CHFC 2018 Proxy Statement

2017 Performance Goals, Qualifiers and Payout Results Performance Goals The Compensation Committee established threshold, target and maximum performance levels and weights for each selected corporate goal. Threshold represents theminimum level of performance at which, if achieved, a payment is earned on each corporate goal. If performance is below the threshold level for any particular corporate goal, no payment will be earned; however, payment will be earned for other corporate goals that are achieved at least at a threshold level of performance. Maximum represents the maximum level of performance at which, if achieved, a maximum payment is earned on each corporate goal. If performance exceeds the maximum level for any corporate goal, no further incentive above the maximum incentive for such corporate goal is earned. Payments for achievement of the threshold, target and maximum goals are 50%, 100% and 150% of the target payment, respectively. Actual performance between threshold, target and maximum performance levels will be interpolated to determine the amount of payment based on relative achievement of the corporate goals. The target corporate goals were set at challenging levels representing significant growth and improvement over 2016, and generally corresponded to or exceeded our budgeted financial plan. In February 2018, the Compensation Committee determined that we achieved the corporate goals, on a weighted basis, at a level corresponding to 72.6% of the target payout, as detailed in the following table. 2017 Corporate Goal Levels (% payout opportunities) 2017 Actual Performance Assigned Weight Threshold (50%) Target (100%) Maximum (150%) $ % Weighted Average Achievement (1) Adjusted Earnings Per Share(EPS) (2) 50% $2.98 $3.11 $3.17 $3.12 108.3% 54.2% Customer Deposit Growth (3) 30% $1.0B $1.1B $1.3B $0.9B 0% 0% Core Noninterest Expense (4) 20% $365.6M $361.9M $358.3M $362.5M 91.9% 18.4% Total 100% 72.6% (1) Presents the results of the weighted average achievement qualifier discussed below. (2) Adjusted EPS is defined as reported net income excluding merger and restructuring expenses, losses on sales of investment securities associated with treasury and tax management objectives, the revaluation of net deferred tax assets due to the enactment of the Tax Cuts and Jobs Act, and the change in fair value of loan servicing rights. (3) Deposit growth was measured by comparing the monthly average deposit balances for December 2017 with the monthly average deposit balances for December 2016. (4) Core noninterest expense is defined as reported noninterest expense excluding merger and restructuring expenses, variable compensation expense, amortization of tax credits and gain on sales of other real estate. Plan Qualifiers In addition to the corporate, department and individual metrics, there are two overall plan qualifiers that may reduce payouts under certain circumstances. • First, if our adjusted earnings per share for the year does not equal or exceed the shareholder cash dividends paid per share for the year, the final calculated payout to the named executive officers is reduced by 50%. • Second, if the weighted average achievement with respect to the three corporate goals does not exceed the threshold level (corresponding to a 50% payout), the payouts that named executive officers may earn under the individual and department components of the plan are limited to 100% of target. For 2017, both of these qualifiers were cleared. Our adjusted earnings per share of $3.12 exceeded our shareholder cash dividends paid per share of $1.10. The weighted average achievement with respect to the three corporate goals was 72.6% which exceeded the 50% threshold. 33