CHFC 2018 Proxy Statement

Payout Results At the beginning of 2017, the Compensation Committee reviewed the individual and departmental goals for each named executive officer and determined that these goals were challenging and reasonable. The Compensation Committee evaluated the performance against these goals and deemed that they had been achieved at a level corresponding to 100% to 150% of target payouts. The following table illustrates the overall incentive payments earned by our named executive officers in 2017 with respect to corporate goals, individual performance goals and department goals (if applicable). Payout Components Incentive Target Corporate Department Individual Payout Named Executive Officer % of Salary Value Result Weight Result Weight Result Weight % of Target Value Dennis L. Klaeser 65% $357,500 72.6% 70% N/A 0% 150% 30% 96% $342,419 Thomas C. Shafer (1) 75% $562,500 72.6% 70% N/A 0% 150% 30% 96% $538,771 Robert S. Rathbun (2) 60% $198,000 72.6% 40% 100.0% 40% 100% 20% 89% $176,256 (1) Mr. Shafer's target incentive award changed from 60% to 90%, effective July 1, 2017, following his appointment to Vice Chair and President and Chief Executive Officer of Chemical Bank. This 75% annual incentive target is a pro-rated percentage based on six months at the 60% rate and six months at the 90% rate. (2) In accordance with his Offer Letter Agreement, Mr. Rathbun's 2017 annual target incentive award was based on his base salary prior to November 17, 2017. 2017 Discretionary Bonuses In addition to the formulaic annual incentive awards described above, the Compensation Committee determined that the contributions of Mr. Klaeser and Mr. Shafer to our success in 2017, and in particular the achievement of our growth targets, the success of our restructuring activities in the second half of the year and the acquisition of additional leadership talent, warranted an additional discretionary bonuses as follows: Named Executive Officer 2017 Annual Incentive Bonus 2017 Discretionary Bonus 2017 Total Bonus Dennis L. Klaeser $342,419 $157,581 $500,000 Thomas C. Shafer $538,771 $111,229 $650,000 2018 Annual Incentive Changes In February 2018, the Compensation Committee approved a new annual cash incentive plan under which executive officer incentive awards will be granted. For a description of the annual incentive plan, see our 2017 Annual Report on Form 10-K. The Compensation Committee determined that the weighting between corporate financial metrics and individual objectives will be 80% and 20%, respectively, in 2018. The Compensation Committee further determined that the corporate goals underlying the 2018 annual incentive awards will beAdjusted Core Net Income weighted at 80% andAdjusted Efficiency Ratio weighted at 20%. 34