EXHIBIT 10.30
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT ("Amendment") is made as of the 17th day of November, 2005
by and among Mercantile Bank Corporation, a Michigan corporation (the
"Company"), Mercantile Bank of Michigan, a Michigan banking corporation (the
"Bank", and collectively with the Company, the "Employers", and each an
"Employer"), and Xxxxxx X. Xxxxxxxx, Xx. (the "Employee").
RECITALS
A. The Company, the Bank and the Employee have previously entered into an
Employment Agreement dated as of October 18, 2001, as amended by a letter
amendment dated October 17, 2002 and by a letter amendment dated October 28,
2004 (the "Employment Agreement").
B. The Company, the Bank and the Employee wish to amend the Employment
Agreement to make changes to cause payments under the Employment Agreement to be
in compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code").
TERMS OF AGREEMENT
In consideration of the mutual covenants and obligations set forth herein,
the Employers and the Employee amend the Employment Agreement as follows:
1. Section 4 is amended and restated in its entirety as follows:
4. Participation in Employee Benefit Plans. In addition to the cash
compensation payable to the Employee under this Agreement, the Employee
shall be entitled to participate in such employee benefit plans, whether
contributory or non-contributory, such as group life and disability
insurance plans, hospital, surgical, vision and dental benefit plans or
other bonus incentive, profit sharing, stock option, retirement or other
employee benefit plans of the Employers as may now or hereafter exist to
the extent that the Employee meets the eligibility requirements of any such
plans. All such group life and disability insurance plans, and hospital,
surgical, vision and dental benefit plans are hereafter referred to as
"Life, Disability and Medical Plans". If any bonus or incentive
compensation plan payments constitute "deferred compensation" within the
meaning of Code Section 409A and applicable Treasury regulations, such
deferred compensation will be paid to the Employee within 2 1/2 months
after the end of the calendar year in which it is payable, unless such
bonus or incentive compensation is deferred pursuant to a timely election
into a plan that complies with Code Section 409A.
2. Section 7.1 is amended and restated in its entirety as follows:
7.1 Disability. In the event the Employee shall become Disabled (as
hereinafter defined) during the Employment Period, the Bank or the Company
may terminate the Employee's employment under this Agreement by giving him
written notice of such termination ("Disability Termination Notice"). In
the event of any such termination during the Employment Period, the Bank
shall continue to pay the Employee his Base Cash Compensation, at the rate
in effect immediately prior to the giving of the Disability Termination
Notice, through the end of the Employment Period (through the Termination
Date then in effect). In addition, the Employers shall cover the Employee
under their disability plans, if any, in effect from time to time under the
terms and conditions that such coverage is made available to other
employees of the respective Employers, and the Employee shall be entitled
to any benefits payable to him under such disability plans. While disabled,
the Bank shall continue to provide the Employee and his dependents with
coverage under its Life, Disability and Medical Plans until the Employee
reaches the age of sixty-five (65) years old to the extent that it may do
so under the provisions of such plans, with the Employee's contributions to
the premiums under such plans being no more than the amounts he paid for
such premiums prior to his disability, adjusted from time to time for
normal periodic increases in such premiums applied in general to employees
of the Bank.
The Employee shall be "Disabled" for purposes of this Agreement if the
Employee (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or (ii) is, by reason of any
medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of
not less than 12 months, receiving income replacement benefits for at least
three (3) months from an Employer's long-term disability policy. The
Employee shall be deemed to be Disabled if he is determined to be totally
disabled by the Social Security Administration.
3. A new Section 9A is added as follows:
9A. Delay in Severance Payments. If the Employee is a Specified
Employee (as hereinafter defined) on the date of termination of employment,
then the 18 monthly installments of severance pay described in Sections
8.5(b) and 9 shall be payable as follows. No payments of the monthly
installments shall be made within six months after the Employee's
termination of employment. On the first business day of the seventh month
after the date on which termination of employment occurs, the Bank shall
pay to the Employee an amount equal to the sum of seven (7) equal monthly
installments. The remaining monthly installments shall be paid on the first
business day of each month thereafter.
The Employee is a "Specified Employee" if he is a "key employee" (as
defined in Code Section 416(i) without regard to Code Section 416(i)(5))
and the stock of the Bank or the Company is publicly traded on an
established securities market or otherwise on the date of termination of
employment. The Employee is a "key employee" during the period described
below if he is one of the following during the 12-month period ending on
any December 31 (the "identification date"):
(a) an officer of the Bank or the Company with annual compensation
greater than $130,000 (as indexed pursuant to Code Section 416(i)(1)
-- $140,000 for 2006), provided, that no more than 50 employees (or,
if less, the greater of 3 employees or 10% of the employees) shall be
treated as officers;
(b) a five percent (5%) owner of the Bank or the Company; or
(c) a one percent (1%) owner of the Bank or the Company with annual
compensation of more than $150,000.
If the Employee is a "key employee" as of an identification date, he
is treated as a Specified Employee for the 12-month period beginning on the
first day of the fourth month following the identification date.
4. Section 8.5(e) is amended and restated in its entirety as follows:
(e) $10,000 for out-placement, interim office, and related expenses,
payable within thirty (30) days after the effective date of the termination
of employment.
5. Except as amended herein, the Employment Agreement shall remain in
full force and effect.
The parties have executed this Amendment as of the day and year first above
written.
MERCANTILE BANK CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Its: Chairman and Chief Executive
Officer
MERCANTILE BANK OF MICHIGAN
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Its: Chairman
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxx, Xx.
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Xxxxxx X. Xxxxxxxx, Xx.
