<PAGE>
                                                                    EXHIBIT 10.2


                             STOCK OPTION AGREEMENT
                       FOR AN INCENTIVE STOCK OPTION UNDER
                         THE MERCANTILE BANK CORPORATION
                         2004 EMPLOYEE STOCK OPTION PLAN


         This STOCK OPTION AGREEMENT is executed and delivered in duplicate, as
of the ____ day of __________, ______ (the "Option Date"), by and between
Mercantile Bank Corporation, a Michigan corporation (the "Company"), and
_________________, an employee of the Company or a Subsidiary (the "Optionee").

         NOW, THEREFORE, in consideration of the mutual covenants of the parties
hereinafter set forth, the parties have agreed and do hereby agree, as follows:

         1. The Company, pursuant to the 2004 Employee Stock Option Plan of the
Company (the "Plan"), which is incorporated into this Agreement by reference,
and subject to the terms and conditions of the Plan, grants to the Optionee an
Incentive Stock Option (the "Option") to purchase ________ shares (the "Optioned
Shares") of Common Stock of the Company at an option price of $_______ per share
(which price represents the fair market value of such Common Stock of the
Company on the Option Date), which Option may be exercised at any time on or
after ____________, 20__ [with respect to _________ shares, and at any time on
or after _________ ___, 20__ with respect to the remaining _________ shares, in
each case] through the date that the Option terminates as set forth in Section 2
below.

         2. The option granted hereby shall terminate, subject to the provisions
of the Plan, no later than at the close of business on _________, 20___.

         3. The option granted by this Agreement shall during the lifetime of
the Optionee be exercisable only by the Optionee in accordance with the terms of
the Plan and shall not be assignable or transferable except by Will or by the
laws of descent and distribution; provided, however, that the option granted by
this Agreement may after the death of the Optionee be exercised pursuant to the
terms of the Plan by a Beneficiary or Beneficiaries of the Optionee as
designated by such Optionee in accordance with Section 6.7(b) of the Plan.

         4. The Optionee agrees to comply with and be bound by all the terms and
conditions contained in the Plan.

<PAGE>


         5. Any notice by the Optionee to the Company under this Agreement shall
be in writing and shall be deemed duly given only upon receipt of the notice by
the Company at its principal executive offices. Any notice by the Company to the
Optionee shall be in writing and shall be deemed duly given if mailed to the
Optionee at the address specified below by the Optionee, or to such other
address as the Optionee may later designate by notice given to the Company.

         6. The Optionee, from time to time during the period when the Option
may by its terms be exercised, may exercise the Option in whole, or in part in
minimum installments of 500 shares, by delivering to the Company: (i) a written
notice signed by the Optionee stating the number of shares that the Optionee has
elected to purchase at that time from the Company, and (ii) cash, a check, bank
draft or money order payable to the Company in an amount equal to the purchase
price of the shares then to be purchased, or (iii) through the delivery of
shares of Common Stock of the Company owned by the Optionee for more than six
months with a value equal to the option price, provided, however, that shares of
Common Stock acquired by the Optionee through the exercise of an incentive stock
option may not be used for payment prior to the expiration of holding periods
prescribed by the Internal Revenue Code, or (iv) by a combination of (ii) and
(iii) above. The value of the shares of the Common Stock delivered shall be the
Fair Market Value of the Common Stock as defined in Section 2.1(e) of the Plan.
The Board of Directors of the Company, acting pursuant to the Plan, if it shall
deem it necessary or desirable for any reason connected with any law or
regulation of any governmental authority relating to the regulation of
securities, may require the Optionee to execute and file with it such evidence
as it may deem necessary that the Optionee is acquiring such shares for
investment and not with a view to their distribution.

         7. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation, at the
discretion of the Board of Directors of the Company, shall cause this Option to
terminate, provided that this Option shall be fully vested and exercisable
immediately prior to such dissolution or liquidation, or such merger or
consolidation, and the Optionee has the right to exercise this Option prior to
such dissolution or liquidation, or such merger or consolidation. This Option
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure, or to merge or consolidate, or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.

         8. The validity and construction of this Agreement shall be governed by
the laws of the State of Michigan.


                                       2

<PAGE>


         The Company has caused this Agreement to be executed by its duly
authorized officer, and the Optionee has executed this Agreement, as of the
Option Date.


                                               MERCANTILE BANK CORPORATION


                                               By:
                                                  -----------------------------

                                                  Its:
                                                      -------------------------


                                               OPTIONEE


                                                  -----------------------------
                                                            (Signature)

                                                  -----------------------------

                                                  -----------------------------

                                                  -----------------------------
                                                         (Print address)


                                       3

<PAGE>

                           MERCANTILE BANK CORPORATION

                                STOCK OPTION PLAN
                           DESIGNATION OF BENEFICIARY

Check One,     ______  I do not wish to designate a Beneficiary at this time;
Complete as            it is my desire that any right to exercise this option
Applicable,            after my death pass by my Will or if applicable, the
and Sign               laws of descent and distribution.

               ______  In the event of my death it is my desire that any right
                       to exercise this option pass to the following designated
                       Beneficiar(ies):

                       Name               Relationship              Address


                       --------------------------------------------------------


                       --------------------------------------------------------

                      (If more than one Beneficiary is named, the Beneficiaries
                      shall share equally in the rights unless otherwise stated
                      above).

                      Unless otherwise expressly provided, if any Beneficiary
                      above-designated predeceases me, any rights shall
                      pass equally to the remaining designated Beneficiar(ies)
                      if any, who survive me, but if no designated Beneficiary
                      survives me, any rights shall pass to my estate.

                      Optionee may change the Beneficiar(ies) by filing written
                      notice with the Company.

                      The designation of Beneficiary herein is subject to all
                      the terms and conditions of the Plan and all applicable
                      laws, rules and regulations. In addition, the Company may
                      require an indemnity and/or other assurances from the
                      Beneficiar(ies) prior to the exercise of any rights by
                      such Beneficiar(ies) under this option.

                      Date:
                            --------------      -------------------------------
                                                   Signature of Optionee


                                       4