Preview | Executive Deferred Compensation Agreement |

Executive Deferred Compensation Agreement

The Middlefield Banking Company
Executive Deferred Compensation Agreement

This Executive Deferred Compensation Agreement (this Agreement) is entered into as of this 28th day of December, 2006, by and between The Middlefield Banking Company, an Ohio-chartered bank (the Bank), and James R. Heslop II, Executive Vice President and Chief Operating Officer of the Bank (the Executive).

Whereas, the Executive has contributed substantially to the success of the Bank and Middlefield Banc Corp, an Ohio corporation of which the Bank is a wholly owned subsidiary, and the Bank desires that the Executive remain in its employ,

Whereas, to encourage the Executive to remain an employee of the Bank, the Bank desires to establish a noncontributory, defined contribution arrangement to provide a supplemental retirement income opportunity for the Executive, with contributions made solely by the Bank and benefits payable out of the Banks general assets,

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 the Bank, is contemplated insofar as the Bank is concerned, and

Whereas, the parties hereto intend that this Agreement shall be considered an unfunded and noncontributory arrangement maintained primarily to provide supplemental retirement benefits for the Executive, and to be considered a non-qualified benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Executive is fully advised of the Banks financial status.

Now Therefore, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the 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 Account Balance means the Banks accounting of Contributions made by the Bank, plus accrued interest.

1.2 Annual Contribution means the amount credited to the Account Balance after the end of each Plan Year for which the Performance Goals are achieved. For the first Plan Year, the Executive will receive an Annual Contribution amount equal to 5% of the Executives Base Annual Salary. For every Plan Year after the first Plan Year, the Annual Contribution will

be conditional on achievement of the Performance Goals. The Annual Contribution amount in any Plan Year shall not be less than 5% or more than 15% of the Executives Base Annual Salary. In its discretion, the Banks board of directors may increase or decrease the amount of the Annual Contribution, but the Annual Contribution amount shall be changed no more frequently than annually.

1.3 Base Annual Salary means compensation of the type that would be required to be reported according to Securities and Exchange Commission Rule 229.402(b) (17 CFR 229.402(b)), specifically column (c) of that rules Summary Compensation Table (or any successor provision).

1.4 Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined according to Article 5.

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

1.6 Change in Control shall mean any one of the following events occurs, provided the event constitutes a change in control within the meaning of Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, and provided the occurrence of the event is objectively determinable and does not require the exercise of judgment or discretion on the part of the Plan Administrator or any other person

(a) Change in Ownership: a change in ownership of Middlefield Banc Corp occurs on the date any one person or group accumulates ownership of Middlefield Banc Corps stock constituting more than 50% of the total fair market value or total voting power of Middlefield Banc Corps stock,

(b) Change in Effective Control: (1) any one person, or more than one person acting as a group, acquires within a 12-month period ownership of stock of Middlefield Banc Corp possessing 35% or more of the total voting power of Middlefield Banc Corps stock, or (2) a majority of Middlefield Banc Corps board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of Middlefield Banc Corps board of directors, or

(c) Change in Ownership of a Substantial Portion of Assets: a change in the ownership of a substantial portion of Middlefield Banc Corps assets occurs on the date any one person, or more than one person acting as a group, acquires assets from Middlefield Banc Corp having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the assets of Middlefield Banc Corp immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of Middlefield Banc Corps

End of Preview

Home Intelligence Services Subscriptions News About Us