ChoiceOne Financial Services, Inc. 10-K


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.


 


		4.3	Adjustments.



 


(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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