EX-10.3







	 	 	 	 	 



Exhibit 10.3




Amendment to Employment Agreements





     THIS AMENDMENT is made as of this 15th day of May, 2009 by and among Mercantile Bank
Corporation, a Michigan corporation (the “Company”), Mercantile Bank of Michigan, a
Michigan banking corporation (the “Bank”, and collectively with the Company, the
“Employers,” and each, an “Employer”) and each of the Employees named on the
signature lines below (each, an “Employee” and collectively, the “Employees.”)



RECITALS




     A. The Company, the Bank and each Employee have previously entered into an Employment
Agreement, as such agreement has been previously amended, each as listed on Exhibit A
attached hereto (each, as amended, an “Employment Agreement”, and collectively, the
“Employment Agreements”).



     B. The Company anticipates entering into a Letter Agreement and Securities Purchase Agreement
(the “Investment Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital
Purchase Program (the “CPP”). For the Company to participate in the CPP, and as a
condition to the closing of the investment contemplated by the Investment Agreement, the Company is
required to establish specified standards for incentive compensation to its senior executive
officers and to make changes to its compensation arrangements.



     C. The Company, the Bank and each Employee desire to amend the Employment Agreements and other
applicable compensation arrangements to comply with these requirements.



TERMS OF AGREEMENT




     In consideration of the mutual covenants and obligations set forth herein, and as
consideration for the benefits that the Employees will receive as a result of the Company’s
participation in the CPP, the parties agree as follows:



     1. No Golden Parachute Payments. During the CPP Participation Period, the Employers
shall not make any golden parachute payment to an Employee that is prohibited by EESA as a result
of the Company’s participation in the CPP.



     2. Recovery of Bonus and Incentive Compensation. Any bonus, retention award and
incentive compensation paid to an Employee during the CPP Participation Period is subject to
recovery or “clawback” by the Employers if the payments were based on statements of earnings,
revenues, gains or other criteria that are later found to be materially inaccurate.



     3. Compensation Program Amendments. Each of the Employers’ compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including the Employment
Agreements) (collectively, the “Benefit Plans”) with respect to each Employee is hereby
amended to the extent necessary to give effect to Paragraphs (1) and (2) above.



 









 





     Further, the Company is required to review the Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires further revisions to any of the Benefit
Plans, each Employee and the Employers agree to negotiate such changes promptly and in good faith.



     4. Definitions. Terms used in this Amendment as defined as follows:



          (a) “Senior executive officer” means an individual who is one of the top five most highly paid
executives of the Company whose compensation is required to be disclosed pursuant to the Securities
Exchange Act of 1934 and any regulations issued thereunder, and as otherwise defined in or
interpreted under Section 111(a)(1) of EESA.




          (b) “Golden parachute payment” means any payment to a senior executive officer for departure
from an Employer for any reason, except for payments for services performed or benefits accrued,
and as otherwise defined in or interpreted under Section 111(a)(2) of EESA.




          (c) “EESA” means the Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009, as both such acts are implemented by guidance or regulation
issued by the Department of Treasury.




          (d) “CPP Participation Period” means the period in which any obligation arising from financial
assistance provided under the TARP remains outstanding, but shall not include any period during
which the Federal Government only holds warrants to purchase common stock of the Company.




     5. Application and Rules of Interpretation. If the Company does not participate or
ceases at any time to participate in the CPP, this Amendment shall be of no further force and
effect and shall automatically terminate. This Amendment is intended to, and shall be interpreted,
administered and construed to comply with, Section 111 of EESA (and, to the maximum extent
consistent with the preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this Amendment.) If an Employee terminates employment during the CPP
Participation Period and would otherwise be entitled to payments under the Employment Agreement
that may not be paid because of the restrictions set forth in this Amendment, then, to the extent
lawful to do so, such payments will be made by the Bank (or if applicable, the Company) at the
earliest date at which it reasonably anticipates that the making of the payment will not violate
applicable law. In the event that the preceding sentence is reasonably expected to result in the
imposition of federal income tax and penalty tax against an Employee before payments under this
Paragraph (5) have commenced to such Employee, and the amount of such tax and penalty is
substantial in relation to such payments, then the preceding sentence shall not apply to the
affected Employee or Employees and this Paragraph (5) shall be deemed amended to remove the
preceding sentence with respect to such affected Employee(s).



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     6. Miscellaneous. To the extent not subject to federal law, this Amendment will be
governed by and construed in accordance with the laws of the State of Michigan. This Amendment may
be executed in two or more counterparts, each of which will be deemed to be an original. Except as
amended herein, the Employment Agreements shall remain in full force and effect. This agreement
may be amended with respect to any Employee by an agreement in writing signed by the Employee and
each of the Employers.



     7. Additional Restriction. Michael H. Price and the Employers agree that (a) the
Employers shall not pay or accrue any bonus, retention award or incentive compensation to or for
him during the CPP Participation Period in violation of Section 111(b)(3)(D) of EESA, (b) no
provision of the Employment Agreement among Mr. Price and the Employers, including the provisions
of Section 4 of the Employment Agreement, shall be construed to require any such payment or
accrual, and (c) if any agreement or plan exists or arises that provides for any such payment or
accrual, the agreement or plan shall be amended as the Employers shall request, to the extent
necessary so that the agreement or plan will not violate such Section 111(b)(3)(D).



     The parties have executed this Amendment as of the day and year first above written.



	 	 	 	 	 
	 	MERCANTILE BANK CORPORATION

 	 
	 	By:  	/s/ Michael H. Price
 	 
	 	 	Michael H. Price 	 
	 	 	Chairman of the Board, President and

Chief Executive Officer 	 
	 
	 	MERCANTILE BANK OF MICHIGAN

 	 
	 	By:  	/s/ Michael H. Price
 	 
	 	 	Michael H. Price 	 
	 	 	Chairman of the Board and

Chief Executive Officer 	 
	 
	 	     /s/ Michael H. Price
 	 
	 	Michael H. Price 	 
	 	 	 
	 	     /s/ Robert B. Kaminski, Jr.
 	 
	 	Robert B. Kaminski, Jr. 	 
	 	 	 
	 	     /s/ Charles E. Christmas
 	 
	 	Charles E. Christmas 	 
	 	 	 



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EXHIBIT A




Employment Agreements




A. Michael H. Price





     Employment Agreement dated as of October 18, 2001, as amended by a letter amendment dated
October 17, 2002 and by a Second Amendment dated as of November 17, 2005.



B. Robert B. Kaminski, Jr.




     Employment Agreement dated as of October 18, 2001, as amended by a letter amendment dated
October 17, 2002, a letter amendment dated October 28, 2004 and a Third Amendment dated as of
November 17, 2005.



C. Charles E. Christmas




     Employment Agreement dated as of October 18, 2001, as amended by a letter amendment dated
October 17, 2002 and by a Second Amendment dated as of November 17, 2005.



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