CHFC 2018 Proxy Statement

Mr. Klaeser’s employment agreement provides for certain payments upon termination, as described below under “Potential Payments upon Termination or Change in Control.” His employment agreement also requires that he keep company information confidential. In addition, Mr. Klaeser is subject to provisions related to non-competition and non-solicitation of customers and employees for a period of 24-months following termination of his employment. Mr. Klaeser's 2017 annual incentive award is explained under "Elements of Compensation – Long-Term Equity Compensation" in the Compensation Discussion and Analysis section of this Proxy Statement. Employment Agreements with Mr. Shafer August 2016 Employment Agreement We entered into an employment with Mr. Shafer in connection with our merger with Talmer effective August 31, 2016. Under this employment agreement, Mr. Shafer served as a Vice President and Director of Regional and Community Banking for Chemical Bank. The agreement had an initial term of two years that automatically extends for additional one year terms unless either party gave the other notice of intention to terminate at least 30 days before the anniversary of the effective date. Under the employment agreement, Mr. Shafer was entitled to an annual base salary of $425,000 and he was entitled to participate in our bonus, equity and fringe benefits plans. Under this employment agreement, we initially agreed to issue Mr. Shafer an equity award equal to 70% of his base salary, to consist of 60% PRSUs, 30% stock options and 10% TRSUs, with such grant to be made as soon as administratively feasible after the effective date of his agreement. We issues these restricted stock units to Mr. Shafer on January 4, 2017, in an amount equal to approximately 81% of his base salary, and in the form of approximately 50% PRSUs and 50%TRSUs, as modified and determined by the Compensation Committee and agreed to by Mr. Shafer. The terms of these awards are further explained under "Elements of Compensation – Long-TermEquityCompensation" in the CompensationDiscussion andAnalysis section of this Proxy Statement. July 2017 Employment Agreement Following Mr. Shafer’s appointment as Vice Chair and President and Chief Executive Officer of Chemical Bank, on July 1, 2017, we entered into a new employment agreement with Mr. Shafer to serve as our Vice Chair and President and Chief Executive Officer of Chemical Bank. This agreement supersedes and replaces his employment agreement datedAugust 31, 2016. The new agreement has an initial term of two years that automatically extends for additional one year terms unless either party gives the other notice of intention to terminate at least 30 days before the anniversary of the effective date. Under the employment agreement, Mr. Shafer is entitled to an annual base salary of $750,000 (up from $425,000 under his prior agreement) and he is entitled to participate in any stock option or other equity compensation programs that we offer at a level commensurate with his position, with an initial annual target equity plan award equal to 110% of his base salary. He is also eligible to participate in our annual bonus programs for senior executives at a level commensurate with his position, with an initial annual target bonus equal to 90% of his base salary. Mr. Shafer is also entitled to participate in health and dental, life insurance, short and long term disability insurance, retirement and other employee fringe benefit programs covering our salaried employees as a group, and in any programs applicable to our senior executives. We also agreed to pay Mr. Shafer $900 per month to purchase or lease an automobile and to reimburse him up to $25,000 per year for country club membership dues. Mr. Shafer’s employment agreement provides for certain payments upon termination, as described belowunder “Potential Payments upon Termination or Change in Control.” His employment agreement also requires that he keep company information confidential. In addition, Mr. Shafer is subject to provisions related to non-competition and non-solicitation of customers and employees for a period of 24-months following termination of his employment. Mr. Shafer’s 2017 awards under our annual incentive plan and long-term incentive plan are explained under “Elements of Compensation – Annual Incentive Plan” and “Elements of Compensation – Long-Term Equity Compensation” in the Compensation Discussion and Analysis section of this Proxy Statement. Employment Agreement and Offer Letter Agreement with Mr. Rathbun Employment Agreement On August 31, 2016, we entered into an employment agreement with Mr. Rathbun to serve as our Executive Vice President and Chief Operating Officer - Customer Experience. Under the employment agreement, Mr. Rathbun was entitled to an annual base salary of $330,000 and he was entitled to participate in any stock option or other equity compensation programs that we offer at 45