UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 17, 2016
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Mercantile Bank Corporation
(Exact name of registrant as specified in its charter)
Michigan |
000-26719 |
38-3360865 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
310 Leonard Street NW, Grand Rapids, Michigan |
49504 | |
(Address of principal executive offices) |
(Zip Code) | |
Registrant's telephone number, including area code |
616-406-3000 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Equity Incentive Grants
Effective November 17, 2016, the Compensation Committee of Board of Directors of Mercantile Bank Corporation (the “Company”) authorized equity incentive grants of shares of restricted stock and stock options under the Company’s Stock Incentive Plan of 2016 (the "Incentive Plan"). The grants were made to certain executives and employees of the Company to incentivize continuous improvements in corporate performance and increasing shareholder value over the long term. As a condition of accepting the grants, each recipient will be required to execute a Restricted Stock Award Agreement and a Stock Option Agreement. The grants are also subject to the terms and conditions of the Incentive Plan.
Each grant of restricted stock will vest in its entirety on November 17, 2019, and is subject to forfeiture if the grantee ceases to be an employee of the Company prior to that date. Vesting may be accelerated under certain circumstances, including in the event of a change of control, death, disability, retirement, or termination of employment by the Company without cause. The Compensation Committee may also accelerate vesting in its discretion.
Each stock option has an exercise price of $36.22, is first exercisable on November 17, 2018, and expires on November 16, 2023. The exercise price was set at 110% of the closing price of the Company's common stock as quoted on Nasdaq on November 17, 2016.
The number of shares of restricted stock and stock options awarded to our named executive officers are listed below:
Restricted Stock |
Stock Options | |
Michael H. Price |
7,000 |
2,000 |
Robert B. Kaminski |
4,500 |
1,500 |
Charles E. Christmas |
3,750 |
1,000 |
Robert Worthington |
2,500 |
500 |
The foregoing description of the grants is qualified in its entirety by the terms and conditions set forth in the Form of Restricted Stock Award Agreement and Form of Stock Option Agreement, copies of which are attached as Exhibit 10.1 and Exhibit 10.2 hereto, respectively, and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
Description |
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10.1 |
Form of Restricted Stock Award Agreement |
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10.2 |
Form of Stock Option Agreement |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Mercantile Bank Corporation | |
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By: |
/s/ Charles E. Christmas |
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Charles E. Christmas Executive Vice President, Chief Financial Officer and Treasurer |
Date: November 18, 2016
Exhibit Index
Exhibit Number |
Description |
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10.1 |
Form of Restricted Stock Award Agreement |
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10.2 |
Form of Stock Option Agreement |
EXHIBIT 10.1
MERCANTILE BANK CORPORATION
STOCK INCENTIVE PLAN OF 2016
RESTRICTED STOCK AWARD AGREEMENT
NOTIFICATION OF AWARD AND TERMS AND CONDITIONS OF AWARD
Name of Grantee:
Grant Date:
Number of Shares:
Restricted Period(s) See Paragraph 5
This Restricted Stock Award Agreement (the “Agreement”) contains the terms and conditions of the restricted stock award granted to you by Mercantile Bank Corporation, a Michigan corporation (the “Company”), under the Mercantile Bank Corporation Stock Incentive Plan of 2016, as amended from time to time (the "Plan").
1. Grant of Restricted Stock. Pursuant to the Plan, the Company has granted to you, effective on the Grant Date (shown above), the right to receive the number of shares shown above of the Common Stock of the Company (“Shares”) at the end of the applicable Restricted Period (as provided for in Paragraph 5 below). The Shares, or any installment of the Shares respectively, while subject to risk of forfeiture or any restrictions imposed by the Plan or this Agreement, are referred to in this Agreement as “Restricted Stock.”
2. Stock Incentive Plan Governs. The award and this Agreement are subject to the terms and conditions of the Plan. The Plan is incorporated into this Agreement by reference and all capitalized terms used in this Agreement have the meaning set forth in the Plan, unless this Agreement specifies a different meaning. By signing this Agreement, you accept this award, acknowledge receipt of a copy of the Plan and the prospectus covering the Plan and acknowledge that the award is subject to all the terms and provisions of the Plan and this Agreement. You further agree to accept as binding, conclusive and final all decisions and interpretations by the Committee of the Plan and this Agreement.
3. Payment. The Restricted Stock is granted without requirement of payment.
4. Shareholder Rights. Your Restricted Stock shall be held for you by the Company, in book entry or certificated form, in your name, during the applicable Restricted Period. You shall have all the rights of a shareholder for your Restricted Stock after the applicable Restricted Period. With respect to your Restricted Stock during the applicable Restricted Period,
A. You will have the right to vote such shares at any meeting of shareholders of the Company;
B. You will have, and the right to receive, free of restrictions (but subject to applicable withholding taxes) all cash dividends and any liquidation amounts paid with respect to such shares; and
C. Any non-cash dividends and other non-cash proceeds of such shares, including stock dividends and any other securities issued or distributed in respect of such shares, other than liquidation payments, will be subject to the same restrictions and risk of forfeiture as the shares of Restricted Stock to which they relate, and the term “Restricted Stock” when used in this Agreement shall also include any related stock dividends and other securities issued or distributed in respect of such shares, other than liquidation payments.
5. Vesting of Restricted Stock.
A. Vesting. The Restricted Period for the Restricted Stock, or applicable installment of the Restricted Stock, will end, the risk of forfeiture and restrictions will lapse, and the Restricted Stock will vest as follows, provided you have not incurred a Forfeiture Event (as defined below):
Percentage of Shares Vesting |
Cumulative Percentage Vested |
Vesting Date (when Restricted Period Ends) |
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All or part of your Restricted Stock may vest earlier than described above in this Paragraph 5A under the circumstances provided for in Paragraphs 5C, 5D or 5E below.
B. Forfeiture Event. Subject to Paragraphs 5C, 5D, 5E, 5F and 5G below, the shares of your Restricted Stock that would otherwise vest on a Vesting Date will not vest and shall automatically be forfeited and returned to the Company, if after the Grant Date and prior to the Vesting Date for such Restricted Stock (i.e. during the applicable Restricted Period), you cease to be an Employee (a "Forfeiture Event").
C. Accelerated Vesting Upon Death, Disability or Retirement. If you cease to be an Employee or Director because of death, Disability or (in the case of Employees Only) Retirement during the Restricted Period, all restrictions remaining on your Restricted Stock shall terminate automatically and your Restricted Stock shall become immediately fully vested and nonforfeitable.
D. Accelerated Vesting Upon Termination Other Than for Cause. If the Company terminates your employment as an Employee other than for Cause and you are no longer employed by the Company or any Subsidiary, then all restrictions remaining on your Restricted Stock shall terminate automatically with respect to the number of such shares (rounded to the nearest whole number) equal to the respective total number of such shares granted to you multiplied by the number of full months that have elapsed since the Grant Date divided by the total number of full months in the respective Restricted Period, calculated separately for Restricted Stock having different Restricted Periods. All remaining shares of Restricted Stock shall be forfeited and returned to the Company. The Committee may, in its sole discretion, waive the restrictions remaining on and forfeiture of any or all such remaining shares of Restricted Stock either before or after your termination other than for Cause.
E. Accelerated Vesting at the Committee's Discretion. The Committee may, in its discretion, at any time accelerate the vesting of your Restricted Stock on such terms and conditions as it deems appropriate.
F. Change in Control. Unless the Committee, in its discretion, prescribes an economically equivalent alternative approach, if a Change in Control of the Company occurs, and if the parties do not agree that your Restricted Stock award will be assumed or substituted by the successor or acquiring company (or a parent company thereof), then all of your Restricted Stock that is outstanding and has not previously been forfeited, shall become immediately fully vested and nonforfeitable as provided in Section 9 of the Plan.
G. Mandatory Deferral of Vesting. If the vesting of Restricted Stock in any year could, in the Committee’s opinion, when considered with your other compensation, result in the Company's inability to deduct the value of your Shares because of the limitation on deductible compensation under Internal Revenue Code Section 162(m), then the Committee, in its sole discretion, may defer the Vesting Date applicable to your Restricted Stock (but only to the extent that, in the Committee’s judgment, the value of your Restricted Stock would not be deductible) until the first business day of January in the year immediately following the date on which you cease to be an Employee. This Paragraph 5G shall not apply to the vesting of your Restricted Stock upon a Change in Control.
6. Forfeiture of Restricted Stock. If any of your Restricted Stock is forfeited as provided for in Paragraph 5, such forfeiture shall be immediate, and forfeited Restricted Stock (including any cash dividends or liquidation payments for which the record date occurs on or after the date of the forfeiture, and any noncash dividends or noncash distributions with respect to Restricted Stock that is forfeited), and all of your rights to and interest in the forfeited Restricted Stock shall terminate without payment of consideration. Forfeited Restricted Stock shall be reconveyed to the Company, and you agree to promptly take such action and sign such documents as the Company may request to facilitate such reconveyance to the Company.
7. Restricted Stock Not Transferable. Unless the Committee otherwise consents or permits, neither the Restricted Stock, nor any interest in the Restricted Stock, may be sold, exchanged, transferred, pledged, assigned, or otherwise alienated or hypothecated during the Restricted Period except by will or the laws of descent and distribution, and all of your rights with respect to the Restricted Stock shall be exercisable during your lifetime only by you, or your guardian or legal representative. Any attempted action in violation of this paragraph shall be null, void, and without effect.
8. Taxes and Tax Withholding
A. The vesting of your Restricted Stock, or making an Internal Revenue Code Section 83(b) election with respect to this award of Restricted Stock, will cause you to have income with respect to the Restricted Stock, and will subject you to income tax on that income.
B. You agree to consult with any tax consultants you think advisable in connection with your Restricted Stock and acknowledge that you are not relying, and will not rely, on the Company for any tax advice.
C. Whenever any Restricted Stock becomes vested under the terms of this Agreement, or an Internal Revenue Code Section 83(b) election is made with respect to this award of Restricted Stock, you must remit, on or prior to the due date thereof, the minimum amount necessary to satisfy all of the federal, state and local withholding (including FICA) tax requirements imposed on the Company (or the Subsidiary that employs you) relating to your Shares. This withholding tax obligation may be satisfied by any (or a combination) of the following means: (i) cash, check, or wire transfer; (ii) authorizing the Company (or Subsidiary that employs you) to withhold from other cash compensation payable to you by the Company or a Subsidiary; or (iii) unless the Committee determines otherwise, authorizing the Company to withhold Shares otherwise deliverable to you as a result of the vesting of the Restricted Stock, or delivering other unencumbered shares of the Common Stock of the Company which have been held for at least six months, equal to the amount of the withholding obligation.
D. You may within the thirty day period after the Grant Date, in your sole discretion, make an election with the Internal Revenue Service under, and to the extent permitted by, Section 83(b) of the Internal Revenue Code. If you make this election, you will promptly give the Company notice that you have made the election, and provide the Company a copy of the election with the notice.
9. Value of Shares Not Included In Other Computations. The value of the Shares under this Agreement will not be taken into account in computing the amount of your salary or other compensation for purposes of determining any incentive compensation, pension, retirement, death or other benefit under any employee benefit plan of the Company or any Subsidiary, except to the extent, if any, that such plan or another agreement between you, and Company or a Subsidiary, specifically provides otherwise.
10. Legending Restricted Stock. The Company may, without liability for its good faith actions, place legend restrictions upon the Restricted Stock or unrestricted Shares obtained upon vesting of the Restricted Stock and issue “stop transfer” instructions requiring compliance with applicable securities laws and the terms of the Restricted Stock.
In addition to any other legend or notice that may be set forth on the certificate or book entry records relating to any Restricted Stock, any certificate or book entry records evidencing shares of Restricted Stock awarded pursuant to this Agreement may bear a legend or notice substantially as follows:
The shares represented by this certificate were issued subject to certain restrictions under the Mercantile Bank Corporation Stock Incentive Plan of 2016 (the “Plan”). This certificate is held subject to the terms and conditions contained in a restricted stock agreement that includes a prohibition against the sale or transfer of the stock represented by this certificate except in compliance with that agreement and that provides for forfeiture upon certain events. Copies of the Plan and the restricted stock agreement are on file in the office of the Secretary of the Company.
11. Committee Determinations Are Conclusive. Determinations regarding this Agreement (including, but not limited to whether an event has occurred resulting in the forfeiture of or vesting of Restricted Stock) shall be made by the Committee in accordance with this Agreement and the Plan, and all determinations of the Committee shall be final and conclusive and binding on all persons.
12. No Right of Continuing Employment. Neither this Agreement nor the Plan creates any contract of employment, and nothing in this Agreement or the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate your employment or service at any time, nor confer upon you the right to continue in the employ of the Company or any Subsidiary. Nothing in this Agreement or the Plan creates any fiduciary or other duty to you owed by the Company, any Subsidiary, or any member of the Committee except as expressly stated in this Agreement or the Plan.
13. Amendment of Plan and this Agreement. The Company reserves the right to amend the Plan and this Agreement as provided for or not prohibited by the Plan. Any amendment to this Agreement shall be in writing and signed by the Company, and to the extent required by the Plan, signed by you.
14. Additional Information. By signing this Agreement, you agree to provide any information relating to this Agreement or the Restricted Stock that is reasonably requested from time to time by the Company.
15. Notices. Any notice by you to the Company under this Agreement shall be in writing and shall be deemed duly given only upon receipt of the notice by the Company at its principal executive office addressed to its Secretary or Chief Financial Officer. Any notice by the Company to you shall be in writing or by electronic transmission, and shall be deemed duly given if mailed or sent by electronic transmission to you at the address specified below by you, or to your email address at the Company, or to such other address as you may later designate by notice given to the Company.
16. Governing Law. The validity, construction and effect of this Agreement shall be governed by the laws of the State of Michigan.
[Signatures on following page]
The Company has caused this Agreement to be executed by its duly authorized officer, and the Grantee has executed this Agreement, each as of the Grant Date set forth above.
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MERCANTILE BANK CORPORATION | |
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By: |
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Its: | |
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GRANTEE | |
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I acknowledge having received, read and understood the Plan and this Agreement, and agree to all of the terms and provisions of this Agreement. |
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(Signature) |
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(Please print your residence address) |
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EXHIBIT 10.2
THE MERCANTILE BANK CORPORATION
STOCK INCENTIVE PLAN OF 2016
NOTICE OF GRANT OF
INCENTIVE STOCK OPTION AND
STOCK OPTION AGREEMENT
You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Agreement, as follows:
Optionee:
Grant Date:
Number of Shares:
Expiration Date:
Exercise Price Per Share: |
$ |
(calculated at ___% of the Market Value of a share of Common Stock on the Grant Date) |
Date First Exercisable:
This STOCK OPTION AGREEMENT is executed and delivered in duplicate, as of the ____ day of ___________, 20__ by and between Mercantile Bank Corporation, a Michigan corporation (the “Company”), and the employee named above (the “Optionee”).
In consideration of the mutual covenants of the parties set forth below, the parties agree as follows:
1. Grant of Option. The Company, pursuant to the Company's Stock Incentive Plan of 2016, as amended from time to time (the “Plan”), and subject to the terms and conditions of the Plan, grants to the Optionee an Incentive Stock Option (the “Option”) to purchase the above-designated number of shares of Common Stock of the Company at the exercise price per share designated above. The number of shares and exercise price per share of the Option shall be proportionately adjusted in the event the Company changes the number of shares of its outstanding Common Stock by reason of a stock dividend or stock split issued to shareholders, and is otherwise subject to adjustment as provided in the Plan.
2. Exercisability of Option. The Option shall become first exercisable as described above, and shall in no event be exercisable after the close of business on the above-designated Expiration Date. Further, the Committee may in its discretion, at any time accelerate the vesting of the Option on such terms and conditions as it deems appropriate.
3. Time to Exercise Option.
(a) General. If Optionee ceases to be an Employee for any reason other than Optionee's death, Disability, Retirement or termination for Cause, Optionee may exercise the Option in accordance with its terms for a period of three months after such termination of employment, but only to the extent Optionee was entitled to exercise the Option on the date of termination.
(b) Death. If Optionee dies while an Employee, the Option shall be automatically 100% vested and shall be exercisable in accordance with its terms by the personal representative of Optionee or other successor to the interest of Optionee for one year after Optionee's death, but not beyond the Expiration Date of the Option. If Optionee dies after the termination of employment other than for Cause but during the time when Optionee could have exercised the Option, the Option shall be exercisable in accordance with its terms by the personal representative of Optionee or other successor to the interest of Optionee for one year after Optionee's death, but only to the extent that Optionee was entitled to exercise the Option on the date of death or termination of employment, whichever first occurred, and not beyond the Expiration Date of the Option.
(c) Disability. If Optionee ceases to be an Employee of the Company or one of its Subsidiaries due to Optionee's Disability, the Option shall be automatically 100% vested and Optionee may exercise the Option in accordance with its terms for one year following such termination of employment, but not beyond the Expiration Date of the Option.
(d) Retirement. If Optionee Retires as an Employee, Optionee shall be automatically 100% vested in the Option and the Option may be exercised in accordance with its terms, but not beyond the Expiration Date of the Option. If the Option is exercised after the expiration of the three-month period after Retirement, the Option will thereafter be treated as a non-qualified option.
(e) Termination for Cause. If Optionee's employment is terminated for Cause, Optionee shall have no further right to exercise this Option and all of Optionee's outstanding Options shall automatically be forfeited and returned to the Company. The Committee or officers designated by the Committee shall have absolute discretion to determine whether a termination is for Cause.
If an Optionee who is an officer terminates employment (other than by reason or Retirement) and continues in service as a Director of the Company, the Optionee shall be deemed not to have terminated or ceased employment for purposes of this Agreement until such time as the Optionee ceases to provide services as a Director.
4. Method of Exercise. Optionee, from time to time during the period when the Option may by its terms be exercised, may exercise the Option in whole or in part by delivering to the Company:
(a) A written notice signed by Optionee in substantially the form attached as Exhibit A stating the number of shares that Optionee has elected to purchase at that time from the Company; and
(b) Cash, a check, bank draft, money order or wire of funds payable to the Company in an amount equal to the purchase price of the shares then to be purchased; or
(c) Through the delivery of shares of Common Stock of the Company owned by Optionee for more than six months with a Market Value equal to the exercise price, provided, however, that shares of Common Stock acquired by Optionee through the exercise of an incentive stock option may not be used for payment prior to the expiration of holding periods prescribed by the Internal Revenue Code; or
(d) Consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; or
(e) By a combination of any one or more of (b), (c) and (d) above aggregating the purchase price of the shares then to be purchased.
The value of the shares of the Common Stock delivered to Optionee shall be the Market Value of the Common Stock as defined in Section 2.19 of the Plan. The Committee, acting pursuant to the Plan, if it shall deem it necessary or desirable for any reason connected with any law or regulation of any governmental authority relating to the regulation of securities, may require Optionee to execute and file with it such evidence as it may deem necessary that Optionee is acquiring such shares for investment and not with a view to their distribution.
5. Non-Transferability of Option. The Option shall during the lifetime of Optionee be exercisable only by Optionee in accordance with the terms of the Plan and shall not be assignable or transferable except by Will or by the laws of descent and distribution.
6. Change in Control. The Option is subject to the accelerated vesting, exercise and other provisions of Section 9 of the Plan relating to Change in Control.
7. Notices. Any notice by Optionee to the Company under this Agreement shall be in writing and shall be deemed duly given only upon receipt of the notice by the Company at its principal executive offices addressed to its Secretary or Chief Financial Officer. Any notice by the Company to Optionee shall be in writing or by electronic transmission and shall be deemed duly given if mailed or sent by electronic transmission to Optionee at the address specified below by Optionee, or to Optionee's email address at the Company, or to such other address as Optionee may later designate by notice given to the Company.
8. Acceptance of the Terms and Conditions of the Plan. The Option and this Agreement are subject to the terms and conditions of the Plan. The Plan is incorporated in this Agreement by reference and all capitalized terms used in this Agreement have the meaning set forth in the Plan, unless this Agreement specifies a different meaning. By signing this Agreement, Optionee accepts the Option, acknowledges receipt of a copy of the Plan and the prospectus covering the Plan and acknowledges that the Option is subject to all the terms and provisions of the Plan and this Agreement. Optionee further agrees to accept as binding, conclusive and final all decisions and interpretations by the Committee upon any questions arising under the Plan.
9. Continued Employment. Nothing in this Agreement shall be deemed to create any employment or guaranty of continued employment or limit in any way the Company's right to terminate Optionee's employment at any time.
10. Early Disposition of Stock. Optionee understands that if Optionee disposes of any shares of Common Stock received under the Option within two years after the date of grant or within one year after such shares of Common Stock were transferred to Optionee, Optionee may be treated for federal and state income tax purposes as having received ordinary income at the time of such disposition as determined in accordance with the Internal Revenue Code and applicable state law. Optionee agrees to notify the Company in writing within thirty days after the date of any such disposition. Optionee authorizes the Company to withhold tax from Optionee's current compensation with respect to any income recognized as a result of any such disposition.
11. Governing Law. The validity, construction and effect of this Agreement shall be governed by the laws of the State of Michigan.
[Signatures on following page]
The Company has caused this Agreement to be executed by its duly authorized officer, and Optionee has executed this Agreement, as of the Grant Date.
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MERCANTILE BANK CORPORATION | |
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OPTIONEE | |
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Optionee acknowledges having received, read and understood the Plan and this Agreement, and agrees to all of the terms and provisions of this Agreement. | |
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(Signature) | |
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(Please print your residence address) |
EXHIBIT A
NOTICE OF EXERCISE
INCENTIVE STOCK OPTION
The undersigned hereby gives notice to Mercantile Bank Corporation (the "Company") of the desire to purchase shares of Common Stock of the Company pursuant to the Stock Option Agreement dated ___________, 20__.
1. Exercise of Option.
Name: _____________________________
Date: ______________________________
Shares to be Exercised: _______________
Per-Share Exercise Price: $________
Aggregate Exercise Price: $___________ (for all shares being purchased)
2. Delivery of Payment. Indicate below how the full option exercise price for the shares is to be paid:
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Cash in the form of check, bank draft, money order, or wire of funds payable to "Mercantile Bank Corporation" |
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By surrender to the Company of shares of Common Stock owned and held for more than six months with a value of $________ represented by certificate number(s): _____________________________ |
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Pursuant to a cashless exercise program implemented by the Company |
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A combination of the above (please provide details, for example, describe the number of shares to be purchased with cash and the number of shares to be purchased with previously owned shares of Common Stock): | |
___________________________________
Signature
Dated: _____________________________
Address: ____________________________
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