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EXHIBIT 10.8 SEPARATION AND RELEASE AGREEMENT This is an agreement (the "Agreement") between CHEMICAL FINANCIAL CORPORATION ("Employer") and JAMES R. MILROY ("Employee"). As used in this Agreement, the term, Employer, includes all of its affiliated or related companies, including without limitation, all employees, officers, directors, shareholders and agents of the Employer and those of any subsidiary, parent, or affiliated company. WHEREAS, Employer and Employee desire to end the relationship, and agree to the following: 1. Administrative Leave and Termination Date. Employee acknowledges that he will begin administrative leave effective April 9, 2007, and that his leave and employment with Employer will end on December 31, 2007, or upon Employee securing new employment, whichever date occurs first (the "Termination Date"). During the administrative leave, Employee shall have no duties, except as provided in this Agreement, and is not to report to the Employer's office. During the administrative leave, Employee is free to seek new employment. During the administrative leave, Employee shall make himself available to provide services as requested by Employer. During the administrative leave, Employee shall receive his base salary. Employee acknowledges that no additional compensation, including but not limited to bonus is owed or will be paid to Employee during the administrative leave period.
2. Waiver and Release. In consideration for the Additional Benefits described below, Employee releases and discharges Employer from all claims (including claims for attorney's fees and costs), demands and causes of action, known or unknown, which Employee may have or claim to have against Employer, arising out of, or in any way relating to, Employee's employment with, or termination of employment, whether based on any act or omission to act. This includes, but is not limited to, claims of negligence, breach of contract, violation of the Civil Rights Acts of 1964 and 1991, violation of the Americans with Disabilities Act, violation of the Consolidated Omnibus Budget Reconciliation Act of 1985 (as amended) ("COBRA"), violation of the Employee Retirement Income Security Act of 1974 (as amended), violation of the Age Discrimination in Employment Act of 1967 (as amended), violation of the Older Workers Benefit Protection Act, violation of Michigan's Elliot
t-Larsen Civil Rights Act, violation of Michigan's Persons with Disabilities Civil Rights Act, violation of Michigan's Payment of Wages and Fringe Benefits Act, claims arising under any federal, state or local laws prohibiting employment discrimination based on age, color, race, gender/sex, height, weight, marital status, national origin, mental or physical disability, religious affiliation, veteran status or any other forms of discrimination, and claims based on any other laws affecting relations between employers and employees, including claims growing out of Employee's termination of employment.
With respect to any charges or complaints that have been filed or may be filed concerning any event or actions relating to Employee's employment or Employee's termination, and which occurred prior to signing this Agreement, Employee additionally waives and releases any right Employee may have to recover in any lawsuit or proceeding brought by Employee, an administrative agency, or any other person on Employee's behalf or which includes Employee in any class. This paragraph is not intended to limit Employee from instituting legal action for the sole purpose of enforcing this Agreement, nor does this Agreement affect any rights or claims Employee may have which arise after Employee signs this Agreement. Nor does the Agreement affect Employee's rights to vested employee benefits, vested stock options, group health benefit continuation rights provided by COBRA or any claim for workers' compensation. Prior to instituting any legal action challenging the enforceability of this
Agreement, Employee will return in full any benefits received from Employer in connection with Employee signing this Agreement. 3. No Admission of Liability. The parties acknowledge that this Agreement is not an admission of liability, but is an effort to reach a mutual understanding concerning Employee's termination from employment with Employer. 4. Period for Review and Consultation. Employee acknowledges that Employer has advised him to consult with an attorney before executing this Agreement.
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Page
2
3
37
38
40
44
81
82
85
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Table of Contents
Years Ended December 31,
2007
2006
2005
2004
2003
$
130,089
$
132,236
$
141,851
$
147,634
$
139,772
11,500
5,200
4,285
3,819
2,834
43,288
40,147
39,220
39,329
39,094
104,671
97,874
98,463
98,469
91,923
39,009
46,844
52,878
56,682
55,716
$
1.60
$
1.88
$
2.10
$
2.26
$
2.24
1.60
1.88
2.10
2.25
2.23
1.14
1.10
1.06
1.01
0.95
21.35
20.46
19.98
19.26
18.33
23.79
33.30
31.76
40.62
34.66
23,815
24,828
25,079
25,169
24,991
$
3,754,313
$
3,789,247
$
3,749,316
$
3,764,125
$
3,708,888
2,799,434
2,807,660
2,706,695
2,583,540
2,476,360
2,875,589
2,898,085
2,819,880
2,863,473
2,967,236
347,412
354,041
400,363
386,830
246,897
508,464
507,886
501,065
484,836
458,049
$
3,785,034
$
3,763,067
$
3,788,469
$
3,856,036
$
3,578,678
3,551,867
3,521,489
3,550,695
3,608,157
3,381,083
2,805,880
2,767,114
2,641,465
2,567,956
2,222,704
2,718,814
2,692,410
2,718,267
2,803,015
2,616,027
2,923,004
2,861,916
2,886,209
2,976,150
2,868,180
327,831
362,990
377,499
370,785
237,787
505,915
510,255
493,419
472,226
439,178
1.03
%
1.24
%
1.40
%
1.47
%
1.56
%
7.7
9.2
10.7
12.0
12.7
3.73
3.82
4.04
4.13
4.18
59.6
56.1
54.2
52.6
50.9
13.4
13.6
13.0
12.2
12.3
71.2
58.5
50.5
44.9
42.6
11.7
11.6
11.7
11.1
10.5
17.3
17.5
17.8
17.5
16.6
1.41
%
1.21
%
1.26
%
1.32
%
1.34
%
2.26
0.96
0.73
0.39
0.46
1.98
0.94
0.71
0.45
0.47
0.22
0.20
0.16
0.11
0.15
(1)
Adjusted for stock dividends.
2
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3
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4
Table of Contents
December 31,
2007
December 31, 2006
December 31, 2005
8% 9%
8% 9%
9% 10%
4% 6%
4% 6%
5% 7%
3% 5%
3% 5%
3% 5%
5
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6
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7
Table of Contents
2007
2006
2005
2004
2003
$
1.14
$
1.10
$
1.06
$
1.01
$
0.95
8
Table of Contents
Years Ended December 31,
2007
2006
2005
Tax
Effective
Tax
Effective
Tax
Effective
Average
Equivalent
Yield/
Average
Equivalent
Yield/
Average
Equivalent
Yield/
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
$
2,805,880
$
192,433
6.86
%
$
2,767,114
$
186,476
6.74
%
$
2,641,465
$
165,355
6.26
%
551,806
24,927
4.52
597,506
24,391
4.08
754,961
28,289
3.74
62,319
4,013
6.44
58,814
3,789
6.44
47,522
3,235
6.81
22,133
1,116
5.04
24,502
1,268
5.18
20,730
927
4.47
100,648
5,135
5.10
60,482
2,975
4.92
69,061
2,121
3.07
9,081
517
5.69
13,071
634
4.85
16,956
984
5.80
3,551,867
228,141
6.42
3,521,489
219,533
6.23
3,550,695
200,911
5.66
36,224
34,384
34,189
93,715
99,166
105,435
48,908
46,161
46,233
126,768
130,635
120,295
$
3,785,034
$
3,763,067
$
3,788,469
$
516,170
$
12,551
2.43
%
$
538,063
$
12,605
2.34
%
$
544,174
$
7,050
1.30
%
744,624
17,816
2.39
714,920
12,326
1.72
858,143
9,426
1.10
1,130,189
50,867
4.50
1,076,437
44,164
4.10
938,451
28,156
3.00
181,773
6,859
3.77
152,003
5,561
3.66
107,634
2,162
2.01
4,110
154
3.75
5,890
216
3.67
8,822
468
5.30
52,055
2,707
5.20
16,011
643
4.02
137,236
7,244
5.28
154,822
7,670
4.95
247,964
9,800
3.95
2,718,814
95,805
3.52
2,692,410
85,187
3.16
2,718,267
57,453
2.11
532,021
532,496
545,441
3,250,835
3,224,906
3,263,708
28,284
27,906
31,342
505,915
510,255
493,419
$
3,785,034
$
3,763,067
$
3,788,469
2.90
%
3.07
%
3.55
%
$
132,336
$
134,346
$
143,458
3.73
%
3.82
%
4.04
%
*
Taxable equivalent basis using a
federal income tax rate of 35%.
**
Nonaccrual loans are included in
average balances reported and are included in the calculation of
yields.
9
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2007 Compared to 2006
2006 Compared to 2005
Increase (Decrease)
Increase (Decrease)
Due to Changes in
Combined
Due to Changes in
Combined
Average
Average
Increase
Average
Average
Increase
Volume**
Yield/Rate**
(Decrease)*
Volume**
Yield/Rate**
(Decrease)*
$
2,459
$
3,498
$
5,957
$
8,097
$
13,024
$
21,121
(2,078
)
2,462
384
(6,160
)
2,603
(3,557
)
224
224
735
(181
)
554
2,046
114
2,160
(290
)
1,144
854
(215
)
98
(117
)
(203
)
(147
)
(350
)
2,436
6,172
8,608
2,179
16,443
18,622
101
(155
)
(54
)
(80
)
5,635
5,555
5,162
328
5,490
(1,776
)
4,676
2,900
1,475
5,228
6,703
4,575
11,433
16,008
(1,326
)
231
(1,095
)
2,443
2,958
5,401
(911
)
485
(426
)
(4,238
)
2,108
(2,130
)
4,501
6,117
10,618
924
26,810
27,734
$
(2,065
)
$
55
$
(2,010
)
$
1,255
$
(10,367
)
$
(9,112
)
*
Taxable equivalent basis using a
federal income tax rate of 35%.
**
The change in interest income and
interest expense due to both volume and rate has been allocated
to the volume and rate change in proportion to the relationship
of the absolute dollar amount of the change in each.
10
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11
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12
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Years Ended December 31,
2007
2006
2005
2004
2003
(Dollars in thousands)
$
525,894
$
545,591
$
517,852
$
468,970
$
405,929
747,400
726,554
704,684
697,779
628,815
137,252
145,933
158,376
120,900
138,280
838,545
835,263
785,160
758,789
762,284
550,343
554,319
540,623
537,102
541,052
$
2,799,434
$
2,807,660
$
2,706,695
$
2,583,540
$
2,476,360
$
34,098
$
34,148
$
34,166
$
33,179
$
30,672
(1,622
)
(1,389
)
(2,126
)
(1,270
)
(2,002
)
(1,675
)
(1,564
)
(88
)
(40
)
(1,272
)
(1,201
)
(484
)
(515
)
(453
)
(430
)
(102
)
(1,935
)
(1,976
)
(2,407
)
(2,175
)
(1,927
)
(6,988
)
(6,645
)
(4,986
)
(3,963
)
(4,071
)
249
370
110
464
174
21
6
11
7
7
30
18
98
29
105
38
494
521
533
555
500
812
995
683
1,131
719
(6,176
)
(5,650
)
(4,303
)
(2,832
)
(3,352
)
11,500
5,200
4,285
3,819
2,834
400
3,025
$
39,422
$
34,098
$
34,148
$
34,166
$
33,179
0.22
%
0.20
%
0.16
%
0.11
%
0.15
%
1.41
%
1.21
%
1.26
%
1.32
%
1.34
%
13
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14
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December 31, 2007
December 31, 2006
Due In
Due In
1 Year
1 to 5
Over 5
1 Year
1 to 5
Over 5
or Less
Years
Years
Total
or Less
Years
Years
Total
$
294,922
$
187,438
$
43,534
$
525,894
$
278,006
$
223,968
$
43,617
$
545,591
197,323
511,093
38,984
747,400
120,694
560,677
45,183
726,554
43,296
47,572
46,384
137,252
67,177
38,171
40,585
145,933
$
535,541
$
746,103
$
128,902
$
1,410,546
$
465,877
$
822,816
$
129,385
$
1,418,078
38
%
53
%
9
%
100
%
33
%
58
%
9
%
100
%
December 31, 2007
December 31, 2006
Amount
Percent
Amount
Percent
one year which have:
$
749,494
86
%
$
791,222
83
%
125,511
14
160,979
17
$
875,005
100
%
$
952,201
100
%
15
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16
Table of Contents
December 31,
2007
2006
2005
2004
2003
(Dollars in thousands)
$
10,961
$
4,203
$
3,133
$
3,245
$
3,902
19,672
9,612
2,950
1,343
1,550
12,979
2,552
3,741
8,516
2,887
3,853
3,133
694
3,468
985
884
676
545
55,596
20,239
14,561
8,397
6,691
1,958
1,693
825
106
777
4,170
2,232
2,002
924
174
1,470
1,158
1,717
1,023
2,371
166
1,414
592
524
584
7,764
6,671
5,136
1,653
4,656
63,360
26,910
19,697
10,050
11,347
11,132
8,852
6,801
6,799
6,002
$
74,492
$
35,762
$
26,498
$
16,849
$
17,349
2.26
%
0.96
%
0.73
%
0.39
%
0.46
%
1.98
%
0.94
%
0.71
%
0.45
%
0.47
%
17
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18
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19
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20
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21
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December 31,
2007
2006
2005
2004
2003
Percent
Percent
Percent
Percent
Percent
of Loans
of Loans
of Loans
of Loans
of Loans
in Each
in Each
in Each
in Each
in Each
Category
Category
Category
Category
Category
Allowance
to Total
Allowance
to Total
Allowance
to Total
Allowance
to Total
Allowance
to Total
Loan Type
Amount
Loans
Amount
Loans
Amount
Loans
Amount
Loans
Amount
Loans
(Dollars in thousands)
$
9,666
18.8
%
$
8,896
19.4
%
$
9,011
19.1
%
$
8,752
18.1
%
$
8,814
16.4
%
12,782
26.7
11,375
25.9
11,613
26.0
11,914
27.0
9,997
25.3
3,042
4.9
1,761
5.2
1,816
5.8
1,382
4.7
1,874
5.6
5,467
29.9
3,641
29.8
3,576
29.1
4,023
29.4
4,006
30.9
6,622
19.7
6,835
19.7
6,744
20.0
6,659
20.8
7,799
21.8
1,843
1,590
1,388
1,436
689
$
39,422
100.0
%
$
34,098
100.0
%
$
34,148
100.0
%
$
34,166
100.0
%
$
33,179
100.0
%
22
Table of Contents
Years Ended December 31,
2007
2006
2005
(In thousands)
$
20,549
$
20,993
$
20,371
8,347
7,906
7,909
3,031
3,068
2,363
2,968
2,707
2,726
2,978
2,472
1,877
773
778
917
2,117
1,742
1,663
1,122
912
1,053
4
(1,330
)
541
487
758
853
$
43,288
$
40,147
$
39,220
23
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24
Table of Contents
Years Ended December 31,
2007
2006
2005
(Dollars in thousands)
$
48,651
$
44,959
$
44,304
10,357
11,053
12,462
10,172
9,534
9,421
8,722
8,842
8,867
2,841
2,599
2,559
1,544
1,335
1,145
4,382
2,645
3,367
3,495
2,141
1,347
1,132
1,391
2,012
1,854
1,645
1,720
1,786
2,087
2,152
1,829
1,868
1,696
2,909
2,899
1,728
4,997
4,876
5,683
$
104,671
$
97,874
$
98,463
1,368
1,443
1,434
59.6
%
56.1
%
54.2
%
25
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26
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27
Table of Contents
Maturity**
After One
After Five
Total
Within
but Within
but Within
After
Carrying
Total
One Year
Five Years
Ten Years
Ten Years
Value
Fair
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Value
(Dollars in thousands)
$
9,983
3.98
%
$
21,467
4.73
%
$
%
$
%
$
31,450
4.49
%
$
31,450
78,833
4.23
114,674
4.82
451
5.20
193,958
4.58
193,958
1,553
7.86
2,930
7.77
2,031
6.62
6,514
7.43
6,514
39,091
4.39
116,144
4.49
25,751
4.99
34,734
5.30
215,720
4.66
215,720
94
6.48
219
6.47
112
6.13
150
5.72
575
6.21
575
6,921
5.14
47,631
5.11
54,552
5.11
54,552
502
8.72
502
8.72
502
136,475
4.35
303,065
4.76
28,345
5.11
35,386
5.35
503,271
4.71
503,271
17,690
3.55
1,028
3.67
18,718
3.56
18,641
7,437
4.09
31,181
3.58
21,282
4.46
11,999
5.38
71,899
4.19
72,354
71
8.21
185
7.78
177
7.41
193
6.39
626
7.30
662
25,198
3.72
32,394
3.61
21,459
4.48
12,192
5.40
91,243
4.08
91,657
$
161,673
4.25
%
$
335,459
4.65
%
$
49,804
4.84
%
$
47,578
5.36
%
$
594,514
4.61
%
$
594,928
*
Yields are weighted by amount and
time to contractual maturity, are on a taxable equivalent basis
using a 35% federal income tax rate and are based on amortized
cost.
**
Mortgage-backed securities and
collateralized mortgage obligations are based on scheduled
principal maturity. Equity securities have no stated maturity.
All others are based on final contractual maturity.
28
Table of Contents
December 31,
2007
2006
2005
(In thousands)
$
31,450
$
22,850
$
43,755
193,958
228,365
220,080
6,514
8,254
9,370
215,720
249,224
297,811
575
775
1,079
54,552
10,547
21,544
502
852
852
503,271
520,867
594,491
18,718
39,731
79,327
71,899
53,996
47,438
626
837
1,041
91,243
94,564
127,806
$
594,514
$
615,431
$
722,297
December 31
2007
2006
2005
27.2
%
25.0
%
23.8
%
56.4
58.9
60.7
8.4
9.3
7.9
8.0
6.8
7.6
100.0
%
100.0
%
100.0
%
December 31,
2007
2006
2005
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in thousands)
$
129,801
44
%
$
210,717
59
%
$
141,242
46
%
50,191
17
57,038
16
65,326
21
68,308
23
73,997
21
52,388
17
49,636
16
13,929
4
50,741
16
$
297,936
100
%
$
355,681
100
%
$
309,697
100
%
29
Table of Contents
December 31, 2007
Minimum Payments Due by Period
Less than
More than
1 year
1-3 years
3-5 years
5 years
Total
(In thousands)
$
1,797,306
$
$
$
$
1,797,306
844,064
216,097
7,462
10,660
1,078,283
197,363
197,363
65,024
85,025
150,049
241
453
127
821
4,416
7,096
3,823
338
15,673
$
2,908,414
$
308,671
$
11,412
$
10,998
$
3,239,495
30
Table of Contents
December 31, 2007
Expected Expiration Dates by Period
Less than
More than
1 year
1-3 years
3-5 years
5 years
Total
(In thousands)
$
264,090
$
68,528
$
33,395
$
38,639
$
404,652
101,736
101,736
22,160
6,124
100
10
28,394
$
387,986
$
74,652
$
33,495
$
38,649
$
534,782
31
Table of Contents
Year-End 2007 Twelve Month
Projection
Interest Rate Change Projection (in basis points)
−200
−100
0
+100
+200
2.0
%
1.0
%
(1.2
)%
(2.5
)%
−200
−100
0
+100
+200
2.6
%
1.4
%
(1.4
)%
(3.1
)%
32
Table of Contents
December 31, 2007
Risk-Based
Leverage
Capital Ratios
Ratio
Tier 1
Total
11.9
%
16.1
%
17.3
%
5.0
6.0
10.0
4.0
4.0
8.0
33
Table of Contents
Total
Average
Total Number of Shares
Maximum Number of
Number of
Price
Purchased as Part of
Shares that May Yet
Period Beginning on First Day
Of
Shares
Paid Per
Publicly Announced
Be Purchased Under
Month Ended
Purchased(1)
Share
Plans or Programs
the Plans or Programs
1,342
$
33.47
54,542
54,542
23,000
28.71
23,000
31,542
3,664
30.16
500,000
269,800
27.11
269,800
230,200
180,000
26.75
180,000
50,200
204,500
23.27
204,500
345,700
184,487
22.65
183,500
162,200
24,500
24.31
24,500
137,700
137,700
106,699
23.24
103,675
34,025
34,025
24.14
34,025
1,032,017
$
24.98
1,023,000
(1)
Includes shares delivered or
attested in satisfaction of the exercise price and/or tax
withholding obligations by holders of employee stock options who
exercised options in 2007. The Corporations stock
compensation plans permit employees to use stock to satisfy such
obligations based on the market value of the stock on the date
of exercise.
34
Table of Contents
35
Table of Contents
36
Table of Contents
OF INTERNAL CONTROL OVER FINANCIAL REPORTING
Lori A. Gwizdala
Executive Vice President, Chief Financial Officer
and Treasurer
February 28, 2008
37
Table of Contents
Chemical Financial Corporation:
38
Table of Contents
Chemical Financial Corporation:
39
Table of Contents
December 31,
2007
2006
(In thousands, except share data)
$
125,285
$
135,544
58,000
49,500
6,228
5,712
189,513
190,756
503,271
520,867
91,243
94,564
22,135
22,131
7,883
5,667
2,799,434
2,807,660
(39,422
)
(34,098
)
2,760,012
2,773,562
49,930
49,475
69,908
70,129
6,876
8,777
53,542
53,319
$
3,754,313
$
3,789,247
LIABILITIES AND SHAREHOLDERS EQUITY
$
535,705
$
551,177
2,339,884
2,346,908
2,875,589
2,898,085
22,848
29,235
197,363
208,969
150,049
145,072
3,245,849
3,281,361
24,827,566 shares at December 31, 2006
23,815
24,828
344,579
368,554
141,867
123,454
(1,797
)
(8,950
)
508,464
507,886
$
3,754,313
$
3,789,247
40
Table of Contents
Years Ended December 31,
2007
2006
2005
(In thousands, except per share data)
$
191,480
$
185,598
$
164,830
24,927
24,391
28,289
2,719
2,557
2,153
1,116
1,268
927
5,135
2,975
2,121
517
634
984
225,894
217,423
199,304
81,234
69,095
44,632
7,327
8,422
3,021
7,244
7,670
9,800
95,805
85,187
57,453
130,089
132,236
141,851
11,500
5,200
4,285
118,589
127,036
137,566
20,549
20,993
20,371
8,347
7,906
7,909
9,750
9,025
7,883
2,117
1,742
1,663
1,053
4
(1,330
)
541
2,521
758
853
43,288
40,147
39,220
59,008
56,012
56,766
10,172
9,534
9,421
8,722
8,842
8,867
26,769
23,486
23,409
104,671
97,874
98,463
57,206
69,309
78,323
18,197
22,465
25,445
$
39,009
$
46,844
$
52,878
$
1.60
$
1.88
$
2.10
1.60
1.88
2.10
1.14
1.10
1.06
41
Table of Contents
Years Ended December 31, 2007, 2006 and 2005
Accumulated
Other
Common
Retained
Comprehensive
(In thousands, except per share
data)
Stock
Surplus
Earnings
Income (Loss)
Total
$
25,169
$
378,694
$
80,266
$
707
$
484,836
52,878
(6,922
)
(352
)
45,604
(26,637
)
(26,637
)
31
847
878
6
225
231
(127
)
(3,720
)
(3,847
)
25,079
376,046
106,507
(6,567
)
501,065
4,582
4,582
46,844
1,725
865
49,434
(4,973
)
(4,973
)
(27,403
)
(27,403
)
(7,076
)
(7,076
)
59
1,274
1,333
8
247
255
(318
)
(9,025
)
(9,343
)
12
12
24,828
368,554
123,454
(8,950
)
507,886
40
40
39,009
5,556
(3
)
1,600
46,162
(20,636
)
(20,636
)
2
31
33
7
216
223
1
44
45
(1,023
)
(24,488
)
(25,511
)
222
222
$
23,815
$
344,579
$
141,867
$
(1,797
)
$
508,464
42
Table of Contents
Years Ended December 31,
2007
2006
2005
(In thousands)
$
39,009
$
46,844
$
52,878
11,500
5,200
4,285
(1,289
)
(1,859
)
(1,048
)
137,056
133,463
110,430
(137,983
)
(119,870
)
(110,856
)
(4
)
1,330
(541
)
(181
)
344
396
(912
)
(1,122
)
406
5,688
5,762
6,041
2,781
2,876
3,273
516
1,224
4,161
222
12
(2,981
)
(417
)
67
4,884
(9,236
)
(1,392
)
907
(998
)
(497
)
58,497
64,675
67,197
137,486
123,414
208,602
66,673
114,341
(111,702
)
(114,772
)
(234,940
)
28,847
46,068
90,524
(25,682
)
(13,089
)
(42,616
)
3,572
(5
)
(4,651
)
(1,065
)
(6,825
)
(116,958
)
(134,716
)
(13,882
)
4,298
6,493
6,406
1,122
1,825
(7,012
)
(10,815
)
(3,522
)
22,352
(27,947
)
3,014
38,468
(75,362
)
(166,522
)
(60,964
)
153,567
122,929
18,394
53,371
23,764
(10,000
)
10,000
135,000
108,000
(30,000
)
(173,000
)
(40,000
)
35,000
35,000
35,000
(30,023
)
(86,693
)
(123,231
)
(27,712
)
(27,403
)
(26,637
)
223
255
231
12
224
21
916
664
(25,511
)
(9,343
)
(3,847
)
(82,092
)
(3,468
)
(59,649
)
(1,243
)
33,260
10,562
190,756
157,496
146,934
$
189,513
$
190,756
$
157,496
$
96,039
$
83,977
$
56,114
20,165
23,920
24,660
8,875
10,743
7,258
43
Table of Contents
44
Table of Contents
45
Table of Contents
46
Table of Contents
47
Table of Contents
2005
$
52,878
(2,592
)
$
50,286
$
2.10
2.00
2.10
2.00
48
Table of Contents
49
Table of Contents
2007
2006
2005
(In thousands, except per share data)
$
39,009
$
46,844
$
52,878
24,360
24,921
25,138
11
34
55
24,371
24,955
25,193
$
1.60
$
1.88
$
2.10
1.60
1.88
2.10
December 31,
2007
2006
2005
(In thousands)
$
1,576
$
(3,977
)
$
(6,567
)
(3,373
)
(4,973
)
$
(1,797
)
$
(8,950
)
$
(6,567
)
50
Table of Contents
51
Table of Contents
52
Table of Contents
53
Table of Contents
December 31,
2007
Amortized Cost
Unrealized Gains
Unrealized Losses
Fair Value
(In thousands)
$
30,924
$
526
$
$
31,450
191,889
2,237
168
193,958
6,391
125
2
6,514
215,656
1,041
977
215,720
567
9
1
575
54,919
22
389
54,552
500,346
3,960
1,537
502,769
502
502
$
500,848
$
3,960
$
1,537
$
503,271
$
23,025
$
$
175
$
22,850
230,403
18
2,056
228,365
8,091
163
8,254
253,202
235
4,213
249,224
760
16
1
775
10,654
107
10,547
526,135
432
6,552
520,015
852
852
$
526,987
$
432
$
6,552
$
520,867
December 31,
2007
Amortized Cost
Unrealized Gains
Unrealized Losses
Fair Value
(In thousands)
$
18,718
$
$
77
$
18,641
71,899
488
33
72,354
626
36
662
$
91,243
$
524
$
110
$
91,657
$
39,731
$
$
663
$
39,068
53,996
358
125
54,229
837
38
875
$
94,564
$
396
$
788
$
94,172
54
Table of Contents
December 31, 2007
Amortized Cost
Fair Value
(In thousands)
$
136,436
$
136,475
300,866
303,065
28,169
28,345
34,875
34,884
502
502
$
500,848
$
503,271
December 31, 2007
Amortized Cost
Fair Value
(In thousands)
$
25,198
$
25,145
32,394
32,558
21,459
21,703
12,192
12,251
$
91,243
$
91,657
55
Table of Contents
December 31, 2007
Less Than 12 Months
12 Months or More
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses
Value
Losses
(In thousands)
$
$
$
76,106
$
245
$
76,106
$
245
2,334
16
4,199
19
6,533
35
63
1
116,367
976
116,430
977
181
1
181
1
39,395
368
2,330
21
41,725
389
$
41,792
$
385
$
199,183
$
1,262
$
240,975
$
1,647
December 31, 2006
Less Than 12 Months
12 Months or More
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses
Value
Losses
(In thousands)
$
13,032
$
38
$
9,818
$
137
$
22,850
$
175
76,769
208
175,092
2,511
251,861
2,719
2,186
9
7,920
116
10,106
125
21,354
122
199,197
4,091
220,551
4,213
71
237
1
308
1
294
1
10,253
106
10,547
107
$
113,706
$
378
$
402,517
$
6,962
$
516,223
$
7,340
2007
2006
2005
(In thousands)
$
2,398
$
2,423
$
3,197
880
764
347
(995
)
(789
)
(1,121
)
$
2,283
$
2,398
$
2,423
$
569,806
$
551,819
$
544,112
$
3,845
$
4,316
$
4,409
56
Table of Contents
December 31,
2007
2006
(In thousands)
$
525,894
$
545,591
747,400
726,554
137,252
145,933
838,545
835,263
550,343
554,319
$
2,799,434
$
2,807,660
2007
2006
2005
(In thousands)
$
34,098
$
34,148
$
34,166
(6,988
)
(6,645
)
(4,986
)
812
995
683
(6,176
)
(5,650
)
(4,303
)
11,500
5,200
4,285
400
$
39,422
$
34,098
$
34,148
57
Table of Contents
December 31,
2007
2006
2005
(In thousands)
$
10,961
$
4,203
$
3,133
19,672
9,612
2,950
12,979
2,552
3,741
8,516
2,887
3,853
3,468
985
884
55,596
20,239
14,561
1,958
1,693
825
4,170
2,232
2,002
174
1,470
1,158
1,717
166
1,414
592
7,764
6,671
5,136
$
63,360
$
26,910
$
19,697
Impaired Loans
Valuation Allowance
2007
2006
2005
2007
2006
2005
(In thousands)
$
22,224
$
3,770
$
5,067
$
4,616
$
912
$
1,284
23,631
16,063
4,757
$
45,855
$
19,833
$
9,824
$
4,616
$
912
$
1,284
$
31,123
$
14,586
$
5,120
58
Table of Contents
December 31,
2007
2006
(In thousands)
$
10,898
$
9,427
63,901
65,290
41,150
37,271
115,949
111,988
(66,019
)
(62,513
)
$
49,930
$
49,475
December 31,
2007
2006
(In thousands)
$
535,705
$
551,177
521,886
523,287
739,715
684,374
297,936
355,681
780,347
783,566
$
2,875,589
$
2,898,085
Years Ended December 31,
2007
2006
2005
(In thousands)
$
20,549
$
20,993
$
20,371
8,347
7,906
7,909
3,031
3,068
2,363
2,968
2,707
2,726
2,978
2,472
1,877
773
778
917
2,117
1,742
1,663
1,122
912
1,053
4
(1,330
)
541
487
758
853
$
43,288
$
40,147
$
39,220
59
Table of Contents
Years Ended December 31,
2007
2006
2005
(In thousands)
$
48,651
$
44,959
$
44,304
10,357
11,053
12,462
10,172
9,534
9,421
8,722
8,842
8,867
2,841
2,599
2,559
1,544
1,335
1,145
4,382
2,645
3,367
3,495
2,141
1,347
1,132
1,391
2,012
1,854
1,645
1,720
1,786
2,087
2,152
1,829
1,868
1,696
2,909
2,899
1,728
4,997
4,876
5,683
$
104,671
$
97,874
$
98,463
2007
2006
2005
(In thousands)
$
20,022
$
24,258
$
27,413
(1,377
)
(1,295
)
(923
)
(448
)
(498
)
(1,045
)
$
18,197
$
22,465
$
25,445
2007
2006
2005
(In thousands)
$
21,178
$
22,882
$
25,378
(2,981
)
(417
)
67
$
18,197
$
22,465
$
25,445
60
Table of Contents
December 31,
2007
2006
(In thousands)
$
13,722
$
11,798
1,376
1,164
2,142
1,059
397
966
856
2,452
2,128
19,575
18,485
799
839
2,336
1,970
848
598
804
2,265
1,203
6,846
4,816
$
12,729
$
13,669
61
Table of Contents
December 31,
Asset Category
2007
2006
62
%
61
%
32
33
6
6
100
%
100
%
2007
2006
(In thousands)
$
75,580
$
84,772
1,863
3,177
4,448
4,452
(5,309
)
(9,993
)
(4,376
)
(2,864
)
(3,964
)
306
72,512
75,580
79,873
76,155
2,548
6,582
(4,376
)
(2,864
)
78,045
79,873
5,533
4,293
6,345
8,581
(21
)
(26
)
11,857
12,848
(6,324
)
(8,555
)
$
5,533
$
4,293
62
Table of Contents
2007
2006
2005
6.50
%
6.00
%
5.60
%
6.00
6.00
5.75
7.00
7.00
8.00
4.25
4.25
5.00
(1)
The Pension Plan discount rate was
5.60% from January 1 through May 31, 2006. The discount
rate was changed to 6.25% effective June 1, 2006 in
conjunction with the partial freeze of the Pension Plan,
resulting in an average discount rate of 6.00% in 2006.
2007
2006
2005
(In thousands)
$
1,863
$
3,177
$
4,879
4,448
4,452
4,273
(5,621
)
(5,853
)
(5,845
)
(5
)
(13
)
(24
)
282
473
(108
)
306
$
991
$
1,937
$
3,756
$
3,266
3,478
3,719
4,185
4,637
26,849
$
46,134
63
Table of Contents
2007
2006
(In thousands)
$
632
$
789
15
21
37
43
(23
)
(180
)
(41
)
(41
)
620
632
41
41
(41
)
(41
)
620
632
101
79
721
711
(101
)
(79
)
$
620
$
632
2007
2006
2005
6.50
%
6.00
%
5.60
%
6.00
5.60
5.75
4.25
4.25
5.00
2007
2006
2005
(In thousands)
$
16
$
21
$
15
37
43
38
(2
)
2
$
51
$
66
$
53
$
41
40
40
40
40
275
$
476
64
Table of Contents
2007
2006
(In thousands)
$
4,779
$
5,427
261
271
(503
)
(613
)
(248
)
(306
)
4,289
4,779
248
306
(248
)
(306
)
4,289
4,779
(563
)
(1,095
)
1,597
1,921
5,323
5,605
(1,034
)
(826
)
$
4,289
$
4,779
2007
2006
2005
(In thousands)
$
261
$
271
$
281
(324
)
(325
)
(324
)
28
56
61
$
(35
)
$
2
$
18
65
Table of Contents
$
347
360
368
375
376
1,788
$
3,614
2007
2006
2005
6.50
%
6.00
%
5.60
%
6.00
5.60
5.75
9.00
9.00
10.50
One Percentage-
One Percentage-
Point Increase
Point Decrease
(In thousands)
$
24
$
(21
)
396
(348
)
Pension
Supplemental
Postretirement
Plan
Plan
Plan
Total
(In thousands)
$
(5,561
)
$
51
$537
$
(4,973
)
(3
)
(211
)
(214
)
1,454
14
346
1,814
1,451
14
135
1,600
$
(4,110
)
$
65
$672
$
(3,373
)
66
Table of Contents
Pension
Supplemental
Postretirement
Plan
Plan
Plan
Total
(In thousands)
$
(3
)
$
$
(211
)
$
(214
)
3
7
10
$
(3
)
$
3
$
(204
)
$
(204
)
Before Application of
After Application of
SFAS 158
Adjustment
SFAS 158
(In thousands)
$
59,197
$
(5,878
)
$
53,319
3,795,125
(5,878
)
3,789,247
30,140
(905
)
29,235
3,282,266
(905
)
3,281,361
3,977
4,973
8,950
512,859
(4,973
)
507,886
$
12,848
$
(8,555
)
$
4,293
10,992
2,677
13,669
711
(79
)
632
5,605
(826
)
4,779
*
Included in interest receivable and
other assets in the consolidated statement of financial position.
**
Included in interest payable and
other liabilities in the consolidated statement of financial
position.
67
Table of Contents
Maximum
Weighted Average
Average Amount
Weighted Average
Outstanding
Ending
Interest Rate At
Outstanding
Interest Rate
at any
Balance
Year-End
During Year
During Year
Month-End
(Dollars in thousands)
$
197,363
3.08
%
$
181,766
3.77
%
$
203,322
8,822
5.31
20,000
$
197,363
3.08
%
$
190,588
3.84
%
$
223,322
$
178,969
3.91
%
$
152,003
3.66
%
$
178,969
4,109
3.74
10,000
30,000
5.28
52,055
5.20
125,000
$
208,969
4.13
%
$
208,167
4.05
%
$
313,969
$
125,598
2.76
%
$
107,634
2.01
%
$
127,613
10,000
3.64
5,890
3.66
10,000
68,000
4.41
16,011
4.02
68,000
$
203,598
3.35
%
$
129,535
2.33
%
$
205,613
December 31, 2007
December 31, 2006
Weighted Average
Weighted Average
Ending
Interest Rate
Ending
Interest Rate
Balance
At Year-End
Balance
At Year-End
(Dollars in thousands)
$
95,049
4.62
%
$
65,072
4.76
%
55,000
5.72
80,000
5.68
$
150,049
5.02
%
$
145,072
5.26
%
68
Table of Contents
$
65,024
45,025
40,000
$
150,049
69
Table of Contents
2007
2006
(In thousands)
$
70,129
$
63,293
(221
)
6,836
$
69,908
$
70,129
December 31, 2007
December 31, 2006
Original
Accumulated
Carrying
Original
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
(In thousands)
$
18,033
$
13,440
$
4,593
$
21,956
$
15,577
$
6,379
$
2,781
2,087
2,152
$
1,542
718
470
406
406
1,051
$
4,593
70
Table of Contents
2007
2005
3.50%
3.20%
34.40%
33.00%
4.25%-5.04%
4.45%
6.87
7.00
71
Table of Contents
Weighted
Weighted-Average
Average
Remaining
Aggregate
Number of
Exercise Price
Contractual Terms
Intrinsic Value
Options
Per Share
(In years)
(In thousands)
626,015
$
30.73
177,450
32.28
(50,562
)
22.53
(7,475
)
33.33
745,428
31.63
(97,896
)
21.75
(6,038
)
30.92
641,494
33.15
182,223
24.76
(10,920
)
26.33
(19,016
)
26.38
793,781
$
31.26
6.66
$
6
611,558
$
33.20
5.79
$
6
72
Table of Contents
Options Outstanding
Options Exercisable
Weighted
Weighted
Average
Range of
Average
Exercise
Exercise
Exercise
Number
Price
Average
Prices
Number
Price
Outstanding
Per Share
Term*
Per Share
Exercisable
Per Share
29,686
$
23.60
3.71
$
23.14 - $23.63
29,686
$
23.60
182,223
24.76
9.55
24.07 - 24.82
154,719
27.36
2.42
26.17 - 27.78
154,719
27.36
168,800
32.28
7.97
32.28
168,800
32.28
83,003
35.67
5.95
35.67
83,003
35.67
175,350
39.69
6.95
39.69
175,350
39.69
793,781
$
31.26
6.66
$
23.14 - $39.69
611,558
$
33.20
*
Weighted average remaining
contractual term in years
73
Table of Contents
$
4,416
3,649
3,447
2,052
1,771
338
$
15,673
74
Table of Contents
December 31, 2007
Risk-Based Capital
Leverage
Tier 1
Total
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in millions)
$
436
12
%
$
436
16
%
$
470
17
%
147
4
109
4
217
8
184
5
163
6
271
10
426
12
426
16
459
17
147
4
108
4
217
8
183
5
162
6
271
10
December 31, 2006
Risk-Based Capital
Leverage
Tier 1
Total
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in millions)
$
440
12
%
$
440
16
%
$
474
18
%
148
4
108
4
217
8
185
5
163
6
271
10
432
12
432
16
466
17
148
4
108
4
216
8
185
5
162
6
270
10
75
Table of Contents
76
Table of Contents
2007
2006
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
(In thousands)
$
125,285
$
125,285
$
135,544
$
135,544
64,228
64,228
55,212
55,212
616,649
617,063
637,562
637,170
7,883
7,883
5,667
5,667
2,760,012
2,732,531
2,773,562
2,717,617
16,872
16,872
17,755
17,755
$
1,797,306
$
1,797,306
$
1,758,838
$
1,758,838
1,078,283
1,077,488
1,139,247
1,136,374
4,594
4,594
4,828
4,828
197,363
197,363
208,969
208,954
150,049
152,533
145,072
145,945
77
Table of Contents
December 31,
Condensed Statements of
Financial Position
2007
2006
(In thousands)
$
4,285
$
9,616
500
850
497,312
498,859
5,469
5,710
1,092
1,092
359
320
$
509,017
$
516,447
$
553
$
8,561
553
8,561
508,464
507,886
$
509,017
$
516,447
Years Ended December 31,
Condensed Statements of
Income
2007
2006
2005
(In thousands)
$
49,000
$
28,000
$
27,000
475
393
593
506
57
137
213
88
536
848
8
9
155
49,458
28,827
29,733
2,019
1,720
4,486
2,019
1,720
4,486
47,439
27,107
25,247
545
599
1,134
(8,975
)
19,123
26,717
15
(220
)
$
39,009
$
46,844
$
52,878
78
Table of Contents
Years Ended December 31,
Condensed Statements of Cash
Flows
2007
2006
2005
(In thousands)
$
39,009
$
46,844
$
52,878
(848
)
439
328
937
16
42
8,975
(19,138
)
(26,497
)
(39
)
190
(483
)
(245
)
(989
)
346
48,139
27,251
26,375
(643
)
1,360
(198
)
(1,132
)
(498
)
(241
)
(1,041
)
350
100
250
1,531
(491
)
87
242
(27,712
)
(27,403
)
(26,637
)
223
255
231
21
916
664
(25,511
)
(9,343
)
(3,847
)
(52,979
)
(35,575
)
(29,589
)
(5,331
)
(8,237
)
(2,972
)
9,616
17,853
20,825
$
4,285
$
9,616
$
17,853
79
Table of Contents
2007
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
(In thousands, except per share data)
$
55,925
$
57,086
$
57,157
$
55,726
24,151
24,666
24,684
22,304
31,774
32,420
32,473
33,422
1,625
2,500
2,900
4,475
10,043
11,356
11,057
10,832
26,758
27,221
25,170
25,522
13,434
14,055
15,460
14,257
4,393
4,543
4,850
4,411
$
9,041
$
9,512
$
10,610
$
9,846
$
0.36
$
0.39
$
0.44
$
0.41
0.36
0.39
0.44
0.41
2006
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
(In thousands, except per share data)
$
52,277
$
53,391
$
55,556
$
56,199
18,686
20,174
22,817
23,510
33,591
33,217
32,739
32,689
460
400
1,750
2,590
(1,330
)
9,832
10,518
9,896
11,231
25,121
25,076
24,196
23,481
17,842
18,259
16,689
16,519
5,945
6,030
5,199
5,291
$
11,897
$
12,229
$
11,490
$
11,228
$
0.47
$
0.49
$
0.46
$
0.45
0.47
0.49
0.46
0.45
80
Table of Contents
CORPORATION COMMON STOCK AND RELATED
SHAREHOLDER MATTERS (UNAUDITED)
2007
2006
High
Low
High
Low
$
33.85
$
27.29
$
33.18
$
30.28
30.94
25.70
32.45
28.56
31.65
21.00
30.89
28.65
27.94
22.00
33.96
29.02
Years Ended December 31,
2007
2006
2005
2004
2003
$
0.285
$
0.275
$
0.265
$
0.252
$
0.238
0.285
0.275
0.265
0.252
0.238
0.285
0.275
0.265
0.252
0.238
0.285
0.275
0.265
0.252
0.238
$
1.140
$
1.100
$
1.060
$
1.008
$
0.952
81
Table of Contents
S&P
Chemical
500
Financial
KBW 50
Stock
December 31
Corporation
Index
Index
2002
$
100.0
$
100.0
$
100.0
2003
122.7
134.0
128.6
2004
148.0
147.5
142.6
2005
119.5
149.2
149.6
2006
129.8
178.2
173.1
2007
96.7
137.2
182.6
82
Table of Contents
(a diversified company specializing in the development,
manufacture and marketing of silicones and related silicon-based
products)
(a holding company with interests in diversified businesses in
Southwest Michigan)
(an accounting and tax services company)
(a company that purchases, sells and leases farm equipment)
(a diversified science and technology company that manufactures
chemical, plastic and agricultural products)
(a health care organization)
(an automotive parts distribution company)
(a diversified science and technology company that manufactures
chemical, plastic and agricultural products)
(a company that provides supply chain, material distribution,
logistics support and construction services to the electric and
gas utility industry)
83
Table of Contents
84
Table of Contents
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2007
or
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from
to
.
Michigan
(State or Other Jurisdiction of
Incorporation or Organization)
38-2022454
(I.R.S. Employer Identification No.)
235 E. Main Street
Midland, Michigan
(Address of Principal Executive Offices)
48640
(Zip Code)
Yes ü No
Yes No ü
Yes ü No
Yes No ü
85
Table of Contents
Pages
Business
87-91
Selected Financial Data
2
Managements Discussion and Analysis Subheadings:
Net Interest Income
8-11
Loans
12-15
Nonperforming Assets
16-19
Provision and Allowance for
Loan Losses
20-22
Liquidity Risk
27-29
Market Risk
31-32
Average Balances, Tax Equivalent Interest and
Effective Yields and Rates
9
Volume and Rate Variance Analysis
10
Summary of Loans and Loan Loss Experience
13
Comparison of Loan Maturities and Interest
Sensitivity
15
Nonperforming Assets
17
Allocation of the Allowance for Loan Losses
22
Maturities and Yields of Investment Securities at
December 31, 2007
28
Summary of Investment Securities
29
Maturity Distribution of Time Deposits of
$100,000 or More
29
Investment Securities
54-56
Loans
57-58
Short-term Borrowings
68
Risk Factors
91
Unresolved Staff Comments
92
Properties
92
Legal Proceedings
92
Submission of Matters to a Vote of Security
Holders
92
Executive Officers of the Registrant
92-93
86
Table of Contents
87
Table of Contents
88
Table of Contents
89
Table of Contents
90
Table of Contents
Variations in quarterly or annual operating results
Deterioration in asset quality
Changes in interest rates
Declining real estate values
New developments in the banking industry
Regulatory actions
Volatility of stock market prices and volumes
Changes in market valuations of similar companies
Current uncertainties and fluctuations in the financial markets
and stocks of financial services providers due to concerns about
credit availability and concerns about the Michigan economy in
particular
Changes in securities analysts estimates of financial
performance
New litigation or contingencies or changes in existing
litigation or contingencies
Changes in accounting policies or procedures as may be required
by the Financial Accounting Standards Board or other regulatory
agencies
Rumors or erroneous information
91
Table of Contents
Item 1B.
Unresolved
Staff Comments.
Item 2.
Properties.
Item 3.
Legal
Proceedings.
92
Table of Contents
93
Table of Contents
Item 5.
Market
for the Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.
Item 6.
Selected
Financial Data.
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations.
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk.
Item 8.
Financial
Statements and Supplementary Data.
94
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Item 9A.
Controls
and Procedures.
Item 9B.
Other
Information.
95
Table of Contents
Item 10.
Directors,
Executive Officers and Corporate Governance.
Item 11.
Executive
Compensation.
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
Equity Compensation Plan Information
Number of Securities
Remaining Available for
Number of Securities to be
Weighted-Average
Future Issuance under
Issued upon Exercise of
Exercise Price of
Equity Compensation
Outstanding Options,
Outstanding Options,
Plans (excluding Securities
Warrants and Rights
Warrants and Rights
Reflected in Column (a))
Plan category
(a)
(b)
(c)
Equity compensation plans approved by security holders
789,794
$
31.29
816,414
Equity compensation plans not approved by security holders
3,987
25.49
41,729
793,781
$
31.26
858,143
96
Table of Contents
97
Table of Contents
Item 13.
Certain
Relationships and Related Transactions and Director
Independence.
Item 14.
Principal
Accountant Fees and Services.
Item 15.
Exhibits
and Financial Statement Schedules.
(a) (1)
Financial Statements. The following financial
statements and reports of the independent registered public
accounting firms of Chemical Financial Corporation and its
subsidiary are filed as part of this report:
Pages
40
41
42
43
44-80
38-39
95
(2)
Financial Statement Schedules. The schedules
for the Corporation are omitted because of the absence of
conditions under which they are required, or because the
information is set forth in the consolidated financial
statements or the notes thereto.
98
Table of Contents
(3)
Exhibits. The following lists the Exhibits to the Annual
Report on
Form 10-K:
Restated Articles of Incorporation. Previously filed as
Exhibit 4.1 to the registrants Registration Statement
on
Form S-8,
filed with the SEC on March 2, 2001. Here incorporated by
reference.
Restated Bylaws. Previously filed as Exhibit 3.2 to the
registrants Quarterly Report on
Form 10-Q
for the fiscal quarter ended September 30, 2004, filed with
the SEC on November 5, 2004. Here incorporated by reference.
Long-Term Debt. The registrant has outstanding long-term debt
which at the time of this report does not exceed 10% of the
registrants total consolidated assets. The registrant
agrees to furnish copies of the agreements defining the rights
of holders of such long-term debt to the SEC upon request.
Chemical Financial Corporation Stock Incentive Plan of 2006.*
Previously filed as an exhibit to the registrants
Form 8-K,
filed with the SEC on April 21, 2006. Herein incorporated
by reference.
Chemical Financial Corporation Stock Incentive Plan of 1997 and
Underlying Agreements.* Previously filed as Exhibit 10.1 to
the registrants Annual Report on
Form 10-K
for the fiscal year ended December 31, 2004, filed with the
SEC on March 15, 2005. Here incorporated by reference.
Chemical Financial Corporation Deferred Compensation Plan for
Directors.* Previously filed as Exhibit 10.3 to the
registrants Annual Report on
Form 10-K
for the fiscal year ended December 31, 2005, filed with the
SEC on March 13, 2006. Here incorporated by reference.
Chemical Financial Corporation Deferred Compensation Plan.*
Previously filed as Exhibit 10.4 to the registrants
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006, filed with the
SEC on March 1, 2007. Here incorporated by reference.
Chemical Financial Corporation Supplemental Pension Plan.*
Previously filed as Exhibit 10.4 to the registrants
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2003, filed with the
SEC on March 12, 2004. Here incorporated by reference.
Chemical Financial Corporation Stock Option Plan for Holders of
Shoreline Financial Corporation.* Previously filed as
Exhibit 4.3 to the registrants Registration Statement
on
Form S-8,
filed with the SEC on March 2, 2001. Here incorporated by
reference.
Chemical Financial Corporation 2001 Stock Purchase Plan for
Subsidiary and Community Bank Directors.* Previously filed as
Exhibit 4.3 to the registrants Registration Statement
on
Form S-8,
filed with the SEC on March 25, 2002. Here incorporated by
reference.
Separation and Release Agreement with James R. Milroy.*
Retirement and Release Agreement with John Reisner.*
Subsidiaries.
Consent of KPMG LLP.
Consent of Ernst & Young LLP.
Consent of Andrews Hooper & Pavlik P.L.C.
Powers of Attorney.
Certification of Chief Executive Officer.
Certification of Chief Financial Officer.
Certification pursuant to 18 U.S.C. §1350.
Chemical Financial Corporation 2001 Stock Purchase Plan for
Subsidiary and Community Bank Directors Audited Financial
Statements and Notes.
99
Table of Contents
100
5. Revocation Period. Employee acknowledges that for a period of seven (7) days following the execution of the Agreement, he may revoke this Agreement and the Agreement shall not become effective or enforceable until the revocation period has expired without Employee having revoked the Agreement (the "Effective Date"). Revocation is to be effective by delivering a written notice of revocation to the Director of Human Resources, 333 E. Main Street, Midland, Michigan 48640. For such revocation to be effective, the notice must be received by the Director of Human Resources not later than the seventh (7th) day after Employee signs the Agreement. Employee acknowledges that if he revokes the Agreement, the Agreement shall not be effective or enforceable and he shall not be entitled to the consideration provided for in the Agreement.
6. (a) No Rehire Obligation. As of the Termination Date, this Agreement will terminate permanently all aspects of the employment relationship between
(b) References. As a condition of this Agreement, Employee acknowledges that he must direct all requests for references to the Employer's Director of Human Resources or Chief Executive Officer.
7. Additional Benefits. So long as Employee satisfies the conditions of this Agreement, Employer shall provide the benefits as set forth herein. Employee acknowledges that these benefits are more than what he is otherwise entitled to.
(a) Severance Pay. If Employee secures employment during the administrative leave period, Employee's employment with Employer will terminate as of the date Employee begins such employment. If Employee secures other employment, during the administrative leave period, Employee will be paid his base salary for the remaining administrative leave period as severance pay. Employee will elect to continue to receive such amount over time as part of the Employer's normal payroll or may elect to receive such amount in a single lump sum payment. For example, if Employee secures new employment two months prior to the end of the administrative leave, Employer will pay Employee two months' salary in a single lump sum payment as severance pay, upon request of Employee.
(b) Health Care Coverage. If Employee secures employment during the administrative leave period and his employment with Employer is terminated, Employer shall pay the cost of Employee's COBRA coverage (including family coverage) for the balance of the administrative leave period, so long as Employee is not eligible to participate in his new employer's health insurance program and Employee timely elects COBRA coverage. For example, if Employee secures new employment two months prior to the end of the administrative leave and Employee is not eligible to participate in his new employer's health insurance plan, Employer will pay Employee's COBRA coverage for the two months period, provided Employee timely elects such coverage.
(c) Vacation. Any accrued but unused vacation time or pay shall be considered to be part of the administrative leave and no separate payment will be made for such vacation time or pay.
(d) Other Benefits. All other benefits shall end on the Termination Date. Insurance conversion rights, if any, will be governed by the applicable law and benefit plan, as with any other separated employee.
(e) Outplacement Assistance. Employer will provide outplacement assistance through an agency mutually selected by the parties at a cost not to exceed Five Thousand Dollars ($5,000.00).
(f) Stock Options. Employee shall be allowed to exercise any outstanding stock options issued to him at any time until March 31, 2008, unless such options expire earlier according to their terms.
8. Return of Property. Employee agrees that all notes, documents, data files, electronic files, or any other information or property belonging to Employer, including but not limited to, any keys, access cards, and credit cards which are in the possession of Employee will be returned to Employer at the commencement of the administrative leave. Employee further agrees that he will not make any duplicates, paper, electronic or otherwise, of these items; nor will he retain any extracts from or summaries of any such materials; nor deliver to anyone else photocopies or other facsimiles of such materials.
9. Confidential Information. Employee agrees that in the course of his employment with Employer he was employed in a position of trust and that he acquired certain confidential information including, but not limited to, financial information, marketing tactics, development tactics, strategies and customer information. Employee understands that this information was disclosed to him in confidence and only for use by Employer. Employee agrees that he will at all times after his employment keep such information confidential and that he will not use this information for his own purpose or disclose or communicate this information to any third party.
Employee further agrees that in the course of his employment he had access to confidential and proprietary information of customers of Employer and agrees that he will keep such information confidential after his employment with Employer and that he will not use or disclose to others any such customer's confidential and proprietary information including, but not limited financial data or personnel information.
Employee further agrees that all copies of any such confidential information have been surrendered to Employer.
10. Entire Consideration. Employee affirms that the terms stated herein are the only consideration for his signing of this Agreement, and no other promise or agreement of any kind has been made to or with him by any person or entity to cause him to execute this Agreement, and that he fully understands the meaning and intent of this Agreement, including but not limited to its final and binding effect.
11. Nondisclosure. Employee and Employer specifically acknowledge and agree that, as a material condition of this Agreement and of the consideration contained herein, neither will disclose the terms or conditions of this Agreement to any third person or entity except as provided in this paragraph. Provided, however, nothing in this paragraph shall be construed to prohibit either party from disclosing the terms and conditions of this Agreement to the parties' attorneys or accountants (so
12. Non-disparagement. Employee agrees that Employee shall not, from and after the date of this Agreement, initiate or join in negative or critical comments, discussions, or other communications about, or otherwise disparage Employer, or its services, employees, officers, directors, or any other person associated with Employer. Employer agrees that members of its Executive Committee shall not, from and after the date of this Agreement, initiate or join in negative or critical comments, discussions, or other communications about, or otherwise disparage Employee. The parties agree that they will jointly craft an announcement to Employer's staff concerning Employee's status and administrative leave and later ultimate termination from employment.
13. Governing Law. The laws of the State of Michigan shall govern this Agreement.
14. Binding Effect. This Agreement is binding on and inures to the benefit of Employee, Employee's spouse, heirs, administrators, and assigns. Employee intends that this Agreement and its releases apply not only to Employer, but to all divisions and affiliated entities of Employer, and to the predecessors, successors, assigns,
15. Entire Agreement. This Agreement constitutes the entire Agreement between the parties and supersedes any and all prior contracts, agreements, or understandings between the parties arising out of or relating to the employment of Employee and the termination of Employee's employment. This Agreement may be changed only by agreement in writing between Employer and Employee. Any such written agreement must be directed personally to the Employee, and must be signed by the President of the Employer on behalf of Employer.
EMPLOYEE FURTHER STATES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND KNOWS AND UNDERSTANDS THE CONTENTS THEREOF, AND THAT HE EXECUTES THE SAME AS HIS OWN FREE ACT AND DEED.
Signed this 20th day of April, 2007.
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EMPLOYEE: |
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/s/ James R. Milroy |
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James R. Milroy |
Subscribed, sworn to and sealed before me, this 20th day of April, 2007, an officer duly authorized to administer oaths.
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/s/ Amanda L. Hilderbrand |
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Notary Public |
Bay County, Michigan, acting in Midland |
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My Commission Expires: December 27, 2012 |
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EMPLOYER: |
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CHEMICAL FINANCIAL CORPORATION, |
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/s/ Joseph Torrence |
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SVP/HR |
EXHIBIT 10.9
RETIREMENT AND RELEASE AGREEMENT
This is an agreement (the Agreement) between CHEMICAL BANK (hereinafter referred to as Employer) and John Reisner (hereinafter referred to as Employee). As used herein, the term, Employer includes all of its affiliated or related companies, including without limitation, all employees, officers, directors, shareholders and agents of the Employer and those of any subsidiary, parent, or affiliated company.
WHEREAS, Employer and Employee desire to end the relationship of employer and employee, they agree to the following:
1. Retirement Date. Employee acknowledges that his/her employment with Employer will terminate on a date on or after June 1 2007, as a result of The Chemical Bank Voluntary Retirement Incentive Program. Employee acknowledges that Employer shall determine the actual date of retirement. Employee's final day of work shall be the actual date of retirement and shall hereinafter be referred to as the Retirement Date.
2. (a) Position: Unless otherwise agreed upon, Employee's employment will continue at his/her current compensation level throughout the Service Period, subject to the terms and conditions of his/her current employment. Employee will be expected to continue in his/her current capacity, and/or to perform such acts and duties as shall be reasonably assigned to him/her, in a manner which consistently supports and contributes to the established business objectives and best
(b) Service Period: Employee's services are required as described within this document for the period from the date Employee signs this Agreement until Employee's Retirement Date.
(c) Compensation/Benefits: Unless otherwise agreed upon, Employee will continue to be paid his/her base salary, less taxes and other withholdings, throughout the Service Period, payable on the regular Employer payroll dates, in accordance with Employer policy. Employee will remain eligible to participate in the employee benefits programs, subject to the established rules of such plans.
(d) Incentive Payment: Provided Employee remains actively employed with Employer until the Retirement Date and Employee signs and does not revoke this Agreement with the Employer and, if necessary, signs and does not revoke the Employment Termination Certificate (Appendix I) on his/her Retirement Date, Employee will be eligible to receive the Severance Benefits identified in Paragraph 8 herein.
(e) Employment Termination Certificate: If Employee signs the Agreement prior to his/her Retirement Date, Employee will be required to sign an Employment Termination Certificate on his/her Retirement Date. Employee would then be given seven (7) additional days, following the Retirement Date, to revoke the Employment Termination Certificate. Any revocation, to be effective, must comply with the requirements set forth in paragraph 6 of this Agreement.
(f) Disqualification: In the event that Employee voluntarily terminates or
3. Waiver and Release. In consideration for the benefits described below, Employee releases and discharges Employer from all claims (including claims for attorney's fees and costs), demands and causes of action, known or unknown, which Employee may have or claim to have against Employer, arising out of, or in any way relating to, Employee's employment with, or termination of employment, whether based on any act or omission to act. This includes, but is not limited to, claims of negligence, breach of contract, violation of the Civil Rights Acts of 1964 and 1991, violation of the Americans with Disabilities Act, violation of the Consolidated Omnibus Budget Reconciliation Act of 1985 (as amended) ("COBRA"), violation of the Employee Retirement Income Security Act of 1974 (as amended), violation of the Age Discrimination in Employment Act of 1967 (as amended), violation of the Older Workers Benefit Protection Act, violation of Michigan's Elliott Larsen Civil Rig
hts Act, violation of Michigan's Persons with Disabilities Civil Rights Act, violation of Michigan's Payment of Wages and Fringe Benefits Act, claims arising under any federal, state or local laws prohibiting employment discrimination based on age, color, race, gender/sex, height, weight, marital status, national origin, mental or physical disability, religious affiliation, veteran status or any other forms of discrimination, and claims based on any other laws affecting relations between employers and employees, including claims growing out of
With respect to any charges or complaints that have been filed or may be filed concerning any event or actions relating to Employee's employment or Employee's termination, and which occurred prior to signing this Agreement, Employee additionally waives and releases any right Employee may have to recover in any lawsuit or proceeding brought by Employee, an administrative agency, or any other person on Employee's behalf or which includes Employee in any class. This paragraph is not intended to limit Employee from instituting legal action for the sole purpose of enforcing this Agreement, nor does this Agreement affect any rights or claims Employee may have which arise after Employee signs this Agreement. Nor does the Agreement affect Employee's rights to vested employee benefits, group health benefit continuation rights provided by COBRA or any claim for workers compensation. Prior to instituting any legal action challenging the enforceability of this Agreement, Employee wi ll return in full any benefits received from Employer in connection with Employee signing this Agreement.
4. No Admission of Liability. The parties acknowledge that this Agreement is not an admission of liability, but is an effort to reach a mutual understanding concerning Employee's termination from Employer.
5. Period for Review and Consultation. Employee acknowledges that Employer has advised him/her to consult with an attorney before executing this Agreement. Employee further acknowledges that he/she has been given forty-five (45) days from the time he/she received this Agreement to consider whether to sign
6. Revocation Period. Employee acknowledges that for a period of seven (7) days following the execution of the Agreement, he/she may revoke this Agreement and the Agreement shall not become effective or enforceable until the revocation period has expired. Revocation is to be effective by delivering a written notice of revocation to the Director of Human Resources, 333 E. Main Street, Midland, Michigan 48640. For such revocation to be effective, the notice must be received by the Director of Human Resources not later than the seventh (7th) day after Employee signs the Agreement. Employee acknowledges that if he/she revokes the Agreement, the Agreement shall not be effective or enforceable and he/she shall not be entitled to the consideration stated herein. Employee also acknowledges that if an Employment Termination Certificate is required, and if Employee signs the Employment Termination Certificate, it may be revoked in the same manner, and any revoc ation would render this Agreement unenforceable.
7. (a) No Rehire Obligation. As of the Retirement Date, this Agreement will terminate permanently all aspects of the employment relationship between Employer and Employee for all time. Employee acknowledges that Employer has no obligation to consider Employee for rehire at any time in the future.
(b) References. As a condition of this Agreement, Employee acknowledges
8. Additional Benefits. So long as Employee satisfies the conditions of this Agreement, Employer shall provide Additional Benefits as set forth herein. Employee acknowledges that this benefit is more than what he/she is otherwise entitled to as a Severance Benefit.
(a) Incentive Payment: Employee will be eligible to receive an Incentive Payment equal to One Hundred and Twenty Five Thousand and no/100 Dollars ($125,000.00), less taxes and other withholdings. This Incentive Payment will be made in one lump sum payment payable ten (10) days after Employee executes this Retirement and Release Agreement, or ten (10) days after Employee executes the Employment Termination Certificate, whichever is later, so long as the Agreement and Certificate remain unrevoked.
The Employee will also receive title to a Black 2007 Jeep Cherokee that the Employee currently uses as a Bank car.
(b) Vacation: The cash value of all accrued and unused vacation days, prorated according to Employer's standard vacation policy, less applicable withholding, will be paid to the Employee with their final payroll check.
(c) Conversion Rights: Insurance conversion rights, if any, will be governed by the applicable law and benefit plan, as with any other separated employee.
9. Return of Property. Employee agrees that all notes, documents, data files,
10. Confidential Information. Employee agrees that in the course of his/her employment with Employer he/she acquired certain confidential information including, but not limited to, financial information, marketing tactics, development tactics, strategies and customer information. Employee understands that this information was disclosed to him/her in confidence and only for use by Employer. Employee agrees that he/she will keep such information confidential after his/her employment with Employer and that he/she will not use this information for his/her own purpose or disclose or communicate this information to any third party.
Employee further agrees that in the course of his/her employment he had access to confidential and proprietary information of customers of Employer and that that such confidential and proprietary information of customers. Employee agrees that he/she will keep such information confidential after his/her employment with Employer and that he/she will not use or disclose to others any such customer's confidential and proprietary information including, but not limited financial data or personnel information.
Employee further agrees that all copies of any such confidential information have been surrendered to Employer.
11. Entire Consideration. Employee affirms that the terms stated herein are the only consideration for his/her signing of this Agreement, and no other promise or agreement of any kind has been made to or with him/her by any person or entity whosoever to cause him/her to execute this Agreement, and that he/she fully understands the meaning and intent of this Agreement, including but not limited to its final and binding effect.
12. Nondisclosure. Employee and Employer specifically acknowledge and agree that, as a material condition of this Agreement and of the consideration contained herein, neither will disclose the terms or conditions of this Agreement to any third person or entity except as provided in this paragraph. Provided, however, nothing in this paragraph shall be construed to prohibit either party from disclosing the terms and conditions of this Agreement to Employee's spouse, the parties' attorneys or accountants (so long as such parties agree to maintain the confidence of the Agreement) or as may be lawfully required to as ordered by any state or federal administrative agency, tribunal or court of law.
13. Severability. The provisions of this Agreement are severable, and, if one or more of said provisions is determined to be invalid, illegal, or otherwise unenforceable, in whole or in part, the remaining provisions, and any partially enforceable provisions to the extent enforceable, shall be binding and enforceable.
14. Entire Agreement. This Agreement constitutes the entire Agreement
15. Non-disparagement. Employee agrees that Employee shall not, from and after the date of this Agreement, initiate or join in negative or critical comments, discussions, or other communications about, or otherwise disparage Employer, or its services, employees, officers, directors, or any other person associated with Employer. Employer agrees that members of its Executive Committee shall not, from and after the date of this Agreement, initiate or join in negative or critical comments, discussions, or other communications about, or otherwise disparage Employee.
16. Governing Law. The laws of the State of Michigan shall govern this Agreement.
17. Binding Effect. This Agreement is binding on and inures to the benefit of Employee, Employee's spouse, heirs, administrators, and assigns. Employee intends that this Agreement and its releases apply not only to Employer, but to all divisions and affiliated entities of Employer, and to the predecessors, successors, assigns, agents, officers, directors, shareholders, employees, and other representatives of each.
EMPLOYEE FURTHER STATES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT AND KNOWS AND UNDERSTANDS THE CONTENTS THEREOF, AND THAT HE/SHE EXECUTES THE SAME AS HIS/HER OWN FREE ACT AND DEED.
This 21st day of May, 2007.
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EMPLOYEE: |
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/s/ John A. Reisner |
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John A. Reisner |
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Subscribed, sworn to and sealed before me, this 21st day of May, 2007, an officer duly authorized to administer oaths.
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/s/ Kathryn E. Horsley |
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Notary Public |
Gladwin County, Michigan, acting in Midland |
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My Commission Expires: September 8, 2012 |
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EMPLOYER: |
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CHEMICAL BANK, |
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By: |
/s/ Joseph Torrence |
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Its: |
SVP/HR |
APPENDIX I
Employment Termination Certificate
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I entered into a Retirement and Release Agreement with CHEMICAL BANK, dated May 21, 2007. I hereby acknowledge that:
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A blank copy of this Employment Termination Certificate was attached as Appendix I to the Agreement Form when it was given to me for review. I have had more time to consider signing this Certificate than the ample time I was given to consider signing the Chemical Bank Consolidation Retirement and Release Agreement Form. I may revoke this Certificate within seven (7) days after I sign it. I was advised to discuss the Retirement and Release Agreement Form, including this Certificate, with an attorney before executing either document. |
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The benefits payable under the Retirement and Release Agreement Form |
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become payable only if I sign this Certificate and do not revoke it within seven (7) days after I sign it. |
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3. |
My employment actually terminated before I signed this Certificate and, in exchange for my Benefits, I hereby agree that this Certificate will be a part of my Retirement and Release Agreement Form and that my release is to be construed and applied as if I signed it on the day I signed this Certificate. This extends my release of claims under the Retirement and Release Agreement Form to any claims that arose during the remainder of my employment through my Retirement Date. |
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6-1-07 |
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Employee: |
John A. Reisner |
EXHIBIT NO. 21
SUBSIDIARIES OF
CHEMICAL FINANCIAL CORPORATION
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Ownership |
State or Other Jurisdiction |
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Chemical Bank |
100% |
Michigan |
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CFC Financial Services, Inc. |
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- also operates under d/b/a CFC |
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CFC Title Services, Inc. |
100% |
Michigan |
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Shoreline Insurance Services, Inc. |
100% |
Michigan |
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Chemical Loan Management |
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Chemical Loan Services, LLC |
100% |
Michigan |
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JV Midland No. 1, LLC |
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EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Chemical Financial Corporation
We consent to the incorporation by reference in the registration statements (333-142733) on Form S-3 and (Nos. 33-40792, 333-38511, 333-56482, 333-84862, 333-125031, and 333-133962) on Form S-8 of Chemical Financial Corporation of our reports dated February 28, 2008, with respect to the consolidated statement of financial position of Chemical Financial Corporation as of December 31, 2007 and 2006, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2007, and the effectiveness of internal control over financial reporting as of December 31, 2007, which reports appear in the December 31, 2007 annual report on Form 10-K of Chemical Financial Corporation.
Our report refers to changes in the method of measuring prior-year uncorrected misstatements when quantifying misstatements in current year financial statements and the method of accounting for defined benefit and post retirement obligations in 2006.
/s/ KPMG LLP |
Detroit, Michigan
February 28, 2008
EXHIBIT 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
Registration Statement No. 33-40792 on Form S-8 dated May 21, 1991
401 (k) Plan;
Registration Statement No. 333-38511 on Form S-8 dated October 22, 1997
Stock Incentive Plan of 1997;
Registration Statement No. 333-56482 on Form S-8 dated March 2, 2001
Stock Option Plan for Option Holders of Shoreline Financial Corporation;
Registration Statement No. 333-84862 on Form S-8 dated March 25, 2002
2001 Stock Purchase Plan for Subsidiary and Community Bank Directors;
Registration Statement No. 333-125031 on Form S-8 dated May 18, 2005
Chemical Financial Corporation 401(k) Savings Plan,
Registration Statement No. 333-133962 on Form S-8 dated May 10, 2006
Chemical Financial Corporation Stock Incentive Plan of 2006;
Registration Statement No. 333-142733 on Form S-3/A dated June 26, 2007
Dividend Reinvestment Plan - Chemical Invest Direct
of our report dated February 24, 2006, with respect to the consolidated financial statements of Chemical Financial Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2007 filed with the Securities and Exchange Commission.
We also consent to the incorporation by reference in the Registration Statement No. 333-84862 on Form S-8 dated March 25, 2002 of our report dated March 6, 2006 with respect to the financial statements of the Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors included in Exhibit 99.1 of this Annual Report (Form 10-K) for the year ended December 31, 2007 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP |
Detroit, Michigan
February 28, 2008
EXHIBIT 23.3
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement No. 333-84862 on Form S-8 dated March 25, 2002 of our report dated February 28, 2008 with respect to the financial statements of the Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors included in Exhibit 99.1 of this Annual Report (Form 10-K) for the year ended December 31, 2007 filed with the Securities and Exchange Commission.
/s/ Andrews Hooper & Pavlik P.L.C. |
Saginaw, Michigan
February 28, 2008
EXHIBIT NO. 24
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: December 15, 2007 |
/s/ Gary E. Anderson |
(signature) |
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Gary E. Anderson |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: January 18, 2008 |
/s/ J. Daniel Bernson |
(signature) |
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J. Daniel Bernson |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: January 5, 2008 |
/s/ Nancy Bowman |
(signature) |
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Nancy Bowman |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: January 1, 2007 |
/s/ James A. Currie |
(signature) |
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James A. Currie |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: December 20, 2007 |
/s/ Thomas T. Huff |
(signature) |
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Thomas T. Huff |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: January 5, 2008 |
/s/ Michael T. Laethem |
(signature) |
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Michael T. Laethem |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: January 15, 2008 |
/s/ Geoffery E. Merszei |
(signature) |
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Geoffery E. Merszei |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: December 16, 2007 |
/s/ Terence F. Moore |
(signature) |
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Terence F. Moore |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: December 12, 2007 |
/s/ Aloysius J. Oliver |
(signature) |
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Aloysius J. Oliver |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: December 15, 2007 |
/s/ Larry D. Stauffer |
(signature) |
|
Larry D. Stauffer |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: December 16, 2007 |
/s/ William S. Stavropoulos |
(signature) |
|
William S. Stavropoulos |
LIMITED POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, of Chemical Financial Corporation, does hereby appoint Gary E. Anderson, David B. Ramaker and Lori A. Gwizdala, or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Chemical Financial Corporation on Form 10-K for its fiscal year ended December 31, 2007, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Dated: January 1, 2008 |
/s/ Franklin C. Wheatlake |
(signature) |
|
Franklin C. Wheatlake |
EXHIBIT 31.1
CERTIFICATIONS
I, David B. Ramaker, certify that:
1. |
I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 of Chemical Financial Corporation; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 28, 2008
/s/ David B. Ramaker David B. Ramaker President and Chief Executive Officer Chemical Financial Corporation |
EXHIBIT 31.2
CERTIFICATIONS
I, Lori A. Gwizdala, certify that:
1. |
I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 of Chemical Financial Corporation; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 28, 2008
/s/ Lori A. Gwizdala Lori A. Gwizdala Executive Vice President, Chief Financial Officer and Treasurer Chemical Financial Corporation |
EXHIBIT 32
CERTIFICATION
Pursuant to 18 U.S.C. § 1350, each of the undersigned hereby certifies in his capacity as an officer of Chemical Financial Corporation (the "Company") that the Annual Report of the Company on Form 10-K for the accounting period ended December 31, 2007 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.
Dated: February 28, 2008 |
/s/ David B. Ramaker |
David B. Ramaker |
Dated: February 28, 2008 |
/s/ Lori A. Gwizdala |
Lori A. Gwizdala |
A signed original of this written statement required by Section 906 has been provided to Chemical Financial Corporation and will be retained by Chemical Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request. |
EXHIBIT No. 99.1
Financial Statements
With Report of Independent Registered Public Accounting Firm
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
December 31, 2007
Report of Independent Registered Public Accounting Firm
Plan Administrator
Chemical Financial Corporation
2001 Stock Purchase Plan for Subsidiary and Community Bank Directors
We have audited the accompanying statements of financial condition of the Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors as of December 31, 2007 and 2006 and the related statements of income and changes in plan equity for the years then ended. These financial statements are the responsibility of the Plan's Administrator. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included considerations of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Plan Administrator, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors as of December 31, 2007 and 2006 and the results of its operations and changes in its plan equity for the years then ended in conformity with U.S. generally accepted accounting principles.
|
/s/ Andrews Hooper & Pavlik P.L.C. |
Saginaw, Michigan
February 28, 2008
Report of Independent Registered Public Accounting Firm
Plan Administrator
Chemical Financial Corporation
2001 Stock Purchase Plan for Subsidiary and Community Bank Directors
We have audited the accompanying statement of financial condition of the Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors as of December 31, 2005 and the related statements of income and changes in plan equity for each of the two years ended December 31, 2005. These financial statements are the responsibility of the Plan's Administrator. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included considerations of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Plan administrator, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors as of December 31, 2005 and the results of its operations and changes in its plan equity for each of the two years ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.
|
/s/ Ernst & Young LLP |
Detroit, Michigan
March 6, 2006
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
Statements of Financial Condition
|
December 31, |
||||
|
2007 |
|
2006 |
||
Assets |
|
|
|
|
|
Cash |
$ |
673 |
|
$ |
1,066 |
Common stock receivable of Chemical |
|
|
|
|
|
Total Assets |
$ |
198,273 |
|
$ |
237,729 |
|
|
|
|
|
|
Plan Equity |
|
|
|
|
|
Plan equity (59 participants at December 31, 2007 and |
|
|
|
|
|
See accompanying notes.
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
Statements of Income and Changes in Plan Equity
|
Years Ended December 31, |
|
|||||||
|
2007 |
|
2006 |
|
2005 |
|
|||
Additions |
|
|
|
|
|
|
|
|
|
Participant contributions |
$ |
223,900 |
|
$ |
217,625 |
|
$ |
249,525 |
|
Dividend equivalents and |
|
|
|
|
|
|
|
|
|
fractional share interests |
|
7,197 |
|
|
5,863 |
|
|
5,400 |
|
|
|
231,097 |
|
|
223,488 |
|
|
254,925 |
|
|
|
|
|
|
|
|
|
|
|
Deductions |
|
|
|
|
|
|
|
|
|
Plan distributions |
|
236,693 |
|
|
249,810 |
|
|
267,381 |
|
|
|
(5,596 |
) |
|
(26,322 |
) |
|
(12,456 |
) |
|
|
|
|
|
|
|
|
|
|
Net unrealized appreciation (depreciation) |
|
|
|
|
|
|
|
|
|
Net decrease |
|
(39,456 |
) |
|
(12,803 |
) |
|
(17,591 |
) |
Plan equity at beginning of period |
|
237,729 |
|
|
250,532 |
|
|
268,123 |
|
Plan equity at end of period |
$ |
198,273 |
|
$ |
237,729 |
|
$ |
250,532 |
|
See accompanying notes.
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
Notes to Financial Statements
Note 1 - Description of the Plan
The Chemical Financial Corporation 2001 Stock Purchase Plan for Subsidiary and Community Bank Directors (Plan) was made effective by Chemical Financial Corporation (Corporation) on March 25, 2002. The Plan is designed to provide non-employee directors of the Corporation's subsidiaries and community banks, who are neither directors nor employees of the Corporation, with a convenient method of acquiring Corporation stock. The Plan provides for a maximum of 75,000 shares of the Corporation's common stock, $1.00 par value (Common Stock), subject to adjustments for certain changes in the capital structure of the Corporation as defined in the Plan (including stock dividends and stock splits), to be available under the Plan.
Subsidiary directors and community advisory directors, who elect to participate in the Plan, may elect to contribute to the Plan fifty percent or one hundred percent of their director retainer fees and/or fifty percent or one hundred percent of their board of director fees and/or fifty percent or one hundred percent of their director committee fees, earned as directors or community advisory directors of the Corporation's subsidiaries. Participant contributions to the Plan are made by the Corporation's subsidiaries on behalf of each electing participant. As of the last day of each month, each participant's cash account is debited for the purchase of whole shares of the Corporation's stock that is credited to a separate participant stock account. The stock purchased under the Plan during the calendar year is issued by the Corporation directly to the participants in the following calendar year. The Plan provides for dividend equivalents to be credited to each participant's cash account as of the dividend record date of the Corporation's common stock. Dividend equivalents are calculated by multiplying the Corporation's dividend rate by the number of shares of common stock in each participant's stock account as of the Corporation's dividend record date. The Plan also provides for an appropriate credit to each participant's stock account for stock dividends, stock splits or other distributions of the Corporation's common stock by the Corporation. Fractional shares calculated as a result of the above adjustments are converted to cash based on the market price of the Corporation's common stock and are credited to each participant's cash account. Plan participants may terminate their participation in the Plan, at any time, by written notice of withdrawal to the Corporation. Participants will cease to be eligible to participate in the Plan when they cease to serve as directors or community advisory directors of subsidiaries of the Corporation. Upon withdrawal from the Plan, each participant will receive the sh ares of common stock of the Corporation in their participant stock account and the cash in their participant cash account.
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
Notes to Financial Statements (continued)
Note 1 - Description of the Plan (continued)
The Plan had 41,729 shares and 48,836 shares as of December 31, 2007 and 2006, respectively, of the Corporation's common stock available for future issuance.
The Corporation reserves the right to terminate or amend the Plan at any time, provided, however, that no termination or amendment shall affect or diminish any participant's right to the benefit of contributions made by him/her prior to the date of such amendment or termination.
The Plan provides that all expenses of the Plan and its administration shall be paid by the Corporation.
The Plan is not qualified under Sections 401(a) or 501(a) of the Internal Revenue Code of 1986, as amended. The Plan does not provide for income taxes because any income is taxable to the participants. Participants in the Plan must treat as taxable income the contributions made to the Plan by the Corporation's subsidiaries on their behalf. Dividend equivalents and any other cash credited to the participants' cash accounts are taxable to the participants for Federal and state income tax purposes in the year such dividend equivalent or cash is credited to the participant cash account. Upon disposition of the common stock of the Corporation issued under the Plan, participants must treat any gain or loss as long-term or short-term capital gain or loss depending upon when such disposition occurs.
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
Notes to Financial Statements (continued)
Note 2 - Summary of Accounting Policies
Valuation of Common Stock Receivable
Common stock receivable of the Corporation is recorded at the market value per share of the Corporation's common stock multiplied by the number of shares receivable at the valuation date. Market value is based on the closing price of the Corporation's common stock at year end ($23.79 per share at December 31, 2007 and $33.30 per share at December 31, 2006).
Income
Dividend equivalents and fractional share interests are accrued on the Corporation's dividend or other record date.
Contributions
Contributions are accounted for on the accrual basis.
Chemical Financial Corporation
2001 Stock Purchase Plan
for Subsidiary and Community Bank Directors
Notes to Financial Statements (continued)
Note 3 - Contributions
Contributions for participants by the participating companies were as follows:
|
Years Ended December 31, |
||||
Participating Company |
2007 |
|
2006 |
|
2005 |
|
|
|
|
|
|
Chemical Bank |
$223,900 |
|
$217,625 |
|
$ 87,650 |
Chemical Bank Shoreline |
|
|
|
|
90,700 |
Chemical Bank West |
|
|
|
|
67,175 |
CFC Financial Services, Inc. |
|
|
|
|
2,000 |
CFC Title Services, Inc. |
|
|
|
|
2,000 |
Total Participant Contributions |
$223,900 |
|
$217,625 |
|
$249,525 |
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