CHFC 2017 Annual Report

• Operating income per share; • Operating income return on equity; • Productivity ratios; • Reduction of losses, loss ratios, expense ratios or fixed costs; • Return on assets; • Return on capital; • Return on equity; • Share price (including without limitation growth measures, total shareholder return or comparison to indices); • Specified objective social goals; and • Such other business criteria as the Committee may determine to be appropriate, which may include financial and nonfinancial performance goals. Each year, the Compensation Committee will select eligible executives who will participate in the Annual Incentive Plan and will set the amount of each participant’s ThresholdAward, Target Award and MaximumAward (each as defined in theAnnual Incentive Plan) that can be awarded under the Annual Incentive Plan, determined as a percentage of the participant’s base salary. As noted above, the Compensation Committee will also establish one or more Performance Measures and a formula to determine the amount of the award that will be earned at different levels of achievement of the Performance Measures. The Annual Incentive Plan is administered by the Compensation Committee, which has full authority, among other things, to designate participants; construe and interpret the plan; waive, prospectively or retroactively, any conditions of or rights of the Corporation under any award; increase or decrease the payout due under any award; and make all other determinations and take all other actions necessary under the plan. Under the Annual Incentive Plan, except as may otherwise be approved by the Compensation Committee or as specifically set forth in a written employment agreement between a participant and the Corporation, no incentive payment will be awarded under the Annual Incentive Plan if the participant is not employed in good standing on the date payment is made for a particular performance period. The foregoing description of the Annual Incentive Plan does not purport to be complete and is qualified in its entirety by reference to the Annual Incentive Plan, which is incorporated herein by reference as Exhibit 10.9. New Employment Agreement with David T. Provost On February 27, 2018, we entered into a new executive employment agreement with David T. Provost, our Chief Executive Officer and President, who will continue to serve in these roles under his new employment agreement. The employment agreement has an initial termof two years commencing onMarch 1, 2018, that automatically renews for successive one year periods, until either party provides advance written notice of non-renewal at least 30 days before an anniversary of the March 1 effective date. Under the employment agreement, his current base salary of $1.00 will be increased to $950,000 effective July 1, 2018. Mr. Provost’s base salary will be reviewed by the Compensation Committee at least annually and can be increased in the Committee’s sole discretion. In addition to base salary, he is: • eligible to participate in our annual bonus and equity programs for senior executives; • entitled to an annual taxable stipend to cover deduction for other benefits under our group health care plan in the amount of $20,000; • entitled to a monthly automobile allowance of $900; and • eligible for reimbursement for membership in two country clubs of his selection. The employment agreement provides that if he is terminated by us for any reason other than for “cause” or because of his “disability,” or if he terminates his employment for “good reason,” each as defined in the employment agreement, then he is entitled to receive severance pay in the amount of two times his then current base salary (with base salary calculated as at least $950,000), plus two times the average of his bonuses under our annual cash incentive plan for each of the three most recently completed calendar years, including complete calendar years with Talmer Bank and Trust (with each bonus calculated as the higher of the actual bonus or $1.5 million). We will also pay Mr. Provost a lump sum equal to 24 times his monthly contribution towards COBRA for employee dependent health, prescription drug and dental coverage elections under our employee benefit plans providing such benefits, minus the COBRA administrative cost (whether or not he elects COBRA). In addition, all equity-based awards previously granted to Mr. Provost that remain outstanding on the termination date will be treated as follows: • all unvested stock options will immediately vest, and together with other vested stock options, will remain exercisable for a period of three years from termination; • all outstanding time-based restricted stock units will automatically vest; and 166