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.
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 period of
two (2) consecutive years (not including any period prior to the
adoption of this amendment), 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.
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.
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" and other 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.