EX-10.1



 Exhibit 10.1 

MERCANTILE BANK CORPORATION/MERCANTILE BANK OF MICHIGAN 

2014 MERCANTILE EXECUTIVE OFFICER BONUS PLAN 
  

	1.	Purpose of this Plan 

 This 2014 Mercantile 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 operating
results that exceed certain specific financial metrics during the first six months of 2014. 
 The purpose of this Plan is to: 

 

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

  

	 	•	 	Encourage superior results by providing a meaningful incentive; and 

  

	 	•	 	Support teamwork among employees. 

  

	2.	Eligibility 

 Michael H. Price, 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 June 30, 2014 to be eligible to
receive a bonus payout. 
 (b) An Executive Officer that is out on medical leave as of June 30, 2014 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 June 30, 2014 will not be eligible to receive a bonus
award. 
 (d) If an Executive Officer terminates his or her employment with the Bank during the first six months of 2014, 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 the first six months of 2014 pursuant to a notice given in 2014, 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 

 Bonus awards will be paid from the Executive Bonus Pool as
defined in this Plan. The maximum amount that can be paid from the Executive Bonus Pool under this Plan is $213,600. 
 The Executive Bonus Pool, if any, is
based on the achievement of targets under the following 2014 Executive Bonus Metrics: 
  

	 	20%	Net loan growth 


	 	10%	Level of non-performing assets 


	 	10%	Loan portfolio composition 


	 	10%	Return on assets 


	 	10%	Return on equity 


	 	10%	Net interest income 


	 	10%	Net interest margin 


	 	10%	Efficiency ratio 


	 	10%	Wholesale funds 

 The specific targets for each metric will be established by the Compensation Committee. Each
individual target must be met or exceeded in order for the percentage associated with that metric to be credited toward the Executive Bonus Pool. The accumulated percentage for each individual target attained will be applied to the maximum Executive
Bonus Pool amount of $213,600 to determine the total amount of the Executive Bonus Pool to be awarded. For example, if the first four factors are attained and the next five factors are not attained, the Executive Bonus Pool under this Plan would be
$213,600 x 50% = $106,800. 
 The Executive Bonus Pool will be paid to each Executive Officer pro rata based on a uniform percentage of the Executive
Officer’s 2014 salary (not to exceed 20% of each Executive Officer’s 2014 salary.) 

  
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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 the first six months of 2014 that would have resulted in the employee being suspended without pay, placed on final written warning or
terminated on or before June 30, 2014, 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. 

  

	 	•	 	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 2014
will be paid to eligible Executive Officers on or before August 10, 2014. 

  
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	6.	Plan Administration 

 The Company’s Compensation Committee will 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 the Compensation Committee 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. 

  
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	9.	Amendment of this Plan 

 This Plan may be amended from time to time by the
Compensation Committee, 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 Compensation Committee, in its sole discretion, deems appropriate, even if such changes 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 Compensation Committee of the
Company and the Bank on February 20, 2014, and is effective as of January 1, 2014. 

  
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