EXHIBIT 10.4

CHEMICAL FINANCIAL CORPORATION
SUPPLEMENTAL RETIREMENT INCOME PLAN
Adopted May 20, 1985 and as
Amended August 15, 1988 and
December 21, 1992

1.

PURPOSE OF THE PLAN

 

 

 

The purpose of the Chemical Financial Corporation Supplemental Retirement Income
Plan (the "Plan") is threefold: (i) to reimburse a Corporate Officer of Chemical
Financial Corporation (the "Company") for any reduction in his benefit payments
under the Chemical Financial Corporation Employees' Pension Plan (the "Pension
Plan") which may be caused by the limitations imposed thereon by Section 415 of
the Internal Revenue Code (the "415 Limit" or Section 401(a)(17) of the Internal
Revenue Code (the "401(a)(17) Limit"); (ii) to provide incentive and reward to
such officer through additional retirement income in recognition of this
meritorious service and material contribution to the Company' s continued growth
and development; and (iii) to assist the Company in retaining and attracting
high caliber key executives upon whose efforts the future successful and
profitable operation of its business is dependent.

 

 

2.

EFFECTIVE DATE

 

 

 

This Plan was approved and adopted by the Board of Directors of Chemical
Financial Corporation as of May 20, 1985 and amended as of August 15, 1988 and
December 21, 1992.

 

 

3.

PARTICIPANTS IN THE PLAN

 

 

 

The Plan is administered by a committee appointed by the Board of Directors
consisting of not less than three members of the Board of Directors (the
Compensation Committee). The Plan empowers the Compensation Committee to grant
such key employees of the Company and its Subsidiaries as shall be selected from
time to time by the Committee, participation rights in the Plan.

 

 

4.

PENSION PLAN BENEFITS

 

 

 

For purposes of this section, "Unrestricted Pension Benefit" means the amount
which would have been payable from the Pension Plan if the 415 Limit or
401(a)(17) Limit did not apply, calculated as of the participant' s date of
retirement based on the applicable optional payment method. "Restricted Benefit
Amount" means the amount actually payable from the Pension Plan calculated as of
the participant' s date of retirement based on the applicable optional payment
method.

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Pension Plan benefits are only available to a participant who is employed by the
Company immediately prior to his normal or early retirement from the Company
under the terms of the Pension Plan.

 

 

 

A participant who retires pursuant to the normal or early retirement provisions
of the Pension Plan and elects benefits from the Pension Plan shall, subject to
approval by the Committee, receive a monthly supplement from the Plan. The
supplement shall be equal to the difference between (i) the Unrestricted Pension
Benefit and (ii) the Restricted Benefit Amount, both calculated according to the
form of payment elected for his Pension Plan Benefits. In the event the
participant' s death and payment election from causes a Pension Plan payment to
a beneficiary, a portion of the supplement shall be paid to such beneficiary
during the period of any related Pension Plan payment. The portion of the
supplement to be paid (if any) shall equal the portion of the participant' s
Pension Plan benefit which is continued for such beneficiary(ies).

 

 

 

However, upon a Change in Control (as hereafter defined), each participant or
his/her recognized survivor shall be paid the present value of the benefit
accrued under the Supplemental Plan in the following manner:

 

a.

If an active employee or former employee with a deferred benefit who is eligible
to retire, the participant' s benefit shall be calculated as if the participant
terminated employment and then retired and elected to receive the 100% Joint
Annuitant Option benefit as of the last day of the month immediately preceding
the Change in Control.

 

 

 

 

b.

If an employee or former employee who is not eligible to retire, the
participant' s benefit shall be calculated as if the participant terminated
employment and then elected to receive the lump sum equivalent of a vested
deferred benefit as of the last day of the month immediately preceding the
Change in Control.

 

All amounts shall be paid in a single lump sum within 90 days of the Change in
Control unless the participant consents to another form of payment.

 

 

 

For purposes of the Supplemental Plan, a Change in Control shall mean a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), whether or not the Company is then
subject to such reporting requirement; provided that, without limitation, a
Change in Control shall be deemed to have occurred if: (i) any individual,
partnership, firm, corporation, association, trust, unincorporated organization
or other entity, or any syndicate or group deemed to be a person under Section
14(d)(2) of the Exchange Act, is or becomes the "beneficial owner" (as defined
in rule 13D-3 of the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of the Company representing 20 percent or
more the of the combined voting power of the Company' s then outstanding
securities entitled to vote in the election of directors of the Company; or (ii)
during any

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period of two (2) consecutive years (not including any period prior to the
adoption of thisamendment), individuals who at the beginning of such period
constitute the Board of Directors and any new directors whose election by the
Board of Directors or nomination for election by the Company' s stockholders was
approved by a vote of at least three-quarters (3/4) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof.

 

 

 

For purposes of this lump sum payment in the event of a Change in Control, the
present value of the accrued benefit shall be calculated using such actuarial
assumptions as the Compensation Committee shall adopt from time to time.

 

 

5.

ADMINISTRATION OF THE PLAN

 

 

 

The Plan shall be administered by the Compensation Committee. The Committee
shall have all such powers that may be necessary to carry out the provisions of
the Plan in the absence of any action by the Board, including without
limitation, the power to delegate administrative matters to other persons, to
construe and interpret the Plan, to adopt and revise the rules, regulations and
forms relating to and consistent with the Plan' s terms and to make any other
determinations which it deems necessary or advisable for the implementation and
administration of the Plan provided, however, that the right and power to amend
and/or terminate the Plan are reserved exclusively to the Board. Subject to the
foregoing, all decisions and determinations by the Committee shall be final,
binding and conclusive as to all parties including, without limitation, the
Company, any participant hereunder and all other employees and persons.

 

 

6.

SOURCE OF BENEFIT PAYMENTS

 

 

 

No fund or other assets of the Company shall be segregated and attributable to
any benefit payments to be made at a later time, as herein above provided, but
rather benefit payments under the Plan shall be made from the general assets of
the company at the time any such payment becomes due and payable. Benefit
payments under the Plan are to be taken as deductions for income tax purposes in
the Company' s fiscal year that they are actually made. At such time as any
benefit payments are made, it shall be determined by the Company whether any
portion thereof is allocable to any affiliates(s) of the Company because of
their recipient having also served as a Corporate Officer of such affiliate(s);
and, if such is the case, the Company may elect to obtain reimbursement from
such affiliate(s) as appropriate, for such allocable portion. No participant or
surviving spouse or beneficiary thereof shall have any proprietary rights of any
nature whatsoever with respect to any benefit payments, unless and until such
time a benefit payment is made to such participant or the surviving spouse or
beneficiaries thereof, and then only as to the amount of such payment.

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7.

NON-ALIENATION OF PAYMENTS

 

 

 

Any benefits payable under the Plan shall not be subject in any manner to
alienation, sale, transfer, assignment, pledge, attachment, garnishment or
encumbrance of any kind, by will, or by inter vivos instrument. Any attempt to
alienate, sell, transfer, assign, pledge or otherwise encumber any such payment,
whether currently or thereafter payable, shall not be recognized by the
Committee or the Company. Any benefit payment due hereunder shall not in any
manner be liable for, or subject to, the debts or liabilities of any participant
or the surviving spouse or beneficiary thereof, as the case may be.

 

 

 

If any such participant, surviving spouse or beneficiary shall attempt to
alienate, sell, transfer, assign, pledge or otherwise encumber any benefit
payments to be made to that person under the Plan or any part thereof, or if by
reason of such person' s bankruptcy or other event happening at any time, such
payments would devolve upon anyone else or would not be enjoyed by such person,
then the Committee, in its discretion, may terminate such person' s interest in
any such benefit payment, and hold or apply it to or for the benefit of that
person, the spouse, children, or other dependents hereof, or any of them, in
such manner as the Committee may deem proper.

 

 

8.

INCOMPETENCY

 

 

 

Every person receiving or claiming benefit payments under the Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee receives a written notice, in a form and manner acceptable to the
Committee, that such person is incompetent and that a guardian, conservator, or
other person legally vested with the care of his estate has bee appointed. In
the event a guardian or conservator of the estate of any person receiving or
claiming benefit payment under the Plan shall be appointed by a court of
competent jurisdiction, payments may be made to such guardian or conservator;
provided that proper proof of appointment and continuing qualification is
furnished in a form and manner acceptable to the Committee. Any such payment so
made shall be a complete discharge of any liability therefor.

 

 

9.

LIMITATION OF RIGHTS AGAINST THE COMPANY

 

 

 

Participation in this Plan, or any modifications thereof, or the payments of any
benefits hereunder, shall not be construed as giving to any participant any
right to be retained in the service of the Company, limiting in any way the
right of the Company to terminate such participant' s employment at any time,
evidencing any agreement or understanding express or implied, that the Company
will employ such participant in any particular position or at any particular
rate of compensation and/or guaranteeing such participant any right to receive
any other form or amount of renumeration from the Company.

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10.

CONSTRUCTION

 

 

 

The Plan shall be construed, administered and governed in all respects under and
by the laws of the State of Michigan. Wherever any words are used herein in the
masculine, they shall be construed as though they were used in the feminine for
all cases where they would so apply; and wherever any words are used herein in
the singular or the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would so
apply. The words "hereof", "hereunder" andother similar compounds of the word
"here" shall mean and refer to this entire document and not to any particular
paragraph.

 

 

11.

LIABILITY

 

 

 

Neither the Company nor any shareholder, director, officer or other employee of
the Company or any member of the committee or any other person shall be jointly
or severally liable for any act or failure to act hereunder, except for gross
negligence or fraud.

 

 

12.

AMENDMENT OR TERMINATION OF THE PLAN

 

 

 

The Company, by action of the Board, reserves the right to amend, modify,
terminate or discontinue the Plan at any time; and such action shall be final,
binding and conclusive as to all parties, including any participant hereunder,
any surviving spouse or beneficiary thereof and all other Company employees and
persons.

 

 

13.

SUCCESSORS AND ASSIGNS

 

 

 

The terms and conditions of the Plan, as amended and in effect from time to
time, shall be binding upon the successors and assigns of the Company, including
without limitation any entity into which the Company may be merged or with which
the Company may be consolidated.

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