Exhibit 10.3

CHOICEONE FINANCIAL SERVICES, INC.
DIRECTORS' STOCK PURCHASE PLAN

Warner Norcross & Judd LLP
900 Old Kent Building
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503-2489

--------------------------------------------------------------------------------

CHOICEONE FINANCIAL SERVICES, INC.
DIRECTORS' STOCK PURCHASE PLAN

TABLE OF CONTENTS

     

Page

ARTICLE 1

Establishment and Purposes of Plan

1

 

1.1

Establishment of Plan; Purposes of Plan

1

 

1.2

Effective Date

1

 

1.3

Number of Shares of Stock

1

ARTICLE 2

Definitions

1

 

2.1

Committee

1

 

2.2

Common Stock

1

 

2.3

Company

1

 

2.4

Director's Fee

1

 

2.5

Market Value

2

 

2.6

Participant

2

 

2.7

Plan

2

ARTICLE 3

Administration

2

 

3.1

Power and Authority

2

 

3.2

Delegation of Powers; Employment of Advisers

2

 

3.3

Indemnification of Committee Members

2

ARTICLE 4

Participation

3

 

4.1

Eligibility to Participate

3

ARTICLE 5

Elective Payment of Director's Fees in Common Stock

3

 

5.1

Payment of Directors Fees

3

 

5.2

Prior Election

3

 

5.3

Timing of Payments

3

 

5.4

Vesting

3

ARTICLE 6

General Provisions

4

 

6.1

Amendment; Termination

4

 

6.2

Rights Not Assignable

4

 

6.3

Unsecured Creditor Status

4

 

6.4

No Trust or Fiduciary Relationship

4

 

6.5

Construction

4

 

6.6

Disputes

4

 

6.7

Unfunded Plan

5

 

6.8

Self-Employment Taxes

5

 

6.9

Right of Company to Replace Directors

5

 

6.10

Governing Law; Severability

5

i

--------------------------------------------------------------------------------

CHOICEONE FINANCIAL SERVICES, INC.
DIRECTORS' STOCK PURCHASE PLAN

ARTICLE 1

Establishment and Purposes of Plan

          1.1          Establishment of Plan; Purposes of Plan. The Company
hereby establishes 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 "Effective Date" of the Plan is July
15, 1998. 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 50,000 shares of Common Stock shall be available under
the Plan.

ARTICLE 2

Definitions

          2.1          Committee. "Committee" means the Personnel and Benefits
Committee of the Board of Directors or such other committee as the Board of
Directors 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.

          2.2          Common Stock. "Common Stock" means the common stock,
without par value, of ChoiceOne Financial Services, Inc.

          2.3          Company. "Company" means ChoiceOne Financial Services,
Inc.

          2.4          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 of Directors or meetings of committees
of the Board of Directors, and any retainer fee paid to members of the Board of
Directors.

1

--------------------------------------------------------------------------------

          2.5          Market Value. "Market Value" means the mean of the bid
and asked prices of shares of Common Stock reported by the Company' s market
makers on the applicable date, or if the market is closed on that date, the last
preceding date on which the market was open for trading.

          2.6          Participant. "Participant" means any individual who is
participating in the Plan.

          2.7          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.

ARTICLE 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.

          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.

2

--------------------------------------------------------------------------------

ARTICLE 4

Participation

          4.1          Eligibility to Participate. A director shall be eligible
to become a Participant in the Plan on the first day of the individual's term as
a director.

ARTICLE 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 quarterly payment 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 quarterly payment 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 quarterly payment date. The election shall continue
in effect until revoked or modified for a subsequent quarterly payment date by
the Participant.

          5.3          Timing of Payments. Payment shall be made to the
Participant on each January 1, April 1, July 1, October 1 or such other dates 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 shares of Common Stock
equal to the quotient of Director' s Fees payable divided by the Market Value of
Common Stock on the quarterly payment date shall not be subject to forfeiture
for any reason.

ARTICLE 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 no change or amendment may be made more than
once every six months and that an amendment or termination may not reduce or
revoke shares of Common Stock accrued and the amounts represented by them

3

--------------------------------------------------------------------------------

promised to be paid to Participants 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.

          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.

4

--------------------------------------------------------------------------------

          6.9          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.

          6.10          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.

5

--------------------------------------------------------------------------------