CHFC 2017 Annual Report

The Compensation Committee of our board of directors, consistent with its historical practices of providing long term equity compensation as a portion of overall executive compensation, approved the awards of restricted stock units to each of our named executive officers. Under the terms of the time-vested restricted stock unit agreements (“TRSUs), the restricted stock units vest in equal installments on the first, second, third, fourth and fifth anniversaries of the February 27, 2018 grant date, based on the named executive officer’s continued employment. The TRSUs will have all non-cash dividend and all liquidation rights with respect to shares of our common stock and each named executive officer will receive a number of restricted stock units equal to the number of shares of our common stock (including fractions of a share) that have a market value equal to the amount of any cash dividends that would have been payable to a shareholder owning the number of shares of common stock represented by restricted stock units subject to the agreement on each dividend payment date. Under the terms of the performance-based restricted stock unit agreements (“PRSUs”), the restricted stock units vest based on the Corporation’s achievement of performance targets determined by the Compensation Committee during the performance period at a threshold, target and maximum performance level, if the named executive officer remains employed through the restricted period. Both the TRSU agreement and PRSU agreement provide that, unless otherwise provided in another written agreement with the executive, in the event of the executive’s termination without cause by us, or if the executive terminates his or her employment for “good reason,” or if the executive dies or is disabled, or if the executive provides one year written notice before his or her intended retirement, then executive will be issued (a) with respect to TRSUs, a pro rata number of TRSUs determined based on the number of months that have passed since the last annual vesting date, or if no vesting date has occurred, the grant date, and (b) with respect to PRSUs, a pro rata number of PRSUs granted at the target (100%) level determined based on the number of months that have elapsed between the first day of the Performance Period (as defined in the agreement) and the effective date of the executive’s termination. Both the TRSU agreement and PRSU agreement also provide that, unless otherwise provided in another written agreement with the executive, in the event of a change in control (as set forth therein), and the awards are assumed by the surviving entity, then (a) with respect to TRSUs, if within two years of the change in control, the executive is terminated without cause by us or the executive terminates his or her employment for good reason, all unvested TRSUs will vest, and (b) with respect to PRSUs, the PRSUs will be fixed at the target (100%) performance level and will vest as of the end of the performance period; provided that, if within two years of the change in control, the executive is terminated without cause by us or the executive terminates his or her employment for good reason, all unvested PRSUs will immediately vest at the target (100%) performance level. If the TRSU and PRSU agreements are not assumed by the surviving entity, each agreement contains a provision for the awards to be paid in cash, as follows: • with respect to TRSUs, the market value of all TRSUs outstanding as of the change in control will be paid in cash, subject to the same vesting schedule; provided that, if within two years of the change in control, the executive is terminated without cause by us or the executive terminates his or her employment for good reason, then the cash value of the TRSUs will be paid at termination; and • with respect to PRSUs, the market value of the target (100%) number of PRSUs outstanding as of the change in control will be paid in cash at the end of the performance period; provided that, if within two years of the change in control, the executive is terminated without cause by us or the executive terminates his or her employment for good reason, then the cash value of the PRSUs will be paid at termination. A copy of the Equity Plan is filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on May 10, 2017. The foregoing description of the restricted stock unit agreements does not purport to be complete and is qualified in its entirety by reference to the form of TRSU agreement and the form of PRSU agreement, each of which is incorporated herein by reference as Exhibits 10.31 and 10.30, respectively. Item 8.01 Other Events. Given the timing of the following event, the following information is included in this Annual Report on Form 10-K pursuant to Item 8.01 of Form 8-K, "Other Events" in lieu of filing a Form 8-K. On February 27, 2018, we entered into a new executive employment agreement with Gary Torgow, the Executive Chairman of our board of directors, who will continue to serve in this role under his new employment agreement, which is substantially similar to Mr. Provost’s new employment agreement described above. 168