MERCANTILE BANK CORPORATION
EMPLOYEE STOCK PURCHASE PLAN OF 2002
SECTION 1
PURPOSE OF PLAN
The purpose of the
Mercantile Bank Corporation Employee Stock Purchase Plan of 2002 is
to encourage Employees of the Company and the Company’s
Subsidiaries to promote the best interests of the Company and to
align the interests of Employees with the Company’s
shareholders by permitting Eligible Employees to purchase shares of
the Company’s Common Stock. The Plan is not intended to
qualify as an employee stock purchase plan under Section 423
of the Internal Revenue Code of 1986, as amended.
The following
words have the following meanings unless a different meaning is
plainly required by the context:
2.1
“ Employee ” means an employee of the Company or
one of its Subsidiaries.
2.2
“ Board ” means the Board of Directors of the
Company.
2.3
“ Committee ” means the Compensation Committee
of the Board or such other committee as the Board may from time to
time designate to administer the Plan.
2.4
“ Common Stock ” means the Company’s
common stock.
2.5
“ Company ” means Mercantile Bank Corporation, a
Michigan corporation, and its successors and assigns.
2.6
“ Election Form ” means a notice (in a form
approved by the Committee) that an Eligible Employee must complete
to participate in the Plan and authorize payroll deductions to be
made on the Eligible Employee’s behalf under the
Plan.
2.7
“ Eligible Employees ” means all present and
future active full-time Employees and part-time Employees who are
regularly scheduled to work 20 hours or more per week.
2.8
“ Fair Market Value ” as of any Stock Purchase
Date means the average, rounded to the nearest whole cent, of the
highest and lowest sales prices of the Common Stock reported on The
Nasdaq Stock Market (or such other quotation system or stock
exchange on which the Company’s Common Stock may be traded on
the date in question) on such Stock Purchase Date or, if such Stock
Purchase Date is not a trading day, the most recent date on which
shares of Common Stock were traded on The Nasdaq Stock Market (or
such other quotation system or stock exchange). If the
Company’s Common Stock is not listed on Nasdaq or another
quotation system or stock exchange on the Stock Purchase Date in
question, the Market Value shall be determined by any means deemed
fair and reasonable by the Committee, which determination shall be
final and binding on all parties.
2.9
“ Investment Sharebuilder Account ” means the
account established on behalf of a Participant pursuant to
Section 8.2 below, in which shares of Common Stock purchased
under the Plan shall be held.
2.10
“ Option Period ” means each calendar quarter,
beginning on the first day of each such calendar quarter and ending
on the last day of such calendar quarter.
2.11
“ Participant ” means an Eligible Employee who
has elected to participate in the Plan in accordance with
Section 6.1 below.
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2.12
“ Payroll Deduction Account ” means the account
established on behalf of a Participant pursuant to Section 7.1
below, to which his or her payroll deductions shall be
credited.
2.13
“ Permanent Disability ” or “
Disability ” means an inability of a Participant to
perform his or her employment duties due to physical or mental
disability sufficient for the Participant to qualify for disability
benefits under the general benefits policies of the Company and in
effect from time to time.
2.14
“ Plan ” means the Mercantile Bank Corporation
Employee Stock Purchase Plan of 2002 as set forth herein, as it may
be amended from time to time.
2.15
“Purchase Price” means the purchase price for a
share of Common Stock to be paid by a Participant on a Stock
Purchase Date, as determined under Section 8.1
below.
2.16
“ Retirement ” means the voluntary termination
of all employment by a Participant such that the Participant would
qualify for retirement benefits from the Company or a Subsidiary
under applicable retirement policies in effect from time to
time.
2.17
“ Stock Purchase Date ” means a date on which
shares of Common Stock are purchased pursuant to the Plan. Unless
otherwise determined by the Committee, the Stock Purchase Date
shall be the last working day of each Option Period during the term
of the Plan.
2.18
“ Subsidiary ” means any corporation or other
entity of which 50% or more of the outstanding voting stock or
voting ownership interest is directly or indirectly owned or
controlled by the Company or by one or more Subsidiaries of the
Company. The term “Subsidiary” includes present and
future Subsidiaries of the Company.
3.1
General. The Committee shall administer the Plan. The Committee
may request advice or assistance or employ such other persons as
are necessary for proper administration of the Plan, including
individuals who are employees of the Company or any Subsidiary.
Subject to the express provisions of the Plan, the Committee shall
have authority to interpret the Plan, to prescribe, amend and
rescind rules, regulations and procedures relating to it, to waive
any requirement of the Plan in whole or in part and on a general or
case-by-case basis, and to make all other determinations necessary
or advisable in administering the Plan, all of which determinations
shall be final and binding upon all persons unless otherwise
determined by the Board. The Committee shall hold its meetings at
such times and places as it considers advisable. Action may be
taken by a written instrument signed by all of the members of the
Committee and any action so taken shall be as fully effective as if
it had been taken at a meeting duly called and held. The Committee
shall make such rules and regulations, if any, for the conduct of
its business as it considers advisable.
3.2
Indemnification of Committee Members. Neither any member or
former member of the Committee, nor any individual or group to whom
authority or responsibility is or has been delegated, shall be
personally responsible or liable for any act or omission in
connection with the performance of powers or duties or the exercise
of discretion or judgment in the administration and implementation
of the Plan. Each person who is or shall have been a member of the
Committee shall be indemnified and held harmless by the Company
from and against any cost, liability or expense imposed or incurred
in connection with such person’s or the Committee’s
taking or failing to take any action under the Plan or the exercise
of discretion or judgment in the administration and implementation
of the Plan. Each such person shall be justified in relying on
information furnished in connection with the Plan’s
administration by any appropriate person or persons.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of
Shares of Common Stock. There shall be reserved for issuance to
and purchase by Participants under the Plan an aggregate of 25,000
shares of Common Stock, subject to adjustment as provided in
Section 4.2. Shares of Common Stock available under the Plan
shall be authorized and unissued shares or shares purchased by the
Company.
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4.2
Adjustments. In the event of a stock dividend, stock split,
recapitalization, merger, reorganization, consolidation,
combination or exchange of shares of Common Stock during the term
of the Plan, the number of shares reserved and authorized to be
issued under the Plan shall be adjusted proportionately, and such
other adjustment shall be made as may be considered necessary or
equitable by the Committee or the Board. In the event of any other
change affecting the Common Stock, such adjustments shall be made
as may be considered equitable by the Committee or the Board to
give proper effect to such change.
Participation in
the Plan shall be open only to Eligible Employees. No option rights
may be granted under the Plan to any person who is not an Eligible
Employee.
SECTION 6
PARTICIPATION AND WITHDRAWAL
6.1 Election
Form; Changes to Election Form.
(a) Participation
by any Eligible Employee in the Plan shall be entirely voluntary.
Any Eligible Employee may become a Participant by completing and
delivering an Election Form to the Company. Except with respect to
the initial Option Period under this Plan, such Eligible Employee
shall become a Participant as of the first day of the next Option
Period following the delivery of his or her Election Form, provided
that the Election Form has been delivered at least ten working days
prior to the beginning of the first day of that Option Period. If
the Election Form has not been delivered at least ten working days
prior to the beginning of the first day of that Option Period, then
such Elig
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