The Middlefield Banking Company

                          Director Retirement Agreement



     This Agreement is made as of December 1, 2001, by and between The

Middlefield Banking Company, an Ohio-chartered bank located in Middlefield, Ohio

("Middlefield Bank") and Frances Frank (the "Director").



     To encourage the Director to remain a member of Middlefield Bank's board of

directors, Middlefield Bank is willing to provide retirement benefits to the

Director. Middlefield Bank will pay the benefits from its general assets. 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 Bank, is contemplated insofar as

Middlefield Bank is concerned.



                                    Agreement



     In consideration of the foregoing premises and other good and valuable

consideration, the receipt and acceptance of which are hereby acknowledged, the

Director and Middlefield Bank hereby agree as follows:



                                    Article 1

                                   Definitions



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

the meanings specified:



     1.1 "Accrual Balance" means the amount reflected in Schedule A of this

Agreement, which is the amount required by generally accepted accounting

principles to be accrued by Middlefield Bank to account for benefits that may

become payable to the Director under this Agreement.



     1.2 "Change in Control" means that any of the following events occur:



          (a) Middlefield Banc Corp., the parent company of Middlefield Bank,

     merges into or consolidates with another corporation, or merges another

     corporation into Middlefield Banc Corp., 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 Banc Corp.'s voting securities immediately

     before the merger or consolidation, or



          (b) 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 Banc Corp.'s voting securities (but this clause (b) shall not

     apply to beneficial ownership of voting shares held by Middlefield Bank or

     another subsidiary of Middlefield Banc Corp. in a fiduciary capacity), or



          (c) during any period of two consecutive years, individuals who

     constitute Middlefield Banc Corp.'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 (c) -- 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 ( ) 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



          (d) Middlefield Banc Corp. sells to a third party substantially all of

     Middlefield Banc Corp.'s assets. For purposes of this Agreement, sale of

     substantially all of Middlefield Banc Corp.'s assets includes sale of

     Middlefield Bank.



     1.3 "Code" means the Internal Revenue Code of 1986, as amended.

<PAGE>



     1.4 "Disability" means, if the Director is covered by a Company-sponsored

disability policy, total disability as defined in such policy, without regard to

any waiting period. If the Director is not covered by such a policy, Disability

means the Director suffers a sickness, accident or injury that -- in the

judgment of a physician satisfactory to Middlefield Bank -- prevents the

Director from performing substantially all of the Director's normal duties for

Middlefield Bank. As a condition to receiving any Disability benefits,

Middlefield Bank may require the Director to submit to such physical or mental

evaluations and tests as Middlefield Bank's board of directors deems

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