UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. __)
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Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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CHOICEONE
FINANCIAL SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s)
Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
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Amount previously paid:
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109 East Division
Sparta, Michigan 49345
April
22, 2021
To our Shareholders:
We invite you to attend the Annual Meeting
of Shareholders of ChoiceOne Financial Services, Inc. The Annual Meeting will be a virtual meeting conducted exclusively via live webcast
at www.virtualshareholdermeeting.com/COFS2021. The meeting will be held on May 27, 2021 and will begin at 11:00 a.m. (Eastern Time,
local time in Sparta, Michigan).
The purpose of the meeting is to elect
directors and to consider the other matters described in this proxy statement.
Please be sure to sign, date and
return the enclosed proxy promptly whether or not you plan to attend the meeting. A proxy may be revoked at any time before it is
exercised and shareholders who are present online at the virtual Annual Meeting may revoke their proxy and vote online at the Annual Meeting
if they wish to do so. All shareholders should sign proxies as their names appear on the proxy.
Shareholders of record at the close
of business on March 30, 2021 are entitled to notice of and to vote at the meeting and any adjournment of the meeting. The proxy statement
and proxy are first being mailed to ChoiceOne shareholders on approximately April 22,
2021.
We hope you will join us at the
2021 Annual Meeting.
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Sincerely,
Kelly J. Potes
Chief Executive Officer
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109 East Division
Sparta, Michigan 49345
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
The Annual Meeting of shareholders of ChoiceOne Financial Services, Inc.
will be a virtual meeting conducted exclusively via live webcast at www.virtualshareholdermeeting.com/COFS2021. The meeting will
be held on May 27, 2021, at 11:00 a.m. (Eastern Time, local time in Sparta, Michigan). The purposes of the meeting are as follows:
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1.
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Election of directors.
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2.
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Proposed amendment to the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 12,000,000
to 15,000,000.
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3.
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Advisory approval of the Company's executive compensation.
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4.
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Ratification of the selection of Plante & Moran, PLLC as our registered independent public accounting
firm for the year ending December 31, 2021.
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We will also transact any other business that may properly come
before the meeting.
Shareholders of record at the close of business
on March 30, 2021 are entitled to notice of and to vote at the meeting and any adjournment of the meeting. The proxy statement and proxy
are first being mailed to ChoiceOne shareholders on approximately April 22, 2021.
In light of the coronavirus pandemic (COVID-19), for the safety of all of our employees, directors and shareholders, we have determined that the Annual Meeting will be held in a virtual meeting format only, via live webcast, with no physical in-person meeting. Shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/COFS2021. You will use the 16-digit control number shown on your proxy to access the virtual meeting. Additional information regarding attending the virtual meeting is included in the proxy statement. We encourage you to vote your shares prior to the Annual Meeting.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON MAY 27, 2021: A complete set of proxy materials relating to our
Annual Meeting and our Annual Report for the year ended December 31, 2020 are available on the Internet at: www.choiceone.com/proxymaterials.
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By Order of the Board of Directors,
Adom J. Greenland
Chief Operating Officer and Secretary
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April
22, 2021
It is important that your shares be represented at the
meeting. Even if you expect to attend the meeting,
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
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CHOICEONE FINANCIAL SERVICES,
INC.
109 East Division
Sparta, Michigan 49345
ANNUAL MEETING OF SHAREHOLDERS
May 27, 2021
PROXY STATEMENT
Meeting
Information
Time and Place of Meeting
You are invited to attend the Annual
Meeting of shareholders of ChoiceOne Financial Services, Inc. that will be held on May 27, 2021, at 11:00 a.m. (Eastern Time, local time
in Sparta, Michigan). The Annual Meeting will be a virtual meeting conducted exclusively via live webcast at www.virtualshareholdermeeting.com/COFS2021.
This proxy statement and the enclosed proxy are
first being mailed to ChoiceOne shareholders on approximately April 22, 2021, in
connection with the solicitation of proxies by ChoiceOne's Board of Directors for use at the annual meeting. In this proxy
statement, "we," "us," "our," "ChoiceOne" and the "Company" refer to ChoiceOne
Financial Services, Inc. and "you" and "your" refer to ChoiceOne shareholders.
Attending the Virtual Meeting
In light of the coronavirus
pandemic (COVID-19), for the safety of all of our employees, directors and shareholders, we have determined that the Annual Meeting
will be held in a virtual meeting format only, via live webcast, with no physical in-person meeting.
Shareholders may listen to and participate
in the Annual Meeting at www.virtualshareholdermeeting.com/COFS2021. You may log
in to this website up to 30 minutes before the start of the annual meeting, and are encouraged to log in at least 15 minutes prior to
the start of the Annual Meeting to ensure sufficient time to register and download the required software, if needed.
To access the Annual Meeting, you will use the 16-digit control
number shown on your proxy. Shareholders who access the Annual Meeting using this control
number will have the same rights and opportunities to participate as they would in an in-person meeting, including the ability to vote.
If you do not have your 16-digit control number, you will still be able to listen to the Annual Meeting, but you will not be able
to vote or otherwise participate. We encourage you to vote your shares prior to the Annual Meeting.
Purpose of Meeting
The purpose of the annual meeting
is to consider and vote upon the election of directors, a proposed amendment to the Company's Articles of Incorporation to increase the
number of authorized shares of common stock, advisory approval of the compensation of the Company's named executive officers as disclosed
in this proxy statement, and the ratification of the selection of Plante & Moran, PLLC as our registered independent public accounting
firm for the year ending December 31, 2021. Your Board of Directors recommends that you vote FOR each of the director nominees discussed
in this proxy statement, FOR the proposed amendment to the Company's Articles of Incorporation, FOR approval of the compensation of the
Company's named executive officers, and FOR ratification of the selection of auditors.
How to Vote Your Shares
You may vote at the meeting if you
were a shareholder of record of ChoiceOne common stock at the close of business on March 30, 2021. You are entitled to one vote per share
of ChoiceOne common stock that you own on each matter presented at the Annual Meeting.
As of March 30, 2021, there were 7,802,285 shares
of ChoiceOne common stock issued and outstanding.
Your shares will be voted at the
annual meeting if you properly sign and return to us the enclosed proxy. If you specify a choice, your proxy will be voted as specified.
If you do not specify a choice, your shares will be voted FOR each director nominee named in this proxy statement, FOR the proposed
amendment to the Company's Articles of Incorporation, FOR approval of the compensation of the Company's named executive officers, and
FOR ratification of the selection of auditors. If other matters are presented at the Annual Meeting, the individuals named in the
enclosed proxy will vote your shares on those matters in their discretion. As of the date of this proxy statement, we do not know of any
other matters to be considered at the annual meeting.
You may revoke your proxy at any time
before it is exercised by:
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delivering written notice of revocation to the Secretary of ChoiceOne prior to the meeting;
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by delivering a proxy bearing a later date than the proxy you wish to revoke prior to the meeting; or
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attending and voting online at the Annual Meeting.
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Who Will Solicit Proxies
Directors, officers and employees
of ChoiceOne and of ChoiceOne Bank, will initially solicit proxies by mail. They also may solicit proxies in person, by telephone or by
other means, but they will not receive any additional compensation for these efforts. Nominees, trustees and other fiduciaries who hold
stock on behalf of beneficial owners of ChoiceOne common stock may communicate with the beneficial owners by mail or otherwise and may
forward proxy materials to and solicit proxies from the beneficial owners. ChoiceOne will pay all expenses related to its efforts to solicit
proxies.
Required Vote and Quorum
Election
of Directors. A plurality of the shares voting at the Annual Meeting is required to elect directors. This means that if there
are more nominees than director positions to be filled, the nominees for whom the most votes are cast will be elected. In counting votes
on the election of directors, abstentions, broker non-votes and other shares not voted will not be counted as voted.
Proposed
Amendment to the Company's Articles of Incorporation. An affirmative vote of the majority of the outstanding shares of ChoiceOne
common stock entitled to vote is required to approve the proposed amendment to the Articles of Incorporation. In counting votes for approval
of the proposed amendment, abstentions, broker non-votes and other shares not voted will have the same effect as shares voted against
the proposal.
Advisory Approval of Executive
Compensation. The advisory vote on executive compensation will be approved on an advisory basis if a majority of the shares that
are voted on the proposal at the meeting are voted in favor of approval. Abstentions, broker non-votes and other shares that are not voted
will not be counted as voted. The vote is advisory and will not be binding on the Company, the Board of Directors or the Personnel and
Benefits Committee. However, the Board of Directors and the Personnel and Benefits Committee value the opinions of our shareholders and
will review the voting results and take them into consideration when making future decisions regarding executive compensation.
Ratification of Independent Auditors.
The ratification of the selection of Plante & Moran, PLLC as our independent auditors for the current fiscal year will be approved
if a majority of the shares that are voted on the proposal at the meeting are voted in favor of ratification. Abstentions and other shares
that are not voted will not be counted as voted.
Required Vote for Other Matters.
We do not know of any other matters to be presented at the meeting. Generally, any other proposal to be voted on at the meeting would
be approved if a majority of the shares that are voted on the proposal at the meeting are voted in favor of the proposal. Abstentions,
broker non-votes and other shares that are not voted will not be counted as voted.
Quorum. A majority of
the shares entitled to vote at the Annual Meeting must be present online or represented at the meeting by proxy to constitute a quorum.
To determine whether a quorum is present, we will include shares that are present online or represented by proxy, including abstentions
and shares represented by a broker non-vote on any matter.
Election of Directors
The Board of Directors presently consists of 14 individuals divided
into three classes. Each class of directors is as equal as possible in number and serves for a three-year term of office. The term of
office of one class of directors expires at the Annual Meeting each year. An individual may not continue to serve on the Board of Directors
after he or she becomes 70 years old, except that any individual serving as a director on December 16, 2020 who was older than 70 years
of age but younger than 72 years of age may continue to serve as a director until reaching 72 years of age.
Following recommendation by the Governance
and Nominating Committee, the Board of Directors proposes that the following nominees be elected as directors for terms expiring at the
Annual Meeting of shareholders to be held in 2024:
Harold J. Burns
Patrick A. Cronin
Paul L. Johnson
Gregory A. McConnell
Roxanne M. Page
Each proposed
nominee currently serves as a director of ChoiceOne. The proposed nominees are willing to be elected and serve as directors. If a nominee
is unable to serve or is otherwise unavailable for election – which we do not anticipate – the incumbent Board of Directors
may or may not select a substitute nominee. If a substitute nominee is selected, your proxy will be voted for the person so selected.
If a substitute nominee is not selected, your proxy will be voted for the election of the remaining nominees. No proxy will be voted for
a greater number of persons than the number of nominees named.
ChoiceOne's Board of Directors and
Executive Officers
Biographical information is presented below concerning the nominees for
director, current directors whose term of office will continue after the Annual Meeting and ChoiceOne's executive officers. The biographical
information for each nominee and director includes the experiences, qualifications, attributes or skills that caused the Governance and
Nominating Committee and the Board of Directors to determine that the person should continue to serve as a director for the Company.
All of the directors of ChoiceOne also serve as directors of ChoiceOne Bank. Except as otherwise indicated, each nominee, current director
and executive officer has had the same principal employment for over five years.
Nominees for Election as Directors with
Terms Expiring in 2024
Harold J. Burns
(age 54) was appointed as a director of ChoiceOne as of October 1, 2019 in connection with the merger of County Bank Corp. with and
into ChoiceOne. Mr. Burns is a Certified Public Accountant, a Certified Management Accountant and a Chartered Global Management Accountant.
Mr. Burns has been a Partner with UHY LLP and Managing Director with UHY Advisors MI, Inc. for nearly 20 years. He is a leader of the
Audit and Assurance Department and ERISA Audit Practice. He is also the Chairperson for the firm’s National Health Care Practice
and Executive committee member for the Michigan region. He received his Bachelor of Business Administration in Accounting from Walsh College.
Mr. Burns previously served as a director of County Bank Corp., parent company of Lakestone Bank & Trust, since 2016. While a director
of County Bank Corp., Mr. Burns served as Vice-Chairman of the Audit Committee as well as member of the Compensation, Investment, Nominating,
Risk and Loan committees. Prior to that, he served as director of Capac Bancorp Inc., parent company of CSB Bank, since 2011. Mr. Burns
currently serves as treasurer for Serving Macomb and multiple political campaign committees. He is also an audit and budget committee
member for the Archdiocese of Detroit. Mr. Burns previously served as President and board member of the SC4 Foundation and has served
on numerous other for-profit and non-profit boards in the community, including the Community Foundation of St. Clair County, St. Clair
County RESA, Memphis Community Schools, and the McLaren Macomb Healthcare Foundation. Mr. Burns is qualified for service as a continuing
director by virtue of his substantial public company auditing, accounting, finance and business consulting expertise and experience in
a wide variety of industries, in addition to his nine years of experience as an outside bank director.
Patrick A.
Cronin (age 68) was appointed as a director of ChoiceOne as of October 1, 2019 in connection with the merger of County Bank Corp.
with and into ChoiceOne. He has been a State Farm Insurance Agent in Lapeer, Michigan since 1974. Mr. Cronin received his Marketing and
Business degree from Mott Community College. Mr. Cronin previously served as director of County Bank Corp., parent company of Lakestone
Bank & Trust, since 1993. While a director of County Bank Corp., Mr. Cronin served as Chairman of the Insurance Committee as well
as member of the Audit, Compensation, Nominating and Loan committees. Mr. Cronin is past President and Chairman of numerous organizations
in Lapeer County, including the Mayfield Township Airport Board, City of Lapeer Downtown Development Authority, Big Brothers Big Sisters
of Lapeer County, Lapeer County Hockey Association, Lapeer Optimist Club and the Gus Macker Basketball Lapeer. Mr. Cronin is qualified
for service as a continuing director by virtue of his 28 years of experience as an outside bank director, and his business and insurance
expertise.
Paul L. Johnson (age 71) is
the owner and retired President of Falcon Resources, Inc. in Belmont, Michigan, a sales, engineering and design firm for the automotive
and furniture industries. Mr. Johnson was appointed as Chairman of the Board of Directors of ChoiceOne and ChoiceOne Bank in December
2013, served as Vice Chairman from July 2013 until December 2013, and has been a director of ChoiceOne and ChoiceOne Bank since July 1999.
Mr. Johnson was a director of ChoiceOne Insurance Agencies, Inc. from November 2000 through December 2006. Mr. Johnson is qualified for
service as a continuing director by virtue of his extensive business and entrepreneurial experience and skills, including 21 years of
experience as a director of ChoiceOne and ChoiceOne Bank. Mr. Johnson also has significant knowledge of and experience with the markets
and customers that ChoiceOne serves.
Gregory A.
McConnell (age 59) was appointed as a director of ChoiceOne as of October 1, 2019 in connection with the merger of County Bank Corp.
with and into ChoiceOne. He was previously a State Farm Insurance Agent and retired from that position in 2017. He received his bachelor's
degree from Ferris State University. Mr. McConnell previously served as director of County Bank Corp., parent company of Lakestone Bank
& Trust, since 2016. Prior to that, he served as Chairman of Capac Bancorp Inc., parent company of CSB Bank, since 1992. While a director
of County Bank Corp., Mr. McConnell served as Chairman of the Compensation Committee as well as member of the Executive, Insurance, Investment,
Nominating, Trust and Loan committees. Mr. McConnell currently serves on the St. Clair County RESA School Board and as a St. Clair County
Commissioner. He was Past Chairman of the Capac Downtown Development Authority. Mr. McConnell is qualified for service as a continuing
director by virtue of his substantial business and insurance experience and his involvement and 28 years of experience as an outside bank
director and past community bank chairman.
Roxanne M.
Page (age 51) is a Certified Public Accountant and Partner with Beene Garter, LLP, an independently owned accounting and consulting
firm. Ms. Page has served as Vice Chairwoman of the Board of Directors of ChoiceOne Bank since December 2013 and has been a director of
ChoiceOne and ChoiceOne Bank since August 2010. Ms. Page served as Vice Chairwoman of the Board of Directors of ChoiceOne from December
2013 until October 1, 2019. Ms. Page also served as a director for the Wolverine Worldwide YMCA Advisory Board until 2013. Ms. Page is
qualified for service as a continuing director by virtue of her substantial accounting and finance expertise and experience.
Your Board of Directors and
Governance and Nominating Committee, which consists entirely of independent directors,
recommend that you vote FOR the election of all nominees as directors.
Continuing Directors with Terms Expiring
in 2023
Keith D. Brophy (age 58) was appointed
a director of ChoiceOne and ChoiceOne Bank in October 2014. Mr. Brophy assumed the role of Director of the Emergent Holdings
Inc. Business Lab Product Group in February 2018. He was the State Director and Chief Executive Officer of the Michigan Small Business
Development Center from March 2015 until February 2018, was previously the Chief Executive Officer of Ideomed, Inc., a health care technology
firm, until February 2015, held executive positions with national technology firms RCM Technologies and Nusoft Solutions, and was co-founder
and Chief Executive Officer of technology firm Sagestone Consulting prior to that. Mr. Brophy has served as an Adjunct Professor at the
GVSU Seidman School of Business at various periods. Mr. Brophy also serves as a director and member of the compensation committee of Greatland
Corporation, as an appointee to the advisory board for the Grand Rapids SmartZone Local Finance Development Authority, and as a member
of the non-profit Meghan’s Army advisory board. He has previously served on other boards in the community including the University
of Michigan MTRAC Life Sciences Fund, the Frederick Meijer Gardens and Sculpture Park, and the West Michigan Center for Arts and Technology.
Mr. Brophy is qualified for service as a continuing director by virtue of his entrepreneurial, technology, and executive experience.
Michael (Mike) Burke, Jr. (age 51) is the President of ChoiceOne and ChoiceOne Bank. He is a lifelong banker,
starting out as a part time teller and working his way up to his current position. Mr. Burke became President of ChoiceOne in October
of 2019 following its merger with County Bank Corp., parent company of Lakestone Bank & Trust, and became President of ChoiceOne Bank
in May of 2020 following the consolidation of Lakestone Bank & Trust and ChoiceOne Bank. In 2016 Mr. Burke became the President of
Lakestone Bank & Trust following the merger of Lapeer County Bank & Trust and CSB Bank. Prior to that, he was President and CEO
of CSB Bank starting in 2012. He received his BA in Finance from the University of Michigan-Flint. Mr. Burke is active in serving the
needs of community banking where he is on the Community Bankers of Michigan board and nationally serves on a committee for the Independent
Community Bankers of America. Mr. Burke supports the communities where he lives and works by serving on several public boards. He is currently
involved with the Lapeer Development Corporation, McLaren Lapeer Region Board of Trustees, Capac DDA, Lapeer Historic Courthouse Committee,
UM Club of Flint, and Lapeer DDA, among others. Mr. Burke is qualified for service as a continuing director by virtue of his extensive
institutional and banking background and his knowledge and expertise regarding area markets, competitors, customers, employees, business
operations, and strategies.
David H. Bush
(age 70) was previously an optometrist, having retired in 2002. He received his Bachelor of Science and Doctor of Optometry degrees
from Pennsylvania College of Optometry. Dr. Bush was appointed as a director of ChoiceOne on October 1, 2019 in connection with the merger
of County Bank Corp. with and into ChoiceOne. Dr. Bush previously served as director of County Bank Corp, parent company of Lakestone
Bank & Trust, since 1987. While a director of County Bank Corp., Dr. Bush served as Chairman of the Compensation Committee as well
as member of the Capital, Executive, Insurance, Nominating, Risk and Loan committees. Dr. Bush is presently a member of Metamora 8 LLC,
Metamora Properties LLC, and Wild Cherry Properties LLC. Dr. Bush has served on the boards for the Lapeer Economic Corporation and the
Tax Increment Finance Authority. He is also Past President of Big Brother Big Sisters of Lapeer County and past member of the Kiwanis
Club of Lapeer. Dr. Bush is qualified for service as a continuing director by virtue of his 32 years of experience as an outside bank
director, knowledge of retail business and land development and continued community service.
Jack G. Hendon (age 65) is
a Certified Public Accountant, Co-Founder, and Partner with H&S Companies, PC, an independently owned accounting and consulting firm.
Mr. Hendon is also a partner in MH and Company LLC, HS&C Group LLC, Spartan Dawg Investments LLC, Dutch Dawg LLC, H&S Land Company
LLC, and Brite Eyes Brewing LLC. Mr. Hendon has been a director of ChoiceOne and ChoiceOne Bank since August 2013. Mr. Hendon serves as
a director of the Spectrum Gerber Hospital Foundation Board and as a director and audit committee member of the Newaygo Area Promise Zone
and is a former director and audit committee chair of Fremont Michigan InsuraCorp, which was a Securities and Exchange Commission ("SEC")
reporting company. Mr. Hendon is qualified for service as a continuing director by virtue of his substantial accounting and finance expertise
and experience and his experience as a director of an SEC reporting company.
Continuing Directors with Terms Expiring
in 2022
James A. Bosserd (age 71)
has been a director of ChoiceOne and ChoiceOne Bank since April 2001. Mr. Bosserd served as Chief Executive Officer of ChoiceOne and ChoiceOne
Bank from April 2001 until his retirement on June 1, 2016, and served as President of ChoiceOne and ChoiceOne Bank from April 2001 to
June 2015. Mr. Bosserd was President of ChoiceOne Insurance Agencies, Inc. from April 2001 until June 2016. Prior to joining ChoiceOne
and ChoiceOne Bank, Mr. Bosserd was Senior Vice President-Retail Group Manager with Huntington National Bank, a commercial bank, since
October 1997 and Senior Vice President-Private Banking Manager with Huntington National Bank since April 1999. Mr. Bosserd also served
as President and Chief Executive Officer of FMB State Savings Bank, a commercial bank in Lowell, Michigan, from 1992 through 1997. Mr.
Bosserd is a director and former member of the compensation committee of the United Methodist Finance Authority. He is a former director
of the Sparta Downtown Development Authority, Wolverine World Wide YMCA, and Community Bankers of Michigan (CBM, formerly MACB), and a
former member of CBM's audit committee. He previously served as President of the Chamber of Commerce, President of Rotary, Chairman of
the Wolverine YMCA board, and was chosen by CBM as Banker of the Year. Mr. Bosserd has over 24 years of experience serving in senior executive
positions at West Michigan banks, including service as ChoiceOne's President for 14 years and Chief Executive Officer for
15 years. Mr.
Bosserd is qualified for service as a continuing director by virtue of his extensive knowledge and expertise regarding ChoiceOne's markets,
competitors, customers, employees, business operations and strategies.
Eric E. “Rick”
Burrough (age 56) was appointed as a director of ChoiceOne on October 1, 2019 in connection with the merger of County Bank Corp. with
and into ChoiceOne. Mr. Burrough previously served as director of County Bank Corp., parent company of Lakestone Bank & Trust, since
2009. While a director of County Bank Corp., Mr. Burrough served on the Nominating, Risk, M&A, Trust, Compensation and Loan committees.
Since 1990, Mr. Burrough has been Owner and President of Michigan Web Press, a commercial printing company with operations in Davisburg,
Michigan and Greenville, Michigan. Since its founding in 2003, he has also been Owner and President of JAMS Media/View Newspaper Group,
publishers of 19 community papers in Michigan. Collectively, Mr. Burrough’s companies employ approximately 300 individuals. Both
individually and through his businesses, Mr. Burrough has been an ardent supporter of the Lapeer community through volunteerism, advocacy,
in-kind donations and monetary sponsorships of local organizations and events. Mr. Burrough is a member of the Lapeer Optimist Club and
the Lapeer Elks Club. He currently serves as a director on the boards of McLaren-Lapeer Region, McLaren-Lapeer Region Foundation, and
the Lapeer Economic Club. He previously served for 14 years on the board of the Lapeer County Community Foundation. He is a 2016 inductee
of the Lapeer High School Alumni Association Distinguished Alumni Hall of Honor. Mr. Burrough is qualified for service as a continuing
director by virtue of his 11 years of experience as an outside bank director, his extensive experience in business and his community leadership.
Bruce J. Cady
(age 69) was appointed as a director of ChoiceOne as of October 1, 2019 in connection with the merger of County Bank Corp. with and into
ChoiceOne. Mr. Cady began his banking career in 1975 with National Bank of Detroit after graduating from the University of Arizona with
a Business Administration degree. After stops at First of America and National City, he joined Lapeer County Bank & Trust Co. in 1999
as a senior lender. Mr. Cady was promoted to Executive Vice President and appointed to the Bank’s board in 2002. He was named President
of Lapeer County Bank & Trust Co. in 2005 and added the title of CEO in 2006. Following the merger of Lapeer County Bank & Trust
Co. with CSB Bank in 2016 to form Lakestone Bank & Trust, Mr. Cady was named Chairman and CEO. Mr. Cady previously served as Chairman
of County Bank Corp., parent company of Lakestone Bank & Trust, since 2002. While a Chairman of County Bank Corp., he served as a
member of the Capital, Executive, Insurance, Investment, Nominating, Risk, Trust and Loan committees. In 2018, Mr. Cady was named the
Community Banker of the Year by Community Bankers of Michigan. Following Mr. Cady’s retirement from Lakestone Bank & Trust in
2019, he continued to serve as Chairman of Lakestone Bank & Trust. Active in the community, Mr. Cady has served as chair or director
in a wide range of municipal, civic and professional organizations in Lapeer, including the I-69 Regional Development Corporation, The
Chatfield School, Michigan Bankers Association, Lapeer Area Chamber of Commerce, City of Lapeer TIFA, the Lapeer Economic Club, the Lapeer
Rotary Club, and the City of Lapeer DDA. He was previously Trustee for the Robert M. Perry School of Banking (MBA). He is known as a key
member of the committee that brought Emergency 911 Dispatch to Lapeer County and assisted in the creation of the City of Lapeer Community
Center. Mr. Cady currently serves as a director for the Lapeer Development Corporation and previously served as its Chairman. He also
serves on the Lapeer Development Corporation Revolving Loan Fund and the I-69 Regional Development Corporation. Mr. Cady is qualified
for service as a continuing director by virtue of his extensive expertise in business and banking, as well as his institutional knowledge
and experience as an inside bank director for 18 years.
Nels W. Nyblad (age 67) owns
Nels Nyblad Family Farm LLC. Mr. Nyblad is also a director of Nyblad Orchards, Inc., Rossroy Enterprises, Nyblad Properties Grand Traverse,
LLC, and Nyblad Farms. Mr. Nyblad served as a former director of the Michigan Agricultural Cooperative Marketing Association, Inc., Cherry
Growers Inc., and Kent City Community Schools. He also served on the Michigan Plum Committee for nearly 18 years. Mr. Nyblad has been
a director of ChoiceOne and ChoiceOne Bank since June 2008. Mr. Nyblad is qualified for service as a continuing director by virtue of
his substantial business, agricultural, and entrepreneurial experience and experience as a director of several Michigan businesses.
Kelly J. Potes
(age 59) has been the Chief Executive Officer of ChoiceOne since June 1, 2016, and the Chief Executive Officer of ChoiceOne Bank,
since October 1, 2019, as well as a director of ChoiceOne and ChoiceOne Bank since June 2015. Mr. Potes served as the President of ChoiceOne
from June 2015 until October 1, 2019. Mr. Potes has served as President of ChoiceOne Insurance Agencies, Inc. since June 2016, and formerly
served as Senior Vice President and General Manager of ChoiceOne Insurance Agencies, Inc. from January 2001 until June 2016 and Senior
Vice President of ChoiceOne Bank from January 2011 until June 2015. Prior to that, Mr. Potes was President of Kent-Ottawa Financial Advisors,
Inc., a financial consulting firm, from 1998 to 2001 and Vice President, Retail Services of ChoiceOne Bank from 1984 to 1998. He is a
director of ChoiceOne Insurance Agencies, Inc., Sparta Downtown Development Authority, Michigan Community Bankers Service Company, and
Urban Transformation Ministries. Mr. Potes formerly served as a Trustee of the Sparta Board of Education and director of West Michigan
United Methodist Church Board of Pension and Health. Mr. Potes is qualified for service as a continuing director by virtue of his extensive
knowledge and expertise regarding ChoiceOne's markets, competitors, customers, employees, business operations and strategies.
Executive Officers who are not
Directors
Peter Batistoni (age 55)
has been Senior Lender since December 2018, a Senior Vice President since December 2016, a Vice President Commercial Loan Manager since
December 2010, and a Commercial Loan Officer since July 2007 with Lakestone Bank & Trust and subsequently with ChoiceOne Bank following
the consolidation of Lakestone Bank & Trust and ChoiceOne Bank. Prior to his employment with Lakestone Bank & Trust he was employed
with Citizens State Bank, Fifth Third Bank (formerly Old Kent Bank), Comerica Bank, D&N Bank and First National Bank of Macomb County.
Lee A. Braford (age 60) has
been a Senior Vice President since January 2012, a Vice President of ChoiceOne Bank in Business Development since September 2001, and
an executive officer since January 2011. He currently serves as Chief Credit Officer. Mr. Braford was also employed by ChoiceOne Bank
from 1980 to 1997. Mr. Braford serves on the board of the Sparta Community Foundation, previously as its chairman, and previously served
on the board of Ravenna Baptist Church.
Heather D. Brolick (age 60),
the Senior Vice President Human Resources of ChoiceOne Bank, has 40 years of commercial banking experience. Ms. Brolick joined ChoiceOne
Bank in October of 2020 following the consolidation of ChoiceOne Bank and Community Shore Bank. Ms. Brolick served as Director, President
and Chief Executive Officer of Community Shores Bank Corporation (“Community Shores”) and Community Shores Bank from 2006
until 2020. From 1998 until 2006, Ms. Brolick served as Senior Vice President of Community Shores, and served as Secretary of Community
Shores from 2000 through April of 2007. From 2003 until 2006, Ms. Brolick served as President and Chief Operating Officer of Community
Shores Bank, and from 1999 until 2003, served as Senior Vice President Retail Lending and Operations of Community Shores Bank. Ms. Brolick
served as Secretary of Community Shores Bank from 2000 through April of 2007. Ms. Brolick joined the Board of Directors of Community Shores
Bank in 2003 and the Board of Directors of Community Shores in 2006. Ms. Brolick currently serves as a Board member and Chairperson of
the Board of Directors of Harbor Hospice; Board member and Chairperson of the Board of Harbor Hospice Foundation; Board Member of the
Mercy Health Physician Partners Board – West Michigan; as a Board member of Michigan Bankers Workers Compensation Fund, past Member
of the Bankers Advisory Board of the Graduate School of Banking at the University of Wisconsin-Madison, and as past Chairman and member
of the Board of Directors of The Chamber of Commerce Grand Haven, Spring Lake and Ferrysburg.
Shelly M. Childers (age 58)
has been Chief Information Officer since 2016, Senior Vice President since 2010, Vice President and Director of Information Technology
since 2008, Data Processing Officer since 1994, Data Processing Manager since 1989, Loan Documentation Clerk since 1986 and Teller since
1985 with Lakestone Bank & Trust. Ms. Childers attended the University of Iowa for pre-physical therapy, then transferred to
the University of Michigan and graduated with a Bachelor of Business Administration and Finance in 1994.
Steven M. DeVolder (age 61)
has been a Senior Vice President and Senior Trust Officer with ChoiceOne Bank since the consolidation of ChoiceOne Bank and Lakestone
Bank & Trust, and served as a Senior Vice President and Senior Trust Officer with Lakestone Bank & Trust from July 2019 to the
date of such consolidation. Mr. DeVolder started at Lakestone Bank & Trust in November 2018 as a Vice President and Trust Officer.
Mr. DeVolder currently manages the Wealth Management Department of Lakestone Bank & Trust. Prior to his employment with Lakestone
Bank & Trust, Mr. DeVolder was employed by J.P. Morgan Chase Bank as a Vice President, Trust Officer for 15 years in Southeast Michigan.
Adom J. Greenland (age 40), a
Certified Public Accountant, has been a Senior Vice President of ChoiceOne Bank since November 2015 and a Vice President of ChoiceOne
Bank since 2013. He currently serves as Secretary and Chief Operating Officer. Prior to his employment with ChoiceOne, Mr. Greenland was
a Senior Manager with PricewaterhouseCoopers, a global accounting and consulting firm.
Bradley A. Henion (age 51) has
been a Senior Vice President and Chief Lending Officer of ChoiceOne Bank since November 2015. Prior to his employment with ChoiceOne,
Mr. Henion was Market President of First Community Bank, formerly Select Bank, in Grand Rapids, Michigan. Prior to that, he worked with
Greenstone Farm Credit Services and Bank of America, formerly LaSalle Bank.
Thomas L. Lampen (age 65),
a Certified Public Accountant, has been a Senior Vice President of ChoiceOne Bank since December 2011, Chief Financial Officer of ChoiceOne
Bank since January 1992 and Treasurer of ChoiceOne since April 1987. Mr. Lampen has been the Treasurer of ChoiceOne Insurance Agencies,
Inc. since January 1996. Prior to his employment with ChoiceOne, Mr. Lampen was employed by Grant Thornton, a national accounting firm.
Amendment to the Company's Articles of
Incorporation to Increase the Number of Authorized Shares of Common Stock from 12,000,000 to 15,000,000
The Board of Directors proposes to amend Article
III of the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 12,000,000 to 15,000,000.
The Board of Directors has unanimously approved, and recommends that ChoiceOne's shareholders approve, the proposed amendment to the Articles
of Incorporation. The Board of Directors has determined that
the approval of the proposed amendment to increase the number of authorized
shares of common stock would be in the best interests of ChoiceOne and its shareholders.
ChoiceOne currently has 100,000 shares of preferred
stock and 12,000,000 shares of common stock authorized for issuance. As of March 30, 2021, no shares of preferred stock were issued and
outstanding, 7,802,285 shares of common stock were issued and outstanding and 72,907 shares were reserved for issuance under the ChoiceOne's
various equity plans, leaving ChoiceOne with 4,124,808 shares of common stock available for future issuance. Therefore, the Board of
Directors believes that it is advisable to have additional authorized shares of common stock available for future issuance to position
ChoiceOne to be able to react quickly to strategic opportunities that may arise in the future. Furthermore, the additional authorized
shares would also be available for possible future dividends, equity compensation plans, and other corporate purposes that might be considered.
All of the additional authorized shares of common
stock would be of the same class with the same dividend, voting, and liquidation rights as the shares of common stock presently issued
and outstanding. Shareholders have no preemptive rights to acquire shares of common stock issued by ChoiceOne under its Articles of Incorporation
and shareholders would not acquire preemptive rights with respect to the additional authorized shares of stock under the proposed amendment
to the Articles of Incorporation.
If the proposed amendment is adopted, the newly authorized
shares would be unreserved and available for issuance, except with respect to any such shares reserved for issuance under existing or
future equity compensation plans as required by Nasdaq Listing Rule 5635(c). No further shareholder authorization would be required prior
to the issuance of such shares by ChoiceOne.
If the shareholders approve the proposal, ChoiceOne
will file a Certificate of Amendment to the Company's Articles of Incorporation to amend the first paragraph of Article III of the Company's
Articles of Incorporation as follows:
Article III
The total authorized capital stock of
the corporation is Fifteen Million One Hundred Thousand (15,100,000) shares of stock divided into two classes, as follows:
A. Fifteen
Million (15,000,000) shares of common stock, which shall be called "Common Stock."
B. One
Hundred Thousand (100,000) shares of preferred stock, which shall be called "Preferred Stock."
The text of the proposed amendment is subject to modification
to include such changes as the Board of Directors determines to be necessary or advisable to effect the increase in authorized shares
of common stock.
Your Board of Directors
recommends that you vote FOR the approval of the
proposed amendment to
the Company's Articles of Incorporation.
Advisory Approval of Executive Compensation
In accordance with the requirements
of Section 14A of the Securities Exchange Act of 1934 (the "Act"), shareholders may cast an advisory vote on the approval of
the compensation of the Company's named executive officers as disclosed in this proxy statement pursuant to the SEC's compensation disclosure
rules. The Company has designed its executive compensation programs to attract, motivate, reward, and retain senior management talent,
and to encourage senior management to manage the Company to achieve our corporate objectives and increase shareholder value through long-term
profitable growth. The Personnel and Benefits Committee, which consists entirely of independent directors, oversees the compensation of
the Company's named executive officers. The Personnel and Benefits Committee believes that the Company's compensation programs are appropriate
for the Company taking into account such factors as the size of the Company and ChoiceOne Bank, the market for executive talent in which
we compete, and the Company's short-term and long-term strategic objectives. The Personnel and Benefits Committee believes that the Company's
compensation programs strike an appropriate balance between incentivizing growth while not encouraging excessive risk-taking. For these
reasons, we are recommending that our shareholders vote "FOR" the adoption of the following resolution:
RESOLVED, that the shareholders
of ChoiceOne Financial Services, Inc. (the "Company") approve the compensation of the Company's named executive officers, as
disclosed in the Company's proxy statement for the 2021 Annual Meeting of Shareholders under the heading entitled "Executive Compensation."
This vote is not intended to
address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy and
programs described in this proxy statement.
The vote is not binding on the
Company, the Board of Directors or the Personnel and Benefits Committee. However, the Board of Directors and Personnel and Benefits Committee
value the opinions of our shareholders and will take the results of the vote into consideration when making future decisions regarding
executive compensation.
The Company's current policy is
to provide shareholders with an opportunity to approve the compensation of the named executive officers each year at the annual meeting
of shareholders. The next such vote will occur at the 2022 annual meeting of shareholders.
Your Board of Directors
and Personnel and Benefits Committee, which consists entirely of independent directors,
recommend that you vote
FOR the approval of the compensation of the Company's named executive officers.
Ratification of the Selection of
Independent Registered Public Accounting Firm
ChoiceOne's Audit and Compliance/CRA
Committee ("Audit Committee") has approved the selection of Plante & Moran, PLLC as the Company's independent registered
public accounting firm to audit the financial statements of ChoiceOne and its subsidiaries for the year ending December 31, 2021, and
to perform such other appropriate accounting services as may be approved by the Audit Committee. The Audit Committee and the Board of
Directors propose and recommend that shareholders ratify the selection of Plante & Moran, PLLC to serve as the Company's independent
auditors for the year ending December 31, 2021. More information concerning the relationship of the Company with its independent auditors
appears below under the headings "Audit Committee," "Independent Registered Public Accounting Firm," and "Audit
Committee Report."
If the shareholders do not ratify the selection
of Plante & Moran, PLLC, the Audit Committee will consider a change in auditors for the next year.
Your
Board of Directors and Audit Committee, which consists entirely of independent directors,
recommend
that you vote FOR ratification of the selection of Plante & Moran, PLLC as our independent auditors for 2021.
Corporate Governance
Independence
The Board of Directors has determined
that the following 11 of its 14 directors who served during 2020 are "independent" directors as of December 31, 2020 as defined
by the rules of the SEC and the Nasdaq Listing Rules:
James A. Bosserd
Keith D. Brophy
Harold J. Burns
Eric E. Burrough
David H. Bush
Patrick A. Cronin
Jack G. Hendon
Paul L. Johnson
Gregory A. McConnell
Nels W. Nyblad
Roxanne M. Page
In making this determination, the Board
of Directors considered all ordinary course loans and other business transactions between the directors and ChoiceOne.
Committees of the Board of Directors
The Board of Directors has established
the following standing committees:
|
·
|
Audit and Compliance/CRA Committee
|
|
·
|
Governance and Nominating Committee
|
|
·
|
Personnel and Benefits Committee
|
Audit and Compliance/CRA Committee. The Audit
Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee oversees
the financial reporting and accounting processes of ChoiceOne. The Audit Committee is directly responsible for the appointment, compensation,
retention and oversight of the work of the independent public accounting firm and reviews its fees for audit and non-audit services and
the scope and results of audits performed by it. The Audit Committee also reviews ChoiceOne's internal accounting controls, the proposed
form of its financial statements, the results of internal audits and compliance programs, and the results of the examinations received
from regulatory authorities. The Audit Committee operates pursuant to a written charter, which was adopted by the Board of Directors.
A current copy of the Audit Committee charter can be found in the Investor Relations section of ChoiceOne's website at www.choiceone.com.
As of the date of this proxy statement, Roxanne M. Page (Chairperson), Keith D. Brophy, Harold J. Burns, Patrick A. Cronin, Jack G. Hendon,
and Gregory A. McConnell serve on the Audit Committee. ChoiceOne has designated Ms. Page as an audit committee financial expert as defined
by rules of the SEC. All of the members of the Audit Committee are "independent" directors as defined by the rules of the SEC
and Nasdaq Listing Rules. In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its
attention, with full access to all books, records, facilities, and personnel of the Company, and may retain outside counsel or other
experts for this purpose at the expense of the Company. The Audit Committee met five times during 2020.
Governance and Nominating Committee.
The Governance and Nominating Committee administers the process of nominations for directorships and coordinates ChoiceOne's corporate
governance initiatives and policies. The Governance and Nominating Committee operates pursuant to a written charter, which was adopted
by the Board of Directors. A current copy of the Governance and Nominating Committee charter can be found in the Investor Relations section
of ChoiceOne's website at www.choiceone.com. As of the date of this proxy statement, Paul L. Johnson (Chairperson), James A. Bosserd,
Keith D. Brophy, David H. Bush, and Patrick A. Cronin serve on the Governance and Nominating Committee. All of the members of the Governance
and Nominating Committee are "independent" directors as defined by Nasdaq Listing Rules. The Governance and Nominating Committee
may establish subcommittees of the committee and delegate authority and responsibility to subcommittees. In appropriate cases, in its
discretion, the Governance and Nominating Committee may delegate its authority to the executive officers, being mindful that the committee
and the Board of Directors are responsible to the Company's shareholders to perform the functions and fulfill the responsibilities charged
to the committee under its charter. The Governance and Nominating Committee has authority to engage consultants, advisors and legal
counsel at the expense of the Company. The Governance and Nominating Committee met three times during 2020.
Personnel and Benefits Committee.
The Personnel and Benefits Committee performs the functions of a compensation committee. The Personnel and Benefits Committee:
|
·
|
Reviews from time to time the personnel policies and programs of ChoiceOne, and
submits recommendations to the Board of Directors;
|
|
·
|
Administers the equity plans of ChoiceOne that are approved by the Board of Directors;
|
|
·
|
Reviews the administration of and proposed changes to the retirement and welfare
benefit plans of ChoiceOne that are approved by the Board of Directors;
|
|
·
|
Makes recommendations to the Board of Directors with respect to incentive compensation plans and equity-based plans;
|
|
·
|
Makes any determinations and approvals relating to incentive-based compensation
(with the ratification of the Board of Directors) as required to comply with applicable tax laws;
|
|
·
|
While meeting outside of the presence of the Chief Executive Officer, reviews and
approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluates the performance of the
Chief Executive Officer in light of those corporate goals and objectives, and determines the compensation of the Chief Executive Officer
based on the evaluation for recommendation to the Board of Directors; and
|
|
·
|
While meeting outside of the presence of the Chief Executive Officer, determines
the long-term incentive component of the compensation of the Chief Executive Officer, taking into consideration ChoiceOne's performance
and relative shareholder return, the value of similar incentive awards to chief executive officers at comparable companies, and the awards
given to ChoiceOne's Chief Executive Officer in past years.
|
The Personnel and Benefits Committee
operates pursuant to a written charter, which was adopted by the Board of Directors. A current copy of the Personnel and Benefits Committee
charter can be found in the Investor Relations Section of ChoiceOne's website at www.choiceone.com. All of the members of the Personnel
and Benefits Committee are "independent" directors as defined by the rules of the SEC and Nasdaq Listing Rules. As of the date
of this proxy statement Jack G. Hendon (Chairperson), Harold J. Burns, Eric E. Burrough, and Nels W. Nyblad serve on the Personnel and
Benefits Committee. The Personnel and Benefits Committee may establish subcommittees of the committee and delegate authority and responsibility
to subcommittees. In appropriate cases, in its discretion, the Personnel and Benefits Committee may delegate its authority to the executive
officers, being mindful that the committee and the Board of Directors are responsible to the Company's shareholders to perform the functions
and fulfill the responsibilities charged to the committee under its charter. The Personnel and Benefits Committee may delegate to the
Chief Executive Officer authority to recommend the amount or form of compensation paid to other executive officers and associates subordinate
to the Chief Executive Officer, subject to approval by the committee and such limitations and reporting responsibilities as the committee
in its discretion shall require. The Personnel and Benefits Committee will not delegate to executive officers its authority to approve
awards of stock options or other stock-based compensation. The Personnel and Benefits Committee has authority to engage consultants, advisors
and legal counsel at the expense of the Company. The Personnel and Benefits Committee met three times during 2020.
Board Leadership Structure and Role
in Risk Oversight
The Board of Directors has determined
that having an independent director serve as Chairman of the Board is in the best interest of shareholders at this time. The structure
ensures a greater role for the independent directors in the oversight of the Company and active participation of the independent directors
in setting agendas and establishing priorities and procedures for the work of the Board of Directors.
The Board of Directors is actively
involved in oversight of risks that could affect the Company. This oversight is conducted primarily through the Audit Committee and through
ChoiceOne Bank's Asset/Liability and Risk Committee, but the full Board of Directors has retained responsibility for general oversight
of risks. The Board of Directors satisfies this responsibility through reports by each committee chair regarding the committee's considerations
and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within the Company.
Nominations of Directors
The Governance and Nominating Committee
will consider director candidates recommended by shareholders, directors, officers, third party search firms and other sources. The Governance
and Nominating Committee will ultimately determine whether a recommendation will result in a nomination. In considering potential nominees,
the committee will review all candidates in the same manner, regardless of the source of the recommendation. In evaluating the skills
and characteristics required of board members, the committee considers various factors and believes that each candidate should:
|
·
|
be chosen without regard to sex, race, religion or national origin;
|
|
·
|
be an individual of the highest character and integrity and have an inquiring mind,
vision and the ability to work well with others;
|
|
·
|
be free of any conflict of interest that would violate any applicable law or regulation
or interfere with the proper performance of the responsibilities of a director;
|
|
·
|
possess substantial and significant experience that would be of particular importance
to ChoiceOne in the performance of the duties of a director;
|
|
·
|
have sufficient time available to devote to the affairs of ChoiceOne in order to
carry out the responsibilities of a director; and
|
|
·
|
have the capacity and desire to represent the balanced, best interests of the shareholders as a whole.
|
A shareholder may nominate a candidate
for director in accordance with ChoiceOne's Restated Articles of Incorporation. A shareholder nominating a director must send a written
notice to the Secretary of ChoiceOne that sets forth with respect to each proposed nominee:
|
·
|
the name, age, business address and residence address of the nominee;
|
|
·
|
the principal occupation or employment of the nominee;
|
|
·
|
the number of shares of common stock of ChoiceOne that the nominee beneficially owns;
|
|
·
|
a statement that the nominee is willing to be nominated and to serve; and
|
|
·
|
such other information concerning the nominee as would be required under the rules
of the SEC to be included in a proxy statement soliciting proxies for the election of the nominee.
|
You must send
this notice to the Secretary not less than 120 days prior to the date of notice of an annual meeting and not more than seven days following
the date of notice of a special meeting called for election of directors.
Anti-Hedging and Pledging Policy
Our anti-hedging and pledging
policy aligns the interests of our directors and executive officers with our shareholders. The policy prohibits our directors and executive
officers from purchasing any instrument or entering into any transaction that is designed to hedge or offset any decrease in the market
value of ChoiceOne's common stock, including short-selling, equity swaps, collars, exchange funds, put or call options, or prepaid variable
forward contracts. Further, the policy prohibits directors and executive officers from pledging, hypothecating or otherwise encumbering
shares of ChoiceOne's stock as collateral for indebtedness (including, but not limited to, holding such shares in a margin account), except
that they may pledge, hypothecate or otherwise encumber shares of ChoiceOne common stock as collateral securing loans made by ChoiceOne
or its subsidiaries to its directors and executive officers if such loans (a) are made in the ordinary course of business, (b) are made
on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons
not related to ChoiceOne or its subsidiaries, and (c) do not involve more than a normal risk of collectability or present other unfavorable
features.
Board Meetings and Attendance
During 2020, the ChoiceOne Board
of Directors held six regular meetings and two special meetings. All directors attended at least 75% of the aggregate number of meetings
of the Board of Directors and meetings of committees on which they served during the periods that they served.
Annual Meeting Attendance
ChoiceOne expects all of its directors
to attend its annual meeting of shareholders. All directors attended the 2020 annual meeting.
Communicating with the Board of Directors
Shareholders and interested parties
may communicate with members of ChoiceOne's Board of Directors by sending correspondence addressed to the board as a whole, a specific
committee, or a specific board member c/o Adom J. Greenland, Chief Operating Officer and Secretary, ChoiceOne Financial Services, Inc.,
109 East Division, Sparta, Michigan 49345. All correspondence will be forwarded directly to the applicable member(s) of the Board of Directors.
Ownership of ChoiceOne Common Stock
Ownership of ChoiceOne Stock by Directors
and Executive Officers
The following table sets forth information
concerning the number of shares of ChoiceOne common stock held as of December 31, 2020, by each of ChoiceOne's directors and nominees
for director, each of the named executive officers and all of ChoiceOne's directors, nominees for director and executive officers as a
group:
Amount
and Nature of Beneficial Ownership of
Common Stock(1)
|
Sole
Voting
and
|
Shared
Voting
or
|
Shares
Underlying
|
Total
|
Percent
|
Name of Beneficial Owner
|
Dispositive
Power
|
Dispositive
Power(2)
|
Unexercised
Options
|
Beneficial
Ownership(3)
|
of
Class
|
James
A. Bosserd
|
7,831.7400
|
13,958.4254
|
-
|
21,790.1654
|
*
|
Keith
D. Brophy
|
7,556.0000
|
4,179.2110
|
-
|
11,735.2110
|
*
|
Michael
J. Burke, Jr.
|
-
|
2,849.4816
|
-
|
2,849.4816
|
*
|
Harold
J. Burns
|
-
|
10,034.7569
|
-
|
10,034.7569
|
*
|
Eric
E. Burrough(4)
|
127,349.0000
|
-
|
-
|
127,349.0000
|
1.63%
|
David
H. Bush(4)
|
-
|
124,140.0000
|
-
|
124,140.0000
|
1.59%
|
Bruce
J. Cady
|
6,417.0000
|
485.0000
|
-
|
6,902.0000
|
*
|
Patrick
A. Cronin
|
4,359.0000
|
2,053.0000
|
-
|
6,412.0000
|
*
|
Adom
J. Greenland
|
1,974.0000
|
5,796.4003
|
1,500.0000
|
9,270.4003
|
*
|
Jack
G. Hendon
|
15,882.4179
|
-
|
-
|
15,882.4179
|
*
|
Paul
L. Johnson
|
4,774.0000
|
51,827.0000
|
-
|
56,601.0000
|
*
|
Gregory
A. McConnell(4)
|
-
|
20,181.0000
|
-
|
20,181.0000
|
*
|
Nels
W. Nyblad
|
20,475.0000
|
17,439.0000
|
-
|
37,914.0000
|
*
|
Roxanne
M. Page
|
2,074.1360
|
3,645.0720
|
-
|
5,719.2080
|
*
|
Kelly
J. Potes
|
3,184.8527
|
25,324.9555
|
6,000.0000
|
34,509.8082
|
*
|
|
|
|
|
|
|
All
directors, nominees for director and executive
|
|
|
|
|
|
officers
as a group
|
213,973.9585
|
300,672.7281
|
20,631.0000
|
535,277.6866
|
6.87%
|
* Less than 1%.
(1)
|
The numbers of shares stated are based on information furnished by each person
listed and include shares personally owned of record by that person and shares that under applicable regulations are considered to be
otherwise beneficially owned by that person.
|
(2)
|
These numbers include shares as to which the listed person is legally entitled to
share voting or dispositive power by reason of joint ownership, trust or other contract or property right, and shares held by spouses,
certain relatives and minor children over whom the listed person may have influence by reason of relationship.
|
(3)
|
Total beneficial ownership includes 11,362.4020
shares of ChoiceOne common stock held by the ChoiceOne Bank 401(k) in the accounts of employees, of which executive officers of ChoiceOne
are administrators. Of the 11,362.4020 shares of ChoiceOne common stock in this plan, the directors and executive officers have included
2,287.4748 shares in this table as beneficially owned with sole voting and dispositive power. The remaining 9,074.9272 shares are reported
as beneficially owned with shared voting or dispositive power and the officers and directors disclaim beneficial ownership of such shares.
|
(4)
|
Of the shares held by Messrs. Burrough, Bush,
and McConnell, the following number of shares were pledged as security for loans with ChoiceOne Bank
as permitted by ChoiceOne's anti-hedging and pledging policy: Mr. Burrough - 125,660; Mr. Bush - 59,657;
Mr. McConnell - 20,000.
|
Five Percent Shareholders
The following table sets forth information concerning
the number of shares of ChoiceOne Common stock beneficially owned as of December 31, 2020 by each person or group known to ChoiceOne to
be a beneficial owner of 5% or more of ChoiceOne's outstanding shares of common stock as of December 31, 2020:
Name and Address of Beneficial Owner
|
Amount and Nature of Beneficial Ownership of
Common Stock(1)
|
Percent of
Class
|
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
|
394,725
|
5.1%
|
(1)
|
Based on a Schedule 13G filed on February 2, 2021 with the SEC by BlackRock, Inc.
on behalf of itself and certain of its subsidiaries (collectively, "BlackRock"). BlackRock has sole voting power over 388,167
of the shares, shared voting power over none of the shares, sole dispositive power over 394,725 of the shares and shared dispositive
power over none of the shares.
|
Executive Compensation
Summary of Executive Compensation
The following table shows certain
information concerning the compensation earned by each person who served as the Chief Executive Officer during the fiscal year ended December
31, 2020 and each of ChoiceOne's two most highly compensated executive officers (other than persons who served as Chief Executive Officer)
who were serving as executive officers as of the fiscal year ended December 31, 2020 (together, the "named executive officers").
SUMMARY COMPENSATION
TABLE
Name and
Principal Position
|
Year
|
Salary(1)
|
Bonus
|
Stock
Awards(2)
|
Option
Awards(3)
|
Non-equity
Incentive Plan
Compensation(4)
|
All Other Compensation(5)
|
Total
|
Kelly
J. Potes
Chief Executive
Officer of
ChoiceOne and
ChoiceOne Bank
|
2020
2019
|
$ 360,000
286,712
|
$ 0
50,995
|
$ 44,736
19,176
|
$ 0
21,840
|
$ 118,800
29,005
|
$ 27,007
20,525
|
$ 550,543
428,253
|
|
|
|
|
|
|
|
|
|
Michael
J. Burke Jr.
President of
ChoiceOne and
ChoiceOne Bank
|
2020
2019
|
310,000
76,116
|
0
60,000
|
34,969
0
|
0
0
|
85,250
0
|
20,778
250,000
|
450,997
386,116
|
|
|
|
|
|
|
|
|
|
AdomJ.
Greenland
Secretary of
ChoiceOne and
Senior Vice
President &
Chief
Operating
Officer of
ChoiceOne Bank
|
2020
2019
|
185,000
166,278
|
0
18,000
|
22,738
19,176
|
0
5,460
|
40,700
12,405
|
0
0
|
248,438
221,319
|
____________________
(1)
|
Includes salary deferred under the ChoiceOne Bank 401(k) plan, described below.
|
(2)
|
The values of all stock awards reported in this column were computed in accordance
with Financial Accounting Standards Board Accounting Standards Codification, ASC Topic 718 Compensation-Stock Compensation (ASC 718).
For a discussion of the valuation assumptions, see Note 14 to the Company's 2020 consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2020. Stock awards consist of awards of restricted stock units granted on April
30, 2020, which will vest in full on the three-year anniversary of the grant date. Any restricted stock units that vest will be converted
to shares of Company common stock on a one-for-one basis. Restricted stock units that do not vest will be forfeited and the named executive
officer will receive no shares of Company common stock attributable to the forfeited units. A holder of restricted stock units has no
rights as a shareholder of the Company until such time as restricted stock units vest and convert into shares of Company common stock.
|
(3)
|
The fair values of all option awards reported
in this column were computed in accordance with Financial Accounting Standards Board Accounting Standards Codification, ASC Topic 718
Compensation-Stock Compensation (ASC 718). For a discussion of the valuation assumptions, see Note 14 to the Company's 2020 consolidated
financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Grantee's right to exercise
options once vested will expire at the earlier of the expiration date or in accordance with the plan's provisions for death or employment
termination. A grantee of stock option awards shall have no rights as a shareholder of the Company until exercise of the option and payment,
issuance, and delivery of such shares has occurred. The fair value of each option award is estimated on the date of grant using a Black-Scholes
option valuation method.
|
(4)
|
Reflects the dollar value of non-equity incentive plan compensation earned during 2019 and 2020.
|
(5)
|
For Mr. Burke's 2019 compensation, this amount reflects a $250,000 transaction bonus payment paid upon
completion of the merger of ChoiceOne and County Bank Corp., effective October 1, 2019, under the employment agreement between ChoiceOne
and Mr. Burke.
|
Independent Compensation Consultants
In
2020, the Personnel and Benefits Committee engaged Findley, a Division of USI ("Findley"), to serve as the Company's independent
compensation consultant. Findley and its affiliates did not provide any services to the Company other than the compensation consultant
services provided to the Personnel and Benefits Committee. The Company's board of directors determined that Findley's work for the Personnel
and Benefits Committee did not raise any conflicts of interest and that Findley was independent under applicable Nasdaq rules at the time
services were provided to the Personnel and Benefits Committee.
Specifically,
Findley was engaged to review the compensation paid to Company directors and executive officers to ensure competitiveness and to assist
in designing compensation programs to attract and retain top talent. Findley performed a market analysis to assess the competitiveness
of the Company's compensation, using compensation surveys and peer group data for companies with comparable operations and size. Findley
also provided to the Personal and Benefits Committee observations and recommendations regarding market and banking industry trends related
to director and executive compensation.
Additionally,
Findley made certain recommendations related to existing and proposed incentive compensation for the Company's executive officers, with
the objective of motivating and retaining them and aligning their interests with Company performance and creation of shareholder value,
without encouraging inappropriate risk taking. In connection with the recommendations and data provided by Findley, the Company implemented
the 2020 Incentive Plan, described below.
2020 Incentive Plan
The 2020 Incentive Plan is designed to align executive officer compensation
with a “pay for performance” model by tying compensation to the achievement of certain company performance metrics, such as
asset growth, return on assets and asset quality, while at the same time discouraging excessive risk-taking. The 2020 Incentive Plan provided
for the grant of short-term, annual cash awards and the grant of long term, equity awards in the form of restricted stock units, in each
case in amounts based on achievement of certain historical Company performance metrics. Incentive targets were set to deliver competitive
pay relative to the market and peer group data. Restricted stock units granted under the 2020 Incentive Plan vest in full upon completion
of a three-year service period.
The
incentive targets as a percentage of salary for each of the named executive officers for 2020 were as follows:
|
Cash Award
|
Restricted Stock Units
|
Kelly J. Potes
|
30%
|
20%
|
Michael J. Burke Jr.
|
25%
|
15%
|
Adom J. Greenland
|
20%
|
10%
|
Employment Agreements
Kelly
J. Potes entered into an employment agreement on September 30, 2019, effective as of October 1, 2019 (the "Potes Employment Agreement"),
pursuant to which Mr. Potes will serve as the Chief Executive Officer of ChoiceOne. Michael J. Burke, Jr., entered into an employment
agreement with ChoiceOne effective as of October 1, 2019 (the "Burke Employment Agreement"), pursuant to which Mr. Burke was
appointed the President of ChoiceOne.
The
terms of the Potes Employment Agreement and Burke Employment Agreement (together, the "Agreements") are substantially similar.
Under each Agreement, in the event of ChoiceOne's termination of Mr. Potes or Mr. Burke, as applicable (the "Executive"), without
cause, or by the Executive for good reason (each as defined in the Agreements), the Executive will be entitled to continued salary for
two years and monthly health care continuation payments for 12 months or until the commencement of new employment. In the event of a change
of control and a qualifying termination within six months before or three years after the change in control (excluding the Merger), the
Executive will be entitled to a lump-sum cash payment equal to three times their then-current base salary and monthly health care continuation
payments for 12 months or until the commencement of new employment. If any payment to be received by the Executive following a change
in control is determined to constitute a "parachute payment" as such term is defined in Section 280G(b)(2) of the Code, ChoiceOne
will act in good faith to mitigate the impact of Section 280G of the Code such that no "parachute payment" will result. To the
extent this effort is unsuccessful, ChoiceOne will reduce the amount of such payment to ensure that the total payments to the applicable
Executive do not exceed 2.99 times the Executive's "base amount" as defined in Section 280G(b)(3) of the Code.
The
Agreements contain provisions related to non-solicitation and non-competition that generally preclude the Executive, during his time of
employment and for a period of 24 months thereafter, from engaging in activities competitive with ChoiceOne in any county in which ChoiceOne
or its affiliates has a branch office or loan production office or in any contiguous counties, and from diverting from ChoiceOne any trade
or business with any customer or supplier with whom the Executive had contact during his employment, subject to certain conditions and
exceptions. The Agreements also require the Executive to maintain the confidentiality of non-public information with respect to ChoiceOne
and its affiliates.
Pursuant
to the Agreements, for 2021 and beyond, the annual salaries of each of Mr. Potes and Mr. Burke will be subject to annual review and adjustment
in accordance with ChoiceOne's normal procedures. Mr. Potes and Mr. Burke will be eligible to participate in ChoiceOne's bonus programs
and equity-based compensation programs.
Additionally,
the Burke Employment Agreement provides that Mr. Burke was entitled to a transaction bonus payment of $250,000, payable upon completion
of the merger of County Bank Corp. with and into ChoiceOne, effective October 1, 2019, which payment equaled half of the amount to which
Mr. Burke would have been entitled under his preexisting employment agreement with County if he had terminated his employment following
completion of the merger.
The
foregoing description of the Burke Employment Agreement and the Potes Employment Agreement does not purport to be complete and is qualified
in its entirety by reference to the Burke Employment Agreement, which is filed as Exhibit 10.7 to ChoiceOne's Pre-Effective Amendment
No. 2 to Form S-4 filed August 5, 2019, and the Potes Employment Agreement, which is filed as Exhibit 10.2 to ChoiceOne's Current Report
on Form 8-K filed October 1, 2019.
401(k) Plan
The ChoiceOne Bank 401(k) plan
is qualified under Section 401(a) of the Internal Revenue Code of 1986 (the "Code").
The purpose of the 401(k) plan is to permit employees
of ChoiceOne Bank, including the named executive officers, to save for retirement on a pre-tax basis. In addition to an employee's pre-tax
contributions, ChoiceOne Bank may contribute discretionary matching or profit-sharing payments to the 401(k) plan. If ChoiceOne Bank
contributes any matching contributions, those contributions are immediately vested. If ChoiceOne Bank contributes profit-sharing payments
to the 401(k) plan, those contributions will become fully vested after six years of a participant's service. ChoiceOne Bank has generally
made a contribution to the 401(k) plan each year. A discretionary match was made for 2020.
Outstanding Equity Awards
at Fiscal Year-End
The following table provides information
concerning outstanding equity awards for each named executive officer as of December 31, 2020.
OUTSTANDING EQUITY AWARDS
AT FISCAL YEAR-END
|
|
Option
Awards
|
|
Stock
Awards
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Number of
Units of
Stock that
Have Not
Vested
|
|
Market Value
of Units of
Stock that
Have Not
Vested
|
Kelly J.
Potes
|
|
0
|
|
6,000(1)
|
$
|
27.25
|
|
4/30/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600(2)
|
$
|
18,486
|
|
|
|
|
|
|
|
|
|
|
1,455(3)
|
|
44,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael J. Burke Jr.
|
|
0
|
|
0
|
|
-
|
|
-
|
|
1,135(3)
|
$
|
34,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adom J. Greenland
|
|
0
|
|
1,500(1)
|
|
27.25
|
|
4/30/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600(2)
|
$
|
18,486
|
|
|
|
|
|
|
|
|
|
|
738(3)
|
|
22,735
|
(1)
|
Stock options granted on April 30, 2019 will vest in full on April 30, 2022.
|
(2)
|
Restricted stock units granted on April 30, 2019 will vest in full on April 30, 2022.
|
(3)
|
Restricted stock units granted on April 30, 2020 will vest in full on April 30, 2023.
|
Director Compensation
The following table provides information concerning the compensation
of directors for ChoiceOne's last completed fiscal year.
DIRECTOR COMPENSATION
|
|
Fees Earned
or Paid in
|
|
All Other
|
|
Name
|
|
Cash
(1)
|
|
Compensation
|
|
Total
|
James
A. Bosserd
|
$
|
41,875
|
$
|
7,500
|
$
|
49,375
|
Keith
D. Brophy
|
|
39,625
|
|
7,500
|
|
47,125
|
Michael
J. Burke, Jr.
|
|
-
|
|
-
|
|
-
|
Harold
J. Burns
|
|
34,000
|
|
7,500
|
|
41,500
|
Eric
E. Burrough
|
|
34,000
|
|
7,500
|
|
41,500
|
David
H. Bush
|
|
34,000
|
|
7,500
|
|
41,500
|
Bruce
J. Cady
|
|
34,000
|
|
7,500
|
|
41,500
|
Patrick
A. Cronin
|
|
35,500
|
|
7,500
|
|
43,000
|
Jack
G. Hendon
|
|
40,375
|
|
7,500
|
|
47,875
|
Paul
L. Johnson
|
|
51,875
|
|
7,500
|
|
59,375
|
Gregory
A. McConnell
|
|
34,000
|
|
7,500
|
|
41,500
|
Nels
W. Nyblad
|
|
39,625
|
|
7,500
|
|
47,125
|
Roxanne
M. Page
|
|
42,500
|
|
7,500
|
|
50,000
|
Kelly
J. Potes
|
|
-
|
|
-
|
|
-
|
(1)
|
Directors may elect to defer fees otherwise payable in cash and instead receive
payment in the form of ChoiceOne common stock pursuant to the Directors Stock Purchase Plan described in the narrative below. For 2020,
Messrs. Burns, Burrough, and Nyblad each elected to receive 100% of their fees in the form of ChoiceOne stock, Messrs. Brophy and Hendon
each received 50% of their fees in the form of ChoiceOne stock, and Mr. Bush received 25% of his fees in the form of ChoiceOne stock.
|
During 2020, ChoiceOne compensated its
directors with a retainer of $2,600 for the Chairperson, and $2,000 for each other director. ChoiceOne directors did not receive per-meeting
compensation for participation in Board of Directors meetings.
During 2020, ChoiceOne Bank compensated
its directors with an annual retainer as follows: $13,400 for the Chairperson, $7,500 for the Audit Committee Chairperson, $7,000 for
the Personnel Committee Chairperson, and $6,000 for each other director. ChoiceOne Bank directors received compensation at the rate of
$1,000 per meeting. In addition, ChoiceOne Bank directors received compensation for meetings of any committee of the Board of Directors
of ChoiceOne Bank on which they served, including interim loan committee meetings and training sessions, at a rate of $375 per meeting.
During 2020 until May 15, 2020, the
effective date of the consolidation of Lakeshore Bank & Trust with and into ChoiceOne Bank, Lakeshore Bank & Trust directors received
compensation at a rate of $1,500 per meeting. In addition, Lakeshore Bank & Trust directors attending a meeting of a committee of
Board of Directors of Lakeshore Bank & Trust received $375 as compensation for such attendance.
Under ChoiceOne's Directors' Stock
Purchase Plan, a director may elect to receive payment of 25%, 50%, 75% or 100% of his or her director fees in the form of ChoiceOne common
stock. On each stock purchase date, a director participating in this plan receives a number of shares of ChoiceOne common stock (rounded
to the nearest whole share) determined by dividing the dollar amount of fees payable that the director has elected to receive as ChoiceOne
common stock by the market value of ChoiceOne common stock determined by a poll of ChoiceOne's market makers on the last day of the month
preceding the stock purchase date.
Neither Mr. Potes nor Mr. Burke received
compensation for his service as a director of ChoiceOne or its subsidiaries.
Potential Payments Upon Termination
or Change in Control
Pursuant
to the Employment Agreements between ChoiceOne and each of Kelly J. Potes and Michael J. Burke, Messrs. Potes and Burke may
be entitled to certain severance benefits following a termination or change
in control, as described above under the heading "Employment Agreements," which
description is here incorporated by reference.
ChoiceOne
has granted certain equity awards pursuant to the Stock
Incentive Plan of 2012 that are subject to accelerated
vesting upon a change in control of ChoiceOne.
The following
table summarizes the potential payments and benefits payable to each of ChoiceOne's named
executive officers upon termination of employment in connection with each of the triggering events set forth in the table below, assuming,
in each situation, that the termination
of employment took place on December 31,
2020. No named executive officer is entitled to any payments or benefits in the event of a change in control absent a qualifying termination.
Triggering Event and
Payments/Benefits
|
|
Kelly J. Potes
|
|
Michael J. Burke, Jr.
|
|
Adom J. Greenland
|
Change in Control(1)(2)
|
$
|
1,161,462
|
$
|
961,869
|
$
|
46,684
|
Death(3)(4)
|
$
|
443,222
|
$
|
134,969
|
$
|
226,224
|
Disability or Retirement(4)
|
$
|
63,222
|
$
|
34,969
|
$
|
41,224
|
(1)
|
Pursuant to the Employment Agreement between ChoiceOne and each of Mr. Potes and
Mr. Burke (as applicable, the "Executive"), the Executive will receive severance benefits in the event of a Change in Control
(as defined in the Employment Agreement) and a qualifying termination within six months before or three years after the change in control
in the form of a lump-sum cash payment equal to three times the Executive's then-current base salary and monthly health care continuation
payments for twelve months or until the commencement of new employment. The payments to each Executive under his Employment Agreement
after a Change in Control are limited by Section 280G of the Code. The amount shown in the table for each Executive reflects this limitation.
|
(2)
|
In accordance with the Stock Incentive Plan of 2012, all outstanding unvested equity
awards and stock options shall become immediately fully vested upon a change in control. The amount shown includes the value of accelerated
vesting of restricted stock units and stock options.
|
(3)
|
ChoiceOne Bank has obtained bank-owned life insurance on certain key executives.
Under ChoiceOne Bank's policies, if either of Mr. Potes or Mr. Greenland die while still working for ChoiceOne Bank, his respective estate
will receive one full year of compensation and if Mr. Burke dies while still working for ChoiceOne Bank, his estate will receive $100,000.
|
(4)
|
In accordance with the Stock Incentive Plan of 2012, restrictions on all outstanding
unvested restricted stock units will be removed on a pro rata basis equal to the total number of such awards multiplied by the number
of full months elapsed since grant date divided by the total number of full months in the respective restricted period upon death, disability,
or retirement.
|
Audit Committee Report
The Audit and Compliance/CRA Committee
("Audit Committee") reviews and supervises ChoiceOne's procedures for recording and reporting the financial results of its operations
on behalf of the Board of Directors. ChoiceOne's management has primary responsibility for the financial statements and the reporting
process, including the systems of internal controls. In fulfilling its supervisory duties, the Audit Committee has reviewed ChoiceOne's
audited financial statements for the year ended December 31, 2020 included in the 2020 Annual Report to Shareholders and has discussed
those financial statements with ChoiceOne's management, including a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements.
The Audit Committee has also reviewed
with ChoiceOne's independent auditors – who are responsible for expressing an opinion on the conformity of those financial statements
with generally accepted accounting principles – the judgments of the independent auditors concerning the quality, not just the acceptability,
of the accounting principles and such other matters that are required under generally accepted auditing standards to be discussed with
the independent auditors. The Audit Committee has discussed with the independent auditors the matters required to be discussed by the
applicable requirements of the Public Company Accounting Oversight Board. In addition, the Audit Committee has received from the independent
auditors the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountant's communications with the Audit Committee concerning independence, has discussed with them their
independence from ChoiceOne's management and ChoiceOne, and has considered the compatibility of nonaudit services with their independence.
After and in reliance on the reviews
and discussions described above, the Audit Committee recommended to ChoiceOne's Board of Directors that the audited financial statements
for the year ended December 31, 2020 be included in ChoiceOne's Annual Report on Form 10-K for the year then ended to be filed with the
SEC.
Respectfully submitted,
Roxanne
M. Page (Chair)
Keith D. Brophy
Harold J. Burns
Patrick A. Cronin
Jack G. Hendon
Gregory A. McConnell
Related Matters
Transactions with Related Persons
Directors, nominees for director
and executive officers of ChoiceOne and members of their immediate families were customers of and had transactions with ChoiceOne Bank
in the ordinary course of business between January 1, 2020 and December 31, 2020. We anticipate that such transactions will take place
in the future in the ordinary course of business. All loans and commitments included in such transactions were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and
did not involve more than the normal risk of collectability or present other unfavorable features. None of these loan relationships presently
in effect were in default as of the date of this proxy statement.
The Audit Committee is responsible for
the review and approval of any transaction between the Company and any related person (as defined in Item 404 of Regulation S-K).
Independent Registered Public Accounting
Firm
Plante & Moran, PLLC ("Plante
Moran") has been selected to serve as ChoiceOne's independent auditors for the year ending December 31, 2021. Plante Moran also served
as ChoiceOne's independent auditors for 2020.
Representatives of Plante Moran
are not expected to attend the annual meeting. If a representative of Plante Moran attends the meeting, the representative will have an
opportunity to make a statement if he or she desires to do so and will be expected to be available to respond to appropriate questions.
In accordance with SEC rules, ChoiceOne's Audit Committee has adopted a Pre-Approval Policy. Under the Pre-Approval Policy, all audit
and non-audit services need to be pre-approved by the Audit Committee.
The Pre-Approval Policy permits the
Audit Committee to delegate to one or more of its members pre-approval decisions. The member or members to whom such authority is delegated
shall report, for informational purposes, any pre-approval decisions to the Audit Committee at its next scheduled meeting.
The Audit Committee has identified certain
services that do not impair the independence of the independent auditors and granted general pre-approval for those services. All services
that do not have general pre-approval must be specifically pre-approved by the Audit Committee. The Audit Committee will periodically
set pre-approval fee levels for all services to be provided by the independent auditors. Any proposed services exceeding these levels
require specific pre-approval by the Audit Committee.
The Pre-Approval
Policy requires the independent auditors to provide detailed back-up documentation, which will be provided to the Audit Committee, regarding
specific services to be provided.
Requests or applications to provide
services that require separate pre-approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditors
and the Chief Executive Officer or Chief Financial Officer, and must include a joint statement as to whether, in their view, the request
or application is consistent with the SEC's rules on auditor independence. All fees paid to Plante Moran for services performed in 2020
and 2019 were pre-approved pursuant to this policy.
Audit Fees. ChoiceOne paid to Plante Moran
$315,500 during 2020 and $184,700 during 2019 for the audit of ChoiceOne's annual financial statements and review of financial
statements included in ChoiceOne's quarterly reports on Form 10-Q, or services that are normally provided by the auditors in connection
with statutory and regulatory filings.
Audit-Related Fees. ChoiceOne
paid to Plante Moran $6,000 during 2020 for assurance and related services that were
reasonably related to the performance of the audit or review of ChoiceOne's financial statements and are not reported under "Audit
Fees" above. ChoiceOne paid to Plante Moran $138,600 during 2019 for services in support of the merger of County Bank Corp. with
and into ChoiceOne and ChoiceOne’s acquisition of Community Bank Shores Corporation and for assurance and related services that
were reasonably related to the performance of the audit or review of ChoiceOne's financial statements and are not reported under "Audit
Fees" above.
Tax Fees. ChoiceOne paid to Plante
Moran $22,580 during 2020 and $18,000 during 2019 for tax compliance, tax advice and tax
planning. Tax services included preparing ChoiceOne's federal and state tax returns.
All Other Fees. ChoiceOne paid to Plante Moran $14,700 during 2020 for services related
to consent procedures in connection with ChoiceOne's registration statements. ChoiceOne did not pay Plante Moran any amounts for services
in 2019 other than those described above.
Shareholder Proposals
If you would like a proposal to be presented at the
2022 Annual Meeting of Shareholders and if you would like your proposal to be considered for inclusion in ChoiceOne's proxy statement
and form of proxy relating to that meeting, you must submit the proposal to ChoiceOne in accordance with Securities and Exchange Commission
Rule 14a-8. ChoiceOne must receive your proposal by December 23, 2021 for your proposal to be eligible
for inclusion in the proxy statement and form of proxy relating to that meeting. To be considered timely, any other proposal that you
intend to present at the 2022 Annual Meeting of Shareholders must be submitted in accordance with ChoiceOne's Bylaws and must be received
by ChoiceOne by December 23, 2021.
Householding
Under the rules adopted by the SEC,
we may deliver a single set of proxy materials to one address shared by two or more of our shareholders. This delivery method is referred
to as "householding" and can result in significant cost savings. To take advantage of this opportunity, we have delivered only
one set of proxy materials to multiple shareholders who share an address, unless we received contrary instructions from the impacted shareholders
prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the proxy materials, as requested,
to any shareholder at the shared address to which a single copy of these documents was delivered. If you prefer to receive separate copies
of the proxy statement or annual report, contact Broadridge Financial Solutions, Inc. by calling 1-866-540-7095 or in writing at 51 Mercedes
Way, Edgewood, New York 11717, Attention: Householding Department.
In addition, if you currently are a
shareholder who shares an address with another shareholder and would like to receive only one copy of future notices and proxy materials
for your household, you may notify your broker if your shares are held in a brokerage account or you may notify us if you hold registered
shares. Registered shareholders may notify us by contacting Broadridge Financial Solutions, Inc. at the above telephone number or address.
Form 10-K Report Available
ChoiceOne's Form 10-K Annual
Report to the Securities and Exchange Commission, including financial statements and financial statement schedules, will be provided to
you without charge upon written request. Please direct your requests to Mr. Thomas L. Lampen, Treasurer, ChoiceOne Financial Services,
Inc., 109 East Division, Sparta, Michigan 49345.
19
CHOICEONE FINANCIAL SERVICES,
INC. P.O. BOX 186 SPARTA, MI 49345-0186 INVESTOR ADDRESS LINE 1 INVESTOR ADDRESS LINE 2 INVESTOR ADDRESS LINE 3 INVESTOR ADDRESS LINE
4 INVESTOR ADDRESS LINE 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 VOTE BY INTERNET – www.proxyvote.com Use the Internet
to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. EDT on 05/26/2021 for shares held
directly and by 11:59 P.M. EDT on 05/24/2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and
follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting – Go to
www.virtualshareholdermeeting.com/COFS2021 You may attend the meeting via the Internet and vote during the meeting. Have the information
that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE – 1-800-690-6903 Use any touch-tone
telephone to transmit your voting instructions. Vote by 11:59 P.M. EDT on 05/26/2021 for shares held directly and by 11:59 P.M. EDT on
05/24/2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark,
sign and date your proxy card and return it in the post-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717. NAME THE COMPANY NAME INC. – COMMON THE COMPANY NAME INC. – CLASS A THE COMPANY NAME
INC. – CLASS B THE COMPANY NAME INC. – CLASS C THE COMPANY NAME INC. – CLASS D THE COMPANY NAME INC. – CLASS
E THE COMPANY NAME INC. – CLASS F THE COMPANY NAME INC. – 401 K CONTROL # 0000000000000000 SHARES 123,456,781,012.12345 PAGE
1 OF 2 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK IN AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED For All Withhold All For All Except To withhold authority to vote for any individual
nominee(s), mark “FOR ALL Except” and write h number(s) of the nominee(s) on the line below. ___________ 1. Election of Directors
Nominees 01) Harold J. Burns 02) Patrick A. Cronin 03) Paul L. Johnson 04) Gregory A. McConnell 05) Roxanne M. Page The Board of Directors
recommends you vote FOR the following proposals: For Against Abstain 2. Proposed amendment to the Company’s Articles of Incorporation
to increase the number of authorized shares of common stock from 12,000,000 to 15,000,000. 3. Advisory approval of the Company’s
executive compensation. 4. Ratification of the selection of Plante & Moran, PLLC as our registered independent public accounting
firm for the current fiscal year. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please
sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full
title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full
corporate or partnership name by authorized office. Signature [PLEASE SIGN WITHIN BOX] Date JOB # Signature (Joint Owners) Date SHARES
CUSIP # SEQUENCE #
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting: The Notice & Proxy Statement, Annual Report is/are available at www.proxyvote.com CHOICEONE FINANCIAL SERVICES,
INC. Annual Meeting of Shareholders May 27, 2021 11:00 AM This proxy is solicited by the Board of Directors The shareholder hereby appoints
Adom J. Greenland, Paul L. Johnson and Roxanne M. Page, or any of them, as proxies, each with the power to appoint his or her substitute,
and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock
of CHOICEONE FINANCIAL SERVICES, INC. that the shareholder is entitled to vote at the Annual Meeting of Shareholders to be held at 11:00
AM, EDT on May 27, 2021, by live webcast at www.virtualsharehodermeetin.com/COFS2021, and any adjournment or postponement therof. This
proxy, when properly executed will be voted in the manner directed herein. If no such direction is made, this proxy will be voted FOR
all director nominees and FOR Proposals 2, 3 and 4 and in their discretion on any other matters that may come before or that are incident
to the conduct of the meeting, including any vote to adjourn the meeting. Continued and to be signed on reverse side
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