ChoiceOne Financial Services, Inc. 10-K [cofs-10k_123119.htm]

 

Exhibit 10.4

 

 

CHOICEONE FINANCIAL SERVICES, INC.

DIRECTORS' STOCK PURCHASE PLAN

 

 

SECTION 1

 

Establishment and Purposes of Plan

 

1.1       Establishment of Plan; Purposes of Plan. The Company hereby amends and
restates the ChoiceOne Financial Services, Inc. Directors' Stock Purchase Plan.
The purposes of the Plan are to provide an opportunity and means by which
directors can increase their financial interest in the Company, and thereby
increase their personal interest in the Company's continued success, through the
payment of directors' fees in Company Common Stock.

 

1.2       Effective Date. The Plan was originally effective July 15, 1998, and
the “Effective Date” of this amended and restated Plan is December 18, 2019.
Each Plan provision applies until the effective date of an amendment of that
provision.

 

1.3       Number of Shares of Stock. Subject to appropriate adjustment as
required in connection with any change in the capital structure of the Company,
a maximum of 100,000 shares of Common Stock shall be available under the Plan
after the Effective Date.

 

 

SECTION 2

 

Definitions

 

2.1       Board. “Board” means the Board of Directors of the Company.

 

2.2       Committee. “Committee” means the Personnel and Benefits Committee of
the Board or such other committee as the Board shall designate to administer the
Plan. The Committee shall consist of at least two members of the Board, and all
of its members shall be “non-employee directors” as defined in Rule 16b-3 under
the Securities Exchange Act of 1934, as amended.

 

2.3       Common Stock. “Common Stock” means the common stock, without par
value, of ChoiceOne Financial Services, Inc.

 

2.4       Company. “Company” means ChoiceOne Financial Services, Inc.

 

2.5       Director's Fee. “Director's Fee” means the amount of income payable to
a Participant for service as a director, including payments for attendance at
meetings of the Board or meetings of committees of the Board, and any retainer
fee paid to members of the Board.

 

2.6       Eligible Director. “Eligible Director” means a member of the Board of
Directors of the Company or any of its Subsidiaries.

 

   

 

 

 

2.7       Market Value. “Market Value” of a share of Common Stock as of any
Stock Purchase Date or other applicable date means: (a) if the Common Stock is
listed for trading on The Nasdaq Stock Market or one or more national securities
exchanges, the last reported sales price on the day before the applicable Stock
Purchase Date, or if the Common Stock shall not have been traded on the
principal exchange on such date, the last reported sales price on the first day
before such date on which Common Stock was so traded; (b) if the security is not
so listed for trading but is traded in the over-the-counter market, the fair
market value determined by the Committee in good faith, taking into account such
factors as it considers advisable in a manner consistent with the valuation
principles of Section 409A of the Code, except when the Committee expressly
determines not to use Section 409A valuation principles, which determination
shall be final and binding on all parties. Factors that the Committee may, but
need not, consider when determining Market Value include, without limitation,
the prices at which recent sales of Common Stock have been made, and the most
recent reported bid and asked prices of the Common Stock as reported by the
Company's market makers on the applicable date.

 

2.8       Participant. “Participant” means any individual who is participating
in the Plan.

 

2.9       Plan. “Plan” means the ChoiceOne Financial Services, Inc. Directors'
Stock Purchase Plan, as such plan may be amended, administered or interpreted
from time to time.

 

2.10       Stock Purchase Date. “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 date on which
Director's Fees are paid.

 

2.11       Subsidiary. “Subsidiary” or “Subsidiaries” means any corporation or
other entity of which 50% of 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, now or in the future.

 

 

SECTION 3

 

Administration

 

3.1       Power and Authority. The Committee shall administer the Plan, shall
have full power and authority to interpret the provisions of the Plan, and shall
have full power and authority to supervise the administration of the Plan. All
determinations, interpretations and selections made by the Committee regarding
the Plan shall be final and conclusive. The Committee shall hold its meetings at
such times and places as it deems advisable. Action may be taken by a written
instrument signed by a majority of the members of the Committee, and any action
so taken shall be fully as effective as if it had been taken at a meeting duly
called and held. The Committee shall make such rules and regulations for the
conduct of its business as it deems advisable. The members of the Committee
shall not be paid any additional fees for their services.

 

3.2       Delegation of Powers; Employment of Advisers. The Committee may
delegate to any agent such duties and powers, both ministerial and
discretionary, as it deems appropriate except those that may not be delegated by
law or regulation. In administering the Plan, the Committee may employ
attorneys, consultants, accountants or other persons, and the Company and the
Committee shall be entitled to rely upon the advice, opinions or valuation of
any such persons. All usual and reasonable expenses of the Committee shall be
paid by the Company.

 

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3.3       Indemnification of Committee Members. 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. 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

 

Participation

 

4.1       Eligibility to Participate. An Eligible Director may become a
Participant in the Plan on the first day of the individual's term as a director.

 

 

SECTION 5

 

Elective Payment of Director's Fees in Common Stock

 

5.1       Payment of Director's Fees. A Participant may elect to receive payment
of 25%, 50%, 75% or 100% of Director's Fees in the form of Common Stock. On each
Stock Purchase Date, the Participant shall receive a number of shares of Common
Stock (rounded to the nearest whole share) determined by dividing the dollar
amount of fees payable that the director has elected to receive in Common Stock
by the Market Value of Common Stock on the day before the Stock Purchase Date.

 

5.2       Prior Election. The election to receive Director's Fees in the form of
Common Stock shall be made by the Participant on a form provided for that
purpose prior to a Stock Purchase Date. The election shall continue in effect
until revoked or modified for a subsequent Stock Purchase Date by the
Participant.

 

5.3       Timing of Payments. Payment of Director’s Fees in the form of Common
Stock shall be made to the Participant on each date on which the Director's Fees
would have been payable to the Participant if the Participant had not made an
election to receive Director's Fees in the form of Common Stock.

 

5.4       Vesting. The right to receive payment of Director's Fees in shares of
Common Stock as provided by this Plan and any shares of Common Stock acquired
under this Plan shall not be subject to forfeiture for any reason.

 

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5.5       Redemption of Common Stock. The Company will have an option,
exercisable within ninety (90) days after the termination of a Participant’s
directorship, to purchase, and the Participant will be required to sell upon
notice of exercise of the Company’s option, all of the shares that were acquired
pursuant to this Plan at a price equal to the Market Value at the time of the
sale. This option will be binding on anyone who would be deemed a beneficial
owner of a Participant's shares under Section 16 of the Securities Exchange Act
of 1934, as amended. The Company may exercise its option by providing written
notice to the Participant or other holders of the shares.

 

 

SECTION 6

 

General Provisions

 

6.1       Amendment; Termination. The Company reserves the right to amend the
Plan prospectively or retroactively, in whole or in part, or to terminate the
Plan, provided that an amendment or termination may not reduce or revoke shares
of Common Stock acquired under the Plan as of the later of the date of adoption
of the amendment or the effective date of the amendment or termination.

 

6.2       Rights Not Assignable. Amounts promised under the Plan shall not be
subject to assignment, conveyance, transfer, anticipation, pledge, alienation,
sale, encumbrance or charge, whether voluntary or involuntary, by the
Participant, even if directed under a qualified domestic relations order or
other divorce order. An interest in any amount shall not provide collateral or
security for a debt of a Participant or be subject to garnishment, execution,
assignment, levy or to another form of judicial or administrative process or to
the claim of a creditor of a Participant through legal process or otherwise. Any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or to otherwise dispose of benefits payable, before actual receipt of the
benefits, or a right to receive benefits, shall be void and shall not be
recognized.

 

6.3       Unsecured Creditor Status. A Participant shall be an unsecured general
creditor of the Company as to the payment of any benefit under the Plan. The
right of any Participant to be paid the amount promised in the Plan shall be no
greater than the right of any other general, unsecured creditor of the Company.

 

6.4       No Trust or Fiduciary Relationship. Nothing contained in the Plan
shall be deemed to create a trust or fiduciary relationship of any kind for the
benefit of any Participant.

 

6.5       Construction. The singular includes the plural, and the plural
includes the singular, unless the context clearly indicates the contrary.
Capitalized terms (except those at the beginning of a sentence or part of a
heading) have the meaning specified in the Plan. If a capitalized term is not
defined in the Plan, the term shall have the general, accepted meaning of the
term.

 

6.6       Disputes. In the event that a dispute arises regarding the eligibility
to participate in the Plan or any other matter relating to Plan participation,
such dispute shall be made to the Committee. The determination by the Committee
with respect to such disputes shall be final and binding on all parties. In the
event that a dispute arises regarding the amount of any benefit payment under
the Plan that is not related to Participant eligibility disputes, the Committee
may appoint a qualified independent certified public accountant to determine the
amount of payment and such determination shall be final and binding on all
parties.

 

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6.7       Unfunded Plan. This shall be an unfunded plan within the meaning of
the Internal Revenue Code of 1986, as amended. Benefits provided in the Plan
constitute only an unsecured contractual promise to pay in accordance with the
terms of the Plan by the Company.

 

6.8       Self-Employment Taxes. To the extent that amounts paid under the Plan
are deemed to be net earnings from self-employment, each director shall be
responsible for any taxes payable under federal, state or local law.

 

6.9       No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting or continuing in
effect other or additional compensation arrangements, including the grant of
stock options and other stock-based and stock-related awards, and such
arrangements may be either generally applicable or applicable only in specific
cases.

 

6.10       Right of Company to Replace Directors. Neither the action of the
Company in establishing the Plan, nor any provision of the Plan, shall be
construed as giving any director the right to be retained as a director, or any
right to any payment whatsoever except to the extent of the benefits provided
for by the Plan. The Company expressly reserves the right at any time to replace
or fail to renominate any director without any liability for any claim against
the Company for any payment whatsoever except to the extent provided for in the
Plan. The Company has no obligation to create any other or subsequent deferred
compensation plan for directors.

 

6.11       Governing Law; Severability. The Plan shall be construed, regulated
and administered under the laws of the State of Michigan. If any provisions of
the Plan shall be held invalid or unenforceable for any reason, such invalidity
or unenforceability shall not affect the remaining provisions of the Plan, and
the Plan shall be deemed to be modified to the least extent possible to make it
valid and enforceable in its entirety.

 

 

 

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