Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”), dated as of August 1, 2007, is entered
into between RAMCO-GERSHENSON PROPERTIES TRUST (the “Trust”) and DENNIS GERSHENSON
(“Executive”).

     The parties agree as follows:

     1. Employment Duties. During the Term (as defined in paragraph 2 below), the Trust
will employ Executive as its Chief Executive Officer. Executive will devote substantially all of
his business time and attention to the performance of his duties under this Agreement. Executive
shall have the duties, rights and responsibilities normally associated with his position with the
Trust, together with such other reasonable duties relating to the operation of the business of the
Trust and its affiliates as may be assigned to him from time to time by the Board of Trustees of
the Trust (the “Board”). If the Trust shall so request, Executive shall become and shall,
at any time during the term of this Agreement as the Trust shall so request, act as a trustee of
the Trust and/or as an officer and/or director of any of the Subsidiaries of the Trust as they may
now exist or may be established by the Trust in the future without any compensation other than that
provided for in paragraph 3.

     2. Term. The term of Executive’s employment under this Agreement (the “Term”)
will begin on the date of this Agreement and will continue, subject to the termination
provisions set forth in paragraph 5 below, until the fifth anniversary of the date hereof;
provided that, upon any expiration of the Term, the Term will automatically be extended for
one year unless either the Trust or Executive gives written notice of non-extension to the other at
least 120 days prior to the expiration of the Term.

3. Salary and Bonus.

          a. Salary. During each year of the Term, Executive will receive a salary at the
annual rate of $447,750, which salary will be subject to increase as set forth below (as so
increased, the “Base Salary”). The Compensation Committee of the Trust’s Board of Trustees
(the “Committee”) will review Executive’s Base Salary on an annual basis, and the
Committee, upon such review and in its sole discretion, may increase or decrease the Base Salary by
an amount which the Committee deems appropriate in light of the Trust’s and Executive’s performance
during the period covered by such review; provided, however, that the Base Salary will not be
reduced below $447,750 per annum. The Base Salary will be payable to Executive in accordance with
the Trust’s standard payroll practices.

          b. Bonus. In addition to the Base Salary, the Trust will pay to Executive bonus
compensation for each fiscal year of the Trust, within the two and one half month period

 

 

following the end of each fiscal year, prorated on a per diem basis for partial fiscal years, as
determined by the Committee but not less than $350,000 per year.

     4. Fringe Benefits. In addition to the other compensation payable pursuant to this
Agreement, during the Term:

          a. Standard Benefits. Executive will be entitled to receive such fringe benefits and
perquisites, including medical, dental, disability and life insurance, as are generally made
available from time to time to management employees and executives of the Trust, and to participate
in any long term incentive, stock option or similar plan or program established from time to time
by the Trust for the benefit of its employees.

          b. Business Expenses. The Trust will pay for or reimburse Executive for all
business-related expenses incurred during the Term by Executive on account of his performance of
duties under this Agreement, subject to the procedures established by the Trust from time to time
with respect to incurrence, substantiation, reasonableness and approval, provided that any
reimbursement will be made no later than the last day of Executive’s taxable year following the
taxable year in which any expense was incurred, the Executive has no control over the timing of the
reimbursement, and the amount of expenses eligible for reimbursement during the Executive’s taxable
year will not affect the expenses eligible for reimbursement in any other taxable year.

          c. Life Insurance. As long as it is available at standard cost, the Trust will
provide Executive $1,000,000 in term life insurance.

     5. Termination of Employment.

          a. Death and Disability. Executive’s employment under this Agreement will terminate
immediately upon his death and upon 30 days’ prior written notice given by the Trust in the event
Executive is determined to be “permanently disabled” (as defined below).

          b. For Cause. The Trust may terminate Executive’s employment under this Agreement for
“Cause” (as defined below), upon providing Executive 30 days’ prior written notice of termination,
which notice will describe in detail the basis of such termination and will become effective on the
30th day after Executive’s receipt thereof unless Executive (i) cures the alleged
violation or other circumstance which was the basis of such termination within such 30-day notice
period or (ii) sends, within such 30-day notice period, written notice to the Board of Trustees of
the Trust disputing in good faith the existence of Cause and requesting arbitration of such dispute
pursuant to paragraph 8 below. During the pendency of the arbitration, Executive will continue to
receive all compensation and benefits to which he is entitled hereunder. If the Trust is not
successful in obtaining a determination by the arbitrators that there was Cause for termination,
the Trust will pay Executive’s reasonable expenses, including, without limitation, reasonable
attorneys’ fees and disbursements, in connection with such dispute resolution.

          c. For Good Reason. Executive may terminate his employment under this Agreement for
“Good Reason” (as defined below) upon providing the Trust 30 days’ prior written notice of
termination, which notice will detail the basis of such termination and will become effective on
the 30th day after the Trust’s receipt thereof unless the Trust cures the

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alleged violation or other circumstance which was the basis of such termination within such 30-day
notice period. The 30 days’ prior notice shall not be effective unless provided to the Trust
within 90 days of the initial existence of the condition which forms the basis of the
termination.

          d. Definitions. For purposes of this Agreement:

     (i) Executive will be deemed “permanently disabled” if he becomes
unable to discharge his normal duties as contemplated under this Agreement for more
than six consecutive months as a result of incapacity due to mental or physical
illness by a physician acceptable to Executive and the Trust and paid by the Trust,
whose determination will be final and binding. If Executive and the Trust are
unable to agree on a physician, Executive and the Trust will each choose one
physician who will mutually choose the third physician, whose determination will be
final and binding.

     (ii) “Cause” means either (A) a material breach by Executive of any
material provisions of this Agreement or of the Noncompetition Agreement, but only
if, after notice provided in subparagraph (b) above, Executive fails to cure such
breach or, if such breach is not subject to cure, fails on an on-going basis
thereafter to comply with the provisions of this Agreement or of the Noncompetition
Agreement, as the case may be, with respect to which he was in such breach; (B)
action by Executive constituting willful malfeasance or gross negligence, having a
material adverse effect on the Trust; (C) an act of fraud, misappropriation of funds
or embezzlement by Executive in connection with his employment hereunder; or (D)
Executive is convicted of, pleads guilty to or confesses to any felony.

     (iii) “Good Reason” means the occurrence of any of the following,
without the prior written consent of Executive: (A) any substantial diminution of
duties, responsibilities or authority, (B) a material breach by the Trust of any of
its material obligations under this Agreement, (C) a relocation of the Trust’s
principal executive offices or of Executive’s principal place of employment to a
location more than 25 miles from Southfield, Michigan; or (D) a “change in control”
as defined below. Executive will be deemed not to have consented to any proposal
resulting in any of the foregoing changes unless he will have given written notice
of his consent thereto to the Board of Trustees of the Trust within 15 days after
receipt of a written proposal describing the change. If Executive will not give
such consent, the Trust will have the opportunity to withdraw such proposed change
by written notice to Executive given within 15 days after expiration of the
foregoing 15-day period.

     (iv) A “change in control” shall occur if any person or group of
commonly controlled persons, other than the Executive and his affiliates, owns or
controls, directly or indirectly, more than thirty-five percent (35%) of the voting
control or value of the capital stock of the Trust, or of securities convertible
into or exchangeable for capital stock of the Trust.

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     6. Benefits upon Termination. 

          a. Termination upon Death or Permanent Disability. Upon termination of Executive’s
employment under this Agreement resulting from his death or permanent disability, the Trust will
pay to Executive or his legal representatives a lump sum amount equal to 12 months of his Base
Salary and bonus, as provided in paragraph 3 above, within 60 days after such termination. In the
event of a termination upon Executive’s permanent disability, Executive will also remain entitled
to receive, during the 12-month period following his termination (such additional period being
referred to in this Agreement as the “Severance Period”), those fringe benefits specified
in paragraph 4(a) above, including coverage under all insurance programs and plans, provided that
any medical benefits as described in Treas. Reg. Section 1.409A-1(b)(9)(v)(B) will not be provided
beyond the period of time during which the Executive would be entitled (or would, but for this
Agreement, be entitled) to continuation coverage under a group health plan of the Trust under COBRA
if the Executive elected such coverage and paid the applicable premiums. Notwithstanding the
preceding, any non-medical fringe benefits that are not excludible from gross income and would not
otherwise be deductible as a business expense by the Executive under Section 162 or 167 of the
Internal Revenue Code of 1986, (the “Code”) shall be paid for by the Executive
out-of-pocket during the six-month period following the Executive’s termination of employment by
the Trust, which payments shall be reimbursed to the Executive within 30 days following the
expiration of the six-month period; further, any such fringe benefits shall be continued through
the remaining period of the Term and shall be subject to the following additional rules: (i) such
fringe benefits provided during a taxable year of the Executive will not affect the benefits to be
provided in any later taxable year, (ii) any expense reimbursement under such a fringe benefit
must be made on or before the last day of the Executive’s taxable year following the taxable year
in which the expense was incurred, and (iii) the right to these fringe benefits cannot be
liquidated or exchanged for any other benefit.

          b. Termination with Cause or Resignation. Upon termination of Executive’s employment
by the Trust pursuant to paragraph 5(b) above or a voluntary resignation by Executive (other than
for Good Reason pursuant to paragraph 5(c) above), the Trust will remain obligated to pay Executive
only the unpaid portion of his Base Salary, bonus and benefits to the extent accrued through the
effective date of termination. Any amount due under this subparagraph will be payable within 30
days after the date of termination.

          c. Termination without Cause or for Good Reason. Upon termination of Executive’s
employment (x) by the Trust other than for Cause or upon Executive’s death or permanent disability
or (y) by Executive for Good Reason, Executive will be entitled to the benefits provide below:

     (i) the Trust will pay Executive his Base Salary through the date of
termination;

     (ii) the Trust will pay as severance pay to Executive, not later than the
30th day following the date that is six months following the date of his
termination, a lump sum severance payment (the “Severance Payment”) equal to
the greater of (x) the aggregate of all compensation due to Executive hereunder
during the balance of the Term, assuming that the annual bonuses payable to

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Executive during such period will equal the average of the annual bonuses paid to
Executive under this Agreement prior to termination of employment, or (y) 2.99 times
the “base amount” within the meaning of Sections 280G(b)(3) and 280G(d) of the Code,
and any applicable temporary or final regulations promulgated thereunder, or its
equivalent as provided in any successor statute or regulation. If Section 280G of
the Code (and any successor provisions thereto) is repealed or otherwise
inapplicable, then the Severance Payment will equal 2.99 times the average of
Executive’s annual compensation for both complete and partial calendar years during
so much of the five calendar year period preceding the calendar year in which the
termination occurs during which Executive was so employed, determined by analyzing
any compensation (other than non-recurring items) includable in Executive’s gross
income for any partial calendar year and then adding such non-recurring items to
such annualized compensation. Compensation payable to Executive by the Trust will
include every type and form of compensation includable in Executive’s gross income
in respect of his employment by the Trust, including compensation income recognized
as a result of Executive’s exercise of stock options or sale of the stock so
acquired, except to the extent otherwise provided in Section 280G of the Code and
any temporary or final regulations promulgated thereunder;

     (iii) if in the opinion of tax counsel elected by Executive and reasonably
acceptable to the Trust, any portion of any payment made to Executive, including
without limitation, the Severance Payment constitutes an excess “parachute payment”
within the meaning of Section 280G(b)(1) of the Code, the Trust will pay Executive
an additional amount (the “Additional Amount”) equal to the sum of (x) all
taxes payable by Executive under Section 4999 of the Code with respect to the
Severance Payment and the Additional Amount, plus (y) all federal, state or local
income taxes payable by Executive with respect to the Additional Amount, and such
payment shall be made no later than the end of the Executive’s taxable year next
following the Executive’s taxable year in which the Executive remits the related
taxes;

     (iv) for the duration of the Term, but not less than 12 months, those fringe
benefits specified in paragraph 4(a) above, including coverage under all insurance
programs and plans, provided that (x) the fringe benefits provided during a taxable
year of the Executive will not affect the benefits to be provided in any later
taxable year, (y) any expense reimbursement under the fringe benefit plans shall be
made on or before the last day of the Executive’s taxable year following the taxable
year in which the expense was incurred, and (z) the right to these fringe benefits
cannot be liquidated or exchanged for any other benefit; notwithstanding the
preceding, any fringe benefits shall be paid for by the Executive out-of-pocket
during the six-month period following the Executive’s termination of employment by
the Trust except to the extent the fringe benefits are excludible from gross income,
are otherwise deductible as a business expense by the Executive under Section 162 or
167 of the Code, or are medical benefits as described in Treas. Reg. Section
1.409A-1(b)(9)(v)(B) provided during the period of time during which the Executive
would be entitled (or would, but for this Agreement, be entitled)

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to continuation coverage under a group health plan of the
Trust under COBRA if the Executive elected such coverage and paid the applicable
premiums. These out-of–pocket payments shall be reimbursed to the Executive within
30 days following the expiration of the six-month period.

          d. No Mitigation. Executive will not be required to mitigate the amount of any
payment provided for in this paragraph 6 by seeking other employment or otherwise, nor will the
amount of any payment or benefit provided for in this paragraph 6 be reduced by any compensation
earned by him as the result of employment by another employer or by retirement benefits after the
date of termination, or otherwise.

          e. Expiration of this Agreement. In the event the Term of this Agreement expires
without having otherwise been previously terminated pursuant to paragraph 5 above or by the Trust
without cause, Executive will not be entitled to any severance compensation whatsoever under this
paragraph 6.

     7. Indemnification. To the full extent permitted by applicable law, Executive shall
be indemnified and held harmless for any action or failure to act in his capacity as a director,
trustee, officer or employee of the Trust. In furtherance of the foregoing and not by way of
limitation, if Executive is a party or is threatened to be made a party to any suit because he is a
director, trustee, officer or employee of the Trust, he shall be indemnified against expenses,
including attorney’s fees, judgments, fines and amounts paid in settlement if he acted in good
faith and in a manner reasonably believed to be in or not opposed to the best interest of the
Trust, and with respect to any criminal action or proceeding, he had no reasonable cause to believe
his conduct was unlawful. Indemnification under this Section shall be in addition to any other
indemnification by the Trust of its officers and trustees. Expenses incurred by the Executive in
defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to
this Section shall be paid by the Trust in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the Executive to repay such amount in
the event that it shall ultimately be determined that he is not entitled to indemnification by the
Trust. Such undertaking shall be accepted without reference to the financial ability of such
Executive to make repayment. The Trust shall use commercially reasonable efforts to maintain in
effect for the Term of this Agreement a director’ and officers’ liability insurance policy, with a
policy limit of at least $20,000,000, subject to customary exclusions, with respect to claims made
against officers and directors of the Trust; provided, however, the Trust shall be relieved of this
obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment
of the Trust, it cannot be obtained at a reasonable cost.

     8. Arbitration. The parties hereto will endeavor to resolved in good faith any
controversy, disagreement or claim arising between them, whether as to the interpretation,
performance or operation of this Agreement or any rights or obligations hereunder. If they are
unable to do so, any such controversy, disagreement or claim will be submitted to binding
arbitration, for final resolution without appeal, by either party giving written notice to the
other of the existence of a dispute which it desires to have arbitrated. The arbitration will be
conducted in Detroit, Michigan by a panel of three (3) arbitrators and will be held in accordance
with the rules of the American Arbitration Association. Of the tree arbitrators, one will be
selected by the Trust, one will be selected by Executive and the third will be selected by the two

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arbitrators so selected. Each party will notify the other party of the arbitrator selected by him
or it within fifteen (15) days after the giving of the written notice referred to in this paragraph
8. The decision and award of the arbitrators must be in writing and will be final and binding upon
the parties hereto, with the same effect as an arbitration pursuant to Michigan Compiled Laws
Annotated §600.5001. Judgment upon the award may be entered in any court having jurisdiction
thereof, or application may be made to such court for a judicial acceptance of the award and an
order of enforcement, as the case may be. The expenses of arbitration will be borne by the Trust.
Pending a decision by the arbitrators with respect to the dispute or difference undergoing
arbitration, all other obligations of the parties will continue as stipulated herein, and all
monies not directly involved in such dispute or difference will be paid when due.

     9. Miscellaneous.

          a. Executive represents and warrants that he is not a party to any agreement, contract or
understanding, whether employment or otherwise, which would restrict or prohibit him from
undertaking or performing employment in accordance with the terms and conditions of this Agreement.

          b. The provisions of this Agreement are severable and if any one of more provisions may be
determined to be illegal or otherwise, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable in any jurisdiction will remain binding
and enforceable.

          c. The rights and obligations of the Trust under this Agreement inure to the benefit of, and
will be binding on, the Trust and its successors and permitted assigns, and the rights and
obligations (other than obligations to perform services) of Executive under this Agreement will
inure to the benefit of, and will be binding upon, Executive and his heirs, personal
representatives and permitted assigns; provided, however, Executive shall not be entitled
to assign or delegate any of his rights and obligations under this Agreement without the prior
written consent of the Trust; provided, further, that the Trust shall not have the right to
assign or delegate any of its rights or obligations under this Agreement except to a corporation,
partnership or other business entity that is, directly or indirectly, controlled by the Trust.

          d. Any notice to be given under this Agreement will be personally delivered in writing or will
have been deemed duly given when received after it is posted in the United States mail, postage
prepaid, registered or certified, return receipt requested, and if mailed to the Trust, will be
addressed to its principal place of business, attention: Secretary, and if mailed to Executive,
will be addressed to him at his home address last known on the records of the Trust or at such
other address or addresses as either the Trust or Executive may hereafter designate in writing to
the other.

          e. The failure of either party to enforce any provision or provisions of this Agreement will
not in any way be construed as a waiver of any such provision or provisions as to any future
violations thereof, nor prevent that party thereafter from enforcing each and every other provision
of this Agreement. The rights granted the parties herein are cumulative and the waiver of any
single remedy will not constitute a waiver of such party’s right to assert all other legal remedies
available to it under the circumstances.

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          f. This Agreement will be governed by and construed according to the laws of the State of
Michigan.

          g. Captions and paragraph headings used herein are for convenience and are not a part of this
Agreement and will not be used in construing it.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first set
forth above.

	 	 	 	 	 	 	 
	 	 	RAMCO-GERSHENSON PROPERTIES TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard J. Smith
	 	 
	 

	 	 
	 	 
	 	 
	 

	 	 	 	Name: Richard J. Smith	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	/s/ Dennis Gershenson	 	 
	 	 	 	 	
Dennis Gershenson	 	 

8<PAGE>

EXHIBIT 10.1
MBT FINANCIAL CORP. SEVERANCE AGREEMENT WITH SCOTT E. MCKELVEY

May 11, 2007

Mr. Scott McKelvey

Dear Scott:

          I want to take this opportunity to reiterate how important you are as
a senior member of the MBT Financial Corp. and/or its subsidiary Monroe Bank &
Trust (collectively the "Company") management team and to thank you for your
commitment to our success. As you know, we face many opportunities and
challenges as our industry continues to evolve, and this Agreement, which
addresses your entitlement to severance benefits should you separate from the
Company while these terms are in effect, is intended to give you the security to
focus on your contributions as we move forward.

     TERM OF AGREEMENT: This Agreement shall commence on the date hereof and
shall continue in effect until December 31, 2007, and will be automatically
renewed thereafter on an annual basis for successive one-year terms unless the
Company provides you with written notice that the Agreement will not be renewed
("Notice of Non-Renewal") no later than 60 days prior to the expiration of the
then-current term. Notwithstanding the foregoing, in the event a Change in
Control (as defined in Exhibit A) occurs during the then current term, the term
of this Agreement shall not end prior to the first anniversary of such Change in
Control.

     SEPARATION FROM EMPLOYMENT: Your employment with the Company is at-will.
Under certain circumstances, however, you will be entitled to severance benefits
should you separate from employment during the term of this Agreement. The
following provisions govern your compensation and benefits should you separate
from employment during the term of this Agreement.

     QUALIFYING TERMINATION: Should you incur a Qualifying Termination (as
defined below) you will be eligible for the following payments and benefits,
provided that you remain in compliance with your obligations under the terms of
this agreement, including, but not limited to the provisions regarding
non-competition, non-solicitation, and non-disparagement, and the Release (as
defined below). Should you fail to comply with your obligations under this
Agreement or the Release, the Company may, in addition to any other available
remedies, cease making any payment or benefit provided for herein.

     SEPARATION PAYMENT: A separation payment, before applicable deductions,
equal to one (1) times the sum of your base salary as in effect as of your
termination of employment, plus in the event of a Qualifying Termination under
subparagraphs (3) or (4) as set forth in the definition below of Qualifying
Termination, an amount equal to the average annual cash bonuses received by you
during the three year period ending prior to the year in which the Change in
Control occurs (the "Separation Payment").

     The Separation Payment shall be paid as follows: 50% of the Separation
Payment shall be paid to you within ten business days of your execution of the
Release, with the remaining 50% to be paid in equal installments, without
interest, commencing on the Company's second regularly scheduled payroll
following your execution of the Release and ending with the Company's regularly
scheduled payroll one year later (the "Separation Pay Period"). In the event of
a change in payroll practice during the Separation Pay Period, the Company may
adjust the amounts of such installments as necessary to ensure that the total
amount paid is equal to the Separation Payment, as defined above.
Notwithstanding the foregoing, in the event of a Qualifying Termination within
one year following a Change in Control, the Separation Payment shall be paid in
a single lump sum within 10 days following the effective date of the Qualifying
Termination.

     HEALTH BENEFIT CONTINUATION: The Company will pay the COBRA premiums for
continuation of healthcare benefits for you and your eligible dependents for so
long as you are otherwise eligible for such coverage during the 12-month period
following a Qualifying Termination. You will be responsible for all other costs,
such as co-payments and deductibles.

     ADDITIONAL RESTRICTION ON DISTRIBUTIONS TO KEY EMPLOYEES: Notwithstanding
the provisions of this agreement providing for payment of benefits, if at the
time a benefit would otherwise be payable, you are a "specified employee" [as
defined below], and the payment provided for would be deferred compensation
within the meaning of the Internal Revenue Code (the "Code"), section 409A, the
distribution of your benefit may not be made until six months after the date of
the your separation from service with the Company [as that term may be defined
in Section 409A(a)(2)(A)(i) of the Code and regulations promulgated thereunder],
or, if earlier the date of your death. This requirement shall remain in effect
only for periods in which the stock of the Company is publicly traded on an
established securities market.

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          For purposes of this subparagraph a "specified employee" shall mean
any employee of the Company who is a "key employee" of the Company within the
meaning of Code section 416(i). This shall include any employee who is (i) a
5-percent owner of the Company's common stock, or (ii) an officer of the Company
with annual compensation from the Company of $130,000.00 or more, or (iii) a
1-percent owner of Company's common stock with annual compensation from the
Company of $150,000.00 or more (or such higher annual limit as may be in effect
for years subsequent to 2005 pursuant to indexing section 416(i) of the Code).

          The provisions of this subparagraph have been adopted only in order to
comply with the requirements added by Code section 409A. These provisions shall
be interpreted and administered in a manner consistent with the requirements of
Code section 409A, together with any regulations or other guidance which may be
published by the Treasury Department or Internal Revenue Service interpreting
such Code section 409A.

     DEFINITION OF QUALIFYING TERMINATION: For purposes of this Agreement, a
Qualifying Termination shall mean any of the following:

(1) Involuntary termination of your employment without Cause. For purposes of
this Agreement, Cause shall mean and be limited to your (a) criminal dishonesty,
(b) refusal to perform your duties on an exclusive and substantially full-time
basis, (c) refusal to act in accordance with any specific substantive
instructions given by the Company with respect to your performance of duties
normally associated with your position prior to the Change in Control, or (d)
engaging in conduct which could be materially damaging to the Company without a
reasonable good faith belief that such conduct was in the best interest of the
Company.

(2) Resignation within 90 days of the occurrence (prior to a Change of Control)
of an event constituting Good Reason, which, for purposes of this Agreement,
shall mean: (a) a material reduction in your job responsibilities, duties,
and/or status within the Company, (b) a reduction in your base salary, unless
such reduction is part of an across-the-board reduction in base salary of all
officers of the Company, or (c) receipt of a Notice of Non-Renewal.
Notwithstanding the foregoing, you will not be eligible for a Separation Payment
unless you provide the Board of Directors with 60 days written notice of your
intent to resign for Good Reason, containing details regarding the grounds for
your resignation, and allow the Board of Directors to take action to remove or
correct the Good Reason within 30 days. If the Board of Directors fails to take
action to remove or correct the Good Reason within 30 days of receiving notice
of same, your resignation for Good Reason shall become effective.

(3) Involuntary termination of your employment by the Company for any reason
within one year following a Change in Control.

(4) Your resignation, within one year following a Change in Control, by reason
of any of the following events which occurs on or after a Change in Control: (a)
a material reduction in your job responsibilities, duties and/or status from
that which existed immediately prior to the Change in Control, (b) a reduction
in your base salary, or (c) receipt of a Notice of Non-Renewal.

          You will not be deemed to have incurred a Qualifying Termination
unless you execute, within 30 days of your separation, a release of claims in a
form substantially similar to the form attached as Exhibit B hereto (the
"Release"). Under no circumstances will your resignation or termination from
employment as a result of Disability (as defined below) or death constitute a
Qualifying Termination.

          INVOLUNTARY TERMINATION FOR CAUSE/RESIGNATION NOT CONSTITUTING A
QUALIFYING TERMINATION: If you are involuntarily terminated for Cause or resign
your employment (other than a resignation constituting a Qualifying
Termination), you will not be entitled to any severance payment under this
Agreement. The Company will have no other obligations under this Agreement, and
all compensation and benefits will be determined by the terms of the governing
plan or program.

          EXCISE TAX ROLLBACK: In the event the payments required under this
Agreement, when added together with any other amounts required to be included by
you under the provisions of the Internal Revenue Code of 1986, as amended,
result in an "Excess Parachute Payment," as that term is defined in Section 280G
of the Code, then the amount of the payments provided for in this agreement will
be reduced in an amount which eliminates any and all excise tax to be imposed
under Section 4999 (or any successor thereto) of the Code.

     COVENANTS: In your role with the Company (which, for purposes of these
Covenants includes the Company, its subsidiaries, affiliates, related entities,
and successors), you will have access to confidential and proprietary
information, and your access to such information is intrinsic to, and essential
to the success of, your employment by the Company. In consideration of your
access to such information, your continuing employment with the Company, and the
payments and benefits provided for under this Agreement, you agree to the
following Covenants, which you

<PAGE>

agree are reasonable and necessary for the protection of the Company's
legitimate business interests, including, but not limited to, goodwill and
information which is confidential and proprietary to the Company.

A.   Noncompetition Agreement and Nonsolicitation Agreement

1. In view of your importance to the success of the Company, you and the Company
agree that the Company would likely suffer significant harm from your competing
with Company during your term of employment with Company and for some period of
time thereafter. Accordingly, you agree that you will not engage in competitive
activities while employed by Company and during the Restricted Period. You will
be deemed to engage in competitive activities if you, without the prior written
consent of the Company, (i) in Monroe County, Michigan and counties contiguous
thereto (including the municipalities therein), render services directly or
indirectly, as an employee, officer, director, consultant, advisor, partner or
otherwise, for any organization or enterprise which competes directly or
indirectly with the business of the Company or any of its affiliates in
providing financial products or services (including, without limitation,
banking, insurance, or securities products or services) to consumers and
businesses, or (ii) directly or indirectly acquire any financial or beneficial
interest in (except as provided in the next sentence) any organization which
conducts or is otherwise engaged in a business or enterprise in Monroe County,
Michigan, and counties contiguous thereto (including all municipalities therein)
which competes directly or indirectly with the business of Company or any of its
affiliates in providing financial products or services (including, without
limitation, banking, insurance or securities products or services) to consumers
and businesses. Notwithstanding the preceding sentence, you will not be
prohibited from owning less than 1 percent of any publicly traded corporation,
whether or not such corporation is in competition with the Company. For purposes
hereof the term "Restricted Period" will equal one year, commencing as of the
date of your termination of employment.

2. While employed by the Company and for a period of one (1) year following your
termination of employment with the Company, you agree that you will not, in any
manner, directly or indirectly, (i) solicit by mail, by telephone, by personal
meeting, or by any other means, either directly or indirectly, any customer or
prospective customer of the Company to whom you provided services, or for whom
you transacted business, or whose identity became known to you in connection
with your services to the Company (including employment with or services to any
predecessor or successor entities), to transact business with a person or an
entity other than the Company or its affiliates or reduce or refrain from doing
any business with the Company or its affiliates or (ii) interfere with or damage
(or attempt to interfere with or damage) any relationship between the Company or
its affiliates and any such customer or prospective customer. The term "solicit"
as used in this Agreement means any communication of any kind whatsoever,
inviting, encouraging or requesting any person to take or refrain from taking
any action with respect to the business of the Company and its subsidiaries.

3. While employed by Company and for a period of one (1) year following your
termination of employment with the Company, you agree that you will not, in any
manner, directly or indirectly, solicit any person who is an employee of the
Company or any of its affiliates to apply for or accept employment or a business
opportunity with any other person or entity.

4. The Company and you agree that nothing herein will be construed to limit or
negate the common law of torts or trade secrets where it provides broader
protection than that provided herein.

B.   Confidential Information

You have obtained and may obtain confidential information concerning the
businesses, operations, financial affairs, organizational and personnel matters,
policies, procedures and other non-public matters of the Company and its
affiliates, and those of third-parties that is not generally disclosed to
persons not employed by the Company or its subsidiaries. Such information
(referred to herein as the "Confidential Information") may have been or may be
provided in written form or orally. You will not disclose to any other person
the Confidential Information at any time during your employment with the Company
or after the termination of your employment, provided that you may disclose such
Confidential Information only to a person who is then a director, officer,
employee, partner, attorney or agent of the Company who, in your reasonable good
faith judgment, has a need to know the Confidential Information.

C.   Remedies

1. You acknowledge that a violation on your part of the Covenants section of
this agreement would cause immeasurable and irreparable damage to the Company.
Accordingly, you agree that notwithstanding the agreement of the parties to
arbitrate disputes arising under the terms of this agreement, the Company will
be entitled to injunctive relief in any court of competent jurisdiction for any
actual or threatened violation of any of the provisions of the Covenants
sections of this agreement, in addition to any other remedies it may have.

2. In addition to the Company's right to seek injunctive relief as set forth
above, in the event that you violate the terms and conditions of the Covenants
sections of this agreement, the Company may: (i) make a general claim for
damages and (ii) terminate any payments or benefits payable by Company, if
applicable, to you.

<PAGE>

3. The Board will be responsible for determining whether you have violated the
Covenants sections of this agreement, and in the absence of your ability to show
that the Board has acted in bad faith and without fair dealing, such decision
will be final and binding. Upon your request, the Company will provide an
advance opinion as to whether a proposed activity would violate the provisions
of this Agreement.

     ARBITRATION: Except for claims by the Company arising out of your alleged
breach of obligations under the Covenants section of this Agreement, all
disputes arising out of or relating to this Agreement or to your employment or
the termination thereof, will be resolved by final and binding arbitration in
Monroe, Michigan, under the Federal Arbitration Act in accordance with the
Employment Dispute Resolution Rules then in effect with the American Arbitration
Association. This paragraph will apply both during and after termination of the
employment relationship. Either party will have the right to enforce this
agreement to arbitrate in either federal or state court.

     All proceedings and documents prepared in connection with any arbitration
under this Agreement will be Confidential Information and, unless otherwise
required by law, the contents or subject matter thereof will not be disclosed to
any person other than the parties to the proceedings, their counsel, witnesses
and experts, the arbitrator, and, if court enforcement of an arbitration award
is sought, the court and court staff hearing such matter.

     Should a dispute under this Agreement be submitted to arbitration and you
prevail in that arbitration, you will be entitled to recover your reasonable
expenses you incurred in connection with that arbitration, including but not
limited to attorneys' fees and arbitrators' fees, from the Company. Should the
Company prevail, each party will pay its own costs. Notwithstanding the
foregoing, the Company will promptly pay or reimburse you for all reasonable
legal fees incurred by you in seeking in good faith to obtain or enforce any
benefit or right provided by this Agreement relating to the termination of your
employment within one year following a Change in Control.

     IMPACT ON OTHER COMPENSATION AND BENEFIT PROGRAMS: There will be no
duplication between payments made under this Agreement and any payment or
benefit under any other plan, program, agreement, or arrangement. Except as
otherwise specifically provided for herein, payments under this Agreement will
not be considered compensation for purposes of any compensation, deferred
compensation, insurance, pension, savings, or other benefit plan.

     CONTROLLING LAW: Except where otherwise provided for herein, this Agreement
will be governed in all respects by the laws of the State of Michigan, excluding
any conflict-of-law rule or principle that might refer the construction of the
Agreement to the laws of another State or country.

     NOTICES: Any notices under this agreement that are required to be given to
the Company will be addressed to Corporate Secretary, MBT Financial Corp., 102
E. Front Street, Monroe, Michigan 48161, and any notices required to be given to
you will be sent to your address as shown in the Company's records.

     SEPARABILITY AND CONSTRUCTION: If any provision of this Agreement is
determined to be invalid, unenforceable, or unlawful by an arbitrator or a court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect, and the provisions that are determined to be invalid,
unenforceable, or unlawful will either be limited so that they will remain in
effect to the extent permissible by law or such arbitrator or court will
substitute, to the extent enforceable, provisions similar thereto or other
provision so as to provide, to the fullest extent allowed by law, the benefits
intended by this Agreement.

     WAIVER OF BREACH: No failure by any party to give notice of any breach of,
or to require compliance with, any condition or provision of this Agreement will
be deemed a waiver or relinquishment of that party's rights, and no waiver or
relinquishment of rights by any party at any one or more times will be deemed to
be a waiver or relinquishment of such right or power at any other time or times.

     ENTIRE AGREEMENT: This Agreement, together with the plan documents referred
to herein, as amended from time to time, will constitute the entire
understanding relating to the severance benefits for which you are eligible upon
your separation from employment with the Company, and any previous severance
agreements (or other agreements providing for severance benefits, to the extent
that they provide for severance benefits), whether written or oral, between you
and the Company will be deemed to be revoked and canceled for all purposes as of
the date of this Agreement. There will be no duplication between payments made
pursuant to this Agreement and payments made under any other plan, program,
arrangement, or agreement.

     MODIFICATION IN WRITING: No addition to, or modification of, this Agreement
will be effective, unless it is in writing and signed by both you and an
authorized representative of the Company.

     I hope that this Agreement provides you with the level of security and
incentive that will allow you to continue as a leader at the Company to the best
of your abilities. Please sign below and return an executed original to indicate
your acceptance of these terms.

Sincerely,

/s/ H. Douglas Chaffin
-------------------------------------
H. Douglas Chaffin
President & Chief Executive Officer
MBT Financial Corp.

<PAGE>

I have read, understand, and agree to the foregoing terms and conditions.

/s/ Scott E. McKelvey                   May 16, 2007
-------------------------------------   Date
Scott E. McKelvey
Executive Vice President &
Senior Wealth Management Officer

Exhibit A
Change in Control Definition

A "Change in Control" shall mean a "Change in Ownership" as defined in (a)
hereof; a "Change in Effective Control" as defined in (b), hereof; or a "Change
in Ownership of a Substantial Portion of Assets" as defined in (c) hereof.

(a) Change in Ownership. For purposes of this Agreement, a change in the
ownership of the Company occurs on the date that any one person, or more than
one person acting as a group (as defined in subsection (d) hereof), acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50 percent of the total fair market value or
total voting power of the stock of the Company. However, if any one person, or
more than one person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same person or persons is
not considered to cause a change in the ownership of the Company (or to cause a
change in the effective control of the Company within the meaning of subsection
(b) hereof). An increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the Company
acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes of this section.

(b) Change in the Effective Control. For purposes of this Agreement, a change in
the effective control of the Company occurs on the date that either -

     (i) Any one person, or more than one person acting as a group (as
     determined under subsection (d) hereof), acquires (or has acquired during
     the 12 month period ending on the date of the most recent acquisition by
     such person or persons) ownership of stock of the Company possessing 35
     percent or more of the total voting power of the stock of the Company; or

     (ii) a majority of members of the Company's board of directors is replaced
     during any 12 month period by directors whose appointment or election is
     not endorsed by a majority of the members of the Company's board of
     directors prior to the date of the appointment or election.

In the absence of an event described in subsection (b)(i) or (ii) above, a
change in the effective control of a Company will not have occurred.

(c) Change in the Ownership of a Substantial Portion of the Company's Assets.
For purposes of this Agreement, a change in the ownership of a substantial
portion of the Company's assets occurs on the date that any one person, or more
than one person acting as a group (as determined in subsection(d) hereof),
acquires (or has acquired during the 12 month period ending on the date of the
most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 40 percent of the
total gross fair market value of all of the assets of the Company immediately
prior to such acquisition or acquisitions. For this purpose, gross fair market
value means the value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.

There is no Change in Control Event under this subsection (c) when there is a
transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer, as provided in this paragraph. A transfer of
assets by the Company is not treated as a change in the ownership of such assets
if the assets are transferred to --

     (i) A shareholder of the Company (immediately before the asset transfer) in
     exchange for or with respect to its stock;

<PAGE>

     (ii) An entity, 50 percent or more of the total value or voting power of
     which is owned, directly or indirectly, by the Company;

     (iii) A person, or more than one person acting as a group, that owns,
     directly or indirectly, 50 percent or more of the total value or voting
     power of all the outstanding stock of the Company; or

     (iv) An entity, at least 50 percent of the total value or voting power of
     which is owned, directly or indirectly, by a person described in section
     (iii) above.

For purposes of this subsection (c) and except as otherwise provided, a person's
status is determined immediately after the transfer of the assets. For example,
a transfer to a corporation in which the transferor corporation has no ownership
interest before the transaction, but which is a majority-owned subsidiary of the
transferor corporation after the transaction is not treated as a change in the
ownership of the assets of the transferor corporation.

(d) Persons Acting as a Group. Persons will not be considered to be acting as a
group solely because they purchase assets or purchase or own stock of the same
corporation at the same time, or as a result of the same public offering.
However, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, purchase or acquisition of assets, or similar business
transaction with the Company. If a person, including an entity shareholder, owns
stock in both corporations that enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation only to the extent
of the ownership in that corporation prior to the transaction giving rise to the
change and not with the ownership interest in the other corporation.

Exhibit B
Release of Claims

     I acknowledge that I have had twenty-one days to decide whether to execute
this Release of Claims ("Release") and that I have been advised in writing to
consult an attorney before executing this Release. I acknowledge that I have
seven days from the date I execute this Release to revoke my signature. I
understand that if I choose to revoke this Release I must deliver my written
revocation to the Company before the end of the seven-day period.

     I, for myself, my heirs, successors, and assigns do hereby settle, waive,
and release the Company ("the Company") and any of its past and present
officers, owners, stockholders, partners, directors, agents, employees,
successors, predecessors, assigns, representatives, attorneys, divisions,
subsidiaries, or affiliates from any and all claims, charges, complaints,
rights, demands, actions, and causes of action of any kind or character, in
contract, tort, or otherwise, based on actions or omissions occurring in the
past and/or present, and regardless of whether known or unknown to me at this
time, including those not specifically mentioned in this Release. Among the
rights, claims, and causes of action which I give up under this Release are
those arising in connection with my employment and the termination of my
employment, including rights or claims under federal, state and local fair
employment practice or discrimination laws (including the various Civil Rights
Acts, the Age Discrimination in Employment Act, the Equal Pay Act, and any
similar state laws of the State of Michigan), laws pertaining to breach of
employment contract, wrongful termination or other wrongful treatment, and any
other laws or rights relating to my employment with the Company and the
termination of that employment. I acknowledge that I am aware of my rights under
the Age Discrimination in Employment Act, and that I am knowingly and
voluntarily waiving and releasing any claim of age discrimination which I may
have under that statute as part of this Release. This agreement does not waive
or release any rights, claims, or causes of action that may arise from acts or
omissions occurring after the date I execute this Release, nor does this
agreement waive or release any rights, claims or causes of action relating to
(A) indemnification from the Company and its affiliates with respect to my
activities on behalf of the Company and its affiliates prior to my termination
of employment, (B) compensation or benefits to which I am entitled under any
compensation or benefit plans of the Company or its affiliates or (C) amounts to
which I am entitled pursuant to the Agreement to which a form of this Release of
Claims was attached as Exhibit B. Except as contemplated by the preceding
sentence, I agree not to bring or join any lawsuit or file any claim against the
Company in any court relating to my employment or the termination of my
employment.

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