BOARD REPRESENTATION AGREEMENT
Macatawa Bank Corporation
This
BOARD REPRESENTATION AGREEMENT (“Agreement”) is made
this 5th day of November, 2008, by and among Macatawa Bank
Corporation , a Michigan corporation and registered financial
holding company (“Macatawa”), and White Bay Capital,
LLC , a Michigan limited liability company (“White
Bay”). Macatawa and White Bay are each referred to herein as
a “Party” and, collectively, as the
“Parties.”
Background
A.
Pursuant to the terms and conditions of a certain Subscription and
Purchase Agreement signed on October 23, 2008 (the
“Subscription Agreement”), White Bay submitted its
irrevocable subscription for twenty thousand (20,000) shares of
Series A Noncumulative Convertible Perpetual Preferred Stock
of Macatawa (“Preferred Stock”) for the aggregate
purchase price of Twenty Million Dollars ($20,000,000) (the
“Subscription”).
B.
The Parties have discussed granting White Bay the contractual right
to representation on the Board of Directors of Macatawa and its
Bank (as defined below) equal to White Bay’s percentage
beneficial ownership of Macatawa’s common stock, on an
as-converted basis, rounded up to the nearest whole director.
Macatawa currently has six directors and, in connection with the
acceptance of the Subscription, intends to expand the Board of
Directors by one member. The Parties have agreed, in accordance
with the Marketplace Rules of NASDAQ and the guidance thereunder,
to round up this fraction to one director, resulting in White Bay
having the contractual right to designate one of the seven board
members.
C.
Macatawa desires to accept the Subscription as of the date hereof
and, in connection therewith, the Parties have agreed to enter into
this Agreement.
NOW,
THEREFORE, the Parties hereby agree as follows:
1.
Director Designee . From the date hereof and continuing
until such date (if ever) that White Bay ceases to own shares of
Preferred Stock and/or shares of Macatawa’s common stock that
collectively represent more than three percent (3%) of the voting
power of Macatawa, on an as-converted basis:
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(a)
Macatawa shall take all action necessary to cause one person
designated by White Bay (such person, together with any successor
as set forth in (f) below, the “Designee”) to be
elected to the Board of Directors of Macatawa;
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(b)
At each meeting of the shareholders of Macatawa at which directors
of Macatawa are to be elected and in each proxy statement relating
thereto, Macatawa shall recommend that the shareholders elect the
Designee to the Board of Directors of Macatawa;
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