIN TWO YEARS AFTER A CHANGE IN
CONTROL. If a Change in Control occurs during the term of this Agreement and if
either of the following also occurs, the Executive shall be entitled to
severance and termination benefits specified in Section 2 of this Agreement --

         (1)      Termination by Middlefield or Subsidiary: the Executive's
                  employment with Middlefield or its Subsidiary(ies) is
                  involuntarily terminated within two years after a Change in
                  Control, except for termination under Section 4 of this
                  Agreement. For purposes of this Agreement, "Subsidiary" means
                  an entity in which Middlefield directly or indirectly
                  beneficially owns 50% or more of the outstanding voting
                  securities, or

         (2)      Termination by the Executive for Good Reason: the Executive
                  terminates his employment with Middlefield or Subsidiary(ies)
                  for Good Reason (as defined in Section 3) within two years
                  after a Change in Control.

         If the Executive is removed from office or if his employment terminates
after discussions with a third party regarding a Change in Control commence, and
if those discussions ultimately conclude with a

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Change in Control, then for purposes of this Agreement the removal of the
Executive or termination of his employment shall be deemed to have occurred
after the Change in Control.

         (b) TERMINATION BY THE EXECUTIVE DURING A 90-DAY PERIOD 12 MONTHS AFTER
A CHANGE IN CONTROL. The Executive shall also be entitled to severance and
termination benefits under Section 2 of this Agreement if he terminates
employment with Middlefield and Subsidiary(ies) for any reason or for no reason
during the 90_day period beginning on the date that is 12 months after a Change
in Control.

         (c) DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement,
"Change in Control" means any of the following events occur:

         (1)      Merger: Middlefield merges into or consolidates with another
                  corporation, or merges another corporation into Middlefield,
                  and as a result less than a majority of the combined voting
                  power of the resulting corporation immediately after the
                  merger or consolidation is held by persons who were the
                  holders of Middlefield's voting securities immediately before
                  the merger or consolidation. For purposes of this Agreement,
                  the term person means an individual, corporation, partnership,
                  trust, association, joint venture, pool, syndicate, sole
                  proprietorship, unincorporated organization or other entity,

         (2)      Acquisition of Significant Share Ownership: a report on
                  Schedule 13D, Schedule TO, or another form or schedule (other
                  than Schedule 13G), is filed or is required to be filed under
                  Sections 13(d) or 14(d) of the Securities Exchange Act of
                  1934, if the schedule discloses that the filing person or
                  persons acting in concert has or have become the beneficial
                  owner of 15% or more of a class of Middlefield's voting
                  securities (but this clause (2) shall not apply to beneficial
                  ownership of voting shares held by a Subsidiary in a fiduciary
                  capacity),

         (3)      Change in Board Composition: during any period of two
                  consecutive years, individuals who constitute Middlefield's
                  board of directors at the beginning of the two-year period
                  cease for any reason to constitute at least a majority
                  thereof; provided, however, that -- for purposes of this
                  clause (3) -- each director who is first elected by the board
                  (or first nominated by the board for election by stockholders)
                  by a vote of at least two-thirds (2/3) of the directors who
                  were directors at the beginning of the period shall be deemed
                  to have been a director at the beginning of the two-year
                  period, or

         (4)      Sale of Assets: Middlefield sells to a third party
                  substantially all of Middlefield's assets. For purposes of
                  this Agreement, sale of substantially all of Middlefield's
                  assets includes sale of The Middlefield Banking Company.

2.       SEVERANCE AND TERMINATION BENEFITS

         (a) SEVERANCE AND TERMINATION BENEFITS. The severance and termination
benefits to which the Executive is entitled under Section 1 are as follows --

         (1)      Lump Sum Payment: Middlefield shall make a lump sum payment to
                  the Executive in an amount in cash equal to two times the
                  Executive's annual compensation. For purposes of this
                  Agreement, annual compensation means (a) the Executive's
                  annual base salary on the date of the Change in Control or the
                  Executive's termination of employment (at whichever date the
                  Executive's current annual base salary is greater), plus (b)
                  the average of the bonuses and incentive compensation earned
                  for the three calendar years immediately preceding the year in
                  which the Change in Control occurs, regardless of when the
                  bonus or incentive compensation is paid. Middlefield
                  recognizes that the bonus and incentive compensation earned by
                  the Executive for a particular year's service might be paid in
                  the year after the calendar year in which the bonus or
                  incentive compensation is earned. The amount payable to the
                  Executive hereunder shall not be reduced to account for the
                  time value of money or discounted to present value. The
                  payment

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                  required under this Section 2(a)(1) is payable no later than 5
                  business days after the date the Executive's employment
                  terminates. If the Executive terminates employment for Good
                  Reason, the date of termination shall be the date specified by
                  the Executive in his notice of termination.

         (2)      Benefit Plans: Middlefield shall cause the Executive to become
                  fully vested in any qualified and non-qualified plans,
                  programs or arrangements in which the Executive participated
                  if the plan, program, or arrangement does not address the
                  effect of a change in control. Middlefield also shall
                  contribute or cause a Subsidiary to contribute to the
                  Executive's Middlefield Banking Company 401(k) Employee
                  Savings and Investment Plan account the matching and voluntary
                  contributions, if any, that would have been made had the
                  Executive's employment not terminated before the end of the
                  plan year.

         (3)      Insurance Coverage: Middlefield shall cause to be continued
                  life, health and disability insurance coverage substantially
                  identical to the coverage maintained for the Executive before
                  his termination. The insurance coverage may cease when the
                  Executive becomes employed by another employer or 24 months
                  after the Executive's termination, whichever occurs first. At
                  the end of the 24-month period, the Executive shall have the
                  option to continue health insurance coverage at his own
                  expense for a period not less than the number of months by
                  which the Consolidated Omnibus Budget Reconciliation Act
                  (COBRA) continuation period exceeds 24 months.

         (b) NO MITIGATION REQUIRED. Middlefield hereby acknowledges that it
will be difficult and could be impossible (1) for the Executive to find
reasonably comparable employment after his employment terminates, and (2) to
measure the amount of damages the Executive suffers as a result of termination.
Additionally, Middlefield acknowledges that its general severance pay plans do
not provide for mitigation, offset or reduction of any severance payment
received thereunder. Accordingly, Middlefield further acknowledges that the
payment of severance and termination benefits by Middlefield under this
Agreement is reasonable and will be liquidated damages, and the Executive shall
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, nor will any profits,
income, earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise.

3.       GOOD REASON

         For purposes of this Agreement, "Good Reason" means the occurrence of
any of the events or conditions described in clauses (a) through (f) hereof
without the Executive's express written consent --

         (a) CHANGE IN OFFICE OR POSITION OR TERMINATION AS A DIRECTOR: failure
to elect or reelect or otherwise to maintain the Executive in the office or
position, or a substantially equivalent office or position, of or with
Middlefield and Subsidiary(ies) that the Executive held immediately before the
Change in Control, or the removal or failure to nominate the Executive as a
director of Middlefield (or any successor thereto) if the Executive shall have
been a director of Middlefield immediately before the Change in Control,

         (b) ADVERSE CHANGE IN THE SCOPE OF HIS DUTIES OR COMPENSATION AND
BENEFITS:

         (1)      a significant adverse change in the nature or scope of the
                  authorities, powers, functions, responsibilities or duties
                  associated with the Executive's position with Middlefield and
                  Subsidiary(ies) compared to the nature or scope of the
                  authorities, powers, functions, responsibilities or duties
                  associated with the position immediately before the Change in
                  Control,

         (2)      a reduction in the aggregate of the Executive's annual
                  compensation received from Middlefield and Subsidiary(ies), or

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         (3)      the termination or denial of the Executive's rights to
                  benefits under Middlefield's or Subsidiary's(ies') benefit,
                  compensation and incentive plans and arrangements or a
                  reduction in the scope or value thereof, which situation is
                  not remedied within 10 calendar days after written notice to
                  Middlefield from the Executive,

         (c) ADVERSE CHANGE IN CIRCUMSTANCES: the Executive determines that a
change in circumstances has occurred after a Change in Control, including
without limitation a change in the scope of the business or other activities for
which the Executive is responsible compared to his responsibilities immediately
before the Change in Control, (1) which renders the Executive substantially
unable to carry out, substantially hinders the Executive's performance of, or
causes the Executive to suffer a substantial reduction in, any of the
authorities, powers, functions, responsibilities or duties associated with the
office or position held by the Executive immediately before the Change in
Control, and (2) which situation is not remedied within 10 calendar days after
written notice to Middlefield from the Executive of such determination. Provided
his determination is made in good faith, the Executive's determination will be
conclusive and binding upon the parties hereto. The Executive's determination
will be presumed to have been made in good faith, unless Middlefield establishes
by clear and convincing evidence that it was not made in good faith,

         (d) LIQUIDATION AND MERGER OF MIDDLEFIELD: the liquidation,
dissolution, merger, consolidation or reorganization of Middlefield or transfer
of all or substantially all of the business or assets of either Middlefield or
The Middlefield Banking Company, unless the successor or successors (by
liquidation, merger, consolidation, reorganization, transfer or otherwise) to
which all or substantially all of the business or assets have been transferred
(directly or by operation of law) assumes all duties and obligations of
Middlefield under this Agreement,

         (e) RELOCATION OF THE EXECUTIVE: Middlefield relocates its principal
executive offices, or requires the Executive to have his principal location of
work changed, to any location that is more than 15 miles from the location
thereof immediately before the Change in Control, or requires the Executive to
travel away from his office in the course of discharging his responsibilities or
duties hereunder at least 20% more (in terms of aggregate days in any calendar
year or in any calendar quarter when annualized for purposes of comparison to
any prior year) than was required of Executive in any of the three full years
immediately before the Change in Control, or

         (f) BREACH OF THIS AGREEMENT: without limiting the generality or effect
of the foregoing, any material breach of this Agreement by Middlefield or any
successor thereto.

4.       TERMINATION FOR WHICH NO SEVERANCE OR TERMINATION BENEFITS ARE PAYABLE

         (a) NO SEVERANCE FOR TERMINATION FOR CAUSE. Anything in this Agreement
to the contrary notwithstanding, under no circumstance shall the Executive be
entitled to severance or termination benefits if his employment terminates for
Cause.

         (1)      Cause Means Commission of Any of the Following Acts: For
                  purposes of this Agreement, "Cause" means the Executive shall
                  have committed any of the following acts

                  (a)      Fraud, Embezzlement, Theft or Other Crime: an act of
                           fraud, embezzlement or theft in connection with his
                           duties or in the course of his employment with
                           Middlefield or a Subsidiary, or commission of a
                           felony or commission of a misdemeanor involving moral
                           turpitude,

                  (b)      Negligence, Disloyalty or Violation of Law or Policy:
                           the Executive's gross negligence or gross neglect of
                           duties, disloyalty, dishonesty, or willful violation
                           of any law or significant policy of Middlefield
                           committed in connection with the Executive's
                           employment and resulting in an adverse effect on
                           Middlefield or a Subsidiary,

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                  (c)      Disclosure of Trade Secrets: intentional wrongful
                           disclosure of secret processes or confidential
                           information of Middlefield or a Subsidiary, causing
                           material harm to Middlefield or the Subsidiary,

                  (d)      Competing with Middlefield: intentional wrongful
                           engagement in any competitive activity. For purposes
                           of this Agreement, competitive activity means the
                           Executive's participation, without the written
                           consent of a senior executive officer of Middlefield,
                           in the management of any business enterprise if (1)
                           the enterprise engages in substantial and direct
                           competition with Middlefield, (2) the enterprise's
                           revenues derived from any product or service
                           competitive with any product or service of
                           Middlefield or Subsidiary(ies) amounted to 10% or
                           more of the enterprise's revenues for its most
                           recently completed fiscal year, and (3) Middlefield's
                           revenues from the product or service amounted to 10%
                           of Middlefield's revenues for its most recently
                           completed fiscal year. A competitive activity does
                           not include mere ownership of securities in an
                           enterprise and the exercise of rights appurtenant
                           thereto, provided the Executive's share ownership
                           does not give him practical or legal control of the
                           enterprise. For this purpose, ownership of less than
                           5% of the enterprise's outstanding voting securities
                           shall conclusively be presumed to be insufficient for
                           practical or legal control, and ownership of more
                           than 50% shall conclusively be presumed to constitute
                           practical and legal control.

                                    If the Executive is now or hereafter becomes
                           subject to an agreement not to compete with
                           Middlefield or Subsidiary(ies), a breach by the
                           Executive of that other non-competition agreement
                           shall be grounds for denial of severance and
                           termination benefits for Cause under this clause (d)
                           of Section 4(a)(1). But if the Executive engages in a
                           competitive activity under circumstances justifying
                           denial of severance or termination benefits for Cause
                           under this clause (d), that shall not necessarily be
                           grounds for concluding that the Executive has also
                           breached the other non-competition agreement to which
                           he is or may become subject. This clause (d) is not
                           intended to and shall not be construed to supersede
                           or amend any provision of an employment or
                           non-competition agreement to which the Executive is
                           or may become subject. This clause (d) does not grant
                           to the Executive any right or privilege to engage in
                           other activities or enterprises, whether in
                           competition with Middlefield or otherwise, or

                  (e)      Termination for Cause under an Employment Agreement:
                           any actions that have caused the Executive to be
                           terminated for cause under any employment agreement
                           existing on the date hereof or hereafter entered into
                           between the Executive and Middlefield or a
                           Subsidiary.

         (2)      Definition of "Intentional": For purposes of this Agreement,
                  no act or failure to act on the part of the Executive shall be
                  deemed to have been intentional if it was due primarily to an
                  error in judgment or negligence. An act or failure to act on
                  the Executive's part shall be considered intentional if it is
                  not in good faith and if it is without a reasonable belief
                  that the action or failure to act is in the best interests of
                  Middlefield.

         (3)      Termination for Cause Can Occur Solely by Formal Board Action.
                  The Executive shall not be deemed under this Agreement to have
                  been terminated for Cause unless and until there shall have
                  been delivered to the Executive a copy of a resolution duly
                  adopted by the affirmative vote of at least three_fourths
                  (3/4) of the directors of Middlefield then in office at a
                  meeting of the board of directors called and held for such
                  purpose, which resolution shall (a) contain findings that, in
                  the good faith opinion of the board, the Executive has
                  committed an act constituting Cause and (b) specify the
                  particulars thereof

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                  in detail. Notice of that meeting and the proposed
                  determination of Cause shall be given to the Executive a
                  reasonable amount of time before the board's meeting. The
                  Executive and his counsel (if the Executive chooses to have
                  counsel present) shall have a reasonable opportunity to be
                  heard by the board at the meeting. Nothing in this Agreement
                  limits the Executive's or his beneficiaries' right to contest
                  the validity or propriety of the board's determination of
                  Cause, and they shall have the right to contest the validity
                  or propriety of the board's determination of Cause even if
                  that right does not exist under any employment agreement of
                  the Executive.

         (b) NO SEVERANCE UNDER THIS AGREEMENT FOR THE EXECUTIVE'S DEATH OR
DISABILITY. Anything in this Agreement to the contrary notwithstanding, under no
circumstance shall the Executive be entitled to severance payments or
termination benefits under this Agreement if --

         (1)      Death: the Executive dies while actively employed by
                  Middlefield or a Subsidiary, or

         (2)      Disability: the Executive becomes totally disabled while
                  actively employed by Middlefield or a Subsidiary. For purposes
                  of this agreement, the term "totally disabled" means that
                  because of injury or sickness, the Executive is unable to
                  perform his duties.

         The benefits, if any, payable to the Executive or his beneficiary(ies)
or estate relating to his death or disability shall be determined solely by such
benefit plans or arrangements as Middlefield or Subsidiary may have with the
Executive relating to death or disability, not by this Agreement.

5.       TERM OF AGREEMENT

         The initial term of this Agreement shall be for a period of three
years, commencing August 12, 2003. On the first anniversary of the August 12,
2003 effective date of this Agreement, and on each anniversary thereafter, the
Agreement shall be extended automatically for one additional year unless
Middlefield's board of directors gives notice to the Executive in writing at
least 90 days before the anniversary that the term of this Agreement will not be
extended. If the board of directors determines not to extend the term, it shall
promptly notify the Executive. References herein to the term of this Agreement
mean the initial term and extensions of the initial term. Unless terminated
earlier, this Agreement shall terminate when the Executive reaches age 65. If
the board of directors decides not to extend the term of this Agreement, this
Agreement shall nevertheless remain in force until its term expires. The board's
decision not to extend the term of this Agreement shall not -- by itself -- give
the Executive any rights under this Agreement to claim an adverse change in his
position, compensation or circumstances or otherwise to claim entitlement to
severance or termination benefits under this Agreement.

6.       THIS AGREEMENT IS NOT AN EMPLOYMENT CONTRACT

         The parties hereto acknowledge and agree that (a) this Agreement is not
a management or employment agreement and (b) nothing in this Agreement shall
give the Executive any rights or impose any obligations to continued employment
by Middlefield or any Subsidiary or successor of Middlefield, nor shall it give
Middlefield any rights or impose any obligations for the continued performance
of duties by the Executive for Middlefield or any Subsidiary or successor of
Middlefield.

7.       PAYMENT OF LEGAL FEES

         Middlefield desires that the Executive not be required to incur legal
fees and the related costs and expenses associated with the interpretation,
enforcement or defense of Executive's rights under this Agreement by litigation
or otherwise, because the amounts thereof would substantially detract from the
benefits intended to be extended to the Executive under this Agreement.
Therefore, even if the Executive does not prevail in whole or in part in
litigation or other legal action associated with the interpretation, enforcement
or defense of Executive's rights under this Agreement, Middlefield hereby agrees
to pay and be solely financially responsible for any and all attorneys' and
related fees, costs and expenses incurred by the Executive in the litigation or
other legal action, up to a maximum of $500,000. The fees and expenses

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of counsel selected by the Executive shall be paid or reimbursed to the
Executive by Middlefield on a regular, periodic basis, upon presentation by the
Executive of a statement or statements prepared by such counsel in accordance
with counsel's customary practices. Anything herein to the contrary
notwithstanding, nothing in this Agreement authorizes Middlefield to pay or the
Executive to demand payment of fees, costs and expenses if and to the extent
payment of fees, costs and expenses constitutes a "prohibited indemnification
payment" within the meaning of Federal Deposit Insurance Corporation Rule
359.1(l)(1) [12 CFR 359.1(l)(1)]. Middlefield's obligation in this Section 7 to
pay the Executive's legal fees operates separately from and in addition to any
legal fee reimbursement obligation Middlefield or a Subsidiary may have under
any separate employment or other agreement between the Executive and
Middlefield.

         Middlefield irrevocably authorizes the Executive to retain from time to
time counsel of Executive's choice to advise and represent him in the
interpretation, enforcement or defense of the parties' rights and
responsibilities under this Agreement, if --

         (1)      the Executive concludes that Middlefield has failed to comply
                  with any of its obligations under this Agreement, or

         (2)      if Middlefield or any other person takes or threatens to take
                  any action to declare this Agreement void or unenforceable, or
                  institutes any litigation or other action or proceeding
                  designed to deny, or to recover from, the Executive the
                  benefits provided or intended to be provided to the Executive
                  under this Agreement,

including without limitation the initiation or defense of any litigation or
other legal action, whether by or against Middlefield or any director, officer,
stockholder or other person affiliated with Middlefield, in any jurisdiction.

8.       WITHHOLDING OF TAXES

         Middlefield may withhold from any benefits payable under this Agreement
all Federal, state, local or other taxes as may be required by law, governmental
regulation or ruling.

9.       SUCCESSORS AND ASSIGNS

         (a) THIS AGREEMENT IS BINDING ON MIDDLEFIELD'S SUCCESSORS. This
Agreement shall be binding upon Middlefield and any successor to Middlefield,
including any persons acquiring directly or indirectly all or substantially all
of the business or assets of Middlefield by purchase, merger, consolidation,
reorganization or otherwise. Any such successor shall thereafter be deemed to be
the "Corporation" for purposes of this Agreement. But this Agreement and
Middlefield's obligations under this Agreement are not otherwise assignable,
transferable or delegable by Middlefield. By agreement in form and substance
satisfactory to the Executive, Middlefield shall require any successor to all or
substantially all of the business or assets of Middlefield expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
Middlefield would be required to perform if no such succession had occurred.

         (b) THIS AGREEMENT IS ENFORCEABLE BY THE EXECUTIVE AND HIS HEIRS. This
Agreement will inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributes and legatees.

         (c) THIS AGREEMENT IS PERSONAL IN NATURE AND IS NOT ASSIGNABLE. This
Agreement is personal in nature. Without written consent of the other party,
neither party shall assign, transfer or delegate this Agreement or any rights or
obligations under this Agreement except as expressly provided in this Section 9.
Without limiting the generality or effect of the foregoing, the Executive's
right to receive payments hereunder is not assignable or transferable, whether
by pledge, creation of a security interest, or otherwise, except for a transfer
by Executive's will or by the laws of descent and distribution. If the Executive

<PAGE>

attempts an assignment or transfer that is contrary to this Section 9,
Middlefield shall have no liability to pay any amount to the assignee or
transferee.

10.      NOTICES

         All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by hand
or mailed, certified or registered mail, return receipt requested, with postage
prepaid to the following addresses or to such other address as either party may
designate by like notice.

         (a)If to Middlefield, to:      Middlefield Banc Corp.
                                        15985 East High Street
                                        P.O. Box 35
                                        Middlefield, Ohio 44062
                                              Attn:  Corporate Secretary

         (b)If to the Executive, to:    Mr. Jay P.Giles
                                        15985 East High Street
                                        Middlefield, Ohio 44062

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

11.      CAPTIONS AND COUNTERPARTS

         The headings and subheadings used in this Agreement are included solely
for convenience and shall not affect the interpretation of this Agreement. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same agreement.

12.      AMENDMENTS AND WAIVERS

         No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in a writing or
writings signed by the Executive and by Middlefield. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement.

13.      SEVERABILITY

         The provisions of this Agreement shall be deemed severable. The
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. Any provision held to
be invalid or unenforceable shall be reformed to the extent (and only to the
extent) necessary to make it valid and enforceable.

14.      GOVERNING LAW

         The validity, interpretation, construction and performance of this
Agreement shall be governed by and construed in accordance with the substantive
laws of the State of Ohio, without giving effect to the principles of conflict
of laws of such State.

15.      ENTIRE AGREEMENT

<PAGE>

         This Agreement constitutes the entire agreement between Middlefield and
the Executive concerning the subject matter hereof. No rights are granted to the
Executive under this Agreement other than those specifically set forth herein.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.

WITNESSES:                                    MIDDLEFIELD BANC CORP.

                                              By:
                                                   James R. Heslop, II
                                              Its: Executive Vice President/
                                              Chief Operating Officer

WITNESSES:                                    EXECUTIVE

                                                   Jay P. Giles

County of Geauga     )
                     ) ss:
State of Ohio        )

         Before me this 12th day of August, 2003, personally appeared the above
named Thomas G. Caldwell and Jay P. Giles, who acknowledged that they did sign
the foregoing instrument and that the same was their free act and deed.

                                                      __________________________
(Notary Seal)                                            Notary Public
                                                         My Commission Expires:

<PAGE>

                                                                   EXHIBIT 10.14

                         THE MIDDLEFIELD BANKING COMPANY
                       EXECUTIVE SURVIVOR INCOME AGREEMENT

         THIS EXECUTIVE SURVIVOR INCOME AGREEMENT (this "Agreement') is made
this 20 day of June , 2003, by and between The Middlefield Banking Company, an
Ohio-chartered, FDIC-insured nonmember bank with its main office in Middlefield,
Ohio (the "Bank"), and Donald L. Stacy (the "Executive").

         WHEREAS, to encourage the Executive to remain an employee of the Bank,
the Bank is willing to provide benefits to the Executive's beneficiary(ies) (i)
if the Executive dies before the age of 85 while employed by the Bank, or (ii)
if the Executive dies before age 85 but after having terminated employment on or
after Early Retirement Age, or because of Disability, or within 12 months after
a Change in Control. The Bank will pay the benefits from its general assets, but
only so long as one of its general assets is a life insurance policy on the
Executive's life.

                                    AGREEMENT

         The Executive and the Bank agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

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

         1.1      "Change in Control" means the definition of Change in Control
specified in any employment or severance agreement existing on the date hereof
or hereafter entered into between the Executive and the Bank. If the Executive
is not a party to an employment or severance agreement containing a definition
of Change in Control, Change in Control means any of the following events
occur--

         (1)      Merger: Middlefield Banc Corp. ("Middlefield") merges into or
                  consolidates with another corporation, or merges another
                  corporation into Middlefield, and as a result less than a
                  majority of the combined voting power of the resulting
                  corporation immediately after the merger or consolidation is
                  held by persons who were the holders of Middlefield's voting
                  securities immediately before the merger or consolidation. For
                  purposes of this Agreement, the term person means an
                  individual, corporation, partnership, trust, association,
                  joint venture, pool, syndicate, sole proprietorship,
                  unincorporated organization, or other entity,

         (2)      Acquisition of Significant Share Ownership: a report on
                  Schedule 13D, Schedule TO, or another form or schedule (other
                  than Schedule 13G), is filed or is required to be filed under
                  Sections 13(d) or 14(d) of the Securities Exchange Act of
                  1934, if the schedule discloses that the filing person or
                  persons acting in concert has or have become the beneficial
                  owner of 15% or more of a class of Middlefield's voting
                  securities (but this clause (2) shall not apply to beneficial
                  ownership of voting shares held by a subsidiary in a fiduciary
                  capacity),

         (3)      Change in Board Composition: during any period of two
                  consecutive years, individuals who constitute Middlefield's
                  board of directors at the beginning of the two-year period
                  cease for any reason to constitute at least a majority
                  thereof; provided, however, that -- for purposes of this
                  clause (3) -- each director who is first elected by the board
                  (or first nominated by the board for election by stockholders)
                  by a vote of at least two-thirds (2/3) of the directors who
                  were directors at the beginning of the period shall be deemed
                  to have been a director at the beginning of the two-year
                  period, or

         (4)      Sale of Assets: Middlefield sells to a third party
                  substantially all of Middlefield's assets. For purposes of
                  this Agreement, sale of substantially all of Middlefield's
                  assets includes sale of The Middlefield Banking Company.<PAGE>

         1.2      "Disability" means the Executive suffers a sickness, accident,
or injury which has been determined by the carrier of any individual or group
disability insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Bank of the
carrier's or the Social Security Administration's determination upon the request
of the Bank.

         1.3      "Early Retirement Age" means the Executive's 55th birthday,
provided the Executive has at least 10 Years of Service with the Bank on that
date. If the Executive does not have 10 Years of Service with the Bank by the
date of his 55th birthday, the Executive's Early Retirement Age means the date
on which the Executive has 10 Years of Service with the Bank, provided such 10
Years of Service occurs before the Executive reaches age 65. For purposes of
this Agreement, years of service means the total number of twelve-month periods
during which the Executive serves as an employee of the Bank.

         1.4      "Good Reason" means the definition of Good Reason specified in
any employment or severance agreement existing on the date hereof or hereafter
entered into between the Executive and the Bank. If the Executive is not a party
to an employment or severance agreement containing a definition of Good Reason,
Good Reason means the occurrence of any of the events or conditions described in
clauses (a) through (e) hereof without the Executive's express written consent -

                           (a) a material reduction in Executive's title or
                  responsibilities;

                           (b) a reduction in base salary as in effect on the
                  date of a Change in Control;

                           (c) relocation of the Bank's principal executive
                  offices, or requiring the Executive to change his or her
                  principal work location, to any location that is more than 15
                  miles from the location of the Bank's principal executive
                  offices on the date of this Agreement;

                           (d) the failure by the Bank to continue to provide
                  the Executive with compensation and benefits substantially
                  similar to those provided to him or her under any of the
                  employee benefit plans in which the Executive becomes a
                  participant, or the taking of any action by the Bank which
                  would directly or indirectly materially reduce any of such
                  benefits or deprive the Executive of any material fringe
                  benefit enjoyed by him at the time of the Change in Control;
                  or

                           (e) the failure of the Bank to obtain a satisfactory
                  agreement from any successor or assignee of the Bank to assume
                  and agree to perform this Agreement.

         1.5      "Termination for Cause" means the definition of termination
for cause specified in any employment or severance agreement existing on the
date hereof or hereafter entered into between the Executive and the Bank. If the
Executive is not a party to an employment or severance agreement containing a
definition of termination for cause, Termination for Cause means the Bank has
terminated the Executive's employment for any of the following reasons:

                           (a)      Gross negligence or gross neglect of duties;

                           (b)      Commission of a felony or of a gross
                  misdemeanor involving moral turpitude; or

                           (c)      Fraud, disloyalty, or willful violation of
                  any law or significant Bank policy committed in connection
                  with the Executive's employment and resulting in an adverse
                  effect on the Bank.

         1.6 "Termination of Employment" with the Bank means that the Executive
shall have ceased to be employed by the Bank for any reason whatsoever,
excepting a leave of absence approved by the Bank. For purposes of this
Agreement, if there is a dispute over the employment status of the Executive or
the date of termination of the Executive's employment, the Bank shall have the
sole and absolute right to decide the dispute, unless a Change in Control shall
have occurred.

<PAGE>

                                    ARTICLE 2
                             ENTITLEMENT TO BENEFIT

         2.1      Pre-Termination of Employment Survivor Income Benefit. If the
Executive dies in active service to the Bank before reaching age 85, the Bank
shall pay to the Executive's designated beneficiary a survivor income benefit of
$222,619. The survivor income benefit shall be paid in a single lump sum within
90 days after submission of proof of a claim substantiating the Executive's
death.

         2.2      Disability Benefit. If the Executive terminates employment due
to Disability, the Bank shall pay to the Executive's designated beneficiary in a
single lump sum the survivor income benefit described in Section 2.5 provided
the Executive dies before reaching age 85.

         2.3      Change in Control Benefit. If the Executive's employment with
the Bank terminates involuntarily within 12 months after a Change in Control
(excepting Termination for Cause) or in the event the Executive terminates
employment voluntarily for Good Reason within 12 months after such Change in
Control, the Bank shall pay the Executive's designated beneficiary the survivor
income benefit described in Section 2.5 provided the Executive dies before
reaching age 85.

         2.4      Early Retirement Benefit. If the Executive terminates
employment on or after Early Retirement Age, the Bank shall pay to the
Executive's designated beneficiary in a single lump sum the survivor income
benefit described in Section 2.5 following the Executive's death, provided the
Executive's death occurs before the Executive's 85th birthday.

         2.5      Amount of Benefits. If the Employee was no longer employed by
the Bank at the time of death but benefits are nevertheless payable under
Section 2.2, 2.3, or 2.4, the Bank shall pay to the Employee's beneficiary a
survivor income benefit of $111,309. The survivor income benefit shall be paid
in a single lump sum within 90 days after submission of proof of a claim
substantiating the Employee's death. If the Employee dies after reaching age 85,
no survivor income benefits shall be payable under this Agreement.

                                    ARTICLE 3
                                  BENEFICIARIES

         3.1      Beneficiary Designations. The Executive shall designate a
beneficiary by filing a written designation with the Bank. 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. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.

         3.2      Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Bank may pay such benefit to the
guardian, legal representative, or person having the care or custody of such
minor, incompetent person, or incapable person. The Bank may require proof of
incompetence, minority, or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Bank from all liability with respect to such benefit.

                                    ARTICLE 4
                               GENERAL LIMITATIONS

         4.1      Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement if Termination of Employment is due to the Executive's actions
resulting in Termination for Cause.

<PAGE>

         4.2      Suicide or Misstatement. The Bank shall not pay any benefit
under this Agreement if the Executive commits suicide within three years after
the date of this Agreement. In addition, the Bank shall not pay any benefit
under this Agreement if the Executive has made any material misstatement of fact
on any application or resume provided to the Bank, or on any application for any
benefits provided by the Bank to the Executive.

         4.3 Removal. If the Executive is removed from office or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. Section 1818(e)(4) or (g)(1), all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order.

         4.4      Default. Notwithstanding any provision of this Agreement to
the contrary, if the Bank is in "default" or "in danger of default" as those
terms are defined in Section 3(x) of the Federal Deposit Insurance Act, 12
U.S.C. 1813(x), all obligations under this Agreement shall terminate.

         4.5      Termination of Participation. The Executive's rights under
this Agreement shall cease if the Executive's employment with the Bank
terminates, except as provided in Section 2.2 (termination because of
Disability), Section 2.3 (termination within 12 months after a Change in
Control), or Section 2.4 (termination because of Early Retirement Age).

                                    ARTICLE 5
                          CLAIMS AND REVIEW PROCEDURES

         5.1      Claims Procedure. A participant or beneficiary ("claimant")
who has not received benefits under the Agreement that he or she believes should
be paid shall make a claim for such benefits as follows:

         5.1.1    Initiation - Written Claim. The claimant initiates a claim by
                  submitting to the Bank a written claim for the benefits.

         5.1.2    Timing of Bank Response. The Bank shall respond to such
                  claimant within 90 days after receiving the claim. If the Bank
                  determines that special circumstances require additional time
                  for processing the claim, the Bank 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
                  Bank expects to render its decision.

         5.1.3    Notice of Decision. If the Bank denies part or all of the
                  claim, the Bank shall notify the claimant in writing of such
                  denial. The Bank 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 (Employee Retirement Income Security Act)
                  Section 502(a) following an adverse benefit determination on
                  review.

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

                                       4

<PAGE>

         5.2.1    Initiation - Written Request. To initiate the review, the
                  claimant, within 60 days after receiving the Bank's notice of
                  denial, must file with the Bank a written request for review.

         5.2.2    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 Bank 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.

         5.2.3    Considerations on Review. In considering the review, the Bank
                  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.

         5.2.4    Timing of Bank Response. The Bank shall respond in writing to
                  such claimant within 60 days after receiving the request for
                  review. If the Bank determines that special circumstances
                  require additional time for processing the claim, the Bank 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 Bank expects to render
                  its decision.

         5.2.5    Notice of Decision. The Bank shall notify the claimant in
                  writing of its decision on review. The Bank 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 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 6
                                  MISCELLANEOUS

         6.1      Amendments and Termination. The Bank may amend or terminate
this Agreement at any time if, pursuant to legislative, judicial, or regulatory
action, continuation of the Agreement would (i) cause benefits to be taxable to
the Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Bank (other
than the financial impact of paying the benefits).

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

         6.3      No Guarantee of Employment. This Agreement is not a contract
for employment. It does not give the Executive the right to remain an employee
of the Bank, nor does it interfere with the Bank's right to discharge the
Executive. The Agreement does not affect the employment status of the Executive,
whether the Executive is an employee at will or otherwise. It also does not
require the Executive to remain an employee nor interfere with the Executive's
right to terminate employment at any time.

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

                                       5

<PAGE>

         6.5      Successors; Binding Agreement. By an assumption agreement in
form and substance satisfactory to the Executive, the Bank will require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the Bank to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform this Agreement if no
such succession had occurred.

         6.6      Tax Withholding. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.

         6.7      Applicable Law. Except to the extent preempted by the laws of
the United States of America, the validity, interpretation, construction, and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio, without giving effect to the principles of
conflict of laws of such state.

         6.8      Unfunded Arrangement. The Executive's beneficiary(ies) are
general unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay 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 is a general
asset of the Bank to which the Executive and the Executive's beneficiary(ies)
have no preferred or secured claim.

         6.9      Entire Agreement. This Agreement constitutes the entire
agreement between the Bank and the Executive as to the subject matter hereof. No
rights are granted to the Executive's beneficiary by virtue of this Agreement
other than those specifically set forth herein.

         6.10     Administration. The Bank shall have all powers which are
necessary to administer this Agreement, including but not limited to:

                  (a) Interpreting the provisions of the Agreement;

                  (b) Establishing and revising the method of accounting for the
         Agreement;

                  (c) Maintaining a record of benefit payments; and

                  (d) Establishing rules and prescribing any forms necessary or
         desirable to administer the Agreement.

         6.11     Named Fiduciary. For purposes of the Employee Retirement
Income Security Act of 1974, if applicable, the Bank shall be the named
fiduciary and plan administrator under this Agreement. The named fiduciary may
delegate to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.

         6.12     Severability. If for any reason any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held invalid, and each such other provision shall continue
in full force and effect to the full extent consistent with the law,. If any
provision of this Agreement is held invalid in part, such invalidity shall not
affect the remainder of such provision not held invalid, and the remainder of
such provision, together with all other provisions of this Agreement, shall
continue in full force and effect to the full extent consistent with the law.

         6.13     Headings. The headings of Sections herein are included solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Agreement.

                                       6

<PAGE>

         6.14     Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed, certified or registered mail, return
receipt requested, with postage prepaid, to the following addresses or to such
other address as either party may designate by like notice.

                  (a)      If to the Bank, to:
                           Board of Directors
                           The Middlefield Banking Company
                           15985 East High Street
                           P.O. Box 35
                           Middlefield, Ohio 44062

                  (b)      If to the Executive, to:
                           Donald L. Stacy
                           15985 East High Street
                           Middlefield, OH  44062

                  and to such other or additional person or persons as either
                  party shall have designated to the other party in writing by
                  like notice.

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

EXECUTIVE:                     BANK:

                               THE MIDDLEFIELD BANKING COMPANY

By:________________________    By: __________________________
                                   James R. Heslop, 2nd
Donald L. Stacy                Its:  Executive Vice President/Chief Operating
                               Officer
Chief Financial Officer

                                       7

<PAGE>

                             BENEFICIARY DESIGNATION

                         THE MIDDLEFIELD BANKING COMPANY
                       EXECUTIVE SURVIVOR INCOME AGREEMENT

         I designate the following as beneficiary of benefits under this
Agreement payable following my death:

Primary: Patricia K. Stacy

_________________________________________________________________________

Contingent: Taylor P. Stacy and Marshall A. Stacy, equally

__________________________________________________________________________

NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE(S)
        AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT.

         I understand that I may change these beneficiary designations by filing
a new written designation with the Bank. 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.

        Signature ___________________________

        Date _______________________________

        By: Donald L. Stacy
        Title: Chief Financial Officer

        Received by the Bank this ________ day of ___________________, 2003

                                       8

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