Choiceone  Financial Services Inc; 10-K  


EXHIBIT
10.1


AMENDED
AND RESTATED EMPLOYMENT AGREEMENT


 
                  THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT between CHOICEONE
FINANCIAL SERVICES, INC., a Michigan Corporation (the "Company"), and JAMES A. BOSSERD, an individual residing in Sparta,
Michigan (the "Employee") is dated November 1, 2006 (the "Effective Date") and completely amends and restates
that employment agreement between the parties dated March 23, 2001.


 
                  WHEREAS, the Company has retained the services of the Employee
as a senior executive officer, and the Employee has accepted such employment; and


 
                  WHEREAS, the parties have operated in an employment relationship
for several years; and


 
                  WHEREAS, the parties desire to enter into this Agreement, which
is intended to set forth in its entirety the terms and conditions of the employment relationship between the Company and the Employee;
and


 
                  WHEREAS, the Board of Directors of the Company has approved this
Agreement and authorized the Chairman of the Board to enter into this Agreement with the Employee;


 
                  THEREFORE, THE PARTIES AGREE as follows:


 
        1.          Employment. The Employee is employed to render such executive
services to the Company as may from time to time be reasonably directed by the Company's Board of Directors. Among his other duties,
it is contemplated that he will serve as the President and Chief Executive Officer of the Company and the Company's subsidiary,
ChoiceOne Bank (the "Subsidiary Bank"). Employee will have primary responsibility for the operation of the Company and
the Subsidiary Bank. Employee shall devote his full time, best efforts and skill to the affairs of the Company. Employee will
have no outside interests, business or otherwise, which interfere or conflict with his duties under this Agreement.


 
        2.          Compensation. The Company agrees to pay the Employee during
the Term (defined below) of this Agreement a base salary in the sum of at least One Hundred Sixty Thousand Dollars ($160,000)
per annum (the "Minimum Salary"), provided, however, that any salary (other than bonuses provided for in Section 4 of
this Agreement) paid to the Employee by any subsidiary of the Company shall be deemed to reduce the salary paid to the Employee
pursuant to this Section 2. The salary provided in this Section shall be payable in accordance with the periodic payment procedures
for all employees of the Company. The Employee's salary shall be reviewed by the Personnel and Benefits Committee of the Board
of Directors not less often than annually beginning on the date one year after the Effective Date (the "First Anniversary
Date") and may be increased (but not decreased) from time to time in such amounts as the Board in its discretion may determine;
any such increased salary shall become the new Minimum Salary. The Employee's salary shall be subject to the usual payroll taxes
and withholding required with respect to compensation paid by a corporation to an employee.


 


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        3.          Directors' Fees. The Employee shall be paid the regular
directors' fees for attending meetings of the Board of Directors of the Company, but not meetings of committees of the Board.
The Employee shall also be paid the regular directors' fees for attending meetings of the Board of Directors of the Subsidiary
Bank, but not meetings of committees thereof.


 
        4.          Discretionary Bonuses. In addition to the salary
provided for in Section 2, the Employee shall be entitled to participate in discretionary bonuses as may be authorized and declared
from time to time by the Board of Directors of the Company or the Subsidiary Bank. No other compensation provided for in this
Agreement shall be deemed a substitute for the Employee's right to participate in such bonuses when and as declared by the Board
of Directors.


 
        5.          Retirement, Employee Benefit Plans,
and Fringe Benefits.


 
        (a)          The Employee shall be entitled to participate in any plan of
the Company or the Subsidiary Bank relating to pension, thrift, deferred profit-sharing, group life insurance, medical coverage,
education, or other retirement or employee benefits that the Company or the Subsidiary Bank may adopt for the benefit of its executive
employees.


 
        (b)          The Employee shall be eligible to participate in any other fringe
benefits which may be, or may later become, applicable to the Company's or the Subsidiary Bank's executive or salaried employees,
including with respect to the Employee, but not limited to, the following: health plans; insurance plans; an automobile allowance
of Six Hundred Dollars ($600.00) per month; reimbursement for reasonable travel, entertainment and other expenses in rendering
services for, on behalf of or for the benefit of the Company or the Subsidiary Bank; the payment of reasonable expenses for attending
annual and periodic meetings of trade associations; and any other benefits which are commensurate with the responsibilities and
functions to be performed by the Employee under this Agreement.


 
        6.          Term. The initial term of this Agreement shall be a period
of three years commencing on the Effective Date, subject to earlier termination as provided in this Agreement. Beginning on the
first anniversary of the Effective Date, and on each anniversary thereafter, the term of this Agreement shall be extended for
a period of one year in addition to the then-remaining term, unless the Company has given notice to the Employee in writing at
least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; if such notice is given,
this Agreement will expire at the end of the then-remaining term. References in this Agreement to the "Term" of this
Agreement shall refer to both such initial term and such extended terms.


 
        7.          Non-Competition. In exchange for the promises made by
Company in this Agreement, Employee agrees that, during the Non-Competition Period (defined below), he will not engage in any
Prohibited Activity, whether as an employee, agent, consultant, representative, joint-venturer, owner or otherwise. The "Non-Competition
Period" shall begin with the first day of this Agreement and continue as follows:


 


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	In the event that the Employee's employment is

    terminated:	then the Non-Competition Period shall
 last until:
	 	 	 
	(a)	by the Company for Cause,	the expiration of the then remaining Term.
	 	 	 
	(b)	by the Employee prior to a Change in Control
 of
    the Company for any reason,	the expiration of the then remaining Term.
	 	 	 
	(c)	by the Employee after a Change in Control of
 the
    Company without a Good Reason,	the expiration of the then remaining Term.
	 	 	 
	(d)	by the Company or the Employee for any other
 reason,	the Employee's last day of employment for the Company.


"Prohibited
Activity" means directly or indirectly (a) soliciting or offering services or products competitive to those offered by or
through the Company or any of its affiliates to any Customer; or (b) inducing any employee of the Company or any of its affiliates
to leave his or her employment. "Customer" means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity
who, at any time while the Employee was employed by the Company, (a) was a customer of the Company; or (b) was identified by the
Company as a potential customer.


 
        8.          Standards. The Employee shall perform his duties under
this Agreement in accordance with reasonable standards established from time to time by the Board of Directors of the Company.


 
        9.          Vacations. The Employee shall be entitled, without loss
of pay, to absent himself voluntarily from the performance of his employment under this Agreement, all such voluntary absences
to count as vacation or personal time, provided that:


 
        (a)          The Employee shall be entitled to twenty-six (26) personal and
vacation days each year. Other than the length of vacation and personal time awarded, the Company's Vacation/Personal Days Policy
will apply to the Employee.


 
        (b)          The timing of vacations shall be scheduled in a reasonable,
mutually agreeable manner.


 
        10.          Termination of Employment.


 
        (a)          The Employee's employment under this Agreement may be terminated
at any time by the Board of Directors of the Company for "Cause" (as defined below). The Employee shall have no right
to receive severance pay or any other remuneration whatsoever under this Agreement for any period after voluntary termination
without "Good Reason" (as defined below) or termination for Cause.


 


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For
purposes of this Agreement, termination for "Cause" shall mean termination of employment for only the following reasons:


 
        (i)          Willful misconduct materially adverse to the Company or the
Subsidiary Bank;


 
        (ii)          Willful breach of a fiduciary duty involving personal profit;


 
        (iii)          Willful violation of any law, rule, or regulation materially
relating to the operation of the Company or the Subsidiary Bank;


 
        (iv)          The order of any court or supervising agency with jurisdiction
over the affairs of the Company or the Subsidiary Bank; or


 
        (v)          The Employee's intentional violation of any material provision
of this Agreement, if Employee fails to cure the breach within a reasonable time after written notice from the Company's Board
of Directors informing him of the breach.


 
                  For purposes of this Agreement, no act or failure to act on the
Employee's behalf shall be considered "willful" or "intentional" unless done, or admitted to be done, by him
not in good faith and unless he knew or should have known that his action or omission was not in, or was opposed to, the best
interests of the Company or the Subsidiary Bank; provided, that any act or omission to act on the Employee's behalf in reliance
upon an opinion of counsel to the Company shall not be deemed to be willful or intentional. The Employee shall not be deemed to
have been terminated for cause unless or until there shall have been delivered to him a copy of a certification of a majority
of the non-officer members of the Company Board of Directors finding that, in the good faith opinion of such majority, the employee
was guilty of conduct deemed to be cause and specifying the details thereof, after reasonable notice to the Employee and an opportunity
for him, together with his counsel, to be heard before such majority. No such determination of the Board shall affect Employee's
right to determination through the legal system of whether there was in fact cause for termination.


 
        (b)          The Employee may terminate his employment at any time upon ninety
(90) days' written notice to the Company or upon such shorter period as may be agreed upon between the Employee and the Board
of Directors of the Company. In the event of such termination without Good Reason, the Company shall be obligated only to continue
to pay the Employee's salary and provide the other compensation and benefits provided by this Agreement up to the date of the
termination.


 
        (c)          The Employee may terminate his employment with the Company for
"Good Reason" after a Change in Control of the Company, which shall mean the occurrence of any of the following events
without the Employee's consent:


 


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        (i)          A material demotion or other adverse change made by the Company
in the Employee's status or position as a senior executive officer of the Company or the Subsidiary Bank;


 
        (ii)          The assignment to the Employee of any duties or responsibilities
which are materially inconsistent with such status or position, or a material reduction in the duties and responsibilities previously
exercised by the Employee;


 
        (iii)          The imposition of any requirement, whether by relocation of
the Company's offices or otherwise, that the Employee perform his normal day-to-day duties and responsibilities outside of an
area within a thirty (30) mile radius of Sparta, Michigan;


 
        (iv)          Failure of the Company to elect the Employee as Chief Executive
Officer of the Company or as Chief Executive Officer and a director of the Subsidiary Bank; or


 
        (v)          Material breach by the Company of any material provision of
this Agreement, if the Company fails to cure the breach within a reasonable time after Employee has given the Company's Board
of Directors written notice of the breach.


Before
terminating his employment for Good Reason pursuant to this Section 9(c), the Employee shall give written notice to the Company's
Board of Directors of the act or omission constituting Good Reason, within 60 days after the occurrence of such act or omission.
If the Board of Directors promptly corrects such act or omission, and takes reasonable measures to prevent its recurrence, Employee
shall not be entitled to terminate the employment with Good Reason. Otherwise, Employee may terminate the employment for Good
Reason within 60 days after such notice to the Board of Directors. If Employee fails to give notice as provided above, Employee
may not terminate the Employment for Good Reason on account of such act or omission.


 
        (d)          If the Employee's employment is terminated by the Employee for
Good Reason after a Change in Control of the Company or by the Company without Cause, the Employee shall be entitled to continuation
of his salary (provided in Section 2) and benefits (provided in Section 5) until the end of the term of this Agreement as if termination
of his employment had not occurred.


 
                  If the termination by the Company occurs prior to a Change in Control
of the Company, then Employee must use his reasonable efforts to procure new employment. Any new compensation and/or benefits
Employee receives from such


 


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new
employment, including self-employment, shall reduce the payments or benefit obligations due under this Section.


 
                  If the termination by the Company occurs after a Change in Control
of the Company, then payment of salary and continuation of benefits as provided in this Section shall continue regardless of whether
the Employee finds new employment following such termination, and without reduction due to any earnings and/or benefits received
by Employee from any other employment or self employment. If continuation of a specific benefit is not possible under applicable
law, Employee shall be provided with an equal substitute benefit or, if that is not possible, with cash in lieu of such benefit;
such substitute benefit or cash shall be structured or supplemented as necessary to place Employee in the same economic position,
after all applicable taxes, as if the benefit had been continued.


 
                  Notwithstanding the preceding, if, at the time the payments under
this Section would commence, Employee is a "specified employee" within the meaning of IRC Regulation Section 1.409A-1(i),
no payment may be made under this Section before the date that is six months after Employee's separation from service. Payments
to which Employee would otherwise have been entitled under this Section during that six months will be accumulated and paid on
the first day of the seventh month following the date of Employee's separation from service.


 
                  If any payment to or benefit continuation for the Employee pursuant
to Agreement constitutes a "parachute payment" under Internal Revenue Code Section 280(G) and, when added to all other
payments to the Employee that are "parachute payments" would result in "excess parachute payments" to Employee
(as defined under Internal Revenue Code Section 280(G)) being nondeductible by the Corporation under Internal Revenue Code Section
280(G), then the payments and benefit continuation provided for under this Section shall be reduced (but not below 0) or delayed
until there are no such excess parachute payments. The amount of any reduction or delay shall be determined by the Company's certified
public accountants, in consultation with the Employee, and to the extent possible Employee shall have the option to choose which
payments or benefits shall be reduced or delayed.


 
        (e)          In the event of the death of the Employee while still employed
under this Agreement, the Employee's estate or beneficiary shall not be entitled to salary and benefit continuation under this
Section, but shall be entitled to receive the salary due the Employee through the last day of the calendar month in which his
death shall have occurred, plus such other benefits as shall have accrued under this Agreement up to the date of death.


 
        (f)          A Change in Control shall be deemed to have occurred as of the
first day that there is a change in the ownership, the effective control, or the ownership of


 


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a
substantial portion of the assets of the Company within the meaning of IRC Proposed Regulation Section 1.409A-3(g)(5), as amended.


 
                  The parties agree that the strategic merger of equals between ChoiceOne
Financial Services, Inc. and Valley Ridge Financial Corp. does not constitute a Change in Control under this Agreement and does
not trigger any payments required by this Section and the Employee hereby waives any right to any such payment as a result of
that transaction.


 
        (g)          If the Employee shall become and remain disabled to the extent
that he is unable to perform his duties under this Agreement for a continuous period of six months or more, the Board of Directors
of the Company may terminate Employee's employment without salary or benefit continuation under Section 9(d). For purposes of
this Agreement, the Employee shall be considered disabled if he is prevented from performing his essential duties under this Agreement
by (i) accidental bodily injury; (ii) sickness; (iii) mental illness; or (iv) substance abuse.


 
        11.          Attorney Fees. In the event that the Company exercises
its right of termination for Cause, but it is determined by a court of competent jurisdiction or by an arbitrator that cause did
not exist for such termination, or if in any event it is determined by any such court or arbitrator that the Company or the Subsidiary
Bank has failed to make timely payment of any amounts owed to the Employee under this Agreement, the Employee shall be entitled
to reimbursement for all reasonable costs, including attorneys' fees, incurred in challenging such termination or collecting such
amounts. Such reimbursement shall be in addition to any rights to which the Employee is otherwise entitled under this Agreement.


 
        12.          No Assignment.


 
        (a)          This Agreement is personal to each of the parties hereto, and
neither party may assign or delegate any of its rights or obligations hereunder without first obtaining the written consent of
the other party; provided, however, that the Company may assign this Agreement to any subsidiary of the Company and shall require
any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company or the Subsidiary Bank, by an assumption agreement in form and substance satisfactory
to the Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken place. Failure of the Company to obtain such an
assumption agreement prior to the effectiveness of any such succession or assignment shall be a breach of this Agreement and shall
entitle the Employee to compensation from the Company in the same amount and on the same terms as the compensation pursuant to
Section 9(d). For purposes of implementing the provisions of this Section 11(a), the date on which any such succession becomes
effective shall be deemed the date of termination.


 


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        (b)          This Agreement and all rights of the Employee hereunder shall
inure to the benefit of and be enforceable by the Employee' s personal and legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Employee should die while any amounts would still be payable to the Employee
under this Agreement if the Employee had continued to live (including but not limited to salary and benefit continuation to which
Employee becomes conditioned under Section 9(d) as a result of a covered termination of the employment before Employee' s death),
all such amounts, unless otherwise provided in this Agreement, shall be paid in accordance with the terms of this Agreement to
the Employee' s devisee, legatee or other designee or, if there is no such designee, to the Employee' s estate.


 
        13.          Other Contracts. All other prior agreements regarding
conditions of employment, whether written or oral, are hereby superseded by this Agreement.


 
        14.          Notices. Any notices under this Agreement shall be deemed
given when in writing and delivered personally or sent by certified mail, postage prepaid, to the last known address of the party
to whom notice is given. If sent by mail, notice shall be deemed given on the second day after mailing.


 
        15.          Amendments. No amendments or additions to this Agreement
shall be binding unless in writing and signed by both parties, except as herein otherwise provided.


 
        16.          Paragraph Headings. The paragraph headings used
in this Agreement are included solely for convenience and shall not affect or be used in connection with the interpretation of
this Agreement.


 
        17.          Severability. The provisions of this Agreement shall
be deemed severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.


 
        18.          Governing Law. Agreement shall be governed by
the laws of the United States of America and the State of Michigan, without regard to conflict of laws principles.


 
        19.          Remedies/Arbitration. Any controversy or claim arising
out of, or relating to this Agreement, or the breach thereof, shall be settled by arbitration before a single arbitrator in a
hearing to be held in Kent County, Michigan, in accordance with the then existing rules of the American Arbitration Association,
and judgment upon the award rendered may be entered in any court having jurisdiction thereof.


 


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                  IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.








	 	CHOICEONE FINANCIAL SERVICES, INC.
	 	 
	 	 
	 	By	/s/
        Jon E. Pike

	 	 	Jon E. Pike,
 Chairman of the Board
	 	 	Company
	 	 	 
	 	 	 
	 	 	/s/
        James A. Bosserd

	 	 	James A. Bosserd
	 	 	Employee




















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