EXHIBIT 10.3
MBT FINANCIAL CORPORATION
RESTRICTED SHARE UNIT AGREEMENT
RESTRICTED SHARE UNIT AGREEMENT (the "Agreement") made as of the ____ day of
_______, ____ (the "Grant Date"), between MBT Financial Corporation, a Michigan
corporation ("MBT"), and __________________ (the "Participant").
RECITALS
A. Employee is employed by MBT or a Subsidiary in a position MBT deems to be a
key position.
B. MBT's Board of Directors adopted the MBT Financial Corp. 2008 Stock
Incentive Plan (the "Plan") effective May 1, 2008.
C. MBT desires to award restricted share units ("RSUs") to Employee under the
Plan subject to the terms and conditions of the Plan and this Agreement as
set forth below.
D. Capitalized terms used but not defined herein shall have the meaning
defined for them in the Plan.
AGREEMENT
Now, therefore, intending to be legally bound and in consideration of the mutual
covenants set forth herein, the parties hereto agree as follows:
1. GRANT OF PERFORMANCE RESTRICTED SHARE UNITS: MBT hereby grants to the
Participant as of the date hereof (the "Grant Date") an aggregate of
________ RSUs. Each RSU shall be equivalent to one Common Share of
MBT. The grant is in all respects limited and conditioned as
hereinafter provided, and is subject to the terms and conditions of
the Plan now in effect as they may be amended from time to.
2. PERFORMANCE PERIOD: The Performance Period for the RSUs awarded herein
shall be the three year period beginning _____________ and ending
____________________.
3. PERFORMANCE SCHEDULE AND VESTING OF RSUS: RSUs awarded shall vest as
of the last day of the Performance Period in accordance with the
following Performance Schedule based on MBT's three-year cumulative
fully diluted earnings per share ("EPS") computed under Generally
Accepted Accounting Principles (GAAP) during the Performance Period.
The Compensation Committee of the Board of Directors reserves the
right to adjust the EPS presented in the annual report for
extraordinary transactions which impact EPS to ensure the pay for
performance relationship. No RSUs will be considered vested and earned
for payment if MBT's three-year cumulative EPS during the Performance
Period is less than $_.___.
Annual EPS Three-Year Cumulative Percent
Growth Rate During Fully Diluted EPS for RSUs
Performance Period the Performance Period Vested
- ------------------ ---------------------- -------
- --% $-- 100%
- --% $-- 90%
- --%(1) $-- 80%
- --% $-- 70%
- --% $-- 60%
- --% $-- 50%
(1) Target annual EPS growth rate. At this level of performance competitive
target level of long-term compensation will be achieved.
Participant must be actively employed by MBT as of the end of the
Performance Period to be eligible to vest in and receive any payment
of RSUs except as noted in Section 7 of this Agreement. Actual vested
percentage rates will be interpolated from the above Performance
Schedule using the actual three-year cumulative fully diluted
cumulative EPS achieved at the end of the Performance Period.
4. DIVIDEND EQUIVALENTS: If any dividends are paid with respect to
Commons Shares of MBT during the Performance Period, MBT will accrue
dividend equivalents on the RSUs awarded under this agreement and
annually credit each Participant's account in the form of additional
RSUs. The amount of additional RSUs will be calculated based on the
accumulated dividend payments made on MBT Common shares during the
calendar year and the Fair Market Value of MBT Common Shares as of the
last day of each calendar year of the Performance Period. Dividend
equivalents accrued in the form of additional RSUs shall vest in
accordance with the Performance Schedule defined in this Agreement.
5. PAYMENT OF EARNED RSUS: Vested RSUs rounded up to the nearest whole
unit shall be converted to Common Shares as of the last day of the
Performance Period. Stock certificates (the "Certificate") evidencing
the conversion of RSUs into Common Shares shall be issued as of the
last day of the Performance Period and registered in the Participant's
name. Subject to Section 6 of this Agreement, Certificates
representing the unrestricted shares of MBT Common Shares will be
delivered to the Participant as soon as practicable after the last day
of the Performance Period. RSUs which do not vest as of the last day
of the Performance Period will be forfeited.
6. TAX WITHHOLDING OBLIGATIONS. As a condition of delivery of Common
Shares pursuant to Section 5 of this Agreement, Participant shall be
required to deposit with MBT an amount of cash equal to the amount
determined by MBT to satisfy any federal, state and local tax
withholding requirements. In lieu of a cash payment, Participant shall
have the discretion, by making the election provided in Section XI (b)
of the Plan, and subject to the terms and limitations of Section XI
(b) of the Plan, to have MBT withhold Common Shares upon settlement of
the RSU award, or to deliver previously owned Common Shares upon the
settlement of the RSU award, to pay a required tax withholding amount.
7. TERMINATION AND FORFEITURE OF RSUS: The Participant's right to receive
unvested RSUs shall terminate in whole and forfeit upon termination of
employment with MBT or its subsidiaries for any reason, except in the
event of Participant's death, Permanent Disability or Retirement. If
the Participant's termination with MBT meets one of the listed
exceptions, then the Participant's unvested RSUs will remain subject
to the Performance Schedule during the Performance Period provided in
this Agreement and the number of RSUs subject to vesting at the end of
the Performance Period will be reduced proportionate to the number of
months rounded to the nearest whole month the Participant was actively
employed during the Performance Period.
8. EARLY VESTING UPON CHANGE IN CONTROL: Notwithstanding the other
vesting provisions of section 3, upon the effective date of a Change
in Control as defined under the MBT Financial Corp. 2008 Stock
Incentive Plan, all of the RSUs granted under this agreement shall
become immediately and unconditionally vested.
9. NONCOMPETITION, NONSOLICITATION AND BUSINESS PROTECTION.
A. Noncompetition Agreement and Nonsolicitation.
1. In view of Participant's importance to the success of MBT,
Participant and MBT agree that MBT would likely suffer
significant harm from Participant's competing with MBT or a
Subsidiary during Participant's term of employment with MBT
or a Subsidiary and for some period of time thereafter.
Accordingly, Participant agrees that Participant shall not
engage in competitive activities while employed by MBT or a
Subsidiary and during the Restricted Period. Participant
shall be deemed to engage in competitive activities if he
shall, without the prior written consent of MBT, render
services directly or indirectly, as an Participant, officer,
director, consultant, advisor, partner or otherwise, for any
organization or enterprise which competes directly or
indirectly with the business of MBT or any Subsidiary in
providing financial products or services (including, without
limitation, banking, insurance, or securities products or
services) to consumers and businesses, or directly or
indirectly acquires 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 which competes directly or indirectly with the
business of MBT or any Subsidiary in providing financial
products or services (including, without limitation,
banking, insurance or securities products or services) to
consumers and businesses. Notwithstanding the preceding
sentence, Participant shall not be prohibited from owning
less than 1 percent of any publicly traded corporation,
whether or not such corporation is in competition with MBT
or a Subsidiary. For purposes of this Section 9 the term
"Restricted Period" shall be the period of one year
following termination for any reason of Participant's
employment with MBT or a Subsidiary.
During the Participant's employment by MBT or a Subsidiary,
the covenants contained in this Section 9.A.1. shall apply
without regard to geographic location. Following the
termination of Participant's employment and during the
Restricted Period, the covenants contained in this Section
9.A.1. shall be limited to those counties in which MBT or a
Subsidiary has branch banking or other offices, and all
contiguous counties to any such county.
2. While employed by MBT or a Subsidiary and during the
Restricted Period, Participant agrees that Participant shall
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 MBT or a Subsidiary to whom
Participant provided services, or for whom Participant
transacted business, or whose identity becomes known to
Participant in connection with Participant's services to MBT
or a Subsidiary (including employment with or services to
any predecessor or successor entities), to transact business
with a person or an entity other than MBT or a Subsidiary or
to refuse or refrain from doing any business with MBT or a
Subsidiary or (ii) interfere with or damage (or attempt to
interfere with or damage) any relationship between MBT or a
Subsidiary 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 MBT or a Subsidiary.
3. While employed by MBT or a Subsidiary and during the
Restricted Period, Participant agrees that Participant shall
not, in any manner, directly or indirectly, solicit any
person who is a Participant of MBT or any Subsidiary to
apply for or accept employment or a business opportunity
with any other person or entity.
4. The parties agree that nothing herein shall 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.
Participant has obtained and may obtain confidential information
concerning the businesses, operations, financial affairs,
organizational and personnel matters, policies, procedures and
other non-public matters of MBT and its Subsidiaries, and those
of third parties that is not generally disclosed to persons not
employed by MBT or its Subsidiaries. Such information (referred
to herein as the "Confidential Information") may have been or may
be provided in written form or orally. Participant shall not
disclose to any other person the Confidential Information at any
time during his employment with MBT or a Subsidiary or after the
termination of his employment, provided that Participant may
disclose such Confidential Information only to a person who is
then a director, officer, Participant, partner, attorney or agent
of MBT or a Subsidiary who, in Participant's reasonable good
faith judgment, has a need to know the Confidential Information.
C. Effect of Breach; MBT's Remedies
1. The RSUs awarded under this Agreement shall terminate
immediately upon Participant's breach of any of
Participant's obligations set forth in this Section 9.
2. Participant acknowledges that the award of the RSU
constitutes valuable consideration to Participant and that a
violation on Participant's part of this Section 9 would
cause immeasurable and irreparable damage to MBT.
Accordingly, Participant agrees that MBT shall be entitled
to injunctive relief in any court of competent jurisdiction
for any actual or threatened violation of any of the
provisions of this Section 8, in addition to any other
remedies it may have.
3. In addition to MBT's right to seek injunctive relief as set
forth in subsection 2 above of this Section 9.C., in the
event that Participant shall violate the terms and
conditions of this Section 9, MBT may: (i) make a general
claim for damages and (ii) terminate any payments or
benefits payable by MBT, if applicable, to Participant.
4. The Board shall be responsible for determining whether
Participant shall have violated this Section 9, and in the
absence of Participant's ability to show that the Board has
acted in bad faith and without fair dealing; such decision
will be final and binding. Upon the request of Participant,
MBT shall provide an advance opinion as to whether a
proposed activity would violate the provisions of Section 9
of this RSU Agreement.
10. RESTRICTION ON TRANSFERABILITY. Until the RSUs are vested as provided
above, they may not be sold, transferred, pledged, assigned, or
otherwise alienated at any time. Any attempt to do so contrary to the
provisions hereof shall be null and void.
11. RIGHTS AS SHAREHOLDER. The Participant shall not have voting or any
other rights as a shareholder of MBT with respect to the RSUs. Upon
settlement of the RSUs into Common Shares, the Participant will obtain
full voting and other rights as a shareholder of MBT.
12. ADMINISTRATION. The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the
administration, interpretation, and application of the Plan as are
consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the
Committee shall be final and binding upon the Participant, MBT, and
all other interested persons. No member of the Committee shall be
personally liable for any action, determination, or interpretation
made in good faith with respect to the Plan or this Agreement.
13. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the RSUs granted
pursuant to this Agreement shall not be included as compensation,
earnings, salaries, or other similar terms used when calculating the
Participant's benefits under any employee benefit plan sponsored by
the MBT or any subsidiary except as such plan otherwise expressly
provides.
14. NO EMPLOYMENT RIGHTS. The award of RSUs pursuant to this Agreement
shall not give the Participant any right to remain employed by MBT or
a subsidiary.
15. SEVERABILITY. Any Section of this Agreement (or part of such a
Section) so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while
remaining lawful and valid.
16. CONSTRUCTION. The RSUs are being issued pursuant to Section 8 (Stock
Awards) of the Plan and are subject to the terms of the Plan. A copy
of the Plan has been given to the Participant, and additional copies
of the Plan are available upon request during normal business hours at
the principal executive offices of MBT. To the extent that any
provision of this Agreement violates or is inconsistent with an
express provision of the Plan, the Plan provision shall govern and any
inconsistent provision in this Agreement shall be of no force or
effect.
17. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all
prior agreements and understandings, whether written or oral.
This Agreement may only be amended in writing signed by the
parties hereto.
(b) The Board may terminate, amend, or modify the Plan; provided,
however, that no such termination, amendment, or modification of
the Plan may in any way adversely affect the Participant's rights
under this Agreement, without the Participant's written approval.
(b) This Agreement shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required. If
all or any part of this Agreement or the Plan is declared by any
court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not invalidate any portion of
this Agreement or the Plan not declared to be unlawful or
invalid.
(c) All obligations of MBT under the Plan and this Agreement, with
respect to the PSUs, shall be binding on any successor to MBT,
whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of MBT.
(d) To the extent not preempted by federal law, this Agreement shall
be governed by, and construed in accordance with, the laws of the
State of Michigan.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the day and year first above written.
MBT FINANCIAL CORP. EMPLOYEE
By:
--------------------------- ---------------------------------
ELECTION TO NAME BENEFICIARY
The undersigned hereby names _______________________________ as beneficiary of
this Restricted Share Unit Award to receive any earned award paid in accordance
with the terms of this agreement and the Plan in the event of my death prior the
end of the referenced performance vesting period.
- -------------------------------- -------------------------------
Signature Date
(Note: In the absence of a beneficiary designation, any award paid under this
agreement will be made to the estate of the deceased participant)