EX-10.1



 EXHIBIT 10.1 

MERCANTILE BANK CORPORATION/MERCANTILE BANK OF MICHIGAN 
 2013 MERCANTILE EXECUTIVE OFFICER BONUS PLAN 
  

	1.	Purpose of this Plan 

 This 2013
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. 

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 December 31, 2013 to be eligible to receive a bonus payout. 
 (b) An Executive Officer that is out
on medical leave as of December 31, 2013 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, 2013 will not be eligible to receive a bonus award. 
 (d) If an Executive
Officer terminates his or her employment with the Bank during 2013, any unpaid bonus award for the Executive Officer is cancelled. 

  
 1 








 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 2013, or during the first four months of 2014 pursuant to a notice given in 2013, 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. 
 If bonuses from the Bank-Wide Goal Pool under the Mercantile Bank Corporation/Mercantile Bank of Michigan 2013 Mercantile Bonus Plan (the “Non-NEO Bonus Plan”) are paid at less than the
Maximum Bank-Wide Bonus Pool (as defined in the Non-NEO Bonus Plan), then no bonuses will be paid from the Executive Bonus Pool under this Plan. The maximum amount that can be paid from the Executive Bonus Pool under this Plan is $206,800.

 The Executive Bonus Pool, if any, is based on the achievement of targets under the following 2013 Executive Bonus Metrics: 

 

			
	20%	  	Net loan growth
	10%	  	Reduction in non-performing assets
	10%	  	Adjustments in 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 $206,800 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 $206,800 x 50% = $103,400. 

  
 2 








 The Executive Bonus Pool will be paid to each Executive Officer pro rata based on a uniform percentage of
the Executive Officer’s 2013 salary (not to exceed 20% of each Executive Officer’s 2013 salary.) 
  

	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 2013 that would have resulted in the employee being suspended without
pay, placed on final written warning or terminated on or before December 31, 2013, 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 2013 will be paid to eligible Executive Officers on or before March 15, 2014. 

  
 3 









	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 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 

  
 4 








 
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 May 23, 2013, and is effective as of January 1, 2013. 

  
 5