<PAGE>


                                                                    Exhibit 10.1

                           MERCANTILE BANK OF MICHIGAN
                           NON-LENDER BONUS PLAN 2006


The Mercantile Bonus Plan is designed to reflect the fact that the directors and
management of Mercantile Bank of Michigan and Mercantile Bank Corporation
believe that the company's shareholders are willing to share financially in
operation results that are superior to those forecast by the company and
approved by the Board of Directors.

The purpose of the Plan is to:

    o    promote the growth, profitability and expense control necessary to
         accomplish corporate strategic long term plans

    o    encourage superior results by providing a meaningful incentive

    o    support the Mercantile Teamwork

ELIGIBILITY

All non-lenders and non-commissioned employees are included in the Plan. The
employee must be an active employee on the day that the bonus awards are
distributed. An employee that is out on medical leave at the time the awards are
distributed will be eligible to receive a bonus. An employee that is suspended
with or without pay at the time the awards are distributed will not be eligible
to receive the bonus award. If an employee terminates his or her association
with Mercantile Bank of Michigan, any accrued but unpaid bonus award is
cancelled.

PERFORMANCE GOALS

The bonus payout is determined by the overall performance of Mercantile Bank
Corporation. The total payout is calculated by comparing current year after tax
net operating income (NOI), inclusive of pre-tax bonus accrual expense, with the
prior year NOI. If current year NOI is not greater than 115% of the prior year
NOI, the pre-tax bonus accrual will be adjusted downward until current year NOI,
inclusive of pre-tax bonus accrual expense, exceeds 115% of prior year NOI.

The maximum bonus payout for each employee is calculated as a percentage of
salary with the percentage applied to each salary based on the employee's job
title within the organization. The maximum bonus pool is the sum of each
employee's maximum bonus payout, and once this maximum pool is achieved, no
additional bonus expense will be accrued. The Board of Directors annually
approves the percentages that are applied to employee salaries.


<PAGE>


                  MAXIMUM BONUS PAYOUTS FOR EMPLOYEES FOR 2006
                        UNDER MERCANTILE BANK OF MICHIGAN
                           NON-LENDER BONUS PLAN 2006


<Table>
<Caption>


                      EMPLOYEE LEVEL                                                PERCENTAGE
                      --------------                                                ----------
<S>                                                                                 <C>
Non-Exempt / Exempt                                                                    10%

Officer                                                                                15%

Assistant Vice President                                                               25%

Vice President                                                                         30%

Senior Vice President                                                                  40%

Chief Operating Officer and Chief Financial Officer                                    45%

Chairman and President                                                                 50%

</Table>