UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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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| Preliminary Proxy Statement |
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| Definitive Proxy Statement |
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| Soliciting Material Pursuant to §240.14a-12under § 240.14a-12 |
CHOICEONE FINANCIAL SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
ChoiceOne Financial Services, Inc. |
(Name of Registrant as Specified in its Charter) |
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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Sparta, Michigan 49345
, 2021
April 11, 2023
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.COFS2023. The meeting will be held on May
27, 202124, 2023 and will begin at
11:9:00 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, 202131, 2023 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
, 2021.April 11, 2023.
We hope you will join us at the
20212023 Annual Meeting.
| | | Sincerely, |
| | | |
| | | Kelly J. Potes
Chief Executive Officer |
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.COFS2023. The meeting will be held on May 27, 2021,24, 2023, at 11:9:00 a.m. (Eastern Time, local time in Sparta, Michigan). The purposes of the meeting are as follows:
| 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. |
| 4.3.
| Ratification of the selection of Plante & Moran, PLLC as our registered independent public accounting firm for the year ending December 31, 2021.2023. |
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, 202131, 2023 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
, 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. |
April 11, 2023.
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/COFS2023. 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 27, 2021: 24, 2023:A complete set of proxy materials relating to our Annual Meeting and our Annual Report for the year ended December 31, 20202022 are available on the Internet at: www.choiceone.com/proxymaterials.proxymaterials. | | | By Order of the Board of Directors, |
| | | |
| | | Adom J. Greenland
Chief OperatingFinancial Officer and Secretary |
, 2021
It is important that your sharesbe represented at the
meeting. Even if you expect to attend the meeting,
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY. |
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.
CHOICEONE FINANCIAL SERVICES, INC.
ANNUAL MEETING OF SHAREHOLDERS
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, 2021,24, 2023, at
11:9:00 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/COFS2021COFS2023.This proxy statement and the enclosed proxy are first being mailed to ChoiceOne shareholders on approximately
, 2021, April 11, 2023, 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"“we,” “us,” “our,” “ChoiceOne” and the
"Company"“Company” refer to ChoiceOne Financial Services, Inc. and
"you"“you” and
"your"“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/COFS2023. 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.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. 2023. 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.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, 2021.31, 2023. 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, 2021,31, 2023, there were
7,802,2857,521,749 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:
| · | delivering written notice of revocation to the Secretary of ChoiceOne prior to the meeting; |
| · | by delivering a proxy bearing a later date than the proxy you wish to revoke prior to the meeting; or |
delivering written notice of revocation to the Secretary of ChoiceOne prior to the meeting; | · | attending and voting online at the Annual Meeting. |
by delivering a proxy bearing a later date than the proxy you wish to revoke prior to the meeting; or
attending and voting online at the Annual Meeting.
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.
Election of
Directors.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,Abstentions, broker non-votes and other shares that are 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.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.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.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.
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
1415 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.old.
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:Harold2026:
Keith D. Brophy
Michael (Mike) J.
BurnsPatrick A. Cronin
Paul L. Johnson
Gregory A. McConnell
RoxanneBurke, Jr.
Bruce John Essex, Jr.
Jack G. Hendon
Michelle M.
PageEachWendling
As of the date of this proxy statement, 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 20242026
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)60) was appointed a director of ChoiceOne and ChoiceOne Bank in October 2014. Mr. Brophy assumed the role of Chief Operating Officer of ADHD Online, a mental health telehealth company, in August 2021. Prior to that, he served as Director of the Emergent Holdings Inc. Business Lab Product Group infrom February 2018.2018 through August 2021. 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, a former West Michigan E&Y Entrepreneur of the Year, holds a Bachelor of Computer Science degree from the University of Michigan, and a Masters in Information Science from Strayer University. 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 City of Grand Rapids SmartZone Local Development Finance Development Authority, and as a member of the non-profit Meghan’s Army advisory board.board, and as a director of Greatland Corporation. 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) J. Burke, Jr. (age 51)53) 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 onas a member of the Community Bankers of Michigan
board and nationallyBoard. Nationally, he serves on
a committee forthe board of directors of 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 withboards, including the Lapeer Development Corporation, McLaren Lapeer Region Board of Trustees, Capac
DDA,Downtown Development Authority, and the Lapeer
Historic Courthouse Committee, UM Club of Flint, and Lapeer DDA, among others.County Community Foundation. 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
Bruce John Essex, Jr. (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. Bush55) was appointed as a director of ChoiceOne on OctoberJune 29, 2022, effective July 25, 2022, to fill the vacancy created by the retirement of Mr. David H. Bush. Mr. Essex was previously appointed as a director of ChoiceOne Bank on July 1, 2019 in connection with2020 as a result of the merger of CountyCommunity Shores Bank Corp. with and into ChoiceOne. Dr. Bush previously servedMr. Essex had been involved with Community Shores Bank since its inception in 1998. Mr. Essex is currently the Managing Director of Port City Ventures, LLC, a private equity/holding company that specializes in investing in small to medium sized manufacturing companies, real estate development, and financial services investments. Mr. Essex is also currently partner and President of the Core Real Estate Group, comprised of Core Commercial, Core Realty Partners, and Core Property Management. From 1998 until 2015, Mr. Essex was the CEO and majority owner of the Port City Group, an integrated manufacturer of aluminum castings, machining, engineered assemblies, plastic products, and aluminum alloys, with six locations in Michigan. Mr. Essex currently serves as director of County Bank Corp, parent company of Lakestone Bank & Trust, since 1987. While a director of County Bank Corp.Eagle Alloy Corporation, Beacon Recycling Inc. (co-founder), Dr. Bush served as ChairmanEagle Aluminum Products, and the Employer’s Association of West Michigan. Mr. Essex volunteers with Community Foundation for Muskegon, Kid’s Food Basket, and Be Nice. Mr. Essex is a graduate of Michigan State University with a B.S. degree in Building Construction Management. Mr. Essex was the 2018 Business Person of the Compensation Committee as well as member ofYear Award recipient from the Capital, Executive, Insurance, Nominating, RiskWest Michigan Spartans Alumni Association 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 boards2017 Nominee for the Lapeer Economic Corporation and the Tax Increment Finance Authority. He is also Past PresidentMuskegon Area Chamber of Big Brother Big SistersCommerce Entrepreneur of Lapeer County and past member of the Kiwanis Club of Lapeer. Dr. BushExcellence Award. Mr. Essex 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.his extensive entrepreneurial experience running several successful businesses across multiple industries.
Jack G. Hendon
(age 65)67) 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. In December 2021, Mr. Hendon was appointed as Chairman of the Boards of Directors of ChoiceOne and ChoiceOne Bank. Mr. Hendon serves as a director on the boards of the Spectrum Gerber Hospital Foundation Board and as a director and audit committee member of the Newaygo County Area Promise Zone andZone. He is a former director and audit committee chair of Fremont Michigan InsuraCorp, which was a Securities and Exchange Commission ("SEC"(“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.Michelle M. Wendling (age 49) was appointed as a director of ChoiceOne on September 21, 2022, to fill the vacancy created by the Board of Directors when the Board of Directors increased the size of the board from 14 to 15 directors. Ms. Wendling was previously appointed as a director of ChoiceOne Bank on October 1, 2019 in connection with the merger of County Bank Corp. with and into ChoiceOne. Prior to the merger, Ms. Wendling served as director of Lakestone Bank & Trust and its holding company, County Bank Corp. since November 2016. Prior to that, she served as Director of Capac Bancorp Inc. Ms. Wendling is a Senior Director of Sales of PepsiCo, leading a team of 47 individuals. She is an Executive Sponsor for PepsiCo’s Women’s Inclusion Network and a Network of Executive Women member. Ms. Wendling previously served on the Memphis Community School Board from 2006-2019, serving as Vice President and President. She also previously served as Treasurer for the Emmett Little League. Ms. Wendling was a Top Women in Grocery winner in 2020, and has received numerous performance and leadership awards from PepsiCo. Ms. Wendling is a graduate of Oakland University with an M.B.A. in Business Administration and a graduate of Western Michigan University with a B.B.A. in Food Marketing. Ms. Wendling is qualified for service as a continuing director by virtue of her years of experience serving as an outside bank director and as well as her extensive management experience leading successful multi-state teams at PepsiCo.
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 20222025
James A. Bosserd
Greg L. Armock (age 71) has been53) was appointed as a director of ChoiceOne on September 8, 2021. Mr. Armock is the Owner and ChoiceOne Bank since April 2001. Mr. BosserdPresident of Armock Mechanical Contractors, Inc., located in Sparta, Michigan, and has 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 committeeChoiceOne Bank Board 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. HeDirectors since January 2018. Mr. Armock previously served as Presidenta member of the ChamberChoiceOne's Board of Commerce, President of Rotary, Chairman of the Wolverine YMCA board, and was chosen by CBM as Banker of the Year.Directors from January 2018 until ChoiceOne's merger with County Bank Corp. in October 2019. 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 for15 years. Mr. BosserdArmock is qualified for service as a continuing director by virtue of his extensive knowledgesubstantial business and expertise regarding ChoiceOne's markets, competitors, customers, employees, business operationsentrepreneurial experience and strategies.
skills.
Eric
(Rick) E.
“Rick” Burrough
(age 56)58) was appointed as a director of ChoiceOne and ChoiceOne Bank 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 of Michigan, Inc., 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,Media, LLC, publishers of 19 community papers in Michigan. Collectively, Mr. Burrough’s companies employ approximately 300 individuals.Burrough is also the sole owner of INV Limited, Huron Holdings of Lapeer, Inc., and Moosejaw Enterprises, LLC. He is also a partner in Polar Palace Arena Complex of Lapeer, LLC, AB Lapeer Properties, LLC, DRD Wildcherry, LLC, R&R Bedding, LLC, Metamora 8, LLC, Metamora 8 Properties, LLC, Sun Devil Property Management, LLC, and Blue Horseshoe Properties, LLC. 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 Development Corporation and is a director emeritus for the Lapeer County Community Foundation. He also served on the boards of McLaren Lapeer Region and the McLaren Lapeer Region 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 ofextensive experience as an outside bank director, his extensivevast experience in business and his community leadership.Bruce
David J.
Cady (ageChurchill (age 69) has been a director of ChoiceOne since May 7, 2022. He was appointed as a director of ChoiceOne Bank 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 1999Churchill served as a senior lender. Mr. Cady was promoted to Executive Vice President and appointed to the Bank’s board in 2002. He was named Presidentdirector of Lapeer County Bank & Trust Co. in 2005 and added the title of CEO in 2006.its holding company, County Bank Corp. from November 2008 to December 2016. Following the merger of Lapeer County Bank & Trust Co. with CSB BankCorp and Capac Bancorp Inc. in 2016, he continued to formserve on the newly formed boards of County Bank Corp and Lakestone Bank & Trust,Trust. Mr. Cady was named ChairmanChurchill is the President and CEO.managing shareholder of Taylor, Butterfield, P.C. in Lapeer, Michigan where he has practiced law since 1979. He is also a partner in Runneymede, LLC. Mr. Cady previously served as ChairmanChurchill received a Bachelor of County Bank Corp., parent company of Lakestone Bank & Trust, since 2002. WhileArts Degree with Honor in Economics from Michigan State University in 1975. He obtained a Chairman of County Bank Corp., he served asJuris Doctor Degree from Wayne State University in 1978. Mr. Churchill is a member of the Capital, Executive, Insurance, Investment, Nominating, Risk, TrustProbate and Loan committees. In 2018, Mr. Cady was named the Community BankerEstate Law, Elder Law, and Real Property Law Sections of the Year by Community BankersState Bar of Michigan. FollowingHe is a charter member of the Economic Club of Lapeer County. He currently serves as Treasurer of the Friends of the Lapeer County Historic Courthouse. 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. CadyChurchill has served as chair or director in a wide rangePresident of municipal, civicthe Lapeer County Bar Association and professional organizations in Lapeer, includingas President of 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.Commerce. 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. CadyChurchill is qualified for service as a continuing director by virtue of his extensive expertise in business and banking, as well as his institutional knowledge andyears of experience as an insideoutside bank director, for 18 years.knowledge of insurance, business, and personal law.
Nels W. Nyblad
(age 67)69) has been a director of ChoiceOne and ChoiceOne Bank since June 2008. Mr. Nyblad owns Nels Nyblad Family Farm, LLC. Mr. NybladHe is also a director of Nyblad Orchards, Inc., Rossroy Enterprises, Nyblad Properties Grand Traverse,Farms, LLC, and Nyblad Farms.Rossroy Enterprises. Mr. Nyblad is a member of the Casnovia Planning Commission and 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)61) 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 and Chief Executive Officer 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. HeMr. Potes is active in serving the needs of community banking as Vice Chairman of the Community Bankers of Michigan Board.
Mr. Potes serves as 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 ofHe also serves on the
SpartaDeacon Board
of Education and director of West Michigan United Methodist Church Board of Pension and Health.for the Kent City Baptist Church. 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.
Continuing Directors with Terms Expiring in 2024 Executive Officers who are not Directors
Peter Batistoni
Harold J. Burns (age 55)56) was appointed as a director of ChoiceOne and ChoiceOne Bank 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 Senior Lender since December 2018, a Senior Vice President since December 2016,Partner with UHY LLP and Managing Director with UHY Advisors MI, Inc. for over 20 years. He is a Vice President Commercial Loan Manager since December 2010,leader of the Audit and Assurance Practice. He is also the Chairperson for the firm’s National Health Care Practice and Executive committee member for the Great Lakes region. He received his Bachelor of Business Administration in Accounting from Walsh College. Mr. Burns previously served as a Commercial Loan Officer since July 2007 withdirector of County Bank Corp., parent company of Lakestone Bank & Trust, since 2016. 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, as a Committee Chairperson for the St. Clair Community Foundation, and subsequently withon the board of Forgotten Harvest and the McLaren Macomb Healthcare Foundation. He is also an audit committee, and finance council 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, and Memphis Community Schools. 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 many years of experience as an outside bank director.
Curt E. Coulter, D.O. (age 61) was appointed as a director of ChoiceOne on September 21, 2022, to fill the vacancy created by the resignation of Mr. Patrick A. Cronin. Dr. Coulter was previously appointed as a director of ChoiceOne Bank followingOctober 1, 2019 in connection with the consolidationmerger of County Bank Corp. with and into ChoiceOne. Prior to the merger, Dr. Coulter served as director of Lakestone Bank & Trust and its holding company, County Bank Corp. since November 2016. Dr. Coulter is a Physician and partner of Lapeer Medical Associates and is Board Certified in Family Medicine. He received his Bachelor of Science from the University of Michigan and Medical Degree from Michigan State University. He completed his internship at Flint Osteopathic Hospital and residency at Genesys Regional Medical Center. Dr. Coulter is an Associate Professor of Clinical Medicine at Michigan State University-COM and an Associate Professor of Clinical Medicine at Michigan State University-CHM. Dr. Coulter is also a member of the American Osteopathic Association, Michigan Osteopathic Association, and the American Association of Family Practitioners. He is partner in PBSC Properties. He has served on the North Branch Township Planning Commission and has a 300-acre farm where he raises cattle, and produces corn, soy beans, wheat, and maple syrup. Dr. Coulter is qualified for service as a continuing director by virtue of his years of experience serving as an outside bank director and his extensive knowledge leading and managing his medical practice for over 25 years.
Gregory A. McConnell (age 61) was appointed as a director of ChoiceOne Bank. Prior toand ChoiceOne Bank 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 employment withbachelor'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. Mr. McConnell currently serves on the St. Clair County Central Dispatch Board and the St. Clair County Emergency Management Board. He is past Chairman of the Capac Downtown Development Authority and previously served as a St. Clair County Commissioner and on the St. Clair County RESA School Board. Mr. McConnell is also a partner in Capac Auto Sales, Inc. and Huron Shores Operating Co, Inc. Mr. McConnell is qualified for service as a continuing director by virtue of his substantial business and insurance experience and his involvement and 29 years of experience as an outside bank director and past community bank chairman.
Bradley F. McGinnis (age 51) was employedappointed as a director of ChoiceOne as of December 25, 2021. Mr. McGinnis previously served as a director of ChoiceOne from October 2018 until ChoiceOne's merger with Citizens StateCounty Bank Fifth ThirdCorp. in October 2019. Mr. McGinnis has served as a director of ChoiceOne Bank (formerly Old Kent Bank)since October 2018. Mr. McGinnis is the Owner and President of Megawall, Inc. a company that specializes in manufacturing and distribution of patented
display fixtures and also manufactures components for the material handling industry. He is also an Owner of KMJ Ventures, LLC, a real estate holding company, and an Owner of McGinnis & Associates, Inc.,
Comerica Bank, D&N Banka company that brokers wood veneer products. Mr. McGinnis is qualified for service as a continuing director by virtue of his entrepreneurial, technology, and
First National Bank of Macomb County.Lee A. Braford executive experience.
Roxanne M. Page (age 60)53) is a Certified Public Accountant with Beene Garter, a Doeren Mayhew Firm, a certified public accounting, audit, tax and business advisory firm. Ms. Page has been a Senior Vice President since January 2012, a Vice Presidentdirector 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,since August 2010 and previously served on the board of Ravenna Baptist Church.Heather D. Brolick (age 60), the Senioras 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 ChairpersonChairwoman 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, andfrom December 2013 until October 1, 2019. Ms. Page also served as a Senior Vice President and Senior Trust Officer with Lakestone Bank & Trust from July 2019 todirector for the date of such consolidation. Mr. DeVolder started at Lakestone Bank & Trust in November 2018Wolverine Worldwide YMCA Advisory Board until 2013. Ms. Page is qualified for service as a Vice Presidentcontinuing director by virtue of her substantial accounting 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.
finance expertise and experience.
Executive Officers who are not Directors
Adom J. Greenland
(age 40)42), a Certified Public Accountant, has been an Executive Vice President of ChoiceOne Bank since January 1, 2023, a Senior Vice President of ChoiceOne Bank since November 2015, and a Vice President of ChoiceOne Bank since 2013. He currently serves as Chief Financial Officer and Secretary, and previously served as 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)53) has been an Executive Vice President and Chief Lending Officer of ChoiceOne Bank since January 1, 2023 and 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"“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"“FOR” the adoption of the following resolution:
RESOLVED, that the shareholders of ChoiceOne Financial Services, Inc. (the
"Company"“Company”) approve the compensation of the Company's named executive officers, as disclosed in the Company's proxy statement for the
20212023 Annual Meeting of Shareholders under the heading entitled
"Executive“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 20222024 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"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,
2021,2023, 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,
2021.2023. More information concerning the relationship of the Company with its independent auditors appears below under the headings
"Audit“Audit Committee,
" "Independent” “Independent Registered Public Accounting Firm,
"” and
"Audit“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
The Board of Directors has determined that the following
1113 of its
1415 directors
who served during 2020 are
"independent"“independent” directors as of December 31,
20202022 as defined by the rules of the SEC and the Nasdaq Listing Rules:
James A. Bosserd
Greg L. Armock
David
H. BushPatrick A. Cronin
J. Churchill
Curt E. Coulter
Bruce John Essex, Jr.
Jack G. Hendon
Paul L. Johnson
Bradley F. McGinnis
Michelle M. Wendling
In making this determination, the Board of Directors considered all ordinary course loans and other business transactions between the directors and ChoiceOne.
Board Diversity
| | Total Number of Directors | | | 15 | |
| | Part I: Gender Identity | | | Female | | | Male | | | Non-Binary | | | Did Not
Disclose
Gender | |
| | Directors | | | 2 | | | 13 | | | 0 | | | 0 | |
| | Part II: Demographic Background | |
| | African American or Black | | | 0 | | | 0 | | | 0 | | | 0 | |
| | Alaskan Native or Native American | | | 1 | | | 0 | | | 0 | | | 0 | |
| | Asian | | | 0 | | | 0 | | | 0 | | | 0 | |
| | Hispanic or Latinx | | | 0 | | | 0 | | | 0 | | | 0 | |
| | Native Hawaiian or Pacific Islander | | | 0 | | | 0 | | | 0 | | | 0 | |
| | White | | | 2 | | | 13 | | | 0 | | | 0 | |
| | Two or More Races or Ethnicities | | | 1 | | | 0 | | | 0 | | | 0 | |
| | LGBTQ+ | | | 0 | |
| | Did Not Disclose Demographic Background | | | 0 | |
The Company recognizes the importance of board diversity and believes its current directors bring an array of diverse perspectives, both professionally and personally, to board decision making and governance of the Company. The Company is committed to achieving greater board diversity in terms of gender identity or demographic background, with the goal of having at least two diverse directors (within the meaning of Nasdaq’s board diversity rule) serving on its board of directors by December 31, 2026. The Company recently made changes to its board composition in order to achieve that goal well in advance of Nasdaq’s 2026 deadline. It currently has at least two diverse directors (within the meaning of Nasdaq’s board diversity rule) serving on its board of directors.
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
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,Curt E. Coulter, 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"“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 five5 times during 2020.
2022.
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, PaulJack G. Hendon (Chairperson), Greg L. Johnson (Chairperson), James A. Bosserd, Keith D. Brophy, David H. Bush,Armock, Harold J. Burns, and Patrick A. CroninEric (Rick) E. Burrough serve on the Governance and Nominating Committee. All of the members of the Governance and Nominating Committee are "independent"“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 three5 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. |
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"“independent” directors as defined by the rules of the SEC and Nasdaq Listing Rules. As of the date of this proxy statement,
Harold J. Burns (Chairperson), Eric (Rick) E. Burrough, Jack G. Hendon,
(Chairperson), Harold J. Burns, Eric E. Burrough, andBradley F. McGinnis, Nels W. Nyblad,
Roxanne M. Page, and Michelle M. Wendling 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
three5 times during
2020.2022.
Mandatory Retirement Policy
Under ChoiceOne's mandatory retirement policy for its Board of Directors, no director may continue to serve on the Board of Directors after reaching 70 years of age.
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.
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 considered based on a variety of personal attributes, including gender, race, religion and national origin; | · | 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. |
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. |
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
ChoiceOne's anti-hedging and pledging policy aligns the interests of
ourits directors and executive officers with
ourits shareholders. The policy prohibits
ourChoiceOne's directors and executive officers from purchasing any
financial 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 officersFDIC-insured depository institutions 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,unaffiliated with the director, and (c) do not involve more than a normal risk of collectability or present other unfavorable features.
Clawback Policy
ChoiceOne has adopted a compensation recovery policy. Under this policy, commonly called a “clawback policy”, in the event that ChoiceOne is required to prepare an accounting restatement to its financial statement due to material noncompliance with any financial reporting requirement, the Board of Directors will require reimbursement or forfeiture of any excess incentive compensation that was received in whole or in part based on the attainment of a
financial reporting measure during the three completed fiscal years immediately preceding the date on which the Company was required to prepare an accounting restatement. A copy of the Clawback Policy is available in the Investor Relations section of ChoiceOne's website at www.choiceone.com.
Board Meetings and Attendance
During
2020,2022, the ChoiceOne Board of Directors held
six6 regular meetings and
two5 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
20202022 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
OperatingFinancial 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.
At December 31, 2022, ChoiceOne had a total of 399 employees, including 67 part-time employees and of which approximately 73% are women. The full-time equivalent of total employees at December 31, 2022, was 381.2. As a financial institution, approximately 69% of ChoiceOne's employees are employed at our branch and loan production offices, and another 3% are employed at our customer care call center. The success of our business is highly dependent on its employees, who provide value to our customers and communities through their dedication to our mission. ChoiceOne's employees are not represented by any collective bargaining group. Management considers ChoiceOne's employee relations to be good.
ChoiceOne believes that its ability to attract and retain employees is a key to its success. Accordingly, ChoiceOne strives to offer competitive salaries and employee benefits to all employees. Management monitors salaries in our market areas and retains the assistance of professional consultants in the assessment, selection, and administration of our employee benefit offerings. At December 31, 2022, 18% of ChoiceOne's current staff had been with ChoiceOne for 15 years or more.
ChoiceOne encourages and supports the growth and development of its staff. ChoiceOne seeks to fill positions by promotion and transfer from within the organization whenever possible. ChoiceOne provides customized training for new, front line customer service staff and we encourage and support the enhancement of professional and technical skills through seminars, courses and conferences primarily sourced through state and national banking associations and affiliates. Career development is achieved through internally developed training courses and specialty banking education using universities that offer Banking Management programs.
ChoiceOne's Board of Directors and management strive to hire, train, and develop a diverse workforce. ChoiceOne believes that doing so enables the Bank to better meet the financial needs of the diverse members of the communities we serve. ChoiceOne recognizes that all employees should feel a sense of belonging where they work and that collaboration among employees of diverse backgrounds improves the day-to-day experience of all our employees and exemplifies our Mission to provide superior service and advice, and to show utmost respect to everyone we meet.
On an ongoing basis, ChoiceOne promotes the health and wellness of our associates by strongly encouraging work-life balance and sponsoring an online wellness program that provides daily tips, encourages healthy competitions, and suggests various ways to incorporate healthy habits into their daily routines.
Commitment to Community
ChoiceOne remains committed to supporting and serving the communities in which we live and work through our ongoing charitable donations, event sponsorships and generous employee volunteerism. ChoiceOne employees working across the state show up every day with compassion and confidence to offer financial solutions to the individuals, families, farmers, and businesses in our communities, also acting as ambassadors to volunteer their time and make a difference in our neighborhoods.
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,
2020,2022, 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%.
Greg L. Armock | | | 5,446.4713 | | | 33,447.9142 | | | — | | | 38,894.3855 | | | * |
Keith D. Brophy | | | 7,556.0000 | | | 6,966.7394 | | | — | | | 14,522.7394 | | | * |
Michael (Mike) J. Burke, Jr. | | | — | | | 3,742.4356 | | | — | | | 3,742.4356 | | | * |
Harold J. Burns | | | — | | | 14,459.0550 | | | — | | | 14,459.0550 | | | * |
Eric (Rick) E. Burrough(3) | | | 141,050.0000 | | | — | | | — | | | 141,050.0000 | | | 1.88% |
David J. Churchill | | | 9,018.9715 | | | — | | | — | | | 9,018.9715 | | | * |
Curt E. Coulter | | | 5,777.6216 | | | — | | | — | | | 5,777.6216 | | | * |
Bruce John Essex, Jr. | | | — | | | 222,164.0000 | | | — | | | 222,164.0000 | | | 2.96% |
Jack G. Hendon | | | 13,453.7870 | | | 6,633.2498 | | | — | | | 20,087.0368 | | | * |
Bradley A. Henion | | | 1,620.0891 | | | — | | | 4,773.0000 | | | 6,393.0891 | | | * |
Gregory A. McConnell | | | — | | | 27,000.0000 | | | — | | | 27,000.0000 | | | * |
Bradley F. McGinnis | | | 18,843.0000 | | | — | | | — | | | 18,843.0000 | | | * |
Nels W. Nyblad | | | 1,357.0000 | | | 40,258.0000 | | | — | | | 41,615.0000 | | | * |
Roxanne M. Page | | | 2,152.7237 | | | 4,676.4488 | | | — | | | 6,829.1725 | | | * |
Kelly J. Potes | | | 5,690.2160 | | | 28,570.4332 | | | 6,000.0000 | | | 40,260.6492 | | | * |
Michelle M. Wendling | | | — | | | 3,632.0000 | | | — | | | 3,632.0000 | | | * |
All directors, nominees for director and executive officers as a group | | | 214,956.0142 | | | 399,201.0298 | | | 12,273.0000 | | | 626,430.0440 | | | 8.33% |
(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.Mr. Burrough, Bush, and McConnell, the following number of128,260 shares were pledged as security for loans with ChoiceOne BankFDIC-insured depository institutions as permitted by ChoiceOne's anti-hedging and pledging policy: Mr. Burrough - 125,660; Mr. Bush - 59,657; Mr. McConnell - 20,000.policy. |
Five Percent Shareholders
No person or group is known to ChoiceOne to
behave been a beneficial owner of 5% or more of ChoiceOne's outstanding shares of common stock as of December 31,
2020.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,
20202022 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,
20202022 (together, the
"named“named executive
officers"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
|
____________________
Kelly J. Potes
Chief Executive Officer
of ChoiceOne and
ChoiceOne Bank
| | | 2022 | | | $ 400,000 | | | $— | | | $91,200 | | | | | | $ 121,600 | | | $ 33,406 | | | $ 646,206 |
| | 2021 | | | $ 380,000 | | | $— | | | $ 104,500 | | | $— | | | $ 146,300 | | | $ 31,527 | | | $ 662,327 |
| | | | | | | | | | | | | | | | | | | | | | | | |
Michael (Mike) J.
Burke, Jr.
President of ChoiceOne and ChoiceOne Bank
| | | 2022 | | | $ 330,000 | | | $— | | | $50,160 | | | | | | $87,780 | | | $ 20,281 | | | $488,221 |
| | 2021 | | | $ 320,000 | | | $— | | | $70,400 | | | $— | | | $ 105,600 | | | $ 17,299 | | | $ 513,299 |
| | | | | | | | | | | | | | | | | | | | | | | | |
Bradley A. Henion
Senior Vice President
& Chief Lending
Officer of ChoiceOne Bank
| | | 2022 | | | $ 225,000 | | | $— | | | $27,790 | | | | | | $55,580 | | | $6,810 | | | $ 315,180 |
| | 2021 | | | $ 210,000 | | | $— | | | $32,611 | | | $— | | | $65,222 | | | $6,319 | | | $ 314,152 |
(1)
| Includes salary deferred under the ChoiceOne Bank 401(k) plan, described below. |
(2)
| The values of all stock awards reported in this column, which represent stock awards earned in the applicable year and granted in the subsequent year, 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 20202022 consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.2022. Stock awards consist of awards of time-based restricted stock units, granted on April 30, 2020, which will vest in full on the three-year anniversary of the grant date.date, and performance-based restricted stock units, which will vest upon satisfaction of the relevant performance metric (three-year cumulative earnings per share) at maximum (125%), target (100%) and threshold (75%) levels and completion of a three-year service period. 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 valuesvalue of all optionthe 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 discussionassumes that the performance-based restricted stock units vest at the target level of performance. Assuming achievement of the valuation assumptions, see Note 14 tohighest possible level of performance, the Company's 2020 consolidated financial statements included invalue of the Company's Annual Report on Form 10-Ktotal stock awards 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 provisions2022 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 optionMr. Potes, Mr. Burke, and payment, issuance,Mr. Henion is $102,600, $56,430, 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.$31,264, respectively. |
(4)(3)
| Reflects the dollar value of non-equity incentive plan compensation earned during 20192021 and 2020.2022. |
(5)(4)
| For Mr. Burke's 2019 compensation, this amount reflects a $250,000 transaction bonus payment paid upon completion ofAmounts reflected in “All Other Compensation” include, as applicable, the merger of ChoiceOnereporting person's car allowance, group term life insurance premiums, HSA employer contributions, and County Bank Corp., effective October 1, 2019, under the employment agreement between ChoiceOne and Mr. Burke.401(k) matching contributions. |
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 20202022 Incentive Plan described below.
2020 Incentive Plan
The 2020
ChoiceOne's 2022 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 20202022 Incentive Plan provided for the grant of short-term annual cash awards and the grant of long term,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. metrics such as asset growth, return on assets and asset quality. Time-based restricted stock units granted under the 2022 Incentive Plan vest in full upon completion of a three-year service period. Performance-based restricted stock units granted under the 2022 Incentive Plan vest in full upon satisfaction of the relevant performance metric (three-year cumulative earnings per share) at maximum (125%), target (100%) and threshold (75%) levels and completion of a three-year service period. No performance-based restricted stock units will vest below the threshold level.
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 theChoiceOne's named executive officers for 20202022 were as follows:
| | Cash Award | Restricted Stock Units |
| Kelly J. Potes | 30% | 20% |
| Michael J. Burke Jr. | 25% | 15% |
| Adom J. Greenland | 20% | 10% |
Kelly J. Potes | | | 40% | | | 30% |
Michael (Mike) J. Burke Jr. | | | 35% | | | 20% |
Bradley A. Henion | | | 30% | | | 15% |
Kelly J. Potes entered into an employment agreement on September 30, 2019, effective as of October 1, 2019 (the
"Potes“Potes Employment
Agreement"Agreement”), pursuant to which Mr. Potes will serve as the Chief Executive Officer of ChoiceOne. Michael
(Mike) J. Burke, Jr., entered into an employment agreement with ChoiceOne effective as of October 1, 2019 (the
"Burke“Burke Employment
Agreement"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"“Agreements”) are substantially similar. Under each Agreement, in the event of ChoiceOne's termination of Mr. Potes or Mr. Burke, as applicable (the
"Executive"“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"“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"“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"“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 beare subject to annual review and adjustment in accordance with ChoiceOne's normal procedures. Mr. Potes and Mr. Burke
will beare 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"“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
2020.2022.
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 |
Kelly J. Potes | | | 6,000 | | | 0 | | | $27.25 | | | 4/30/2029 | | | | | | | | | | | | |
| | | | | | | | | | | | | | 1,452(1) | | | $42,108 | | | | | | |
| | | | | | | | | | | | | | 2,571(2) | | | $74,559 | | | | | | |
| | | | | | | | | | | | | | 1,973(3) | | | $57,217 | | | | | | |
| | | | | | | | | | | | | | | | | | | | 1,972(4) | | | $57,188 |
Michael (Mike) J. Burke, Jr. | | | | | | | | | | | | | | | 1,135(1) | | | $32,915 | | | | | | |
| | | | | | | | | | | | | | 1,661(2) | | | $48,169 | | | | | | |
| | | | | | | | | | | | | | 1,329(3) | | | $38,541 | | | | | | |
| | | | | | | | | | | | | | | | | | | | 1,329(4) | | | $38,541 |
Bradley A. Henion | | | 120 | | | 0 | | | $21.13 | | | 12/16/2025 | | | | | | | | | | | | |
| | 1,653 | | | 0 | | | $20.86 | | | 4/15/2027 | | | | | | | | | | | | |
| | 1,500 | | | 0 | | | $25.65 | | | 6/1/2028 | | | | | | | | | | | | |
| | 1,500 | | | 0 | | | $27.25 | | | 4/30/2029 | | | | | | | | | | | | |
| | | | | | | | | | | | | | 738(1) | | | $21,402 | | | | | | |
| | | | | | | | | | | | | | 647(2) | | | $18,763 | | | | | | |
| | | | | | | | | | | | | | 616(3) | | | $17,864 | | | | | | |
| | | | | | | | | | | | | | | | | | | | 615(4) | | | $17,835 |
| (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. |
(2)
| Restricted stock units granted March 15, 2021 will vest in full on March 15, 2024. |
(3)
| Restricted stock units granted February 15, 2022 will vest on April 30, 2025. |
(4)
| ChoiceOne granted performance stock units on February 15, 2022 to a select group of employees under the Stock Incentive Plan of 2012. These performance stock units vest on the three year anniversary of the grant date based on earnings per share growth rate from the date of the grant. Shares can vest at a rate of 125%, 100%, 75%, or 0% based on the growth rate achieved over the three-year time frame. |
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 | | - | | - | | - |
Greg L. Armock | | | $36,500 | | | $10,000 | | | $46,500 |
Keith D. Brophy | | | 35,500 | | | 10,000 | | | 45,500 |
Michael (Mike) J. Burke, Jr. | | | — | | | — | | | — |
Harold J. Burns | | | 35,500 | | | 10,000 | | | 45,500 |
Eric (Rick) E. Burrough | | | 34,000 | | | 10,000 | | | 44,000 |
David H. Bush(2) | | | 25,500 | | | 7,500 | | | 33,000 |
Bruce J. Cady(3) | | | 18,500 | | | 5,000 | | | 23,500 |
David J. Churchill(4) | | | 33,750 | | | 10,000 | | | 43,750 |
Curt E. Coulter(6) | | | 32,500 | | | 10,000 | | | 42,500 |
Patrick A. Cronin(5) | | | 25,500 | | | 7,500 | | | 33,000 |
Bruce John Essex, Jr.(7) | | | 32,500 | | | 10,000 | | | 42,500 |
Jack G. Hendon | | | 44,000 | | | 10,000 | | | 54,000 |
Gregory A. McConnell | | | 35,500 | | | 10,000 | | | 45,500 |
Bradley F. McGinnis | | | 34,000 | | | 10,000 | | | 44,000 |
Nels W. Nyblad | | | 34,000 | | | 10,000 | | | 44,000 |
Roxanne M. Page | | | 36,500 | | | 10,000 | | | 46,500 |
Kelly J. Potes | | | — | | | — | | | — |
Michelle M. Wendling(8) | | | 34,000 | | | 10,000 | | | 44,000 |
(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 2020,2022, Messrs. Armock, Burns, Burrough, McGinnis, and Nyblad each elected to receive 100% of their fees in the form of ChoiceOne stock, Messrs. Brophy and Hendon eachCoulter received 50% of their fees in the form of ChoiceOne stock, and Mr. Churchill, Ms. Wendling, and Mr. Bush received 25% of histheir fees in the form of ChoiceOne stock. |
(2)
| 15 | Mr. Bush resigned from the Board of Directors on July 25, 2022 in accordance with ChoiceOne’s retirement policy for members of the Board of Directors. |
(3)
| Mr. Cady resigned from the Board of Directors on May 7, 2022 in accordance with ChoiceOne’s retirement policy for members of the Board of Directors. |
(4)
| Mr. Churchill became a director of ChoiceOne on May 7, 2022 upon the resignation of Bruce J. Cady. |
(5)
| Mr. Cronin resigned from the Board of Directors on September 21, 2022. |
(6)
| Mr. Coulter became a director of ChoiceOne on September 21, 2022 upon the resignation of Patrick A. Cronin. |
(7)
| Mr. Essex became a director of ChoiceOne on July 25, 2022 upon the resignation of David H. Bush. |
(8)
| Ms. Wendling became a director of ChoiceOne on September 21, 2022, when the Board of Directors increased the size of the board from 14 to 15 directors. |
During 2020,2022, ChoiceOne compensated its directors with aan annual retainer of $2,600 for the Chairperson,$34,000 and $2,000 for each other director.$10,000 in stock awards. ChoiceOne directors did not receive per-meeting compensation for participation in Board of Directors meetings.
ChoiceOne compensated its Chairman of the Board with an additional $10,000. ChoiceOne compensated its Committee Chairpersons as follows: $2,500 for the Audit Committee Chairperson, $1,500 for the Personnel and Compensation Committee Chairperson, and $1,500 for the Governance and Acquisition Committee Chairperson.
During
2020,2022, ChoiceOne Bank compensated its directors with an annual retainer
of $32,000 and $10,000 in stock awards. ChoiceOne Bank compensated its Committee Chairpersons as follows:
$13,400$2,500 for the
Loan Committee Chairperson,
$7,500$1,500 for the
AuditRisk Committee Chairperson,
$7,000$1,500 for the
PersonnelWealth Management Committee Chairperson, and
$6,000$1,500 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.
Information Technology Committee Chairperson.
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
(Mike) 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“Employment Agreements,"” which description is here incorporated by reference.ChoiceOne has
granted certain equity awards pursuant to the
Stock Incentive Plan of
2012 and the Equity Incentive Plan of 2022 that are subject toacceleratedvesting 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 onDecember31, 2020.2022. 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 |
Change in Control(1)(2) | | | $1,390,380 | | | $1,126,121 | | | $58,029 |
Death(3)(4) | | | $496,527 | | | $397,868 | | | $259,841 |
Disability or Retirement(4) | | | $96,527 | | | $67,868 | | | $34,841 |
(1)
| Pursuant to the Employment Agreement between ChoiceOne and each of Mr. Potes and Mr. Burke (as applicable, the "Executive"“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 and the Equity Incentive Plan of 2022, 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, Mr. Burke or Mr. Henion 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.compensation. |
(4)
| In accordance with the Stock Incentive Plan of 2012 and the Equity Incentive Plan of 2022, 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. |
Pay versus Performance Table
2022 | | | $646,206 | | | $678,579 | | | $401,701 | | | $428,680 | | | $102.02 | | | $23,640,000 |
2021 | | | $662,327 | | | $617,068 | | | $413,726 | | | $389,228 | | | $89.15 | | | $22,042,000 |
(1)
| 16 | For each of the years presented above, our PEO was Mr. Potes, and our other Non-PEO NEOs were Mr. Burke and Mr. Henion. |
(2)
| The table below details amounts deducted and added to calculate Compensation Actually Paid to the PEO and Average Compensation Actually Paid to the Non-PEO NEOs. |
Total compensation per Summary Compensation Table (“SCT”) | | | $646,206 | | | $662,327 | | | $401,701 | | | $413,726 |
Less the value of stock grants reported in the SCT, respectively | | | $(91,200) | | | $(104,500) | | | $(38,975) | | | $(51,506) |
Plus year-end value of stock grants awarded in the covered fiscal year that are unvested and outstanding as of the end of the covered fiscal year | | | $114,405 | | | $68,106 | | | $56,391 | | | $30,569 |
Plus the change in fair value of prior year awards that are outstanding and unvested as of the end of the covered fiscal year | | | $10,098 | | | $(8,865) | | | $10,494 | | | $(3,561) |
Plus the change in fair value as of the vesting date of prior year awards that vested at the end of or during the covered fiscal year | | | $(930) | | | — | | | $(930) | | | — |
Compensation actually paid for year shown | | | $678,579 | | | $617,068 | | | $428,680 | | | $389,228 |
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid to our PEO and the Average of the Compensation Actually Paid to the Other Non-PEO NEOs and the Company’s Cumulative Total Shareholder Return (TSR). From 2021 to 2022, the compensation actually paid to our PEO and the average of the compensation actually paid to the Other NEOs increased by 10% and 10%, respectively, compared to a 14% increase in our TSR over the same time period. Relationship Between Compensation Actually Paid to our PEO and the Average of the Compensation Actually Paid to the Other Non-PEO NEOs and the Company’s Net Income. From 2021 to 2022, the compensation actually paid to our PEO and the average of the compensation actually paid to the Other NEOs increased by 10% and 10%, respectively, compared to a 7% increase in our Net Income over the same time period.
Audit Committee Report
The Audit and Compliance/CRA Committee
("(“Audit
Committee"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,
20202022 included in the
20202022 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,
20202022 be included in ChoiceOne's Annual Report on Form 10-K for the year then ended to be filed with the SEC.
Keith D. Brophy
Harold J. Burns
Patrick A. Cronin
Curt E. Coulter
Related Matters
Delinquent Section 16(a) Reports
Based solely on our review Forms 3, 4, and 5 and amendments thereto filed electronically with the Commission during ChoiceOne's most recent fiscal year and written representations from certain reporting persons that no Forms 5 were required for those persons, we believe that all persons required to file reports required by Section 16(a) of the Securities Exchange Act of 1934 filed such reports on a timely basis during the most recent fiscal year and prior fiscal years, except as previously disclosed, and except that one report on Form 4 reporting one untimely-reported transaction was filed for each of Messrs, Essex, Braford, and Potes.
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,
20202022 and December 31,
2020.2022. 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"Moran”) has been selected to serve as ChoiceOne's independent auditors for the year ending December 31,
2021.2023. Plante Moran also served as ChoiceOne's independent auditors for
2020.2022.
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
20202022 and
20192021 were pre-approved pursuant to this policy.
Audit Fees
. ChoiceOne paid to Plante Moran $261,100$326,155 during 20202022 and $184,700$273,250 during 20192021 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 $138,200$27,500 during 20202022 and $6,200 during 2021 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"“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 $22,180$17,000 during 20202022 and $18,000$29,700 during 20192021 for tax compliance, tax advice and tax planning. Tax services included preparing ChoiceOne's federal and state tax returns.
All Other Fees
. ChoiceOne did not paypaid no other fees to Plante Moran any amounts in 2020 or 2019 for services other than those described above.Shareholder Proposals
If you would like a proposal to be presented at the
20222024 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
, 2021December 14, 2023 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
20222024 Annual Meeting of Shareholders must be submitted in accordance with ChoiceOne's Bylaws and must be received by ChoiceOne by
, 2021.December 21, 2023.
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"“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,Adom Greenland, Chief Financial Officer, ChoiceOne Financial Services, Inc., 109 East Division, Sparta, Michigan 49345.
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