EXHIBIT 10.1

SEPARATION AND GENERAL RELEASE AGREEMENT

                    THIS SEPARATION AND GENERAL RELEASE AGREEMENT ("Agreement")
is entered into as of the 4th day of December, 2009, by and among MACATAWA BANK
CORPORATION (the "Corporation"), a Michigan corporation, MACATAWA BANK (the
"Bank"), a Michigan chartered bank (together, the "Employer"), and PHILIP J.
KONING (the "Executive").

          1.          RESIGNATION FROM BOARD OF DIRECTORS AND CONTINUING
EMPLOYMENT. Executive hereby resigns from the Board of Directors of the Bank as
of the effective date of this Agreement. Executive's employment with the
Employer and all Affiliates (defined as entities under common control with the
Corporation or the Bank) will end on May 20, 2010 ("Planned Separation Date"),
or may be terminated before that date as provided in Section 3 or Section 4. The
termination of Executive's employment will constitute a Separation from Service
within the meaning of Internal Revenue Code Section 409A. During the remaining
term of Executive's employment with Employer Executive will devote his best
efforts to preserving the goodwill of the Bank, including meeting with
significant depository and loan customers of the Bank to transition those
relationships and carrying out such other duties as the Bank's Board of
Directors may request. Provided, however, that for the final three months before
the Planned Separation Date Executive will be on administrative leave with pay
and need not perform any duties for the Employer except consultation by
telephone at Executive's reasonable convenience with regard to transitional
matters.

          2.          SALARY AND BENEFITS. Executive's current salary and fringe
benefits will continue for the remainder of the term of Executive's employment
hereunder. In addition:

          (a)          Employer will provide Executive with outplacement
assistance through Right Management, beginning on the effective date of this
Agreement for a period not to exceed six months. The cost to Employer for such
outplacement assistance shall not exceed $15,200.

          (b)          Executive has been granted 20,000 shares of Restricted
Stock under the 2006 Macatawa Bank Corporation Employee Stock Compensation Plan.
Provided that Executive's employment is not terminated before the Planned
Separation Date under Section 3(a), 3(c), or 4, all of such shares of Restricted
Stock will vest, and no longer be subject to risk of forfeiture, as of the
Planned Separation Date.

          3.          TERMINATION OF EMPLOYMENT. The Executive's employment may
be terminated before the Planned Separation Date as provided in Section 4, or as
follows.

          (a)          The Employer may terminate Executive's employment for
Cause, defined as the Executive's personal dishonesty, willful
employment-related misconduct, breach of a fiduciary duty to the Employer,
intentional failure to perform duties required by this Agreement, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses), or material breach of any provision of this Agreement. If the
Employer terminates the Executive's employment for Cause, all payments under
Section 2 shall cease as of the date of termination

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except for salary earned through the date of termination.

          (b)          The Employer may terminate Executive's employment without
Cause (as defined above), but if the Employer does so it will (i) continue to
pay Executive's salary under Section 2 through the Planned Separation Date, and
(ii) pay the COBRA continuation cost necessary to continue Executive's
participation under the Employer's health program through the Planned Separation
Date, provided that Executive timely elects and remains eligible for COBRA
coverage. All other payments under Section 2 shall cease at the time of
termination of Executive's employment, except that Section 2 (a) and (b) shall
remain in effect.

          (c)          Executive may resign by written notice to the Employer.
If Executive resigns, all payments under Section 2 shall cease as of the date of
termination except for salary earned through the date of termination.

          4.          REGULATORY TERMINATION. Executive's employment and
payments under this Agreement shall cease if the Bank is so directed by FDIC or
other regulatory authorities.

          5.          WAIVER AND RELEASE OF CLAIMS. Executive waives and
releases the Corporation, the Bank, all Affiliates, and all of their officers,
directors, employees, agents, benefit plans and insurers from any and all claims
which Executive may have arising out of any matter, act or omission up to the
date on which Executive signs this Agreement, or arising out of the termination
of Executive's employment as provided by this Agreement. The claims that
Executive is waiving and releasing include, but are not limited to, any claims
arising under any policy or agreement (except this Agreement), any claims under
the Michigan Civil Rights Act, the Michigan Persons With Disabilities Civil
Rights Act, the federal Civil Rights Act of 1964, the federal Age Discrimination
in Employment Act, the federal Americans With Disabilities Act, or any other
state or federal law, order, regulation or administrative ruling, and any claims
for attorney fees or other compensation of any kind except as specifically
provided in this Agreement. This waiver and release does not prohibit an
administrative complaint to the extent that the right to file such a complaint
may not be waived as a matter of law, but does waive and release any right to
any award or recovery of damages or other payments or benefit of any kind
relating to any such complaint.

                    The waivers and releases in this Section do not apply to:
(i) Executive's right to COBRA continuation coverage at Executive's expense
subject to COBRA rules; (ii) any vested account balance or vested benefits under
the terms of the Employer's qualified retirement plans; (iii) Executive's right
to stock options and restricted stock subject to the terms of the pertinent
agreements and the terms of the Macatawa Bank Corporation 1998 Director Stock
Plan, the Macatawa Bank Corporation 1998 Employee Stock Compensation Plan, and
the 2006 Macatawa Bank Corporation Employee Stock Compensation Plan, and subject
to Section 2(b) of this Agreement; (iv) any rights of indemnification to which
Executive may otherwise be entitled under the Articles of Incorporation or
Bylaws of the Corporation or the Bank.

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          6.          CONFIDENTIALITY AND RETURN OF PROPERTY. Executive agrees
never to use or disclose, without the written consent of the Corporation, any
confidential, proprietary or trade secret information ("Confidential
Information") of the Corporation, the Bank or any Affiliate. Confidential
Information shall include, but not be limited to, any and all records, notes,
memoranda, data, ideas, processes, methods, techniques, systems, formulas,
patents, models, devices, programs, computer software, writings, research,
personnel information, customer information, financial information, plans, or
any other information of whatever nature concerning the Corporation, the Bank or
any Affiliate which has not been published or disclosed to the general public,
or which gives to the Bank, the Corporation or such Affiliate an opportunity to
obtain an advantage over competitors who do not know of or use it. Upon
termination of the Executive's employment, or earlier if requested by the
Corporation, Executive will return all property of the Bank, the Corporation,
and any Affiliate to the Corporation, and will also deliver to the Corporation
all documents, electronic information or other information constituting or
containing Confidential Information. Executive's obligation not to disclose
Confidential Information shall not apply to a disclosure mandated by law or
order of a court of competent jurisdiction, but Executive shall give the
Corporation immediate notice of any such proposed disclosure, and an opportunity
to seek an appropriate protective order.

          7.          INTELLECTUAL PROPERTY. Executive agrees that all business
ideas and concepts and all inventions, improvements and developments made or
conceived by the Executive, either solely or in collaboration with others,
during the period of Executive's employment with the Employer, whether or not
made or conceived during working hours, and relating to the business of the
Employer or any aspect thereof, or to any business, product or service that the
Employer is considering entering or developing, shall be and remain the
exclusive property of the Employer, its successors and assigns. The Executive
shall disclose promptly in writing to the Corporation all such inventions,
improvements and developments, and will cooperate in confirming, protecting and
obtaining legal protection of the Employer's ownership rights.

          8.          NONDISPARAGEMENT. Executive agrees not to initiate or join
in disparaging comments about the Corporation, the Bank, any Affiliate, or any
of their past or present directors, officers or management.

          9.          RESTRICTIVE COVENANTS. During the remaining term of
Executive's employment under this Agreement and for a period of 12 months
thereafter Executive covenants and agrees that he will not do any of the
following without the written consent of the Bank's Chief Executive Officer:

          (a)          engage in the financial services industry, as a
proprietor, employee, consultant or in any other capacity, within a 60 mile
radius of any office or branch of the Corporation, the Bank or any Affiliate;

          (b)          furnish financial services to any person or entity
located within a 60 mile radius of any office or branch of the Corporation, the
Bank or any Affiliate;

          (c)          furnish financial services to any person or entity that
is a customer of the Corporation, the Bank or any Affiliate as of the date of
this Agreement;

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          (d)          furnish services or advice to any person or entity about
such person's or entity's dispute or relationship with the Corporation, the Bank
or any Affiliate;

          (e)          solicit or suggest to any employee, customer, vendor or
other person or entity having a business relationship with the Corporation, the
Bank or any Affiliate that they should end or limit such relationship or deal
with anyone else instead of the Corporation, the Bank or such Affiliate.

                    As used in this Section, the term "financial services"
includes banking services or other services of the type offered by the
Corporation, the Bank or any Affiliate. If Executive breaches any of the
covenants in this Section, the duration of such covenant shall be extended to a
date 12 months after the latest breach of such covenant.

          10.          LIMITATION OF BENEFITS. It is the intention of the
parties that no payment be made or benefit provided to the Executive that would
constitute an "excess parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), and any regulations
thereunder, thereby resulting in a loss of an income tax deduction by the
Employer or the imposition of an excise tax on the Executive under Section 4999
of the Code. If the independent accountants serving as auditors for the Employer
immediately prior to the date of a change of control, as defined in the Code,
determine that some or all of the payments or benefits under this Agreement,
when combined with any other payments or benefits provided to the Executive on a
change of control by the Employer, would constitute nondeductible excess
parachute payments by the Employer under Section 280G of the Code, then the
payments or benefits under this Agreement will be reduced to one dollar less
than the maximum amount which may be paid or provided without causing any such
payments or benefits scheduled under this Agreement or otherwise provided on a
change of control to be nondeductible. The determination made as to the
reduction of benefits or payments required hereunder by the independent
accountants shall be binding on the parties. The Executive shall have the right
to designate within a reasonable period which payments or benefits scheduled
under this Agreement will be reduced; provided, however, that if no direction is
received from the Executive, the Employer shall implement the reductions under
this Agreement in its discretion.

          11.          SEVERABILITY AND REMEDIES. The invalidity or
unenforceability of any provision of this Agreement will not affect the validity
or enforceability of any other provision of this Agreement, which will remain in
full force and effect. If a court of competent jurisdiction ever determines that
any provision of this Agreement (including, but not limited to, all or any part
of the Restrictive Covenants in Section 9) is unenforceable as written, the
parties intend that the provision shall be deemed narrowed or revised in that
jurisdiction (as to geographic scope, duration, or any other matter) to the
extent necessary to allow enforcement of the provision. The revision shall
thereafter govern in that jurisdiction, subject only to any allowable appeals of
that court decision. Executive agrees that the Executive's breach of Section 6,
7, 8 or 9 of this Agreement would cause the Employer and its Affiliates
irreparable harm, that the remedy at law for any such breach would be
inadequate, and that the Employer will be entitled to injunctive relief, in
addition to any other available remedy, for any breach of any of those Sections.

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          12.          ENTIRE AGREEMENT. No agreements or representations, oral
or otherwise, express or implied, with respect to Executive's employment with
the Employer or any of the subjects covered by this Agreement have been made by
either party that are not set forth expressly in this Agreement, and this
Agreement supersedes any pre-existing employment agreements and any other
agreements on the subjects covered by this Agreement.

          13.          GOVERNING LAW. The validity, interpretation, and
construction of this Agreement are to be governed by Michigan laws, without
regard to choice of law rules. The parties agree that any judicial action
involving a dispute arising under this Agreement will be filed, heard and
decided in either Kent County Circuit Court or the U.S. District Court for the
Western District of Michigan. The parties agree that they will subject
themselves to the personal jurisdiction and venue of either court, regardless of
where Executive or the Employer may be located at the time any action may be
commenced. The parties agree that Kent County is a mutually convenient forum and
that each of the parties conducts business in Kent County.

          14.          AMENDMENT AND WAIVER. No provisions of this Agreement may
be amended, modified, waived or discharged unless the waiver, modification, or
discharge is authorized by the Corporation's Board of Directors or an authorized
committee of the Board of Directors, and is agreed to in a writing signed by
Executive and by the Chief Executive Officer of the Corporation. No waiver by
either party at any time of any breach or non-performance of this Agreement by
the other party shall be deemed a waiver of any prior or subsequent breach or
non-performance.

          15.          COUNTERPARTS. This Agreement may be signed in original or
by fax in counterparts, each of which shall be deemed an original, and together
the counterparts shall constitute one complete document.

          16.          OPPORTUNITY FOR REVIEW AND CONSULTATION. Executive
acknowledges having read this Agreement and understands all of its provisions.
Executive knowingly and voluntarily agrees to all of the terms and provisions of
this Agreement. Executive may take up to 21 days after receiving this Agreement
to decide whether to sign this Agreement. If Executive signs this Agreement
before expiration of this 21 day period, he does so voluntarily and intending to
waive the balance of the 21 day period. The Corporation and the Bank advise
Executive to consult with an attorney about this Agreement before signing it.

          17.          REVOCATION PERIOD. For a period of 7 calendar days after
Executive signs this Agreement, Executive may revoke this Agreement by giving
written notice to the Employer's Vice President of Human Resources within that 7
day period. This Agreement will not become effective or enforceable unless and
until this revocation period has expired without Executive having revoked this
Agreement.

The Corporation, the Bank and Executive have signed below to confirm their
agreement on the above terms.

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EXECUTIVE

 

 

 

ATTEST:

 

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/s/ Philip J. Koning

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Philip J. Koning

 

 

 

 

 

 

 

Date: December 4, 2009

 

 

 

 

 

 

 

 

 

 

 

MACATAWA BANK CORPORATION

 

 

 

 

ATTEST:

 

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By:

/s/ Ronald L. Haan

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Its:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

Date:

December 4

, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MACATAWA BANK

 

 

 

 

ATTEST:

 

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By:

/s/ Ronald L. Haan

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Its:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

Date:

December 4

, 2009

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