CHFC 2018 Proxy Statement

General Release Agreement, as Amended As discussed above, effective August 8, 2017, Mr. Ramaker retired as our Chief Executive Officer and President. In connection with his retirement, we entered into a General Release Agreement with Mr. Ramaker, which we refer to as the release agreement, that provides for certain payments and other benefits. Under the release agreement, we agreed to provide Mr. Ramaker with the following separation benefits: • salary continuation benefits equal to $2,755,322 (paid in installments as set forth in the release agreement over a period of 52 bi-weekly payments); • a lump sum payment of $20,088; • accelerated vesting of 32,195 nonqualified stock optionswith an exercise price of $32.81 per share and 24,299 nonqualified stock options with an exercise price of $53.72 per share; • accelerated vesting of 10,396 TRSUs which converted into shares of our common stock; • the restrictions on an aggregate of 36,824 PRSUs will continue to lapse as the applicable performance conditions are met and such units will convert into shares of our common stock; • payment of outplacement services for up to 12 months; • following payment of the last salary continuation payment described above, we will pay Mr. Ramaker a stipend equal to $1,377,661 payable in 26 equal bi-weekly installments; and • title to the automobile used by Mr. Ramaker. In addition, Mr. Ramaker will begin receiving benefit payments from the Chemical Deferred Compensation plan. Pursuant to the First Amendment to his release agreement, on the first payroll period of the seventh month after his separation from service, he will receive (a) $783,772 as a lump sum payment for compensation deferred prior to August 31, 2016, (b) annual payments in the amount of $20,774 (paid out under a five-year payout election) representing compensation deferred between September 1, 2016 and December 31, 2016, and (c) annual payments in the amount of $34,205 (paid out under a ten-year payout election) representing compensation deferred between January 1, 2017 and August 8, 2017, his retirement date. Mr. Ramaker will also begin receiving benefits from his Supplemental Pension Plan. Pursuant to the First Amendment to his release agreement, on the first payroll period of the seventh month after hisAugust 8, 2017 separation from service, he will receive (a) $1,898,082 as a lump sum payment for benefits earned prior toAugust 31, 2016, (b) a $134,540 lump sum payment for interest earned fromAugust 31, 2016 until the payment date (representing interest earned on amount described in (a) of 4.5% annualized, and (c) $392,443 (calculated using a 3.38% discount rate), to be paid in monthly installments (paid out under a 50% joint and survivor annuity with 10 years certain election), representing benefits earned after August 31, 2016 until his retirement date. As noted above, pursuant to his release agreement, we accelerated the vesting of all of Mr. Ramaker’s unvested TRSUs and nonqualified stock options (and we modified the expiration date of all of his outstanding stock options to August 9, 2020), and we will continue to vest his remaining PRSUs if we meet the applicable performance goals, even though he will not meet the service requirements. For his awards granted in February 2017 and modified as of his August 2017 retirement, pursuant to SEC guidance, the incremental fair value of the modified award, computed as of the modification date in accordance with FASB ASC Topic 718, as well as the grant date fair value of the original award has been reported in the “Summary Compensation Table” and “Grants of Plan-Based Awards” table. However, he will receive no value related to each of the February 21, 2017 awards listed in the “Grants of Plan-Based Awards,” as these awards have been superseded and replaced with the August 9, 2017 awards. For awards that were granted in years prior to 2017, pursuant to SEC guidance, we have reported the incremental fair value of the modified award in the “Summary Compensation Table” and “Grants of Plan-Based Awards” table. The performance conditions related to Mr. Ramaker’s PRSUs under our long-term incentive plan are explained under “Elements of Compensation – Long-Term Equity Compensation” in the Compensation Discussion and Analysis section of this Proxy Statement. Under the release agreement, Mr. Ramaker has agreed, for a period of 36 months following his separation from service, not to: • engage in activities that compete with us in any county in which we have a branch office, ATM, loan processing center or other facility, subject to limited exceptions; • solicit any of our customers or prospective customers to whom he provided services, or for whom he transacted business, or whose identity became known to him in connection with his employment; and • solicit any of our employees to apply for or accept employment or a business opportunity with another person or entity. If Mr. Ramaker materially breaches any provision of the release agreement, we may withhold or cancel any remaining payment or benefits due to him under the release agreement. Because Mr. Ramaker’s remaining payments are subject to his compliance with the above-referenced non-competition and non-solicitation provisions, we have only included amounts he has already been paid under his release agreement in the “Summary Compensation Table.” For additional information regarding all amounts owed 47