Document:

ChoiceOne Financial Services, Inc. - 10-K

Exhibit 10.4

 

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 -
	 	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	- 3 -
	 	6.1	Amendment; Termination	- 3 -
	 	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	- 4 -
	 	6.8	Self-Employment Taxes	- 4 -
	 	6.9	Right of Company to Replace Directors	- 5 -
	 	6.10	Governing Law; Severability	- 5 -

 

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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 an amount determined by the Committee, in its discretion, taking into account
such factors as it considers advisable. Factors that the Committee may, but need not, consider 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.

 

2.6       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 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.

 

    - 3 - 

     

    

 

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 -ChoiceOne Financial Services, Inc. - 10-K

Exhibit 10.7

 

CHOICEONE FINANCIAL SERVICES, INC.

2002 EMPLOYEE STOCK PURCHASE PLAN

AS AMENDED AND RESTATED

 

SECTION 1

PURPOSE OF PLAN

 

          The
purpose of the ChoiceOne Financial Services, Inc. 2002 Employee Stock Purchase Plan is to encourage Employees of the Company and
the Company’s Subsidiaries to promote the best interests of the Company and to align the interests of Employees with the Company’s
shareholders by permitting Eligible Employees to purchase shares of the Company’s Common Stock, at a price less than the Market
Value of the Common Stock. The purchase of Common Stock under the Plan is intended to qualify as the exercise of an option granted
under, and the Plan is intended to qualify as, an employee stock purchase plan under Section 423 of the Code.

 

SECTION 2

DEFINITIONS

 

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

 

	 	2.1	“Board” means the Board of Directors of the Company.
	 	 	 
	 	2.2	“Code” means the Internal Revenue Code of 1986, as amended. Each reference herein to a section or sections of the Code shall, unless otherwise noted, be deemed to include a reference to the rules and regulations issued under such section(s) of the Code.
	 	 	 
	 	2.3	“Committee” means the Personnel and Benefits Committee of the Board or such other committee as the Board shall designate to administer the Plan. The Committee shall consist of at least two members of the Board and all of its members shall be “non-employee directors” as defined in Rule 16b-3 issued under the Securities Exchange Act of 1934, as amended.
	 	 	 
	 	2.4	“Common Stock” means the Common Stock of the Company.
	 	 	 
	 	2.5	“Company” means ChoiceOne Financial Services, Inc., a Michigan corporation, and its successors and assigns.

 

     

     

    

 

	 	2.6	“Cut-Off Date” means the date on which the Company determines the funds in each
    Participant’s Payroll Deduction Account, which funds shall be used to purchase shares of Common Stock on the next succeeding Stock Purchase Date pursuant to the Plan. Unless otherwise determined by the Committee, the Cut-Off Date shall be the twentieth day prior to the end of each Option Period during the term of the Plan or, if such day is not a working day, the next succeeding working day.
	 	 	 
	 	2.7	“Dividend Reinvestment Plan” means the ChoiceOne Financial Services, Inc. Dividend Reinvestment Plan, as amended from time to time.
	 	 	 
	 	2.8	“Election Form” means a notice (in a form approved by the Committee) that an Eligible Employee must complete to participate in the Plan and authorize payroll deductions to be made on the Eligible Employee’s behalf under the Plan.
	 	 	 
	 	2.9	Subject to Section 5 below, “Eligible Employees” means all present and future active Employees of the Company and its Subsidiaries, except (a) Employees whose customary employment by the Company or its Subsidiaries is (i) 20 hours or less per week or (ii) not more than five months in any calendar year and (b) Employees who have been employed by the Company or a Subsidiary for less than one year.
	 	 	 
	 	2.10	“Employee” means an employee of the Company or its Subsidiaries.
	 	 	 
	 	2.11	“Investment Sharebuilder Account” means the book-entry account established on behalf of a Participant pursuant to Section 8.2 below, in which shares of Common Stock purchased under the Plan shall be held.
	 	 	 
	 	2.12	“Market Value” of a share of Common Stock as of any Stock Purchase Date or other applicable date means: (a) if the Common Stock is listed for trading on The Nasdaq Stock Market or one or more national securities exchanges, the last reported sales price on the most recent Cut-Off Date prior to such Stock Purchase Date or other applicable date, or if the Common Stock shall not have been traded on the principal exchange on such Cut-Off Date, the last reported sales price on the first day before such Cut-Off Date on which Common Stock was so traded; (b) if the security is not so listed for trading, the fair market value determined by the Committee in good faith, taking into account such factors as it considers advisable. Factors that the Committee may, but need not, consider 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.
	 	 	 
	 	2.13	“Option Period” means each calendar quarter, beginning on the first day of each such calendar quarter and ending on the last day of such calendar quarter.

 

     

     

    

 

	 	2.14	“Participant” means an Eligible Employee who has elected to participate in the Plan in accordance with Section 6.1 below.
	 	 	 
	 	2.15	“Payroll Deduction Account” means the administrative record keeping account established on behalf of a Participant pursuant to Section 7.1 below, to which his or her payroll deductions shall be credited.
	 	 	 
	 	2.16	“Permanent Disability” or “Disability” means an inability of a Participant to perform his or her employment duties due to physical or mental disability such that the Participant would qualify for benefits under the Company’s disability benefits program.
	 	 	 
	 	2.17	“Plan” means the ChoiceOne Financial Services, Inc. 2002 Employee Stock Purchase Plan as set forth herein, as it may be amended from time to time.
	 	 	 
	 	2.18	“Purchase Price” means the purchase price for a share of Common Stock to be paid by a Participant on a Stock Purchase Date, as determined under Section 8.1 below.
	 	 	 
	 	2.19	“Retirement” means the voluntary termination of all employment by the Participant after the Participant has attained 55 years of age and completed six (6) years of service with the Company or its Subsidiaries.
	 	 	 
	 	2.20	“Stock Purchase Date” means a date on which shares of Common Stock are purchased pursuant to the Plan. Unless otherwise determined by the Committee, the Stock Purchase Date shall be the last working day of each Option Period during the term of the Plan.
	 	 	 
	 	2.21	“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, now or in the future.

 

SECTION 3

ADMINISTRATION

 

          3.1 
        General. The Committee shall administer the Plan. The Committee may delegate record keeping,
calculation, payment and other ministerial administrative functions to individuals designated by the Committee, who may be employees
of the Company and its Subsidiaries. Subject to the express provisions of the Plan, the Committee shall have authority to interpret
the Plan, to prescribe, amend and rescind rules, regulations and procedures relating to it, and to make all other determinations
necessary or advisable in administering the Plan, all of which determinations shall be final and binding upon all persons unless
otherwise determined by the Board. 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 
        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 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. Each such person shall be justified in relying on information furnished in connection with the
Plan’s administration by any appropriate person or persons.

 

SECTION 4

STOCK SUBJECT TO THE PLAN

 

          4.1 
        Number of Shares of Common Stock. There shall be reserved for issuance and purchase by Participants
under the Plan a total of 105,126 shares of Common Stock, subject to adjustment as provided in Section 4.2. Shares of Common Stock
available under the Plan shall be authorized and unissued shares or shares repurchased by the Company.

 

          4.2 
        Adjustments. In the event of a stock dividend, stock split, recapitalization, merger, reorganization,
consolidation, combination or exchange of shares of Common Stock during the term of the Plan, the number of shares reserved and
authorized to be issued under the Plan shall be adjusted proportionately, and such other adjustments shall be made as may be considered
necessary or equitable by the Committee or the Board. In the event of any other change affecting the Common Stock, such adjustments
shall be made as may be considered equitable by the Committee or the Board to give proper effect to such change.

 

SECTION 5

ELIGIBILITY

 

Participation
in the Plan shall be open only to Eligible Employees. No option rights may be granted under the Plan to any person who is not an
Eligible Employee. No Eligible Employee shall be granted option rights under the Plan if such Employee, immediately after receiving
the grant of such option rights under the Plan, would own (as determined pursuant to Sections 423(b)(3) and 424(d) of the Code)
stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any of its Subsidiaries.

 

     

     

    

 

SECTION 6

PARTICIPATION AND WITHDRAWAL

 

          6.1 
        Election Form; Changes to Election Form.

 

         
(a)          Participation by any Eligible Employee in the Plan shall be entirely voluntary. Any Eligible
Employee may become a Participant by completing and delivering an Election Form to the Company. Such Eligible Employee shall become
a Participant as of the first day of the next Option Period following the delivery of his or her Election Form, provided that the
Election Form has been delivered at least twenty working days prior to the beginning of the first day of that Option Period. The
Election Form will authorize specified regular payroll deductions (within the limits specified in Section 7.2 below) from the Participant’s
periodic compensation during the time he or she is a Participant.

 

         
(b)          Payroll deductions shall be made for each Participant in accordance with the Election Form
and shall continue until the Participant’s participation terminates, the Election Form is modified or the Plan is terminated. A
Participant may increase or decrease his or her payroll deduction (within the limits specified in Section 7.2 below) by delivering
a new Election Form to the Company no later than twenty working days prior to the beginning of an Option Period. The Company or
the applicable Subsidiary shall deduct the modified amount from the Participant’s payroll beginning with the first pay date to
occur during the next Option Period. A Participant may not increase or decrease his or her payroll deductions during any Option
Period.

 

          6.2 
        Withdrawal. A Participant may elect at any time to withdraw from participation in the Plan
by written notice delivered to the Company no later than twenty working days before a pay date, or by such other time as the Committee
may from time to time determine. Upon any termination by a Participant, (a) the Participant shall cease to be a Participant, (b)
his or her Election Form shall be revoked insofar as subsequent payroll deductions that occur on or after twenty days after his
or her withdrawal notice is delivered to the Company are concerned, and (c) the amount in his or her Payroll Deduction Account,
as well as any payroll deductions made after such withdrawal notice becomes effective, shall be returned to him or her. Furthermore,
upon the former Participant’s written request, (i) a certificate for the whole shares of Common Stock credited to the former Participant’s
Investment Sharebuilder Account at any time after the withdrawal notice becomes effective shall be forwarded to the former Participant
and (ii) the dollar amount of any remaining fractional shares of Common Stock credited to the former Participant’s Investment Sharebuilder
Account, determined based on the Market Value of such fractional shares on the later of the date the former Participant’s request
is delivered to the Company or the date on which the withdrawal notice becomes effective, shall be returned to him or her. An Eligible
Employee who has withdrawn from the Plan shall not be eligible for reinstatement as a Participant during the Option Period in which
such withdrawal occurs or for the following Option Period.

 

     

     

    

 

          Except
as otherwise provided in Section 9 below, if a Participant ceases to be an Eligible Employee, (a) the Participant shall cease to
be a Participant, (b) no further payroll deductions that occur on or after twenty days after the date the Participant ceases to
be an Eligible Employee shall be made on his or her behalf and (c) the amount in his or her Payroll Deduction Account, as well
as any payroll deductions that occur on or after twenty days after the date the Participant ceases to be an Eligible Employee,
shall be returned to him or her. Furthermore, upon the former Participant’s written request, (i) a certificate for the whole shares
of Common Stock credited to the former Participant’s Investment Sharebuilder Account at any time after twenty days after the date
the Participant ceases to be an Eligible Employee shall be forwarded to the former Participant and (ii) the dollar amount of any
remaining fractional shares of Common Stock credited to the former Participant’s Investment Sharebuilder Account, determined based
on the Market Value of such fractional shares on the later of the date the former Participant’s request is delivered to the Company
or the date that is twenty days after the date the Participant ceases to be an Eligible Employee, shall be returned to him or her.

 

SECTION 7

PAYROLL DEDUCTIONS

 

          7.1 
        Payroll Deduction Account. The Company and its Subsidiaries will maintain a Payroll Deduction
Account for each Participant. Authorized payroll deductions shall begin with the first pay date to occur on or after the first
day of the first Option Period with respect to which a Participant has elected (in accordance with Section 6.1) to participate
in the Plan. Payments made by Participants through payroll deductions shall be credited to each Participant’s Payroll Deduction
Account. No amounts other than payroll deductions authorized under the Plan may be credited to a Participant’s Payroll Deduction
Account, unless the Committee otherwise consents in writing. No Participant shall be entitled to any interest on amounts held in
his or her Payroll Deduction Account.

 

     

     

    

 

          7.2 
        Limits on Payroll Deductions. The amount of the payroll deduction specified by a Participant
in his or her Election Form shall not be less than Ten Dollars ($10) or more than One Hundred Twenty-five Dollars ($125) for each
pay period, or such other amount(s) as the Committee may determine in its sole discretion from time to time. Any such limit established
by the Committee shall comply with the requirements of Section 423 of the Code.

 

SECTION 8

PURCHASE OF COMMON STOCK; INVESTMENT SHAREBUILDER ACCOUNTS

 

          8.1 
        Purchase Price. The Purchase Price for each share of Common Stock purchased on a Stock Purchase
Date shall be ninety percent (90%) of the Market Value of the CommonStock as of that Stock Purchase Date, rounded to the nearest
whole cent, or such other price that the Committee may determine in its sole discretion from time to time that is at least eighty-five
percent (85%) of such Market Value.

 

          8.2 
        Method of Purchase and Investment Sharebuilder Accounts.

 

         
(a)          Except as otherwise provided herein, each Participant having funds in his or her Payroll
Deduction Account on a Cut-Off Date shall be, without any further action, granted an option on the next succeeding Stock Purchase
Date to purchase the number of shares (including fractional shares) of Common Stock which the funds in his or her Payroll Deduction
Account on such Cut-Off Date could purchase on such Stock Purchase Date, and each such Participant shall, without any further action,
be deemed to have exercised such option on such Stock Purchase Date. Options that are not exercised automatically shall expire
immediately and in no event shall any option be exercisable beyond the periods specified in Section 423(b)(7) of the Code. If the
number of available shares on a Stock Purchase Date is not sufficient to exhaust all Payroll Deduction Accounts, the available
shares shall be allocated in proportion to the funds available in each Payroll Deduction Account and the Plan shall terminate.

 

         
(b)          All shares purchased under the Plan shall be maintained in Investment Sharebuilder Accounts
for Participants under the terms of the Dividend Reinvestment Plan. Any cash dividends paid with respect to the shares in a Participant’s
Investment Sharebuilder Account shall be applied to the Participant’s Investment Sharebuilder Account for the purchase of shares
(including fractional shares) of Common Stock pursuant to the terms of the Dividend Reinvestment Plan, and shares so purchased
shall be added to the shares held for a Participant in his or her Investment Sharebuilder Account. Any non-cash dividends paid
with respect to the shares in a Participant’s Investment Sharebuilder Account shall be added to the shares held for a Participant
in his or her Investment Sharebuilder Account.

 

     

     

    

 

          8.3 
        Limitation on Value of Common Stock to be Purchased. A Participant shall not have and may
not exercise any option that would permit the Participant’s rights to purchase Common Stock under the Plan to accrue at a rate
that exceeds Twenty-five Thousand Dollars ($25,000) of Common Stock (determined at the time of the grant of the option) in any
one calendar year, and in no event may such option rights accrue at a rate which exceeds that permitted by Section 423(b)(8) of
the Code.

 

          8.4 
        Title of Accounts. Each Investment Sharebuilder Account may be in the name of the Participant
or, if so indicated on such Participant’s Election Form, in his or her name jointly or as tenants in common with a member of the
Participant’s family, with right of survivorship. With the Committee’s consent, a Participant may be permitted to (a) designate
a beneficiary to receive the Common Stock held in the Participant’s Investment Sharebuilder Account upon death or (b) transfer
the Common Stock held in the Investment Sharebuilder Account to a revocable trust for the benefit of the Participant.

 

          8.5 
        Rights as a Shareholder. After a Participant’s Payroll Deduction Account has been charged
with the amount of the Purchase Price on a Stock Purchase Date, the Participant shall have all of the rights and privileges of
a shareholder of the Company with respect to shares purchased under the Plan and held in his or her Investment Sharebuilder Account,
whether or not certificates representing the shares shall have been issued. In addition to the provisions specified in the Plan
relating to termination of a Participant’s participation in the Plan, a Participant may withdraw the whole shares in his or her
Investment Sharebuilder Account at any time upon written notice to the Company. Participants will be notified as to the amount
and status of their Payroll Deduction Accounts and Investment Sharebuilder Accounts at the same times and in the same manner as
shareholders receive similar notices under the Dividend Reinvestment Plan, and in no event less than annually.

 

     

     

    

 

SECTION 9

RIGHTS ON DEATH, RETIREMENT OR PERMANENT DISABILITY

 

          9.1 
        Death. If a Participant dies during an Option Period, no further contributions on behalf of
the deceased Participant shall be made, and certificates for any whole shares in the deceased Participant’s Investment Sharebuilder
Account will be delivered to the deceased Participant’s beneficiary or such other person designated on the Election Form, along
with the dollar amount of any remaining fractional shares of Common Stock credited to the Investment Sharebuilder Account, determined
based on the Market Value of such fractional shares on the date of the Participant’s death. Furthermore, the executor or administrator
of the deceased Participant’s estate may elect to withdraw the balance in the Participant’s Payroll Deduction Account by notifying
the Company in writing at least ten working days before the Cut-Off Date in respect of such Option Period. If no timely election
to withdraw has been made, the balance accumulated in the deceased Participant’s Payroll Deduction Account on such Cut-Off Date
shall be used to purchase shares of Common Stock in accordance with Section 8 of the Plan on the next succeeding Stock Purchase
Date. Promptly following such Stock Purchase Date, certificates for any whole shares in the deceased Participant’s Investment Sharebuilder
Account will be delivered to the deceased Participant’s beneficiary or such other person designated on the Election Form, along
with the dollar amount of any remaining fractional shares of Common Stock credited to the Investment Sharebuilder Account, determined
based on the Market Value of such fractional shares on such Stock Purchase Date.

 

          9.2 
        Retirement or Permanent Disability. If, during an Option Period, a Participant (a) Retires
or (b) incurs a Permanent Disability, no further contributions on behalf of the Retired or Disabled Participant shall be made.
A Retired or Disabled Participant may elect to withdraw the balance in his or her Payroll Deduction Account by notifying the Company
in writing at least ten working days before the Cut-Off Date in respect of such Option Period. If no election to withdraw has been
made, the balance accumulated in the Retired or Disabled Participant’s Payroll Deduction Account shall be used to purchase shares
of Common Stock in accordance with Section 8 of the Plan on the next succeeding Stock Purchase Date. Upon the Participant’s written
request, certificates for whole shares credited to the Participant’s Investment Sharebuilder Account, along with the dollar amount
of any remaining fractional shares of Common Stock credited to Participant’s Investment Sharebuilder Account, determined based
on the Market Value of such fractional shares on the later of the date that the written request is delivered to the Company or
the date on which the withdrawal request becomes effective, will be forwarded to the Participant. If a Retired or Disabled Participant
dies during the Option Period of such Participant’s Retirement or Permanent Disability and such Participant shall not have notified
the Company of his or her desire to withdraw the balance in his or her Payroll Deduction Account, the executor or administrator
of such Participant’s estate or other legal title holder shall have all the rights provided pursuant to Section 9.1.

 

     

     

    

 

SECTION 10

GENERAL PROVISIONS

 

          10.1 
        Rights Not Transferable. Rights under the Plan are not transferable by a Participant other
than by will or the laws of descent and distribution, and are exercisable during his or her lifetime only by the Participant.

 

          10.2 
        Amendment of the Plan. The Committee or the Board may at any time, and from time to time,
amend the Plan in any respect; provided, however, the Plan may not, without appropriate approval of the Company’s shareholders,
be amended in any way that will cause the Plan to fail to meet the requirements of Section 423 of the Code. Any amendments to the
Plan required under the Code to be approved by the Company’s shareholders shall not become effective unless and until such shareholder
approval is obtained in accordance with the requirements of the Code.

 

          10.3 
        Termination of the Plan. The Plan and all rights of Employees hereunder shall terminate at
the earliest of (a) when all shares of Common Stock reserved under the Plan have been purchased or (b) at any time, at the discretion
of the Committee or the Board. Notice of termination shall be given to all Participants, but any failure to give notice shall not
impair the termination. Upon termination of the Plan, (i) all amounts in a Participant’s Payroll Deduction Account shall be returned
to such Participant and (ii) upon a Participant’s written request to the Company, certificates for all whole shares of Common Stock
held in such Participant’s Investment Sharebuilder Account shall be forwarded to such Participant, along with the dollar amount
of any remaining fractional shares of Common Stock credited to such Participant’s Investment Sharebuilder Account, determined based
on the Market Value of such fractional shares on the date such Participant’s written request is delivered to the Company. Any fractional
shares remaining in such Participant’s Investment Sharebuilder Account shall thereupon be cancelled.

 

          10.4 
        Governing Law; Compliance with Law. The Plan shall be construed in accordance with the laws
of the state of Michigan and applicable federal law. The Company’s obligation to sell and deliver shares of Common Stock hereunder
shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental
agency as may, in the opinion of counsel for the Company, be required. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes or payment of any taxes which it determines may be required to withhold or pay in connection with
a Participant’s participation in the Plan.

 

     

     

    

 

          10.5 
        Not an Employment Contract. The Plan shall not be deemed to constitute a contract of employment
between the Company or any Subsidiary and any Eligible Employee or Participant or to be consideration or inducement for the employment
of any Eligible Employee or Participant. The Plan shall not be deemed to give any Participant or Eligible Employee the right to
be retained as an Employee or in any other service of the Company or any Subsidiary, or to interfere with the right of the Company
or any Subsidiary to discharge any Participant or Eligible Employee at any time regardless of the effect that such discharge shall
have upon such person as a participant in the Plan.

 

          10.6 
        Effective Dates. Subject to shareholder approval at the 2002 Annual Meeting of Shareholders,
the first Option Period under the Plan shall commence on July 1, 2002 and end on September 30, 2002, unless the Committee determines
that the first Option Period should be later. If the Company’s shareholders do not approve the Plan at the 2002 Annual Meeting
of Shareholders, the Plan shall terminate.

 

          10.7 
        Investment Intent. The Committee may require a Participant to confirm that he or she is purchasing
with investment intent and not with a view to resale or other distribution.

 

          10.8 
        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.

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