CHFC 2018 Proxy Statement

All board of directors and board committee meeting attendance fees were eliminated beginning May 1, 2017. Instead, directors will be compensated on a retainer-only basis, as follows: Annual Cash Retainer $45,000 Annual Equity Retainer $45,000 Lead Independent Director Retainer $25,000 Annual Cash Retainers for Audit Committee Service Chair – $20,000 Member – $10,000 Annual Cash Retainers for Compensation and Pension Committee Service Chair – $15,000 Member – $7,500 Annual Cash Retainers for Service on All Other Board Committees Chair – $10,000 Member – $5,000 For 2017, non-employee directors were required to elect the form of delivery of their cash retainers from three alternatives: Directors’ Deferred Stock Plan (DDSP) units, restricted stock vesting one year from the date of grant, or cash. Mr. Klein and Mr. Wheatlake elected to receive all cash retainers in the form of cash. Mr. Pelizzari elected to receive his committee service retainers in the form of cash and his annual retainer in the form of DDSP units. The other non-employee directors elected to receive their both their annual cash retainers and their committee service retainers in the form of DDSP units. Prior to May 1, 2017, in lieu of Committee service retainers, our directors were also compensated at the rate of $1,250 for each board of directors meeting attended, $750 for each committee meeting attended, and $1,000 for certain special meetings and training sessions held on an as needed basis. Our directors who are employees are not entitled to any additional compensation related to their service as a director. For 2017, this included Mr. Provost, Mr. Shafer, Mr. Torgow and Mr. Ramaker prior to his retirement. On April 21, 2008, the shareholders approved the Chemical Financial Corporation Directors’ Deferred Stock Plan (DDSP), authorizing the issuance of up to 400,000 shares of our common stock. The DDSP provides benefits to non-employee directors of the Corporation and Chemical Bank in the form of an equity retainer that is required to be deferred annually and invested in stock units representing shares of our common stock. The equity retainer is 50% of the annual retainer of each non-employee director, or such greater percentage as determined by the board of directors. The annual retainer is a lump-sum amount paid to each non-employee director for the director’s service throughout the year. The difference between the annual retainer and the equity retainer is the cash retainer. The DDSP allows each non-employee director to voluntarily defer the cash retainer and/or all director and/or community advisory director fees and invest in stock units representing shares of our common stock. The amount of the annual retainer, director and community advisory director fees contributed to the DDSP are vested immediately. The deferral election must be made before the beginning of a plan year. The DDSP is an unfunded supplemental nonqualified deferred compensation plan that complies with Internal Revenue Code Section 409A. The equity retainer and any cash retainer voluntarily contributed to the DDSP are converted to stock units on the date paid. Any director and community advisory director fees that are voluntarily contributed to the DDSP are converted to stock units on the date we pay our next quarterly cash dividend. The number of stock units credited to each participating director’s account is determined by dividing the dollar amount of the equity retainer and any deferred cash retainer by the market value of a single share of our common stock on the date the annual retainer is paid, and by dividing the dollar amount of any deferred director and community advisory director fees by the market value of a single share of our common stock on the next quarterly cash dividend payment date. Each participating director’s account is also credited with dividend equivalents on each date we pay cash dividends. Dividend equivalents are a number of stock units equal to the number of shares of common stock that have a market value equal to the amount of any cash dividends that would have been paid to a shareholder owning the number of shares of common stock represented by stock units in a participating director’s account on each cash dividend payment date. Distributions will be made in our common stock equal to the number of stock units in the participating director’s account. Any fractional shares will be paid in cash. Distributions will not be made until a director retires or terminates service as a director or upon the death of the director or a change in control of the Corporation. For common stock issued upon a director’s retirement from or termination of service, the director has a choice to receive the shares in a lump-sum or in five annual installments. A director must make an irrevocable election between the lump-sum and five annual installments at the time the director begins participating in the DDSP. The election is irrevocable and applies to all future deferral elections. Upon a change in control of the 60