Exhibit 10.2

MERCANTILE BANK CORPORATION/MERCANTILE BANK OF MICHIGAN

2012 MERCANTILE SENIOR EXECUTIVE OFFICER BONUS PLAN FOR

ROBERT B. KAMINSKI, JR. AND CHARLES E. CHRISTMAS

 

1. Purpose of this Plan

This 2012 Mercantile Senior Executive Officer Bonus Plan (this “Plan”) is
designed to reflect that the directors of Mercantile Bank Corporation (the
“Company”) and Mercantile Bank of Michigan (the “Bank”) believe that the
Company’s shareholders are willing to share financially in the operating results
that are superior to those achieved during 2011.

The purpose of this Plan is to:

 

  •  

Promote the growth, profitability and expense control necessary to accomplish
corporate strategic long-term plans;

 

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Encourage superior results by providing a meaningful incentive; and

 

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Support teamwork among employees.

 

2. Eligibility

Robert B. Kaminski, Jr. and Charles E. Christmas (the “Executive Officers,” and
each an “Executive Officer”) are included in this Plan. The following provisions
(a) – (d) set forth circumstances where an Executive Officer will, or will not,
be eligible for a bonus payout, or where an unpaid bonus award will be
cancelled:

(a) An Executive Officer must be an active employee as of December 31, 2012 to
be eligible to receive a bonus payout.

(b) An Executive Officer that is out on medical leave as of December 31, 2012
will be eligible to receive a bonus award.

(c) An Executive Officer that is suspended with or without pay or is on final
written warning as of December 31, 2012 will not be eligible to receive a bonus
award.

(d) If an Executive Officer terminates his or her employment with the Bank
during 2012, any unpaid bonus award for the Executive Officer is cancelled.

 

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Notwithstanding any of the provisions (a), (b), (c) or (d) above, no such
provision shall adversely affect an Executive Officer’s eligibility for, or
right to receive, any bonus award, if during 2012, or during the first four
months of 2013 pursuant to a notice given in 2012, such Executive Officer’s
employment terminates under one or more circumstances set forth in Section 8.5
or 9 of the Employment Agreement made as of the 18th day of October 2001 between
the Executive Officer, the Company and the Bank, as amended (a “Special
Termination”).

 

3. Performance Goal and Bonus Awards

Amounts payable for 2012 under (a) this Plan, (b) the 2012 Mercantile Non-Senior
Executive Officer Bonus Plan (the “Non-SEO Plan”), and (c) the 2012 Mercantile
Senior Executive Officer Bonus Plan for Michael H. Price (the “Price SEO Plan”),
are payable from substantially the same bonus fund (the “Bonus Fund”). A
reference to any plan in provision (a), (b) or (c) of this paragraph above shall
be deemed to include any amendments that from time to time are made to such
plan. The Bonus Fund, if any, is determined by the overall operating performance
of the Company. The Bonus Fund for 2012 is the amount, if any, by which (a) the
actual 2012 consolidated net income of the Company and its consolidated
subsidiaries, before federal income tax expense, and excluding any pre-tax bonus
accrual expense (“2012 Net Income”), exceeds 1.68 times (b) the actual 2011
consolidated net income of the Company and its consolidated subsidiaries, before
federal income tax expense (“2011 Net Income”). 2011 Net Income is $9,580,000.
In making the calculation, actual residential mortgage loan sale and referral
fee income, and related employee commissions, are excluded from the calculation
of 2012 Net Income and 2011 Net Income. Bonuses will be paid from the Bonus Fund
to the Executive Officers under this Plan up to the Maximum Aggregate Bonus
Payout (defined below).

The Maximum Bonus Payout for each Executive Officer under this Plan equals 35%
of the salary paid (or made available) to the Executive Officer for services as
an employee of the Bank or any affiliated company for 2012. The Maximum
Aggregate Bonus Payout under this Plan is the sum of each Executive Officer’s
Maximum Bonus Payout under this Plan. Once the Maximum Bonus Payout is made to
an Executive Officer under this Plan, no additional bonus can be paid to such
Executive Officer under this Plan.

In the event that the amount available for bonuses under this Plan, the Non-SEO
Plan and the Price SEO Plan, is less than the amount necessary for a Maximum
Bonus Payout under this Plan and a maximum bonus payout under the Non-SEO Plan
and the Price SEO Plan, in each case to all of the eligible participants in the
plan, the bonus payouts under this Plan, the Non-SEO Plan, and the Price SEO
Plan, and to the eligible participants in the three plans, will be prorated. The
proration of the Bonus Fund between this Plan, the Non-SEO Plan, and the Price
SEO Plan shall be 4.2% to this Plan, 92.3% to the Non-SEO Plan, and 3.5% to the
Price SEO Plan. The proration of the portion of the Bonus Fund available for
bonuses under this Plan shall be allocated among the Executive Officers, based
on each Executive Officer’s Maximum Bonus Payout.

 

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4. Clawback Provision

Payouts made under this Plan are subject to recovery or clawback, and an
Executive Officer receiving a payout will be required to promptly return the
monies (or any portion of the monies requested by the Company) in each of the
following circumstances:

 

  •  

if it is determined that the Executive Officer was engaging in an activity
during 2012 that would have resulted in the employee being suspended without
pay, placed on final written warning or terminated on or before December 31,
2012, and no Special Termination of the Executive Officer is involved.

 

  •  

If the payout is based on materially inaccurate financial statements (which
includes, but is not limited to statements of earnings, revenues, or gains) or
any other materially inaccurate performance metric criteria, including net
income, or if the payout is otherwise required to be recovered by the Company or
the Bank under law or rules that apply due to the Company’s participation in the
Capital Purchase Program under the United States Department of the Treasury’s
Troubled Asset Relief Program.

 

  •  

If the payout is required to be returned pursuant to a policy adopted by the
Company regarding clawback in order to comply with the Dodd-Frank Wall Street
Reform and Consumer Protection Act or any stock exchange or other rule adopted
pursuant to that Act.

In the event that the Company or Bank demands recovery or clawback of any payout
(or portion of any payout), and the Executive Officer who received the payout
does not promptly return the payout (or demanded portion of the payout) to the
Company or the Bank, the Executive Officer shall be required to pay to the
Company or the Bank, immediately upon demand, all expenses, including reasonable
attorneys’ fees, incurred to recover the payout (or demanded portion of the
payout), unless the Executive Officer establishes in an appropriate legal
proceeding that he or she had no obligation under this Section of this Plan to
return the payout (or demanded portion of the payout). Executive Officers, as a
condition to receiving a payout under this Plan, may be required to agree in
writing to the terms of this Section.

 

5. Timing of Bonus Payouts

Bonus awards that are earned under this Plan for 2012 will be paid to eligible
Executive Officers on or before March 15, 2013.

 

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6. Plan Administration

The Board of Directors of the Bank and the Company’s Compensation Committee, or
if the Board of Directors of the Bank so designates, another committee of the
Board of Directors of the Company or the Bank (each an “Administrator”), will
each have the authority to administer and interpret this Plan, and approve or
determine the amounts to be distributed under this Plan as bonus awards, in its
sole discretion. Any interpretation or construction of this Plan or approval or
determination of bonus awards by an Administrator, will be final and binding on
the Company, the Bank and their respective subsidiaries, all employees and past
employees of any of them, their heirs, successors and assigns. No member of the
Board of Directors of the Bank or the Company, or any of their affiliates, or
any committee of the Board of Directors of the Bank, the Company, or any
affiliate, will be liable for any action or determination made in good faith
regarding this Plan or any bonus award.

 

7. No Right to Employment

This Plan does not give any Executive Officer any right to continued employment,
or limit in any way the right of the Bank or any affiliated company to terminate
his employment at any time.

 

8. Withholding of Taxes

The Bank and any affiliated company will have the right to deduct from any
payment to be made pursuant to this Plan any Federal, state or local taxes
required by law to be withheld. It is contemplated that substantially all
payments that are made under this Plan will be made by the Bank or one of its
subsidiaries, and not by the Company.

 

9. Amendment of this Plan

This Plan may be amended from time to time by the Board of Directors of the
Bank, without the consent of any Executive Officer or past Executive Officer,
(a) to the extent required to comply with applicable law; (b) to make reasonable
adjustments for any acquisition or sale of a business or branch, merger,
reorganization, or restructuring, change in accounting principles or their
application, or special charges or extraordinary items, that materially affect
the Company or any of its consolidated subsidiaries; (c) to make any changes
that do not materially and adversely affect the bonus award payable to any
eligible employee; (d) to expand the Executive Officers or other employees who
are eligible to receive a bonus from the amounts available for bonuses under
this Plan; or (e) to make any other changes that the Board of Directors of the
Bank, in its sole discretion, deems appropriate, even if such changes

 

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materially and adversely affect, or eliminate, the bonus award payable to any
Executive Officer or past Executive Officer; provided that, after a Special
Termination or notice that will result in a Special Termination, no amendment
made under provision (d) or (e) of this paragraph above shall adversely affect
either Executive Officer’s rights under this Plan. To the extent required to
comply with applicable stock exchange rules, any amendment to this Plan shall be
submitted to the Company’s Compensation Committee for a recommendation or
approval.

 

10. Governing Law

The validity, construction and interpretation of this Plan will be determined in
accordance with the laws of the State of Michigan.

 

11. Effective Date

This Plan was approved by the Boards of Directors of the Company and the Bank on
June 28, 2012, and is effective as of June 28, 2012.

 

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