<PAGE>
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. ______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
[ ] Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
CHOICEONE FINANCIAL SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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<PAGE>
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
-----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
[CHOICEONE
FINANCIAL SERVICES, INC. LOGO]
109 EAST DIVISION
SPARTA, MICHIGAN 49345
April 2, 1999
To Our Shareholders:
The Annual Meeting of Shareholders of ChoiceOne Financial Services, Inc.,
Sparta, Michigan, will be held at the following location and date:
Sparta Ridgeview Elementary School Gymnasium
557 South State Street
Sparta, Michigan 49345
Thursday, April 29, 1999
6:30 p.m. Dinner - 7:30 p.m. Annual Meeting
The purpose of the meeting is set forth in the attached ANotice of Annual
Meeting of Shareholders.@
Please plan to join us before the meeting for an informal sit-down dinner
to be served at 6:30 p.m. Shareholders holding stock in single ownership
form are cordially invited to bring a guest. To assist us in our planning,
please complete and return the enclosed reservation card by Thursday, April
22, 1999.
The following Proxy Statement and enclosed form of proxy are being
furnished to holders of ChoiceOne Financial Services, Inc. Common Stock on
and after April 2, 1999. 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 at the meeting may withdraw their proxy and vote in person
if they wish to do so. Proxies must be signed by all owners as their names
appear on the proxy.
Please join us at the 1999 Annual Meeting on the evening of April 29. We
look forward to seeing you there.
<PAGE>
Sincerely,
/s/ Jae M. Maxfield
Jae M. Maxfield
President and Chief Executive Officer
<PAGE>
[CHOICEONE
FINANCIAL SERVICES, INC. LOGO]
109 EAST DIVISION
SPARTA, MICHIGAN 49345
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- ---------------------------------------------------------------------------
The annual meeting of shareholders of ChoiceOne Financial Services,
Inc. will be held in the Gymnasium at Sparta Ridgeview Elementary School,
557 South State Street, Sparta, Michigan, on Thursday, April 29, 1999, at
7:30 p.m. local time, for the following purposes:
1. To elect directors.
2. To transact any other business that may properly come before the
meeting.
Shareholders of record at the close of business on March 17, 1999, are
entitled to notice of and to vote at the meeting and any adjournment of the
meeting.
By Order of the Board of Directors,
/s/ Linda R. Pitsch
Linda R. Pitsch
Secretary
April 2, 1999
- ---------------------------------------------------------------------------
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.
- ---------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
CHOICEONE FINANCIAL SERVICES, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1999
This Proxy Statement and the accompanying form of proxy are being
furnished to holders of common stock, without par value ("Common Stock"),
of ChoiceOne Financial Services, Inc. (the "Corporation") on and after
April 2, 1999, in connection with the solicitation of proxies by the
Corporation's Board of Directors to be voted at the annual meeting of the
Corporation's shareholders (the "Annual Meeting") to be held on April 29,
1999, and any adjournment of that meeting. The Annual Meeting will be held
in the Gymnasium at Sparta Ridgeview Elementary School, 557 South State
Street, Sparta, Michigan, at 7:30 p.m. local time.
The purpose of the Annual Meeting is to consider and vote upon the
election of directors. If a proxy in the form distributed by the
Corporation is properly signed and returned to the Corporation, the shares
represented by that proxy will be voted at the Annual Meeting and any
adjournment of that meeting. If a shareholder specifies a choice, the
proxy will be voted as specified. If no choice is specified, the shares
represented by the proxy will be voted for the election of all nominees of
the Board of Directors named in this Proxy Statement. The Corporation's
management does not know of any other matter to be presented at the Annual
Meeting. If other matters are presented, all shares represented by the
proxy will be voted in accordance with the judgment of the persons named as
proxies with respect to those other matters.
A proxy may be revoked at any time prior to its exercise by written
notice delivered to the Secretary of the Corporation. A proxy may also be
revoked by attending and voting at the Annual Meeting.
Solicitation of proxies will be made initially by mail. Directors,
officers and employees of the Corporation and ChoiceOne Bank (the "Bank")
also may solicit proxies in person, by telephone or by other means without
additional compensation. In addition, proxies may be solicited by nominees
and other fiduciaries who may mail material to or otherwise communicate
with the beneficial owners of shares held by them. All expenses of
solicitation of proxies will be paid by the Corporation.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors has nominated the following three persons for
reelection to the Corporation's Board of Directors for terms expiring at
the annual meeting of shareholders to be held in 2002:
Jae M. Maxfield
Jon E. Pike
Linda R. Pitsch
Each nominee is presently a director of the Corporation whose term
will expire at the Annual Meeting. Six other directors are serving terms
that will expire in 2000 and 2001. It is the intent of the persons named
in the accompanying proxy to vote for the election of the three nominees
listed above. The proposed nominees are willing to be elected and to
serve. If any nominee is unable to serve or is otherwise unavailable for
election, which is not contemplated, the incumbent Board of Directors may
or may not select a substitute nominee. If a substitute nominee is
selected, all proxies will be voted for the person so selected. If a
substitute nominee is not selected, all proxies will be voted for the
election of the remaining nominees. Proxies will not be voted for a
greater number of persons than the number of nominees named above.
A plurality of the shares represented in person or by proxy and voting
on the election of directors is required to elect directors. For the
purpose of counting votes on the election of directors, abstentions, broker
non-votes and other shares not voted will not be counted as shares voted,
and the number of shares of which a plurality is required will be reduced
by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
Voting Securities
Holders of record of Common Stock at the close of business on March
17, 1999, will be entitled to vote at the Annual Meeting on April 29, 1999,
and any adjournment of that meeting. As of March 17, 1999, there were
1,053,601 shares of Common Stock issued and outstanding. Each share of
Common Stock is entitled to one vote on each matter submitted for
shareholder action.
As of March 17, 1999, no shareholder is known to the Corporation's
management to have been the beneficial owner of more than 5% of the
outstanding shares of Common Stock.
-2-
<PAGE>
The following table sets forth information concerning the number of
shares of Common Stock held as of December 31, 1998, by each of the
Corporation's directors and nominees for director, each of the named
executive officers and all of the Corporation's directors, nominees for
director and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF COMMON STOCK<F1>
-----------------------------------------------
SOLE VOTING SHARED
AND VOTING OR TOTAL PERCENT
NAME OF DISPOSITIVE DISPOSITIVE BENEFICIAL OF
BENEFICIAL OWNER POWER POWER<F2> OWNERSHIP CLASS
---------------- ----------- ----------- --------- -----
<S> <C> <C> <C> <C>
Frank G. Berris 11,368 - 11,368 1.1%
Lawrence D. Bradford 186 11,740 11,926 1.1%
William F. Cutler, Jr. - 9,190 9,190 <F*>
Lewis G. Emmons 9,892 - 9,892 <F*>
Stuart Goodfellow 14,604 54 14,658 1.4%
Jae M. Maxfield 8,026<F3> 3,454<F4> 11,480<F3><F4> 1.1%
Jon E. Pike 1,764 1,208 2,972 <F*>
Linda R. Pitsch 170 451 621 <F*>
Andrew W. Zamiara 1,444 642 2,086 <F*>
All directors and
executive officers
as a group 47,958<F3> 26,805<F4> 74,025<F3><F4> 7.0%
____________________________
<FN>
<F*> Less than 1%.
<F1> 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. Voting
power includes the power to vote or direct the voting of the security.
Dispositive power includes the power to dispose or direct the
disposition of the security. A person is considered the beneficial
owner of a security if the person has a right to acquire beneficial
ownership of the security within 60 days.
<F2> These numbers include shares as to which the listed person is legally
entitled to share voting or dispositive power by reason of joint
-3-
<PAGE>
ownership, trust or other contract or property right, and shares held
by spouses and minor children over whom the listed person may have
influence by reason of relationship.
<F3> These numbers include 5,250 shares of Common Stock that may be
acquired by Mr. Maxfield through the exercise of stock options within
60 days of December 31, 1998.
<F4> Includes 3,454 shares of Common Stock held by the ChoiceOne Bank
401(k) and Employee Stock Ownership Plan in the accounts of other
employees, of which Mr. Maxfield is an administrator. Mr. Maxfield
disclaims beneficial ownership of such shares. Of such 3,454 shares
of Common Stock, 738 shares have been included as beneficially owned
in this table by other directors and executive officers.
</FN>
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The Corporation's Board of Directors is divided into three classes,
which are as nearly equal in number as possible. Each class of directors
serves a successive three-year term of office. An individual may not
continue to serve on the Board of Directors after attaining age 70.
Three members of the present Board of Directors are standing for
reelection. Six other directors are serving terms that will expire in 2000
and 2001.
Biographical information concerning the Corporation's directors and
executive officers, including the three nominees who are nominated for
election to the Board of Directors at the Annual Meeting, is presented
below. Except as otherwise indicated, all directors, nominees for director
and executive officers have had the same principal employment for over five
years. All executive officers are appointed annually and serve at the
pleasure of the Board of Directors. All of the directors of the
Corporation also serve as directors of the Bank.
NOMINEES FOR ELECTION AS DIRECTORS TO TERMS EXPIRING IN 2002:
JAE M. MAXFIELD (age 53) has been a director and President
and Chief Executive Officer of the Corporation and the Bank since
January 1995 and a director of ChoiceOne Insurance Agencies, Inc.
since January 1996. From 1993 until January 1995, Mr. Maxfield
operated Maxfield Associates, an association of financial
advisors engaged in providing financial services to business and
professional occupations. Mr. Maxfield served as President and
Chief Executive Officer of Society Bank in Monroe, Michigan,
-4-
<PAGE>
formerly a subsidiary of First of America Bank, from 1988 until
1993 and, before that, served Society Bank in various executive
capacities. Mr. Maxfield also is a director of West Shore
Computer Services, Inc., a data processing company, in which the
Bank owns a 20% interest and a director of Michigan Bankers Title
of West Michigan, L.L.C., a title insurance agency, in which the
Bank owns a 6% interest.
JON E. PIKE (age 57) is a certified public accountant and
Managing Partner of Beene Garter LLP, certified public
accountants, of Grand Rapids, Michigan. Mr. Pike has been
Chairman of the Board of Directors since August 1998 and a
director of the Corporation and the Bank since September 1990.
Mr. Pike is also a director of Wm. A. Rogers & Co., a retail
hardware business in Sparta, Michigan, and President and a
director of B.G. Systems, Inc., a computer software business
affiliated with Beene Garter LLP.
LINDA R. PITSCH (age 51) has been a director of the
Corporation and the Bank since December 1994 and Secretary of the
Corporation and the Bank since February 1995. Ms. Pitsch also
has served as Senior Vice President and Cashier of the Bank since
January 1993. Ms. Pitsch has been an employee of the Bank since
September 1969, serving in various management and executive
capacities. Ms. Pitsch has been a director and Secretary of the
Board for ChoiceOne Insurance Agencies, Inc. since December 1998
and a director and Secretary of ChoiceOne Travel, Inc. since
August 1997. Ms. Pitsch is also a director and past President of
the Grand Rapids Chapter of the American Institute of Banking and
an instructor at Davenport College of Business, serving on its
Accounting Advisory Board.
DIRECTORS WITH TERMS EXPIRING IN 2001
FRANK G. BERRIS (age 51) is President of and owns American
Gas & Oil, Inc., a distributor of petroleum products and operator
of gas stations. Mr. Berris is also Past President of West
Michigan Oilman's Club and a member of the Michigan Petroleum
Association/Michigan Association of Convenience Stores. Mr.
Berris has been a director of the Corporation and the Bank since
August 1991.
LAWRENCE D. BRADFORD (age 59) is President of ChoiceOne
Insurance Agencies, Inc., an insurance agency that is a
subsidiary of the Bank. Mr. Bradford was a co-owner of the
insurance agency prior to its acquisition by the Bank in January
1996. Mr. Bradford has been a director of the Corporation since
1986 and a director of the Bank since 1974.
-5-
<PAGE>
LEWIS G. EMMONS (age 54) is President and a director of
Emmons Development-Real Estate and Special Projects Coordinator
for Great Day Food Stores. Mr. Emmons has been a director of the
Corporation since 1986 and a director of the Bank since 1978.
STUART GOODFELLOW (age 55) owns Goodfellow Blueberry Farms
and Goodfellow Vending Services, a vending company. Mr.
Goodfellow is also past Vice President and a director of the
Michigan Blueberry Growers Association. Mr. Goodfellow has been
a director of the Corporation and the Bank since August 1991.
DIRECTORS WITH TERMS EXPIRING IN 2000
WILLIAM F. CUTLER, JR. (age 51) is the former Vice President
of the H. H. Cutler Company, an apparel manufacturer. Mr. Cutler
joined the H. H. Cutler Company in 1970 and served in various
management and executive capacities until January 1994. The H.
H. Cutler Company was sold to VF (Vanity Fair) Corporation in
January 1994. Mr. Cutler has been a director of the Corporation
and the Bank since October 1993. Mr. Cutler served as a director
of the Sparta Health Center from 1981 until 1996 and is a trustee
of the Rockford Education Foundation.
ANDREW W. ZAMIARA (age 58) is a registered pharmacist and
President/Manager of Momber Pharmacy and Gift Shop in Sparta,
Michigan and Momber Hallmark in Rockford, Michigan. Mr. Zamiara
has been a director of the Corporation and the Bank since August
1990.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
DENIS L. CROSBY (age 56) has been Vice President of the
Corporation since 1991. Mr. Crosby has been Senior Vice
President of Commercial Services at the Bank since 1990 and Vice
President of Loans at the Bank since 1986. From 1972 until
joining the Corporation in 1986, Mr. Crosby was a commercial loan
officer at various affiliates of Michigan National Bank. Mr.
Crosby is a member of the Sparta Downtown Development Authority
and a member of the Economic Development Foundation of Western
Michigan.
DEANNE L. GAVALIS (age 33) has been Vice President of Retail
Services for the Bank since January 1999. Prior to her
employment at the Bank, Ms. Gavalis was employed by National City
Bank, formerly known as First of America Bank, for over 10 years.
-6-
<PAGE>
THOMAS L. LAMPEN (age 43), a Certified Public Accountant,
has been Vice President and Chief Financial Officer of the Bank
since January 1992 and Treasurer of the Corporation since
April 1987. Prior to his employment with the Corporation, Mr.
Lampen worked for Grant Thornton, a national accounting firm.
BOARD COMMITTEES AND MEETINGS
The Corporation's Board of Directors has, among others, the following
standing committees:
AUDIT COMMITTEE. The members of the Audit Committee as of March 17,
1999, were Jon E. Pike (Chairman), Lewis G. Emmons and Stuart Goodfellow.
The Audit Committee is responsible for causing a suitable examination of
the financial records and operations of the Corporation and the Bank to be
made by the internal auditor of the Corporation through a program of
continuous internal audits. The Audit Committee recommends to the
Corporation's Board of Directors independent certified public accountants
for employment to examine the financial statements of the Corporation and
make such additional examinations as the committee considers advisable.
The Audit Committee also reviews reports of examination of the Corporation
and the Bank received from regulatory authorities and reports to the Board
of Directors at least once each calendar year the results of examinations
made and such conclusions and recommendations as the committee considers
appropriate concerning the scope of the Corporation's and the Bank's
procedures for internal auditing and the results thereof. The Audit
Committee met 4 times during 1998.
PERSONNEL AND BENEFITS COMMITTEE. The members of the Personnel and
Benefits Committee as of March 17, 1999, were Andrew W. Zamiara (Chairman),
William F. Cutler, Jr., Lewis G. Emmons, Stuart Goodfellow and Jae M.
Maxfield. Mr. Maxfield is a non-voting member of this committee. The
Personnel and Benefits Committee performs the function of a compensation
committee and receives recommendations from senior management and makes
recommendations to the Board of Directors concerning the compensation and
benefits of the officers of the Corporation and the Bank. The Personnel
and Benefits Committee also reviews the provisions of the Personnel Manual
and sets the parameters for the Bank's incentive bonus plan. The Personnel
and Benefits Committee met 3 times during 1998.
EXECUTIVE AND LOAN REVIEW COMMITTEE. The members of the Executive and
Loan Review Committee as of March 17, 1999, were Jon E. Pike (Chairman),
Frank G. Berris, Lawrence D. Bradford, William F. Cutler, Jr., Lewis G.
Emmons, Stuart Goodfellow, Jae M. Maxfield, Andrew W. Zamiara and Denis L.
Crosby. Mr. Crosby is an executive officer of the Bank. This committee
reviews all aspects of loan activity for the Bank for the preceding months,
including new loans of $25,000 or more, problem loans and loans identified
-7-
<PAGE>
by examiners, loans 60 days or more past due and non-accrual loans. This
committee also approves loan charge-offs and extensions of credit of up to
15% of the capital and surplus of the Bank. The Executive and Loan Review
Committee may also act in other capacities as authorized by the Board of
Directors. The Executive and Loan Review Committee met 3 times during
1998.
BRANCHING AND ACQUISITIONS COMMITTEE. The members of the Branching
and Acquisitions Committee as of March 17, 1999, were Frank G. Berris,
Lawrence D. Bradford, William F. Cutler, Jr., Jae M. Maxfield and Jon E.
Pike. The purpose of this committee is to consider potential acquisitions
by the Bank and/or the Corporation. The Branching and Acquisitions
Committee met once during 1998.
COMPLIANCE/CRA COMMITTEE. The members of the Compliance/CRA Committee
as of March 17, 1999, were Linda R. Pitsch (Chairperson), Lawrence D.
Bradford, Jae M. Maxfield and the following individuals who are officers of
the Bank: Mary J. Johnson, Karen M. Gilbert, Deanne L. Gavalis and Denis L.
Crosby. The Compliance/CRA Committee is responsible for compliance with
various federal banking regulations and the Community Reinvestment Act of
1977. The Compliance/CRA Committee met 4 times during 1998.
NOMINATING COMMITTEE. The members of the Nominating Committee as of
March 17, 1999, were William F. Cutler, Jr., Jae M. Maxfield and Jon E.
Pike. The Corporation will consider nominations of candidates for the
Board of Directors submitted by shareholders. Any shareholder who desires
to nominate a candidate for the Board of Directors at a meeting must
deliver, not less than 120 days prior to the date of notice of the meeting
in the case of an annual meeting, and not more than seven days following
the date of notice of the meeting in the case of a special meeting, a
notice to the Secretary of the Corporation setting forth: (i) the name,
age, business address and residence address of each nominee proposed in
such notice; (ii) the principal occupation or employment of each such
nominee; (iii) the number of shares of capital stock of the Corporation
that are beneficially owned by each such nominee; (iv) a statement that
each such nominee is willing to be nominated and serve; and (v) such other
information concerning each such nominee as would be required under the
rules of the Securities and Exchange Commission in a proxy statement
soliciting proxies for the election of such nominees. The Nominating
Committee met once during 1998.
During 1998, the Corporation's Board of Directors held 12 regular and
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 year.
-8-
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors and officers of the Corporation and persons who
beneficially own more than 10% of the outstanding shares of Common Stock to
file reports of beneficial ownership and changes in beneficial ownership of
shares of Common Stock with the Securities and Exchange Commission.
Directors, officers and greater than 10% beneficial owners are required by
Securities and Exchange Commission regulations to furnish the Corporation
with copies of all Section 16(a) reports they file. Based solely on its
review of the copies of such reports received by it or written
representations from certain reporting persons that no Forms 5 were
required for those persons, the Corporation believes that all applicable
Section 16(a) reporting and filing requirements were satisfied from
January 1, 1998, through December 31, 1998, except that one report for Mr.
Maxfield covering one transaction was filed late. This delinquency was due
to an inadvertent oversight by the Corporation=s personnel and an
appropriate report was filed to correct it as soon as it was discovered.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
GENERAL. The following table shows certain information concerning
the compensation earned by the Chief Executive Officer of the Corporation
for services rendered to the Corporation or the Bank during each year in
the three-year period ended December 31, 1998. No other executive officer
of the Corporation had cash compensation in excess of $100,000 during 1998.
Mr. Maxfield was compensated by the Bank in the capacity indicated in the
table.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
----------------------
AWARDS
NAME AND ANNUAL COMPENSATION ------------------
PRINCIPAL ------------------- NUMBER OF SHARES ALL OTHER
POSITION YEAR SALARY<F1> BONUS<F2> UNDERLYING OPTIONS COMPENSATION<F3>
-------- ---- ---------- --------- ------------------ ----------------
<S> <C> <C> <C> <C> <C>
Jae M. Maxfield 1998 $120,600 $35,306 - $11,668
Director, President and Chief 1997 115,600 17,092 10,500<F*> 15,489
Executive Officer of the 1996 107,800 40,917 - 25,091
Corporation and the Bank
- ---------------------------
<FN>
<F*>Adjusted for stock splits and dividends
-9-
<PAGE>
<F1> Includes compensation deferred under the Bank's 401(k) and Employee
Stock Ownership Plan and director fees paid by the Corporation and the
Bank.
<F2> Includes compensation deferred under the Bank's 401(k) and Employee
Stock Ownership Plan.
<F3> All other compensation for Mr. Maxfield in 1998 includes amounts paid
by the Bank for (i) life and disability insurance ($1,341); (ii) Bank
contributions under the Bank=s 401(k) and Employee Stock Ownership
Plan ($8,061); and (iii) storage expenses associated with Mr.
Maxfield=s initial employment by the Corporation ($2,266).
</FN>
</TABLE>
The following table sets forth information regarding stock options
held by Mr. Maxfield at the end of the last fiscal year. Mr. Maxfield was
not granted and did not exercise any stock options during 1998.
<TABLE>
FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END <F1>
-------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISBLE
- ---------------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Jae M. Maxfield 5,250 5,250 $40,897.50 $40,897.50
<FN>
<F1> Based on a market value of $26.83 per share at December 31, 1998,
adjusted to reflect stock dividends and splits.
</FN>
</TABLE>
EMPLOYMENT CONTRACTS. Mr. Maxfield has an employment agreement with
the Bank. Under this agreement, Mr. Maxfield shall be employed as
President and Chief Executive Officer of the Bank and the Corporation
unless his employment is terminated by him or he is dismissed at the
pleasure of the Board of Directors of the Bank. Under this agreement, Mr.
Maxfield is entitled to a base salary to be reviewed annually by the Board
of Directors of the Bank, participation in the Bank=s incentive bonus plan,
payment of director fees normally payable to directors of the Corporation
and the Bank for meetings attended and other benefits generally available
to all Bank employees. Mr. Maxfield has agreed not to compete in any way
-10-
<PAGE>
with the business of the Bank and the Corporation while in the employ of
the Bank and for one year after termination of his employment with the
Bank.
401(K) PLAN. The ChoiceOne Bank 401(k) and Employee Stock Ownership
Plan ("401(k) Plan") is qualified under Section 401(a) of the Code.
The purpose of the 401(k) Plan is to permit Bank employees, including
Mr. Maxfield, to save for retirement on a pre-tax basis. In addition to
the pre-tax contributions by Bank employees, the Bank may make
discretionary matching and/or employee stock ownership plan ("ESOP")
contributions to the 401(k) Plan. If matching and/or ESOP contributions
are made to the 401(k) Plan, a participant is fully vested in those
contributions after six years of vested service.
Each participant in the 401(k) Plan has an account to record the
participant=s interest in the plan. The amount of the contributions made
by or on behalf of the participants are credited to their accounts. A
participant's benefit from the 401(k) Plan is equal to the vested amount in
the participant=s account under the plan when he or she terminates
employment with the Bank. Under the ESOP provisions, part of the 401(k)
Plan is designed to invest primarily in stock of the Corporation.
INCENTIVE BONUS PLAN. The Bank's incentive bonus plan (the "Bonus
Plan") was established for all of the Bank's officers in 1985. The Bonus
Plan has applied to all employees (both officer and non-officer personnel)
since the 1986 fiscal year. The purposes of the Bonus Plan are to (i)
motivate all personnel of the Bank, (ii) encourage growth of profits and
maximization of return on equity and (iii) provide an opportunity for
participants to be rewarded for individual effort and performance that is
considered by the Personnel and Benefits Committee to be above average.
The Bonus Plan is based on return on equity. A funding range of
11.25% through 12.25% was established for 1998. If return on equity is
below 11.25%, or the "threshold," no bonus based on Bank profits will be
paid. Bonuses payable under the Bonus Plan begin to accrue at 11.25%
return on equity. One quarter of the targeted bonus amount is payable for
each one quarter of one percentage point increase in return on equity above
11.25%, with 100% of the targeted bonus amount payable at 12.25% return on
equity. There was no maximum bonus payable under the Bonus Plan, such that
any increase in return on equity over 12.25% provided a bonus greater than
100% of the targeted bonus.
Determinations of eligibility, funding, allocations and amounts of
awards are subject to the review and final approval of the Board of
Directors of the Bank. The Bank's executive officers, as a group, who are
also executive officers of the Corporation, received incentive bonuses
totaling $78,941 under the Bonus Plan for the 1998 fiscal year.
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During 1998, the Corporation compensated its directors at the rate of
$50 per monthly meeting of the Board attended and an additional $200 for
each quarterly meeting of the Board attended. Directors who were not
employees of the Corporation or the Bank received $60 per hour for each
meeting of any committee of the Board of Directors on which they served
other than the Executive and Loan Review Committee. During 1998, the Bank
compensated its directors at the rate of $350 per meeting attended. The
Chairman of the Board of the Bank received an additional $100 per meeting
attended.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors, nominees for director and executive officers of the
Corporation and members of their immediate families were customers of and
had transactions with the Bank in the ordinary course of business between
January 1, 1998, and March 17, 1999. It is anticipated 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
collectibility or present other unfavorable features.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Crowe, Chizek and Company LLP, certified public accountants, served as
the Corporation's principal accountant for 1998. The Board of Directors of
the Corporation has selected Crowe, Chizek and Company LLP to act as the
Corporation=s principal accountant for 1999. Representatives of Crowe,
Chizek and Company LLP are not expected to be present at the Annual
Meeting. If a representative of Crowe, Chizek and Company LLP attends the
meeting, the representative will have an opportunity to make a statement
and will be expected to be available to respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders that are intended to be presented at the
2000 annual meeting of shareholders and that the proponent would like
included in the Corporation=s proxy statement and form of proxy relating to
that meeting must be made in accordance with Securities and Exchange
Commission Rule 14a-8 and must be received by the Corporation by December
4, 1999 for consideration for inclusion in the proxy statement and form of
proxy relating to that meeting. To be considered timely, all other
proposals of shareholders intended to be presented at the 2000 annual
meeting of shareholders of the Corporation must similarly be received by
the Corporation by December 4, 1999.
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FORM 10-KSB REPORT AVAILABLE
THE CORPORATION'S FORM 10-KSB ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES, WILL BE PROVIDED WITHOUT CHARGE TO SHAREHOLDERS UPON WRITTEN
REQUEST. REQUESTS SHOULD BE DIRECTED TO MR. THOMAS L. LAMPEN, TREASURER,
CHOICEONE FINANCIAL SERVICES, INC., 109 EAST DIVISION, SPARTA, MICHIGAN
49345.
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<PAGE>
CHOICEONE FINANCIAL SERVICES, INC.
P R O X Y 109 EAST DIVISION P R O X Y
SPARTA, MICHIGAN 49345
ANNUAL MEETING OF SHAREHOLDERS - APRIL 29, 1999
The undersigned shareholder appoints Jae M. Maxfield and Linda R.
Pitsch, or either of them, each with the power to appoint his or her
substitute, attorneys and proxies to represent the shareholder and to vote
and act, with respect to all shares that the shareholder would be entitled
to vote at the annual meeting of shareholders of ChoiceOne Financial
Services, Inc. referred to above and any adjournment of that meeting, on
all matters that come before the meeting.
Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as indicated below) to vote for all nominees listed
below
Jae M. Maxfield Jon E. Pike Linda R. Pitsch
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. IF THIS PROXY
IS PROPERLY EXECUTED AND DELIVERED, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL
BE VOTED FOR ELECTION OF ALL NOMINEES NAMED ON THIS PROXY. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON
ANY OTHER MATTERS THAT MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT OF
THE MEETING.
<PAGE>
Dated: __________________________, 1999 Please sign exactly as your
name appears on this proxy.
If signing for estates, trusts
or corporations, title or
capacity should be stated. IF
SHARES ARE HELD JOINTLY, EACH
HOLDER SHOULD SIGN.
______________________________
Signature
______________________________
Signature if held jointly
IMPORTANT -- PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
