EXHIBIT 10.6

RETIREMENT AGREEMENT

                    THIS AGREEMENT is made as of January 8, 2001, between DAN L.
SMITH ("Mr. Smith") and CHEMICAL FINANCIAL CORPORATION ("Chemical"), and joined
in by its subsidiary, SHORLINE BANK (the name of which will be changed to
"Chemical Bank - Shoreline", in this agreement referred to as "Shoreline Bank");

                    WHEREAS, Chemical believes that its ability to conduct its
business successfully is dependent upon retaining key management employees until
such time as they retire; and

                    WHEREAS, Mr. Smith has been employed in an important
management and chief executive position with Shoreline Bank for many years, and
the parties desire to continue to maintain a relationship upon the terms and
conditions set forth herein; and

                    WHEREAS, Mr. Smith has determined to retire from the active
management of Shoreline Bank, but has agreed to provide assistance and advice to
Chemical and Shoreline Bank;

                    IT IS, THEREFORE, AGREED AS FOLLOWS:

                    1.          Retirement. Effective the close of business
January 31, 2001, Mr. Smith will resign and retire from his position as Chief
Executive Officer of Shoreline Bank. Mr. Smith shall continue to serve as a
Director of Chemical and Shoreline Bank and Chairman of the Board of Shoreline
Bank, through January 31, 2003, without compensation for Directors' meetings.
Mr. Smith may thereafter continue his service to Chemical and Shoreline Bank for
such time and in such role as Chemical and he deem appropriate.

                    2.          Compensation and Benefits. Chemical agrees to
pay to Mr. Smith compensation at an annual rate of Fifty Thousand Dollars
($50,000.00), commencing on the first day of February, 2001, for a period of two
years or until his death, if earlier. Payments to Mr. Smith will be made on the
first business day of each month during the term of this Agreement.

          Mr. Smith shall be provided group health benefits in accordance with
the terms of Chemical's Retiree Medical and Dental Plan. If at any time Chemical
terminates any such insurance plan for its retirees, Chemical may also terminate
such plan for Mr. Smith; if Chemical substitutes medical and hospitalization
insurance plans for its retirees or provides additional medical or
hospitalization insurance coverage for its retirees, then such substituted
and/or additional insurance coverage shall be made available to Mr. Smith.

                    3.          Covenant Not To Compete. Mr. Smith agrees that
during the period that payments are being made to him hereunder, he shall not
enter into employment or any form of equity ownership of any business which is
competitive with the businesses related to, affiliated with, or managed by
Chemical; provided, however, that the parties agree that this provision will be
limited to a geographic area consisting of a fifty (50) mile radius from each
existing business location of Chemical or any business related to, affiliated
with, or managed by Chemical. In the event the Board of Directors of Chemical
determines that Mr. Smith is in violation of this covenant not to compete, it
shall give written notice to him. Mr. Smith shall have a period of ninety (90)
days from the date of such notice to cease his competitive activity, and the
payments hereunder shall continue during such period. If the competitive
activity is not terminated within the ninety (90) day period, further payments
hereunder shall cease. In the event of a dispute hereunder, the parties agree to
submit their disagreement to arbitration. Nothing in this

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Section 3 shall be construed to prevent Mr. Smith from acquiring or holding,
directly or indirectly, securities of any corporation or other entity the
securities of which are listed for trading on any national or regional
securities exchange or quoted on any automated quotation system sponsored by the
National Association of Securities Dealers, Inc. as long as Mr. Smith's total
beneficial ownership in any such corporation or entity does not exceed five
percent (5%) of the total securities outstanding of such corporation or entity.

                    4.          No Assignment. This Agreement is personal to
each party to this Agreement and no party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of the others.

                    5.          Modification. This Agreement supersedes all
prior agreements with respect to the matters covered hereby, and no modification
of this Agreement shall be valid unless it is in writing and signed by Chemical
and by Mr. Smith.

                    6.          Construction. This Agreement shall be governed
and construed in accordance with the laws of the State of Michigan.

                    7.          Headings. The paragraph headings in this
Agreement are for convenient reference only, and shall not modify or amend the
express terms hereof.

                    8.          Successors and Assigns. This Agreement shall be
binding upon, and shall insure to the benefit of, the parties hereto and their
respective heirs, personal representatives, successors and assigns.

DATED: January 8, 2001

 

/s/ Dan L. Smith

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Dan L. Smith            

DATED: January 2, 2001

 

CHEMICAL FINANCIAL CORPORATION

By /s/ Alan W. Ott

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     Alan W. Ott
     Its Chairman            

DATED: January 8, 2001

 

SHORELINE BANK

By /s/ James R. Milroy

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     James R. Milroy
     Its President