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exhibit103.htm

	
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STOCK ONLY STOCK APPRECIATION RIGHTS AGREEMENT

This Stock Only Stock Appreciation Rights Agreement (“Agreement”) is made as of the award date set forth above between UNITED BANCORP, INC., a Michigan corporation (“United” or the “Company”), and the Employee named above (“Employee”).

The United Bancorp, Inc. Stock Incentive Plan of 2010 (the “Plan”) is administered by the Compensation and Governance Committee of United’s Board of Directors (the “Committee”).  The Committee has determined that Employee is eligible to participate in the Plan.  The Committee has awarded stock appreciation rights to Employee, subject to the terms and conditions contained in this Agreement and in the Plan.

Employee acknowledges receipt of a copy of the Plan and accepts this stock appreciation rights award subject to all of the terms, conditions, and pro­visions of this Agreement and the Plan.

1. Award.  United hereby awards to Employee stock appreciation rights (the “Stock Appreciation Rights”) with respect to the number of shares of United’s Common Stock, set forth next to “Number of Shares” above.  A Stock Appreciation Right is a right awarded to Employee that entitles Employee to receive Common Stock on the date the Stock Appreciation Right is exercised that is equal in value to the excess of (a) the Market Value of a share of Common Stock at the time of exercise over (b) the Base Price per Share set forth above (subject to adjustment as provided in the Plan), which equals the Market Value of a share of Common Stock on the date of this award.  The Stock Appreciation Rights consist of a single Stock Appreciation Right for each share of Common Stock.

2. Term and Vesting.  The right to exercise the Stock Appreciation Rights shall vest 1/3 on each of the first three anniversaries of the date of this Agreement and shall terminate on the Expiration Date set forth above, unless earlier terminated pursuant to the terms of the Plan.

3. Exercise.  Employee may exercise the Stock Appreciation Rights by giving United a written notice of the exercise of the Stock Appreciation Rights in the form of Exhibit A to this Agreement and providing any other documentation that the Committee may require from time to time.  The notice shall set forth the number of shares with respect to which Employee is exercising the Stock Appreciation Rights.  The notice shall be effective when

  

  

  

 

received at United’s main office.  The Stock Appreciation Rights will be considered exercised with respect to the number of shares specified in the notice on the latest of (i) the date of exercise designated in the notice, (ii) if the date so designated is not a business day, the first business day following such date or (iii) the earliest business day by which United has received the notice and all documentation required by the Committee.  United shall deliver to Employee a certificate or certificates representing, or issue in book-entry form without certificates, the shares to be received upon exercise of the Stock Appreciation Rights.  If at any time the number of shares to be received upon exercise of the Stock Appreciation Rights includes a fractional share, the number of shares actually issued shall be rounded down to the nearest whole share.  If Employee fails to accept delivery or tender of all or any of the shares to be received upon exercise of the Stock Appreciation Rights specified in the notice, Employee’s right to exercise the Stock Appreciation Rights with respect to such unaccepted shares shall terminate.

4. Transferability.  The Plan provides that the Stock Appreciation Rights are generally not transferable by Employee except by will or according to the laws of descent and distribution, and are exercisable during Employee’s lifetime only by Employee, Employee’s guardian, or Employee’s legal guardian.  Employee may designate a “beneficiary” to be the person or entity entitled to be Employee’s successor in interest in the event of Employee’s death. The designated beneficiary shall be treated for all purposes as Employee’s successor in interest entitled to exercise and receive the proceeds of exercise the Stock Appreciation Rights.  If no revocable trust is named as owner during Employee’s lifetime and no beneficiary is designated, Employee’s estate is the successor in interest.  United may place an appropriate restrictive legend upon any certificate representing shares received upon exercise of the Stock Appreciation Rights and issue appropriate stop-transfer instructions to its transfer agent with respect to such shares.  Employee may not transfer 50% of the “net” number of shares issued upon exercise of Stock Appreciation Rights awarded pursuant to this Agreement for one year after the Stock Appreciation Rights are exercised, as required by the Company’s Stock Ownership Guidelines for the Company’s executive officers.

5. Termination of Employment or Officer Status.  If Employee’s employment or officer status with United or any of its Subsidiaries terminates for any reason except for Retirement (as defined in the Plan), death, or Disability (as defined in the Plan), such termination shall affect the Stock Appreciation Rights, and Employee’s rights with respect to the Stock Appreciation Rights, as set forth in the Plan.

Notwithstanding any provisions of the Plan or this Agreement, if Employee Retires, dies, or becomes Disabled while an employee of the Company or one if its Subsidiaries, the Stock Appreciation Rights shall become fully vested and exercisable for one year following Employee’s death or Disability and for three years following Employee’s Retirement; however, in no event will Employee’s Retirement, death, or Disability extend the last date to exercise the Stock Appreciation Rights.

Notwithstanding any provisions of the Plan or this Agreement, all of the Stock Appreciation Rights shall be immediately exercisable in the event of any Change in Control and may be exercised for the remaining term of the award.

  

  

  

 

6. Covenants.  All unexercised Stock Appreciation Rights (whether vested or unvested) shall automatically be forfeited and returned to United upon Employee’s breach of any of Employee’s obligations under this Section 6.  Employee acknowledges that the award of Stock Appreciation Rights under this Agreement is valuable consideration to Employee and that a violation of this Section 6 would cause immeasurable and irreparable harm to United.  Accordingly, Employee agrees that United shall be entitled to injunctive relief in any court of competent jurisdiction for any actual or threatened violation of any provision of this Section 6, in addition to the forfeiture of unexercised Stock Appreciation Rights and any other remedies the Company may have.

(a)           Covenant Not-to-Compete.  This Agreement’s non-competition provisions are a material part of the consideration relied upon by United in entering into this Agreement.  The Company and Employee acknowledge and agree that by virtue of Employee’s past experience in the banking industry and Employee’s knowledge of the business of the Company, Employee is uniquely qualified to successfully compete with the Company.  In recognition of these circumstances, and in consideration for the Company’s grant of Stock Appreciation Rights to the Participant as set forth in Section 1 above, Employee covenants and agrees that Employee will not, at any time before exercise of the Stock Appreciation Rights and for one (1) year thereafter, engage in the counties of Lenawee, Washtenaw, Livingston or Monroe in any business which is competitive with a business then being regularly conducted by the Company in any of said counties; provided, however, that the forgoing covenant shall not prohibit Employee from owning, directly or indirectly, 1% or less of any publicly traded financial services corporation.  Employee further covenants that during the above-stated period he/she will not, directly or indirectly, induce or attempt to induce any of the suppliers, clients or employees of the Company to terminate or change the nature of their business relationships with the Company, or otherwise engage in or conduct activities, directly or indirectly, which could reasonably be expected to have an adverse effect on the Company’s business relationships with its suppliers, clients or employees.  Employee acknowledges that a breach of the provisions of this Section 6 will cause the automatic forfeiture of any unexercised Stock Appreciation Rights.

(b)           Confidential Information.  This Agreement’s confidentiality provisions are a material part of the consideration relied upon by United in entering into this Agreement.  In connection with Employee’s employment with United, Employee will have access to information or materials of United and the Subsidiaries that are considered trade secret, confidential and/or proprietary (“Confidential Information”).  Confidential Information includes but is not limited to information, documents and material:

(i)           pertaining to customers; potential customers; accounting; costs; supplier lists; details of any supplier or prospective supplier relationship; client or consultant contracts; supplier contracts; current, former and prospective employees; pricing policy; operational method; marketing plan or strategy; sales, servicing, management or administration; service development or plan; business acquisition plan; any scientific, technical information, idea, discovery,

  

  

  

invention, design, process, procedure, formula, pattern or device that is designed or used to give a competitive edge or improvement to United or any of the Subsidiaries; any computer software in any form and computer software methods and techniques or algorithms of organizing or applying the same; and any specialized equipment, processes and techniques developed to further the business of the United or any of the Subsidiaries; or

(ii)           pertaining to trade secrets as defined in the Restatement of Torts which the parties accept as an appropriate statement of law; or

(iii)           of the type described above which United or any of the Subsidiaries obtained from another party and which United treats as proprietary or designates as confidential, whether or not owned or developed by United or any of the Subsidiaries.

Employee shall use Confidential Information only for the benefit of United or any of the Subsidiaries and not for Employee’s own benefit.  Employee shall not take Confidential Information or related materials upon termination of Employee’s employment.  Employee shall not interfere or attempt to interfere with United’s or any of the Subsidiaries’ access to Confidential Information.  Employee shall not destroy Confidential Information in any form, except as permitted by United.

Confidential Information shall be disclosed and used only by staff members of United and the Subsidiaries who have a need to access it in order to do their jobs, shall be maintained in secure physical locations, and shall not be disclosed to any other company or person except in connection with the business activities of United or any of the Subsidiaries.

Confidential Information created by Employee during Employee’s employment with United that relates to the business of United or any of the Subsidiaries (or prospective business opportunities), or uses Confidential Information created with resources of United or any of the Subsidiaries (including staff, premises and equipment), belongs to United.  The term “Confidential Information” includes copyrightable works of original authorship (including but not limited to reports, analyses, and compilations, business plans, new product plans), ideas, inventions (whether patentable or not), know-how, processes, trademarks and other intellectual property.  All works of original authorship created during Employee’s employment are “works for hire” as that term is used in connection with the U.S. Copyright Act.  Employee hereby assigns to United all rights, title and interest in work product, including copyrights, patents, trade secrets, trademarks and know-how.

The confidentiality provisions of this Agreement survive termination of the employment relationship with United and the Subsidiaries and shall survive for so long a period of time as the Confidential Information is maintained by United or any of the Subsidiaries as confidential.

(c)           Nonsolicitation of Employees and Customers.  This Agreement’s no solicitation provisions form a material part of the consideration relied upon by United in entering into this Agreement. These no solicitation provisions apply to Employee regardless of whether Employee is acting on behalf of Employee or a third party.  During the term of Employee’s employment and for a period of one (1) year after Employee’s last day of employment, Employee agrees not to, directly or indirectly:

(i)           induce, influence or solicit any stockholder, director, officer, joint venture, investor, leaser, supplier, customer or any other person with a business relationship with United or any of the Subsidiaries to discontinue or reduce or modify the extent of its relationship with United or any of the Subsidiaries; or

(ii)           solicit, recruit, encourage, hire, employ or seek to employ, or cause any other business to solicit, recruit, encourage, hire, employ or seek to employ, or otherwise induce or influence any current or former employee of United or any of the Subsidiaries to reduce, modify or terminate an employment or agency relationship with United or any of the Subsidiaries unless the employment relationship between the employee and United and the Subsidiaries has been terminated for a minimum of six (6) months at the time of the solicitation, recruitment or other contact.

7. Employment by United.  The award of the Stock Appreciation Rights under this Agreement shall not impose upon United or any of its Subsidiaries any obligation to retain Employee in its employ for any given period or upon any specific terms of employment.  United or any of its Subsidiaries, as appropriate, may at any time dismiss Employee from employment, free from any liability or claim under the Plan or this Agreement, except as otherwise expressly provided in any written agreement with Employee.

8. Stockholder Rights.  Employee shall have no rights as a stockholder by reason of the Stock Appreciation Rights or with respect to any shares to be received upon exercise of the Stock Appreciation Rights until the date of issuance of shares of Common Stock to Employee.

 

9. Withholding.  United and its Subsidiaries shall be entitled to (a) withhold and deduct from Employee’s future wages (or from other amounts that may be due and owing to Employee from United or any of its Subsidiaries), or make other arrangements for the collection of, all amounts necessary to satisfy any and all federal, state, and local withholding and employment-related tax requirements attributable to the Stock Appreciation Rights under this Agreement, including without limitation, attributable to the award, vesting or exercise of the Stock Appreciation Rights; or (b) require Employee promptly to remit the amount of such withholding to United before taking any action with respect to the Stock Appreciation Rights.  Employee acknowledges that Employee is obligated to pay the amount of such withholding. Unless the Committee provides otherwise, withholding may be satisfied by withholding shares to be received upon exercise of the Stock Appreciation Rights or by delivery to United of previously owned Common Stock, in which case the shares withheld shall be valued at the Market Value as of the date of the taxable event.

10. Severability and Savings Clause.  The Company may unilaterally amend this Agreement if the Committee or the Company’s Board of Directors determines an amendment is appropriate to avoid any material risk of a violation of or penalties under any law or regulation or to avoid any other material and unintended adverse consequence to the Company.  If a court of competent jurisdiction determines that any provision of the Plan or this Agreement or any portion of a provision is void or unenforceable, only such provision or portion will be rendered void or unenforceable.  The remainder of this Agreement will continue in full force and effect.  If a court of proper jurisdiction determines that any of Employee’s covenants in Section 6 of this Agreement is overbroad as to duration, coverage, or geographic scope, it is the intent of the parties that such covenant will be limited in such jurisdiction to the extent necessary to allow its enforcement.

11. Effective Date.  The Stock Appreciation Rights Agreement shall be effective as of the date first set forth above.

12. Amendment.  This Agreement shall not be modified except in a writing executed by the parties hereto.

13. Agreement Controls.  The Plan is incorporated in this Agreement by reference.  Capitalized terms not defined in this Agreement shall have those meanings provided in the Plan.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of this Agreement shall control.

 

 

	  	
UNITED BANCORP, INC.

	  	
 

by

	  
	  	
 

Its

	  
	  	  	
“United”

	 	 	 
	  	  	  
	  	  	
Signature

	  	  	  
	  	  	  
	  	  	
Print name

	  	  	
“Employee”

 

 

5166091-3Macatawa Bank Corporation Exhibit 4.1 to Form 8-K - 04-22-11

Exhibit 4.1

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF ALL GENERAL CREDITORS OF MACATAWA BANK CORPORATION AND IS NOT SECURED.

MACATAWA BANK CORPORATION

2% Subordinated Note Due 2018

	
$ 1,000,000
	
April 21, 2011
	
 

	
No. 1
	
Issue Date
	
 

          FOR VALUE RECEIVED, Macatawa Bank Corporation (the "Company"), promises to pay to the order of Richard L. Postma, ("Purchaser"), at the principal office of the Company in Holland, Michigan (or at such other place as the Company may from time to time designate) the principal sum of One Million Dollars ($1,000,000.00) (the "Principal Amount") and accrued interest on April 30, 2018 (the "Stated Maturity Date") or any earlier date of prepayment or acceleration of the date the payment is due (as applicable, the "Maturity Date").

          1.          Subscription Agreement. This 2% Subordinated Note due 2018 (this "Note") is the Note referred to in the Subscription Agreement, dated April 21, 2011, by and between the Company and Purchaser (the "Subscription Agreement").

          2.          Prepayment. This Note may not be prepaid by the Company at any time prior to September 30, 2011. This Note may be prepaid, in whole or in part, without premium or penalty, at any time on and after September 30, 2011, on the following terms and conditions: (a) the Company shall give the holder at least three business days' prior written notice of its intent to make each prepayment; and (b) each prepayment shall be made in immediately available funds and shall be made by paying the principal amount to be prepaid, together with all unpaid interest accrued thereon to the date of prepayment. Notwithstanding the foregoing, the Company may not make any prepayment of this Note unless the Company has received prior written approval of the Board of Governors of the Federal Reserve System or its designee, or any successor thereto (the "FRB"), if required.

          3.          Exchange Right; Conversion Right.

          (a)          Exchange Right in Connection with Public Offering of Common Stock.  If and when the Company conducts a public offering of its common stock for cash, generally as described in the Company's Preliminary Prospectus included in the Form S-1 Registration Statement amendment filed with the United States Securities and Exchange Commission on March 31, 2011, as such prospectus may be amended and updated from time to time (the "Public

Offering"), prior to April 30, 2012, the holder will have the right to participate in the Public Offering and to purchase shares of the Company's common stock offered in the Public Offering and to pay the cash price of those shares as offered in the Public Offering by delivery of this Note to the Company in exchange for that whole number of shares of the Company's common stock (rounded to the nearest whole number) equal to: (A+B)/C where:

	
A
	
=
	
the principal amount of this Note
	
 

	
B
	
=
	
the amount of interest due on this Note accrued through the date of participation in the public offering
	
 

	
C
	
=
	
the cash price per share of the Company's common stock as offered in the public offering
	
 

          This exchange right may be exercised only in full and not in part.  In order to participate in the Public Offering, the holder must notify the Company in writing of its desire to purchase Company common stock in the Public Offering and deliver this Note to the Company in exchange for shares of Company common stock (as calculated above) issued in the Public Offering.

          (b)          Optional Conversion Right.  The holder shall have the option to convert this Note into the whole number of shares of the Company's common stock (rounded to the nearest whole number) equal to: (A+B)/C where:

	
A
	
=
	
the principal amount of this Note
	
 

	
B
	
=
	
the amount of interest on this Note accrued through the date of conversion
	
 

	
C
	
=
	
the Company's Book Value Per Share as of the end of the Company's then most recently completed fiscal quarter
	
 

          "Book Value Per Share" means the Company's total shareholder's equity divided by the number of shares of Common Stock used to compute the Company's diluted earnings (loss) per common share, both as reported in the Company's Form 10-K Annual Report or Form 10-Q Quarterly Report for the period ending on the date as of which Book Value Per Share is computed (the "Determination Date").  If the number of shares of the Company's common stock outstanding has changed between the Determination Date and the conversion date due to a stock split, stock dividend, or other transaction, Book Value Per Share shall be equitably and ratably adjusted as determined by the Audit Committee of the Company's Board of Directors.

          This optional conversion right may be exercised only in full and not in part.  In order to exercise the optional conversion right, the holder must notify the Company in writing of its election to convert this Note into the Company common stock and deliver this Note to the Company.

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          4.          Interest. Accrued interest will not be paid quarterly or in other periodic intervals and will be paid in full at the Stated Maturity Date or such earlier date as the Principal Amount of this Note shall be paid in full as a result of prepayment or acceleration of maturity upon the occurrence of an event of default as provided in this Note. Interest will accrue on the unpaid balance of the Principal Amount of this Note from the Issue Date stated above through and including the Stated Maturity Date or such earlier date as the Principal Amount is paid in full. Interest on the unpaid balance shall be computed on the basis of a 360-day year of 12 30-day months at the rate of 2% per annum from the Issue Date, compounded quarterly in arrears on March 31, June 30, September 30 and December 31 in each year commencing June 30, 2011.

          5.          Events of Default. Any of the following events shall represent an event of default under this Note (each, an "Event of Default"):

          (i)          A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of the Company or for any substantial part of its property, or orders the winding-up or liquidation of its affairs and such decree, appointment or order shall remain unstayed and in effect for a period of 60 days; or

          (ii)          the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Company or of any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

          (iii)          a court or administrative or governmental agency or body shall enter a decree or order for the appointment of a receiver of the Company's wholly-owned subsidiary bank, Macatawa Bank (the "Bank"), or all or substantially all of its property in any liquidation, insolvency or similar proceeding with respect to the Bank or all or substantially all of its property; provided that at such time the Bank is a major subsidiary depository institution of the Company as contemplated by Appendix A of 12 CFR part 225; or

          (iv)          the Bank shall consent to the appointment of a receiver for it or all or substantially all of its property in any liquidation, insolvency or similar proceeding with respect to it or all or substantially all of its property; provided that at such time the Bank is a major subsidiary depository institution of the Company as contemplated by Appendix A of 12 CFR part 225.

          Upon the occurrence of an Event of Default described in subsections (i), (ii), (iii) or (iv) of this Section, the principal of and interest accrued on this Note will immediately become due and

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payable, without presentment, demand, protest or notice of any kind.

          There is no right of acceleration of the payment of principal of this Note upon a "default" in the payment of interest or principal on this Note or in the performance of any of the Company's covenants or agreements contained in this Note, the Subscription Agreement or any of the Company's other obligations or liabilities. However, upon a default in the payment of principal of or interest on this Note, the holder of this Note will have a right to institute suit directly against the Company for the collection of such overdue payment.

          6.          Company Obligation. This Note is a debt of the Company only, and is not an obligation of the Bank.

          7.          Unsecured and Subordinate. The indebtedness of the Company evidenced by this Note, including the principal and interest, is not secured by any assets or commitments of the Company, and shall be subordinated to all senior debt of the Company of any kind, whenever incurred, and as outstanding at any time (which senior debt shall expressly exclude all indebtedness incurred in connection with, or relating to, any trust preferred securities caused to be issued by, or reflected in the consolidated financial statements of, the Company, but shall expressly include all indebtedness of the Company for borrowed money). Unless and until the Company receives a written notification from the FRB that this Note no longer constitutes Tier 2 Capital of the Company (other than due to the limitation imposed by the second sentence of 12 CFR Section 250.166(e), which limits the capital treatment of subordinated debt during the five years immediately preceding the maturity date of the subordinated debt) ("FRB Notice"), then the indebtedness evidenced by this Note shall be subordinated and junior in right of payment to the Company's obligations to the general creditors of the Company. Therefore, unless and until the Company receives an FRB Notice, upon dissolution or liquidation of the Company, no payment of principal or interest shall be due and payable until all general creditors of the Company have been paid in full. Purchaser and each other holder of this Note, by the acceptance hereof, agree to be bound by the foregoing provision.

          8.          Ranking as to Junior Subordinated Indebtedness. This Note will rank senior to all indebtedness already incurred, or hereafter incurred, in connection with, or relating to, any trust preferred securities caused to be issued by, or reflected in the consolidated financial statements of, the Company.

          9.          11% Subordinated Notes due 2017. This Note will have equal priority and be pari passu with the 11% Subordinated Notes due 2017 issued by the Company.

          10.          Successors to the Company. The Company may consolidate with or merge into any other entity or convey, transfer or lease its properties and assets substantially as an entirety to any entity, provided that the entity formed by such consolidation or into which the Company is merged or the entity which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, in form satisfactory to the Company, the due and punctual payment of the principal of and interest on this Note and the

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performance or observance of every covenant of this Note on the part of the Company to be performed or observed. The holder of this Note will have no right of acceleration in the event of a consolidation, merger, sale of all or substantially all of the assets, recapitalization or change in stock ownership of the Company.

          11.          Amendments. This Note may be amended with the written consent of the Company and the holder of this Note, and upon receipt of such consent, this Note shall be deemed amended thereby.

          12.          Register and Transfer. The Company or its duly appointed agent shall maintain a register for this Note in which it shall register the issuance and transfer of this Note (the "Note Register"). The holder of this Note may assign or transfer some or all of its rights hereunder, subject to compliance with applicable state and federal securities laws, without the consent of the Company. All transfers of this Note shall be recorded on the Note Register maintained by the Company or its agent, and the Company shall be entitled to regard the registered holder of such Note as the actual owner of the Note so registered until the Company or its agent is required to record a transfer of such Note on the Note Register. The Company or its agent shall be required to record any such transfer when it receives the Note to be transferred duly and properly endorsed by the registered holder thereof or by its attorney duly authorized in writing. Upon surrender for registration of transfer of the Note, the Company or its duly appointed agent shall execute and deliver, in the name of the designated transferee or transferees, one or more new Notes in minimum denominations of $25,000 and integral multiples of $25,000. If this Note is prepaid in part, the holder of the Note must physically surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the holder of the Note a new Note of like tenor, registered as such holder may request, representing in the aggregate the remaining principal represented by this Note. The holder of this Note and any assignee, by acceptance of this Note, acknowledge and agree that following any prepayment of any portion of this Note, the principal of this Note may be less than the principal amount stated on the face hereof.

          13.          Miscellaneous. The Company shall pay all taxes (other than transfer taxes) and all other expenses and charges payable in connection with the preparation, execution and delivery of this Note.

          This Note shall be governed by and construed in accordance with the internal laws of the State of Michigan, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Michigan or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Michigan.  Any action or proceeding with respect to this Note shall be brought exclusively in any state or federal court in the City of Grand Rapids, State of Michigan.  The parties waive any right to a jury trial.        

          The Company expressly waives any presentment, demand, protest, notice of default, notice of intention to accelerate, notice of acceleration or notice of any other kind.

          The headings in this Note are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this note.

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This Note is executed as of the Issue Date written above.

	
 
	
MACATAWA BANK CORPORATION

	
 
	
 

	
 
	
 

	
 
	
By
	
 

	
 
	
 
	
Ronald L. Haan

Chief Executive Officer and President

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Signature Page

Macatawa Bank Corporation

2% Subordinated Debt Due 2018

THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES ACT OF ANY STATE. EXCEPT AS OTHERWISE PROVIDED IN THE SUBSCRIPTION AGREEMENT REFERENCED IN THIS SUBORDINATED NOTE, THIS SUBORDINATED NOTE MAY NOT BE OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS SUBORDINATED NOTE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH STATE OR OTHER LAWS AS MAY BE APPLICABLE, OR RECEIPT BY MACATAWA BANK CORPORATION OF AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED

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