ChoiceOne Financial Services, Inc. 10-K [cofs-10k_123117.htm]

EXHIBIT 10.2

 

CHOICEONE FINANCIAL SERVICES, INC.

STOCK INCENTIVE PLAN OF 2012

 

SECTION 1

 

Establishment Of Plan; Purpose Of Plan

 

1.1          Establishment of Plan. The Company hereby establishes the STOCK
INCENTIVE PLAN OF 2012 for its corporate and Subsidiary officers and other key
employees. The Plan permits the grant and award of Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Awards and
other stock-based and stock-related awards.

 

1.2          Purpose of Plan. The purpose of the Plan is to provide Participants
with an increased incentive to contribute to the long-term performance and
growth of the Company and its Subsidiaries, to join the interests of
Participants with the interests of the Company’s shareholders through the
opportunity for increased stock ownership and to attract and retain
Participants. The Plan is further intended to provide flexibility to the Company
in structuring long-term incentive compensation to best promote the foregoing
objectives. Within that context, it is intended that the Plan may provide
performance-based compensation under Section 162(m) of the Code.

 

SECTION 2

 

Definitions

 

The following words have the following meanings unless a different meaning
plainly is required by the context:

 

2.1          “Act” means the Securities Exchange Act of 1934, as amended.

 

2.2          “Affiliate” means any organization controlling, controlled by or
under common control with the Company.

 

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

 

2.4          “Change in Control,” unless otherwise defined in an Incentive Award
agreement, means an occurrence of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A issued under the Act.
Without limiting the inclusiveness of the definition in the preceding sentence,
a Change in Control of the Company shall be deemed to have occurred as of the
first day that any one or more of the following conditions is satisfied: (a) any
Person is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company’s then outstanding securities;
(b) the failure at any time of the Continuing Directors to constitute at least a
majority of the Board; or (c) any of the following occur: (i) any merger or
consolidation of the Company, other than a merger or consolidation in which the
voting securities of the Company immediately prior to the merger or
consolidation continue to represent (either by remaining outstanding or being
converted into securities of the surviving entity) 60% or more of the combined
voting power of the Company or surviving entity immediately after the merger or
consolidation with another entity; (ii) any sale, exchange, lease, mortgage,
pledge, transfer or other disposition (in a single transaction or a series of
related transactions) of assets or earning power aggregating more than 50% of
the assets or earning power of the Company on a consolidated basis; (iii) any
complete liquidation or dissolution of the Company; (iv) any reorganization,
reverse stock split or recapitalization of the Company which would result in a
Change in Control as otherwise defined in this Plan; or (v) any transaction or
series of related transactions having, directly or indirectly, the same effect
as any of the foregoing.

 

 

 

2.5          “Code” means the Internal Revenue Code of 1986, as amended. Each
reference in this Plan to a section or sections of the Code, unless otherwise
noted, shall be deemed to include a reference to the rules and regulations
issued under such section or sections of the Code.

 

2.6          “Committee” means the Personnel and Benefits Committee of the Board
or such other committee as the Board may designate from time to time. 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 issued under
the Act and “outside directors” as defined in Section 162(m) of the Code.

 

2.7          “Common Stock” means the Company’s common stock, no par value per
share.

 

2.8          “Company” means ChoiceOne Financial Services, Inc., a Michigan
corporation, and its successors and assigns.

 

2.9          “Continuing Directors” means the individuals who were either (a)
first elected or appointed as a director prior to January 1, 2012, or (b)
subsequently appointed as a director, if appointed or nominated by at least a
majority of the Continuing Directors in office at the time of the nomination or
appointment, but specifically excluding any individual whose initial assumption
of office occurs as a result of either an actual or threatened solicitation
subject to Rule 14a-12(c) of Regulation 14A issued under the Act or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board.

 

2.10        “Covered Employee” means any Employee who is or may become a
“Covered Employee,” as defined in Section 162(m) of the Code, and who is
designated, either as an individual Employee or class of Employees, by the
Committee within the shorter of (i) 90 days after the beginning of the
Performance Period, or (ii) the period of time after the beginning of the
Performance Period and before 25% of the Performance Period has elapsed, as a
“Covered Employee” under this Plan for such applicable Performance Period.

 

2.11        “Director” means a member of the Board.

 

2.12        “Disability” means an inability of a Participant to perform his or
her employment duties due to physical or mental disability for a continuous
period of 180 days or longer and the Participant is eligible for benefits under
the Company’s long-term disability policy, if any.

 

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2.13        “Employee” means an employee of the Company or one of its
Subsidiaries or Affiliates.

 

2.14        “Incentive Award” means the award or grant of a Stock Option, a
Stock Appreciation Right, Restricted Stock, a Restricted Stock Unit, a Stock
Award, or another stock-based or stock-related award, to a Participant pursuant
to the Plan.

 

2.15        “Market Value” on any given date means: (a) if the security is
listed for trading on The Nasdaq Stock Market or one or more national securities
exchanges, the last reported sales price on the date in question, or if the
security shall not have been traded on the principal exchange on the applicable
date, the last reported sales price on the first day before that date on which
such security 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.

 

2.18        “Participant” means a corporate officer or any key employee of the
Company or its Subsidiaries who is granted an Incentive Award under the Plan.

 

2.19        “Performance” means the level of achievement of the performance
goals established by the Committee pursuant to Section 10.1.

 

2.20        “Performance Measures” means measures as described in Section 10 on
which the performance goals are based.

 

2.21        “Performance Period” means the period of time during which the
performance goals must be met to determine the degree of payout, the vesting, or
both, with respect to an Incentive Award that is intended to qualify as
Performance-Based Compensation.

 

2.22        “Performance-Based Compensation” means compensation under an
Incentive Award that satisfies the requirements of Section 162(m) of the Code
for certain “performance-based compensation” paid to Covered Employees.
Notwithstanding the foregoing, nothing in this Plan shall be construed to mean
that an Incentive Award which does not satisfy the requirements for
performance-based compensation under Section 162(m) of the Code does not
constitute performance-based compensation for other purposes, including Section
409A of the Code.

 

2.23        “Person” has the same meaning as set forth in Sections 13(d) and
14(d)(2) of the Act.

 

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2.24        “Plan” means the ChoiceOne Financial Services, Inc. Stock Incentive
Plan of 2012 as set forth herein, as it may be amended from time to time.

 

2.25        “Restricted Period” means the period of time during which Restricted
Stock, Restricted Stock Units or other stock-based or stock-related awards that
are awarded under the Plan are subject to the risk of forfeiture, restrictions
on transfer and other restrictions or conditions pursuant to Sections 7 or 8.
The Restricted Period may differ among Participants and may have different
expiration dates with respect to shares of Common Stock covered by the same
Incentive Award.

 

2.26        “Restricted Stock” means Common Stock awarded to a Participant
pursuant to Section 7 of the Plan while such Common Stock remains subject to the
risk of forfeiture, restrictions on transfer and other restrictions or
conditions pursuant to Section 7.

 

2.27        “Restricted Stock Unit” means an award to a Participant pursuant to
Section 7 of the Plan and described as a “Restricted Stock Unit” in Section 7.

 

2.28        “Retirement” means the voluntary termination of all employment by
the Participant after the Participant has attained 55 years of age and completed
six years of service with the Company or any of its Subsidiaries or as otherwise
may be set forth in the Incentive Award agreement or other grant document with
respect to a Participant and a particular Incentive Award.

 

2.29        “Stock Appreciation Right” or “SAR” means any right granted to a
Participant pursuant to Section 6 of the Plan.

 

2.30        “Stock Award” means an award of Common Stock awarded to a
Participant pursuant to Section 8 of the Plan.

 

2.31        “Stock Option” means the right to purchase Common Stock at a stated
price for a specified period of time. For purposes of the Plan, a Stock Option
may be either an incentive stock option within the meaning of Section 422(b) of
the Code or a nonqualified stock option.

 

2.32        “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.

 

2.33        “Termination” or “Cessation” of employment shall be considered to
occur on the date on which the Employee is no longer obligated to perform
services for the Company or any of its Subsidiaries and the Employee’s right to
re-employment is not guaranteed by statute, contract or written policy of the
Company, regardless of whether the Employee continues to receive compensation
from the Company or any of its Subsidiaries after such date. The following shall
not be considered such a termination or cessation: (i) a transfer of an employee
among the Company and its Subsidiaries; (ii) a leave of absence, duly authorized
in writing by the Company, for military service or for any other purpose
approved by the Company if the period of such leave does not exceed 90 days;
(iii) a leave of absence in excess of 90 days, duly authorized in writing by the
Company, provided that the employee’s right to re-employment is guaranteed by
statute, contract or written policy of the Company; or (iv) a termination of
employment as an officer with continued service as an Employee or director.

 

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SECTION 3

 

Administration

 

3.1          Power and Authority. The Committee shall administer the Plan. The
Committee may delegate any, some or all of its record keeping, calculation,
payment and other ministerial or administrative authority and responsibility
from time to time to and among one or more individuals, who may be members of
the Committee or Employees, but all actions taken pursuant to delegated
authority and responsibility shall be subject to such review, change and
approval by the Committee as the Committee considers appropriate. Except as
limited in the Plan or as may be necessary to ensure, to the extent that the
Committee so desires, that the Plan provides Performance-Based Compensation, the
Committee shall have all of the express and implied powers and duties set forth
in the Bylaws of the Company and the Plan, shall have full power and authority
to interpret the provisions of the Plan and Incentive Awards granted under the
Plan and shall have full power and authority to supervise the administration of
the Plan and Incentive Awards granted under the Plan and to make all other
determinations and do all things considered necessary or advisable for 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 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 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 considers
advisable.

 

3.2          Grants or Awards to Participants. In accordance with and subject to
the provisions of the Plan, the Committee shall have the authority to determine
all provisions of Incentive Awards as the Committee may consider necessary or
desirable and as are consistent with the terms of the Plan, including, without
limitation, the following: (a) the persons who shall be selected as
Participants; (b) the nature and, subject to the limitations set forth in
Sections 4.1 and 4.2 of the Plan, extent of the Incentive Awards to be made to
each Participant (including the number of shares of Common Stock to be subject
to each Incentive Award, any exercise or purchase price, the manner in which an
Incentive Award will vest or become exercisable and the form of payment for the
Incentive Award); (c) the time or times when Incentive Awards will be granted;
(d) the duration of each Incentive Award; and (e) the restrictions and other
conditions to which payment or vesting of Incentive Awards may be subject.

 

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3.3          Amendments or Modifications of Incentive Awards. Subject to Section
12, the Committee shall have the authority to amend or modify the terms of any
outstanding Incentive Award in any manner, provided that the amended or modified
terms are not prohibited by the Plan as then in effect and provided such actions
do not cause an Incentive Award not already subject to Section 409A of the Code
to become subject to Section 409A of the Code, including, without limitation,
the authority to: (a) modify the number of shares or other terms and conditions
of an Incentive Award; provided that any increase in the number of shares of an
Incentive Award other than pursuant to Section 4.3 shall be considered to be a
new grant with respect to such additional shares for purposes of Section 409A of
the Code and such new grant shall be made at Market Value on the date of grant;
(b) extend the term of an Incentive Award to a date that is no later than the
earlier of the latest date upon which the Incentive Award could have expired by
its terms under any circumstances or the 10th anniversary of the date of grant
(for purposes of clarity, as permitted under Section 409A of the Code, if the
term of a Stock Option is extended at a time when the Stock Option exercise
price equals or exceeds the Market Value, it will not be an extension of the
term of the Stock Option, but instead will be treated as a modification of the
Stock Option and a new Stock Option will be treated as having been granted); (c)
accelerate the exercisability or vesting or otherwise terminate, waive or modify
any restrictions relating to an Incentive Award; (d) accept the surrender of any
outstanding Incentive Award; and (e) to the extent not previously exercised or
vested, authorize the grant of new Incentive Awards in substitution for
surrendered Incentive Awards; provided, however, that such grant of new
Incentive Awards shall be considered to be a new grant for purposes of Section
409A of the Code and shall be made at Market Value on the date of grant and,
provided further, that Incentive Awards issued under the Plan may not be
repriced, replaced, regranted through cancellation or modified without
shareholder approval if the effect of such repricing, replacement, regrant or
modification would be to reduce the exercise price or base price of such
Incentive Awards to the same Participants.

 

3.4          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, and any other individual or group exercising delegated authority
or responsibility with respect to the Plan, 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. This Section 3.4
shall not be construed as limiting the Company’s or any Subsidiary’s ability to
terminate or otherwise alter the terms and conditions of the employment of an
individual or group exercising delegated authority or responsibility with
respect to the Plan, or to discipline any such person. Each such person shall be
justified in relying on information furnished in connection with the Plan’s
administration by any appropriate person or persons.

 

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SECTION 4

 

Shares Subject to the Plan

 

4.1          Number of Shares. Subject to adjustment as provided in Section 4.3
of the Plan, the total number of shares available for Incentive Awards under the
Plan shall be 100,000 shares of Common Stock; plus shares subject to Incentive
Awards that are canceled, surrendered, modified, exchanged for substitute
Incentive Awards or that expire or terminate prior to the exercise or vesting of
the Incentive Awards in full and shares that are surrendered to the Company in
connection with the exercise or vesting of Incentive Awards, whether previously
owned or otherwise subject to such Incentive Awards. Such shares shall be
authorized and may be unissued shares, shares issued and repurchased by the
Company (including shares purchased on the open market), and shares issued and
otherwise reacquired by the Company.

 

4.2          Limitation Upon Incentive Awards. No Participant shall be granted,
during any calendar year, Incentive Awards with respect to more than 25% of the
total number of shares of Common Stock available for Incentive Awards under the
Plan set forth in Section 4.1 of the Plan, subject to adjustment as provided in
Section 4.3 of the Plan, but only to the extent that such adjustment will not
affect the status of any Incentive Award theretofore issued or that may
thereafter be issued as Performance-Based Compensation. The purpose of this
Section 4.2 is to ensure that the Plan may provide Performance-Based
Compensation and this Section 4.2 shall be interpreted, administered and amended
if necessary to achieve that purpose.

 

4.3Adjustments.

 

(a)          Stock Dividends and Distributions. If the number of shares of
Common Stock outstanding changes by reason of a stock dividend, stock split,
recapitalization or other general distribution of Common Stock or other
securities to holders of Common Stock, the number and kind of securities subject
to outstanding Incentive Awards and available for issuance under the Plan,
together with applicable exercise prices and base prices and the limitation
provided in Section 4.2, shall be adjusted in such manner and at such time as
shall be equitable under the circumstances. No fractional shares shall be issued
pursuant to the Plan and any fractional shares resulting from such adjustments
shall be eliminated from the respective Incentive Awards.

 

(b)          Other Actions Affecting Common Stock. If there occurs, other than
as described in Section 4.3(a), any merger, business combination,
recapitalization, reclassification, subdivision or combination approved by the
Board that would result in the persons who were shareholders of the Company
immediately prior to the effective time of any such transaction owning or
holding, in lieu of or in addition to shares of Common Stock, other securities,
money and/or property (or the right to receive other securities, money and/or
property) immediately after the effective time of such transaction, then the
outstanding Incentive Awards (including exercise prices and base prices) and
reserves for Incentive Awards under the Plan shall be adjusted in such manner
and at such time as shall be equitable under the circumstances. It is intended
that in the event of any such transaction, Incentive Awards under the Plan shall
entitle the holder of each Incentive Award to receive (upon exercise in the case
of Stock Options and SARs), in lieu of or in addition to shares of Common Stock,
any other securities, money and/or property receivable upon consummation of any
such transaction by holders of Common Stock with respect to each share of Common
Stock outstanding immediately prior to the effective time of such transaction;
upon any such adjustment, holders of Incentive Awards under the Plan shall have
only the right to receive in lieu of or in addition to shares of Common Stock
such other securities, money and/or other property as provided by the
adjustment.

 

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SECTION 5

 

Stock Options

 

5.1          Grant. A Participant may be granted one or more Stock Options under
the Plan. No Participant shall have any rights as a shareholder with respect to
any shares of stock subject to Stock Options granted hereunder until such shares
have been issued. For purposes of determining the number of shares available
under the Plan, each Stock Option shall count as the number of shares of Common
Stock subject to the Stock Option. Stock Options shall be subject to such terms
and conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. In addition, the Committee
may vary, among Participants and among Stock Options granted to the same
Participant, any and all of the terms and conditions of the Stock Options
granted under the Plan. Subject to the limitation imposed by Section 4.2 of the
Plan, the Committee shall have complete discretion in determining the number of
Stock Options granted to each Participant. The Committee may designate whether
or not a Stock Option is to be considered an incentive stock option as defined
in Section 422(b) of the Code; provided, that the number of shares of Common
Stock that may be designated as subject to incentive stock options for any given
Participant shall be limited to that number of shares that become exercisable
for the first time by the Participant during any year (under all plans of the
Company and its Subsidiaries) and have an aggregate Market Value less than or
equal to $100,000 (or such other amount as may be set forth in the Code) and all
shares subject to an Incentive Award that have a Market Value in excess of such
aggregate amount shall automatically be subject to Stock Options that are not
incentive stock options.

 

5.2          Stock Option Agreements. Stock Options shall be evidenced by stock
option agreements, certificates of award, or both, containing the terms and
conditions applicable to such Stock Options. To the extent not covered by a
stock option agreement or certificate of award, the terms and conditions of this
Section 5 shall govern.

 

5.3          Stock Option Exercise Price and Grant Date. The per share Stock
Option exercise price shall be determined by the Committee, but shall be a price
that is equal to or greater than 100% of the Market Value on the date of grant.
The date of grant of a Stock Option shall be the date the Stock Option is
authorized by the Committee or a future date specified by the Committee as the
date for issuing the Stock Option.

 

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5.4          Medium and Time of Payment. The exercise price for each share
purchased pursuant to a Stock Option granted under the Plan shall be payable in
cash or, if the Committee consents or provides in the applicable stock option
agreement or grant, in shares of Common Stock or other consideration
substantially equivalent to cash. The time and terms of payment may be amended
with the consent of a Participant before or after exercise of a Stock Option,
provided that such amendment would not cause a Stock Option to become subject to
Section 409A of the Code. Except as limited by the Act, the Sarbanes-Oxley Act
of 2002 or other laws, rules or regulations, the Committee may from time to time
authorize payment of all or a portion of the Stock Option exercise price in the
form of a promissory note or other deferred payment installments according to
such terms as the Committee may approve; provided, however, that such promissory
note or other deferred payment installments shall be with full recourse and
shall bear a market rate of interest. The Board may restrict or suspend the
power of the Committee to permit such loans and may require that adequate
security be provided. The Committee may implement a program for the
broker-assisted cashless exercise of Stock Options.

 

5.5          Stock Options Granted to Ten Percent Shareholders. No Stock Option
granted to any Participant who at the time of such grant owns, together with
stock attributed to such Participant under Section 424(d) of the Code, more than
10% of the total combined voting power of all classes of stock of the Company or
any of its Subsidiaries may be designated as an incentive stock option, unless
such Stock Option provides an exercise price equal to at least 110% of the
Market Value of the Common Stock and the exercise of the Stock Option after the
expiration of five years from the date of grant of the Stock Option is
prohibited by its terms.

 

5.6          Limits on Exercisability. Stock Options shall be exercisable for
such periods, not to exceed 10 years and one day from the date of grant, as may
be fixed by the Committee. At the time of exercise of a Stock Option, the holder
of the Stock Option, if requested by the Committee, must represent to the
Company that the shares are being acquired for investment and not with a view to
the distribution thereof. The Committee may in its discretion require a
Participant to continue the Participant’s service with the Company or its
Subsidiaries for a certain length of time prior to a Stock Option becoming
exercisable and may eliminate such delayed vesting provisions.

 

5.7          Restrictions on Transferability.

 

(a)          General. Unless the Committee otherwise consents or permits (before
or after the stock option grant) or unless the stock option agreement or grant
provides otherwise, Stock Options granted under the Plan may not be sold,
exchanged, transferred, pledged, assigned or otherwise alienated or hypothecated
except by will or the laws of descent and distribution, and, as a condition to
any transfer permitted by the Committee or the terms of the stock option
agreement or grant, the transferee must execute a written agreement permitting
the Company to withhold from the shares subject to the Stock Option a number of
shares having a Market Value at least equal to the amount of any federal, state
or local withholding or other taxes associated with or resulting from the
exercise of a Stock Option. All provisions of a Stock Option that are determined
with reference to the Participant, including without limitation those that refer
to the Participant’s employment with the Company or its Subsidiaries, shall
continue to be determined with reference to the Participant after any transfer
of a Stock Option.

 

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(b)          Other Restrictions. The Committee may impose other restrictions on
any shares of Common Stock acquired pursuant to the exercise of a Stock Option
under the Plan as the Committee considers advisable, including, without
limitation, holding periods or further transfer restrictions, forfeiture or
“claw-back” provisions, and restrictions under applicable federal or state
securities laws.

 

5.8          Termination of Employment. Unless the Committee otherwise consents
or permits (before or after the stock option grant) or unless the stock option
agreement or grant provides otherwise:

 

(a)          General. If a Participant is no longer employed by the Company or
its Subsidiary for any reason other than the Participant’s Retirement, death,
Disability or termination for cause, the Participant may exercise his or her
Stock Options in accordance with their terms for a period of 3 months after such
termination of employment, but only to the extent the Participant was entitled
to exercise the Stock Options on the date of termination.

 

(b)          Death. If a Participant dies either while an Employee or otherwise
during a time when the Participant could have exercised a Stock Option, the
Stock Options issued to such Participant shall be exercisable in accordance with
their terms by the personal representative of such Participant or other
successor to the interest of the Participant for a period of one year after such
Participant’s death to the extent that the Participant was entitled to exercise
the Stock Options on the date of death or termination, whichever first occurred,
but not beyond the original term of the Stock Options.

 

(c)          Disability. If a Participant ceases to be employed by the Company
or one of its Subsidiaries due to the Participant’s Disability, he or she may
exercise his or her Stock Options in accordance with their terms for one year
after he or she ceases to be employed unless such Stock Options earlier expire
by their terms, but only to the extent that the Participant was entitled to
exercise the Stock Options on the date of such event and not beyond the original
terms of the Stock Options.

 

(d)          Participant Retirement. If a Participant ceases to be employed by
the Company or one of its Subsidiaries due to Retirement, the Participant may
exercise his or her Stock Options in accordance with their terms for three years
after such termination of employment unless such Stock Options earlier expire by
their terms, but only to the extent that the Participant was entitled to
exercise the Stock Options on the date of such event and not beyond the original
terms of the Stock Options.

 

(e)          Termination for Cause. If a Participant’s employment is terminated
for cause, the Participant shall have no further right to exercise any Stock
Options previously granted to him or her. The Committee or officers designated
by the Committee shall have absolute discretion to determine whether a
termination is for cause.

 

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SECTION 6

 

Stock Appreciation Rights

 

6.1          Grant. A Participant may be granted one or more Stock Appreciation
Rights under the Plan and such SARs shall be subject to such terms and
conditions, consistent with the other provisions of the Plan, as shall be
determined by the Committee in its sole discretion. An SAR may relate to a
particular Stock Option and may be granted simultaneously with or subsequent to
the Stock Option to which it relates. Except to the extent otherwise modified in
the grant, (i) SARs not related to a Stock Option shall be granted subject to
the same terms and conditions applicable to Stock Options as set forth in
Section 5, and (ii) all SARs related to Stock Options granted under the Plan
shall be granted subject to the same restrictions and conditions and shall have
the same vesting, exercisability, forfeiture and termination provisions as the
Stock Options to which they relate. SARs may be subject to additional
restrictions and conditions. The per-share base price for exercise or settlement
of SARs shall be determined by the Committee, but shall be a price that is equal
to or greater than the Market Value of such shares on the date of the grant.
Other than as adjusted pursuant to Section 4.3, the base price of SARs may not
be reduced without shareholder approval (including canceling previously awarded
SARs and regranting them with a lower base price).

 

6.2          Exercise; Payment. To the extent a SAR relates to a Stock Option,
the SAR may be exercised only when the related Stock Option could be exercised
and only when the Market Value of the shares subject to the Stock Option exceeds
the exercise price of the Stock Option. When a Participant exercises such SARs,
the Stock Options related to such SARs shall automatically be cancelled with
respect to an equal number of underlying shares. Unless the Committee decides
otherwise (in its sole discretion), SARs shall only be paid in cash or in shares
of Common Stock. For purposes of determining the number of shares available
under the Plan, each Stock Appreciation Right shall count as one share of Common
Stock, without regard to the number of shares, if any, that are issued upon the
exercise of the Stock Appreciation Right and upon such payment.

 

SECTION 7

 

Restricted Stock and Restricted Stock Units

 

7.1          Grant. Subject to the limitations set forth in Sections 4.1 and 4.2
of the Plan, Restricted Stock and Restricted Stock Units may be granted to
Participants under the Plan. Shares of Restricted Stock are shares of Common
Stock the retention, vesting and/or transferability of which is subject, during
specified periods of time, to such conditions (including continued employment
and/or achievement of performance goals established by the Committee) and terms
as the Committee deems appropriate. Restricted Stock Units are Incentive Awards
denominated in units of Common Stock under which the issuance of shares of
Common Stock is subject to such conditions (including continued employment
and/or achievement of performance goals established by the Committee) and terms
as the Committee deems appropriate. For purposes of determining the number of
shares available under the Plan, each Restricted Stock Unit shall count as the
number of shares of Common Stock subject to the Restricted Stock Unit. Unless
determined otherwise by the Committee, each Restricted Stock Unit shall be equal
to one share of Common Stock and shall entitle a Participant to either shares of
Common Stock or an amount of cash determined with reference to the value of
shares of Common Stock. To the extent determined by the Committee, Restricted
Stock and Restricted Stock Units may be satisfied or settled in cash, in shares
of Common Stock or in a combination thereof. Restricted Stock Units shall be
settled no later than the 15th day of the third month after the Restricted Stock
Units vest. Restricted Stock and Restricted Stock Units granted pursuant to the
Plan need not be identical but shall be consistent with the terms of the Plan.
Subject to the requirements of applicable law, the Committee shall determine the
price, if any, at which awards of Restricted Stock or Restricted Stock Units, or
shares of Common Stock issuable pursuant to Restricted Stock Unit awards, shall
be sold or awarded to a Participant, which may vary from time to time and among
Participants.

 

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7.2          Restricted Stock Agreements. Awards of Restricted Stock and
Restricted Stock Units shall be evidenced by restricted stock or restricted
stock unit agreements or certificates of award containing such terms and
conditions, consistent with the provisions of the Plan, as the Committee shall
from time to time determine. Unless the restricted stock or restricted stock
unit agreement or certificate of award provides otherwise, awards of Restricted
Stock and Restricted Stock Units shall be subject to the terms and conditions
set forth in this Section 7.

 

7.3          Vesting. The grant, issuance, retention, vesting and settlement of
shares of Restricted Stock and Restricted Stock Units shall occur at such time
and in such installments as determined by the Committee or under criteria
established by the Committee. The Committee shall have the right to make the
timing of the grant and/or issuance of, the ability to retain and the vesting
and/or the settlement of Restricted Stock Units and shares of Restricted Stock
subject to continued employment, passage of time and/or such performance
criteria as deemed appropriate by the Committee.

 

7.4          Termination of Employment. Unless the Committee otherwise consents
or permits (before or after the grant of Restricted Stock or Restricted Stock
Units) or unless the restricted stock or restricted stock unit agreement or
grant provides otherwise:

 

(a)          General. If a Participant ceases to be an Employee during the
Restricted Period for any reason other than death, Disability, Retirement or
termination for cause, each share of Restricted Stock and Restricted Stock Unit
still subject in full or in part to restrictions at the date of such termination
shall automatically be forfeited and returned to the Company.

 

(b)          Death, Retirement or Disability. In the event a Participant
terminates his or her employment with the Company because of death, Disability
or Retirement during the Restricted Period, the restrictions remaining on any or
all shares of Restricted Stock and Restricted Stock Units shall terminate
automatically with respect to that respective number of such shares or
Restricted Stock Units (rounded to the nearest whole number) equal to the
respective total number of such shares or Restricted Stock Units granted to such
Participant multiplied by the number of full months that have elapsed since the
date of grant divided by the total number of full months in the respective
Restricted Period; provided, that if such Restricted Stock or Restricted Stock
Units are subject to attainment of performance goals, then the restrictions
shall not lapse until the end of the applicable performance period and then only
after it is determined that the Company shall have attained such performance
goals. All remaining shares of Restricted Stock and Restricted Stock Units shall
be forfeited and returned to the Company; provided, that the Committee may, in
its sole discretion, waive the restrictions remaining on any or all such
remaining shares of Restricted Stock and Restricted Stock Units either before or
after the death, Disability or Retirement of the Participant.

 

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(c)          Termination for Cause. If a Participant’s employment is terminated
for cause, the Participant shall have no further right to receive any Restricted
Stock or Restricted Stock Units and all Restricted Stock and Restricted Stock
Units still subject to restrictions at the date of such termination shall
automatically be forfeited and returned to the Company. For purposes of the
Plan, the Committee or officers designated by the Committee shall have absolute
discretion to determine whether a termination is for cause.

 

7.5          Restrictions on Transferability.

 

(a)          General. Unless the Committee otherwise consents or permits or
unless the terms of the restricted stock or restricted stock unit agreement or
grant provide otherwise: (i) neither shares of Restricted Stock nor Restricted
Stock Units 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 (ii) all rights with respect to Restricted
Stock and Restricted Stock Units granted to a Participant under the Plan shall
be exercisable during the Participant’s lifetime only by such Participant or his
or her guardian or legal representative.

 

(b)          Other Restrictions. The Committee may impose other restrictions on
any shares of Common Stock acquired pursuant to an award of Restricted Stock or
issuable pursuant to Restricted Stock Unit awards under the Plan as the
Committee considers advisable, including, without limitation, holding periods or
further transfer restrictions, forfeiture or “claw-back” provisions, and
restrictions under applicable federal or state securities laws.

 

7.6          Legending of Restricted Stock. In addition to any other legend that
may be set forth on a Participant’s share certificate, any certificates
evidencing shares of Restricted Stock awarded pursuant to the Plan shall bear
the following legend:

 

The shares represented by this certificate were issued subject to certain
restrictions under the ChoiceOne Financial Services, Inc. Stock Incentive Plan
of 2012 (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.

 

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The Committee may require that certificates representing shares of Restricted
Stock be retained and held in escrow by a designated employee or agent of the
Company or any Subsidiary until any restrictions applicable to shares of
Restricted Stock so retained have been satisfied or lapsed.

 

7.7          Rights as a Shareholder. A Participant shall have all dividend,
liquidation and other rights with respect to Restricted Stock held of record by
such Participant as if the Participant held unrestricted Common Stock; provided,
that the unvested portion of any award of Restricted Stock shall be subject to
any restrictions on transferability or risks of forfeiture imposed pursuant to
this Section 7 and the terms and conditions set forth in the Participant’s
restricted stock agreement. Unless the Committee otherwise determines or unless
the terms of the applicable restricted stock unit agreement or grant provide
otherwise, a Participant shall have all dividend and liquidation rights with
respect to shares of Common Stock subject to awards of Restricted Stock Units
held by such Participant as if the Participant held unrestricted Common Stock.
Unless the Committee determines otherwise or unless the terms of the applicable
restricted stock or restricted stock unit agreement or grant provide otherwise,
any noncash dividends or distributions paid with respect to shares of unvested
Restricted Stock and shares of Common Stock subject to unvested Restricted Stock
Units shall be subject to the same restrictions and vesting schedule as the
shares to which such dividends or distributions relate. Any dividend payment
with respect to Restricted Stock or Restricted Stock Units shall be made no
later than the 15th day of the third month following the date the dividends are
paid to shareholders.

 

7.8          Voting Rights. Unless otherwise determined by the Committee,
Participants holding shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those shares during the Restricted Period.
Participants shall have no voting rights with respect to shares of Common Stock
underlying Restricted Stock Units unless and until such shares are reflected as
issued and outstanding shares on the Company’s stock ledger.

 

SECTION 8

 

Stock-Based Awards

 

8.1          Grant. Subject to the limitations set forth in Sections 4.1 and 4.2
of the Plan, in addition to any Stock Options, Stock Appreciation Rights,
Restricted Stock, or Restricted Stock Units that a Participant may be granted
under the Plan, a Participant may be granted one or more other types of awards
based on or related to shares of Common Stock (including the grant of Stock
Awards). Such awards shall be subject to such terms and conditions, consistent
with the other provisions of the Plan, as may be determined by the Committee in
its sole discretion. Notwithstanding the previous sentence, the shares of stock
subject to Stock Awards shall be issued no later than the 15th day of the third
month after the end of the calendar year in which the award is granted. Such
awards shall be expressed in terms of shares of Common Stock or denominated in
units of Common Stock. For purposes of determining the number of shares
available under the Plan, each such unit shall count as the number of shares of
Common Stock to which it relates.

 

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8.2          Rights as a Shareholder.

 

(a)          Stock Awards. A Participant shall have all voting, dividend,
liquidation and other rights with respect to shares of Common Stock issued to
the Participant as a Stock Award under this Section 8 upon the Participant
becoming the holder of record of the Common Stock granted pursuant to such Stock
Award; provided, that the Committee may impose such restrictions on the
assignment or transfer of Common Stock awarded pursuant to a Stock Award as it
considers appropriate. Any dividend payment with respect to a Stock Award shall
be made no later than the 15th day of the third month following the date the
dividends are paid to shareholders.

 

(b)          General. With respect to shares of Common Stock subject to awards
granted under the Plan other than Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units and Stock Awards, a Participant shall
have such rights as determined by the Committee and set forth in the respective
award agreements; and the Committee may impose such restrictions on the
assignment or transfer of Common Stock awarded pursuant to such awards as it
considers appropriate.

 

SECTION 9

 

Change in Control

 

9.1          Acceleration of Vesting. If a Change in Control of the Company
occurs, then, unless the Committee or the Board otherwise determines and
expressly states in the agreements governing one or more Incentive Awards,
without action by the Committee or the Board: (a) all outstanding Stock Options
and Stock Appreciation Rights shall become vested and exercisable in full
immediately prior to the effective time of a Change in Control and shall remain
exercisable during the remaining terms thereof, regardless of whether the
Participants to whom such Stock Options and Stock Appreciation Rights have been
granted remain in the employ or service of the Company or any Subsidiary; and
(b) all other outstanding Incentive Awards shall become immediately fully vested
and exercisable and nonforfeitable.

 

9.2          Cash Payment for Stock Options and Stock Appreciation Rights. If a
Change in Control of the Company occurs, then the Committee, in its sole
discretion and without the consent of any Participant affected thereby, may
determine that some or all Participants holding outstanding Stock Options and/or
Stock Appreciation Rights shall receive, with respect to and in lieu of some or
all of the shares of Common Stock subject to such Stock Options and/or Stock
Appreciation Rights, as of the effective date of any such Change in Control of
the Company, cash in an amount equal to the highest price per share actually
paid in connection with any Change in Control of the Company over the exercise
price per share of such Stock Options and/or the base price per share of such
Stock Appreciation Rights. Upon a Participant’s receipt of such amount with
respect to some or all of his or her Stock Options and/or Stock Appreciation
Rights, the respective Stock Options and/or Stock Appreciation Rights shall be
cancelled and may no longer be exercised by such Participant.

 

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SECTION 10

 

Performance Measures

 

10.1        Performance Measures. Unless and until the Committee proposes for
shareholder vote and the shareholders approve a change in the general
Performance Measures set forth in this Section 10, the performance goals upon
which the payment or vesting of an Incentive Award to a Covered Employee that is
intended to qualify as Performance-Based Compensation may be based shall be
limited to the following Performance Measures:

 

(a)Net income (before or after taxes, interest, depreciation, and/or
amortization);

(b)Net income per share;

(c)Return on equity;

(d)Cash earnings;

(e)Cash earnings per share (reflecting dilution of the Common Stock as the
Committee deems appropriate and, if the Committee so determines, net of or
including dividends);

(f)Cash earnings return on equity;

(g)Operating income;

(h)Operating income per share;

(i)Operating income return on equity;

(j)Return on assets;

(k)Cash flow;

(l)Cash flow return on capital;

(m)Return on capital;

(n)Productivity ratios;

(o)Share price (including without limitation growth measures, total shareholder
return or comparison to indices);

(p)Expense or cost levels;

(q)Margins;

(r)Operating efficiency;

(s)Efficiency ratio;

(t)Customer satisfaction, satisfaction based on specified objective goals or a
Company-sponsored customer survey;

(u)Economic value added measurements;

(v)Market share or market penetration with respect to specific designated
products or services, product or service groups and/or specific geographic
areas;

(w)Reduction of losses, loss ratios, expense ratios or fixed costs;

(x)Employee turnover;

(y)Specified objective social goals;

(z)Noninterest income;

 

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(aa)Loan growth;

(bb)Deposit growth; and

(cc)Interest income

 

One or more Performance Measures may be used to measure the performance of one
or more of the Company, its Subsidiaries, its Affiliates, or any combination of
the foregoing, compared to pre-determined levels, as the Committee may deem
appropriate, or compared to the performance of a pre-established peer group, or
published or special index that the Committee, in its sole discretion, deems
appropriate. The Committee also has the authority to provide for accelerated
vesting of any Incentive Award based on the achievement of performance goals
pursuant to the Performance Measures specified in this Section 10.

 

10.2        Evaluation of Performance. The Committee may provide in any such
Incentive Award that any evaluation of Performance may include or exclude any of
the following events or their effects that occurs during a Performance Period:
(a) asset write-downs, (b) litigation or claim judgments or settlements,
(c) changes in tax laws, accounting principles, or other laws or provisions
affecting reported results, (d) any reorganization and restructuring programs,
(e) extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
shareholders for the applicable fiscal year, (f) acquisitions, mergers,
divestitures or accounting changes, (g) amortization of goodwill or other
intangible assets, (h) discontinued operations, and (i) other special charges or
extraordinary items. To the extent such inclusions or exclusions affect
Incentive Awards to Covered Employees, they shall be prescribed in a form that
meets the requirements of Section 162(m) of the Code for deductibility.

 

10.3        Committee Discretion. In the event that applicable tax laws,
securities laws, or both, change to permit Committee discretion to alter the
governing Performance Measures without obtaining shareholder approval of such
changes, the Committee shall have sole discretion to make such changes without
obtaining shareholder approval. In addition, in the event that the Committee
determines that it is advisable to grant Incentive Awards that shall not qualify
as Performance-Based Compensation, the Committee may make such grants without
satisfying the requirements of Section 162(m) of the Code and may base vesting
on Performance Measures other than those set forth in Section 10.1.

 

10.4        Adjustment of Performance-Based Compensation. Incentive Awards that
are designed to qualify as Performance-Based Compensation, and that are held by
Covered Employees, may not be increased or adjusted upward. The Committee shall
retain the discretion to decrease or adjust such Incentive Awards downward, and
such Incentive Awards may be forfeited in whole or in part.

 

10.5        Performance-Based Compensation Conditioned on Performance. Payment
of Performance-Based Compensation to a Participant for a Performance Period
under this Plan shall be entirely contingent upon achievement of the performance
goals established by the Committee pursuant to this Section 10, the satisfaction
of which must be substantially uncertain when established by the Committee for
the Performance Period.

 

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10.6        Time of Determination of Performance Goals by Committee. All
performance goals to be made by the Committee for a Performance Period pursuant
to this Section 10 shall be established in writing by the Committee during the
first 90 days of such Performance Period and before 25% of the Performance
Period has elapsed.

 

10.7        Objective Standards. Performance-Based Compensation shall be based
solely upon objective criteria, consistent with this Section 10, from which an
independent third party with knowledge of the facts could determine whether the
performance goal or range of goals is met and from that determination could
calculate the Performance-Based Compensation to be paid. Although the Committee
has authority to exercise reasonable discretion to interpret this Plan and the
criteria it shall specify pursuant to this Section 10 of the Plan, it may not
amend or waive such criteria after the 90th day of the respective Performance
Period with respect to an Incentive Award intended to qualify as
Performance-Based Compensation. The Committee shall have no authority or
discretion to increase any Performance-Based Compensation or to construct,
modify or apply the measurement of a Participant’s Performance in a manner that
will directly or indirectly increase the Performance-Based Compensation for the
Participant for any Performance Period above the amount determined by the
applicable objective standards established within the time period set forth in
Section 10.6.

 

SECTION 11

 

General Provisions

 

11.1        No Rights to Incentive Awards. No Participant or other person shall
have any claim to be granted any Incentive Award under the Plan and there is no
obligation of uniformity of treatment of Participants or holders or
beneficiaries of Incentive Awards under the Plan. The terms and conditions of
Incentive Awards of the same type and the determination of the Committee to
grant a waiver or modification of any Incentive Award and the terms and
conditions thereof need not be the same with respect to each Participant or the
same Participant.

 

11.2        Withholding. The Company or a Subsidiary shall be entitled to: (a)
withhold and deduct from future wages of a Participant (or from other amounts
that may be due and owing to a Participant from the Company or a Subsidiary), or
make other arrangements for the collection of, all legally required amounts
necessary to satisfy any and all federal, state, local and foreign withholding
and employment-related tax requirements attributable to an Incentive Award,
including, without limitation, the grant, exercise or vesting of, or payment of
dividends with respect to, an Incentive Award; or (b) require a Participant
promptly to remit the amount of such withholding to the Company before taking
any action with respect to an Incentive Award. Unless the Committee determines
otherwise, withholding may be satisfied by withholding Common Stock to be
received upon exercise or vesting of an Incentive Award or by delivery to the
Company of previously owned Common Stock. The Company may establish such rules
and procedures concerning timing of any withholding election as it deems
appropriate.

 

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11.3        Compliance With Laws; Listing and Registration of Shares. All
Incentive Awards granted under the Plan (and all issuances of Common Stock or
other securities under the Plan) shall be subject to all applicable laws, rules
and regulations, and to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification of
the shares covered thereby upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the grant of
such Incentive Award or the issuance or purchase of shares thereunder, such
Incentive Award may not be exercised in whole or in part, or the restrictions on
such Incentive Award shall not lapse, unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.

 

11.4        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.

 

11.5        No Right to Employment. The grant of an Incentive Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Subsidiary. The Company or any Subsidiary may at any time dismiss
a Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any written
agreement with the Participant.

 

11.6        No Liability of Company. The Company and any Subsidiary or Affiliate
which is in existence or hereafter comes into existence shall not be liable to a
Participant or any other person as to: (a) the non-issuance or non-sale of
Common Stock as to which the Company has been unable to obtain from any
regulatory body having jurisdiction the authority deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any shares hereunder;
(b) any tax consequence to any Participant or other person due to the receipt,
exercise or settlement of any Incentive Award granted hereunder; and (c) any
provision of law or legal restriction that prohibits or restricts the transfer
of shares of Common Stock issued pursuant to any Incentive Award.

 

11.7        Suspension of Rights under Incentive Awards. The Company, by written
notice to a Participant, may suspend a Participant’s and any transferee’s rights
under any Incentive Award for a period not to exceed 60 days while the
termination for cause of that Participant’s employment with the Company and its
Subsidiaries is under consideration.

 

11.8        Governing Law. The validity, construction and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Michigan and applicable federal law.

 

11.9        Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of the Plan and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included, unless
such construction would cause the Plan to fail in its essential purposes.

 

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11.10     Compliance with 409A. The Plan is intended to provide Incentive Awards
that are exempt from Section 409A of the Code as either exempt equity awards
under Treasury Regulation Section 1.409A-1(b)(5) or as exempt short-term
deferrals under Treasury Regulation Section 1.409A-1(b)(4), and is to be
interpreted and operated consistently with those intentions.  To the extent that
the Committee determines that any Incentive Award granted hereunder is subject
to Section 409A of the Code, the agreement evidencing such Incentive Award shall
incorporate the terms and conditions necessary to avoid the tax consequences
specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan
and agreements shall be interpreted in accordance with Section 409A of the Code.

 

SECTION 12

 

Termination and Amendment

 

12.1        Board and Committee Actions. The Board may terminate the Plan at any
time or may from time to time amend or alter the Plan or any aspect of it as it
considers proper and in the best interests of the Company; provided, that no
such amendment may be made, without the approval of shareholders of the Company,
that would (i) reduce the exercise price at which Stock Options, or the base
price at which Stock Appreciation Rights, may be granted below the prices
provided for in Sections 5.3 and 6.1, respectively (ii) reduce the exercise
price of outstanding Stock Options or the base price of outstanding Stock
Appreciation Rights, (iii) increase the individual maximum limits in Section 4.2
or (iv) otherwise amend the Plan in any manner requiring shareholder approval by
law or under the rules or listing requirements of any national securities
exchange on which the Company's Common Stock is traded, and provided further
that the Plan may not be amended in any way that causes the Plan to fail to
comply with or be exempt from Section 409A of the Code.

 

12.2        No Impairment. Notwithstanding anything to the contrary in Section
12.1, no such amendment or alteration to the Plan or to any previously granted
award agreement or Incentive Award shall be made which would impair the rights
of the holder of the Incentive Award, without such holder’s consent; provided,
that no such consent shall be required if the Committee determines in its sole
discretion and prior to the date of any Change of Control that such amendment or
alteration is required or advisable in order for the Company, the Plan or the
Incentive Award to satisfy any law or regulation or to meet the requirements of
or avoid adverse financial accounting consequences under any tax or accounting
standard, law or regulation.

 

SECTION 13

 

Effective Date and Duration of the Plan

 

The Plan shall take effect February 22, 2012, subject to approval by the
shareholders at the 2012 Annual Meeting of Shareholders or any adjournment
thereof or at a Special Meeting of Shareholders. Unless earlier terminated by
the Board of Directors, no Incentive Award shall be granted under the Plan after
February 22, 2022.

 

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