ex10-1.htm


    EXHIBIT
10.1

    


    
      FIRST
DEFIANCE FINANCIAL CORP.

    

    
      2008
LONG TERM INCENTIVE COMPENSATION PLAN

    

    
      


    

    
      ARTICLE
1

    

    
      General
Purpose of Plan; Definitions

    

    
      


    

    
      
        	
                1.1

              	
                Name and Purposes. The
      name of this Plan is the First Defiance Financial Corp. 2008 Long Term
      Incentive Compensation Plan. The purpose of this Plan is to enable First
      Defiance Financial Corp. and its Affiliates to: (i) reward executive
      officers and other key management employees who contribute to the
      long-term success of the Company, by making the amount of their
      compensation contingent upon the Company’s long-term profitable
      performance and growth; and (ii) to attract and retain executive officers
      and other key management employees of exceptional
  ability.

              


      

    

    
      


    

    
      
        	
                1.2

              	
                Certain Definitions.
      Unless the context otherwise indicates, the following words used
      herein shall have the following meanings whenever used in this
      instrument:

              


      

    

    


    
      
        	
              	
                (a)

              	
                "Affiliate"
      means any corporation, partnership, joint venture or other entity,
      directly or indirectly, through one or more intermediaries, controlling,
      controlled by, or under common control with the Company, as determined by
      the Board of Directors in its
discretion.

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                “Contingent
      Award Agreement” means a written agreement between the Board of Directors
      and a Participant setting forth the terms and conditions of an
      Award.

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                "Award"
      means an actual cash award to a Plan Participant in accordance with the
      terms and conditions of the Plan and a Contingent Award
      Agreement

              


      

    

    
      


    

    
      
        	
              	
                (d)

              	
                "Board
      of Directors" means the Board of Directors of the Company, as constituted
      from time to time.

              


      

    

    
      


    

    
      
        	
              	
                (e)

              	
                “Cause”
      with respect to an employee of the Company or any affiliate of the Company
      means and is limited to (a) criminal dishonesty, (b) refusal to perform
      duties on an exclusive and substantially full-time basis, (c) refusal to
      act in accordance with any specific substantive instructions given by the
      Company or any affiliate of the Company with respect to performance of
      duties normally associated with such employee’s position, or (d) engaging
      in conduct which could be materially damaging to the Company or any
      affiliate of the Company without a reasonable good faith belief that such
      conduct was in the best interest of the Company or any affiliate of the
      Company.

              


      

    

    
      


    

    
      
        	
              	
                (f)

              	
                "Code"
      means the Internal Revenue Code of 1986, as amended, and any lawful
      regulations or guidance promulgated thereunder. Whenever reference is made
      to a specific Internal Revenue Code section, such reference shall be
      deemed to be a reference to any successor Internal Revenue Code section or
      sections with the same or similar
purpose.

              


      

    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    
       

    

    
      


    

    
      
        	
              	
                (g)

              	
                "Committee"
      means the Compensation Committee of the Board administering this Plan as
      provided in Article 2.

              


      

    

    
      


    

    
      
        	
              	
                (h)

              	
                "Company"
      means First Defiance Financial Corp., a corporation organized under the
      laws of the State of Ohio and, for purposes of determining whether a
      Change in Control has occurred, any corporation or entity that is a
      successor to First Defiance Financial Corp. or substantially all of the
      assets of First Defiance Financial Corp. and that assumes the obligations
      of First Defiance Financial Corp. under this Plan by operation of law or
      otherwise.

              


      

    

    
      


    

    
      
        	
              	
                (i)

              	
                “Contingent
      Award” means an Award that is contingent on satisfying performance
      conditions set forth under a Contingent Award
  Agreement.

              


      

    

    
      


    

    
      
        	
              	
                (j)

              	
                "Director"
      means a member of the Board of
Directors.

              


      

    

    
      


    

    
      
        	
              	
                (k)

              	
                "Disability"
      means the person (a) is unable to engage in any substantial gainful
      activity by reason of any medically determinable physical or mental
      impairment which can be expected to result in death or can be expected to
      last for a continuous period of not less than 12 months, (b) is, by
      reason of any medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12 months, receiving income replacement
      benefits for a period of not less than 3 months under an accident and
      health plan of the Company or an affiliate covering the person, or (c) has
      been determined.

              


      

    

    
      


    

    
      
        	
              	
                (l)

              	
                “Outside
      Director” means a nonemployee Director who meets the definitions of the
      terms "outside director" set forth in Section 162(m) of the
      Code.

              


      

    

    
      


    

    
      
        	
              	
                (m)

              	
                "Participant"
      means an employee of the Company who is designated as a Participant in the
      Plan as provided for under Article
3.

              


      

    

    
      


    

    
      
        	
              	
                (n)

              	
                "Performance
      Period" means each period of at least three consecutive fiscal years, as
      established by the Committee, over which Awards may be earned contingent
      on satisfying specified performance conditions. Performance Periods shall
      begin on January 1 and end on December 31. The Committee may, in its
      discretion, establish partially concurrent Performance
      Periods.

              


      

    

    
      


    

    
      
        	
              	
                (o)

              	
                "Plan"
      means this First Defiance Financial Corp. 2008 Long Term Incentive
      Compensation Plan, as amended from time to
time.

              


      

    

    
      


    

    
      
        	
              	
                (p)

              	
                “Retirement”
      means a voluntary termination of employment by the Participant on or after
      attainment of age 62.

              


      

    

    
      


    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    ARTICLE
2

    Administration

    


    
      
        	
                2.1

              	
                Authority and Duties of the
      Committee.

              


      

    

    
      


    

    
      
        	
              	
                (a)

              	
                The
      Plan shall be administered by a Committee of at least three Directors who
      are appointed by the Board of Directors. Unless otherwise determined by
      the Board of Directors, the Compensation Committee of the Board of
      Directors (or any subcommittee thereof) shall serve as the Committee, and
      all of the members of the Committee shall be Outside
      Directors.

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                The
      Committee has the sole and exclusive authority, subject to any limitations
      specifically set forth in this Plan,
to:

              


      

    

    
      


    

    
      
        	
              	
                (i)

              	
                select
      the Eligible Participants to whom Contingent Awards are
    made;

              


      

    

    
      


    

    
      
        	
              	
                (ii)

              	
                determine
      the specific terms and conditions of Contingent Awards made to a
      Participant, not inconsistent with the terms of the
  Plan;

              


      

    

    
      


    

    
      
        	
              	
                (iii)

              	
                determine
      whether any conditions or objectives related to Awards have been
      met,

              


      

    

    
      


    

    
      
        	
              	
                (iv)

              	
                subsequently
      modify or waive any terms and conditions of Awards, not inconsistent with
      the terms of this Plan;

              


      

    

    
      


    

    
      
        	
              	
                (v)

              	
                adopt,
      alter and repeal such administrative rules, guidelines and practices
      governing this Plan as it deems advisable from time to
    time;

              


      

    

    
      


    

    
      
        	
              	
                (vi)

              	
                promulgate
      such administrative forms as it from time to time deems necessary or
      appropriate for administration of the
Plan;

              


      

    

    
      


    

    
      
        	
              	
                (vii)

              	
                construe,
      interpret, administer and implement the terms and provisions of this Plan,
      any Contingent Award and any related
agreements;

              


      

    

    
      


    

    
      
        	
              	
                (viii)

              	
                correct
      any defect, supply any omission and reconcile any inconsistency in or
      between the Plan, any Contingent Award and any related agreements;
      and

              


      

    

    
      


    

    
      
        	
              	
                (ix)

              	
                otherwise
      supervise the administration of this
Plan.

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                All
      decisions made by the Committee pursuant to the provisions of this Plan
      are final and binding on all persons, including the Company and
      Participants, but may be made by their terms subject to ratification or
      approval by the Board of
Directors.

              


      

    

    



    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    
      
        	
                2.2

              	
                Delegation of Duties.
      The Committee may delegate ministerial duties to any other person
      or persons, and it may employ attorneys, consultants, accountants or other
      professional advisers for purposes of Plan administration at the expense
      of the Company.

              


      

    

    
      


    

    
      
        	
                2.3

              	
                Limitation of Liability.
      Members of the Board of Directors, members of the Committee and
      Company employees who are their designees acting under this Plan shall be
      fully protected in relying in good faith upon the advice of counsel and
      shall incur no liability except for gross or willful misconduct in the
      performance of their duties
hereunder.

              


      

    

    


    


    
      ARTICLE
3

    

    
      Participants

    

    
      


    

    
      
        	
                3.1

              	
                Eligibility.
      Executive officers and
      other key management employees of the Company or any of its Affiliates
      (each an "Eligible Participant") who are selected by the Committee in its
      sole discretion are eligible to participate in this
  Plan.

              


      

    

    
      


    

    
      
        	
                3.2

              	
                Contingent Award Agreements.
      Awards made under the Plan are contingent upon the Participant's
      execution of a written agreement in a form prescribed by the Committee
      (hereinafter “Contingent Award Agreement”).  Execution of a
      Contingent Award Agreement shall constitute the Participant's irrevocable
      agreement to, and acceptance of, the terms and conditions of the
      Contingent Award set forth in such agreement and of the terms and
      conditions of the Plan applicable to such Contingent Award. Contingent
      Award Agreements may differ from time to time and from Participant to
      Participant.

              


      

    

    
      


    

    
      


    

    ARTICLE
4

    Performance
Based Awards

    


    
      
        	
                4.1

              	
                Contingent Awards. A
      Contingent Award represents a right to receive a future Award conditioned
      upon the attainment of specified performance objectives and such other
      conditions, restrictions and contingencies as the Committee may determine.
      Each Contingent Award made under this Plan will be evidenced by minutes of
      a meeting, or by a unanimous written consent without a meeting, of the
      Committee and by a Contingent Award Agreement is executed by the Board and
      the Plan Participant. The timing of Contingent Awards and the Award
      opportunity covered by each Contingent Award are to be determined by the
      Committee in its discretion

              


      

    

    
      


    

    
      
        	
                4.2

              	
                Performance Conditions.
      At the time a Contingent Award is made, the Committee will specify
      the performance conditions which, depending on the extent to which they
      are met, will determine the level of Award paid to the Participant. The
      Committee will also specify the Performance Period applicable to a
      Contingent Award during which the performance conditions must be met. With
      respect to awards intended to be "performance based compensation," the
      Committee may use performance objectives based on one or more of the
      following but not limited to: earnings per share, total revenue, net
      interest income, non-interest income, net income, net income before tax,
      non-interest expense,

              


      

    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    
      efficiency
ratio, return on equity, return on assets, economic profit added, loans,
deposits, tangible equity, assets, net charge-offs, new market growth, product
line developments, and nonperforming assets. The Committee may designate a
single goal criterion or multiple goal criteria for performance measurement
purposes. Performance measurement may be described in terms of objectives that
are related to the performance by the Company, by any Affiliate, or by any
employee or group of employees in connection with services performed by that
employee or those employees for the Company, a Subsidiary, or one or more
subunits of the Company or of any Affiliate. The performance objectives may be
made relative to the performance of other companies. The performance objectives
and periods need not be the same for each Participant nor for each Contingent
Award.

    

    
      


    

    
      
        	
                4.3

              	
                Adjustment of Performance
      Conditions. The Committee may modify, amend or otherwise adjust the
      performance conditions specified for outstanding Contingent Awards if it
      determines that an adjustment would be consistent with the objectives of
      this Plan and taking into account the interests of the Participants and
      the public shareholders of the Company. The types of events which could
      cause an adjustment in the performance objectives include, without
      limitation, accounting changes which substantially affect the
      determination of performance objectives, changes in applicable laws or
      regulations which affect the performance objectives, and divisive
      corporate reorganizations, including spin-offs and other distributions of
      property or stock.

              


      

    

    
      


    

    
      
        	
                4.4

              	
                Determination of
      Awards. At the end of each Performance Period corresponding to a
      Contingent Award, the Committee shall determine the extent to which
      designated performance conditions have been achieved based on reference to
      audited financial statements for each fiscal year during the Performance
      Period. Upon making this determination, the Committee shall then determine
      the level of Award earned in accordance with the terms and conditions set
      forth under the corresponding Contingent Award Agreement, and shall then
      notify each Participant of the Award to be
paid.

              


      

    

    
      


    

    
      
        	
                4.5

              	
                Payment of Awards.
      Awards earned and payable as determined by the Committee shall be paid to
      the Participant in cash no later than March 15 of the year immediately
      following the Performance Period. In the event of a Participant’s death
      after the end of the Performance Period, but before payment of the Award,
      such Award shall be paid to the beneficiary or beneficiaries designated in
      writing by the Participant and filed with the Company or, in the absence
      of and such designation, or if no such designated beneficiary survives the
      Participant, to the Participant’s
estate.

              


      

    

    
      


    

    
      
        	
                4.6

              	
                Special
      Limitations on Contingent Awards. Unless a
      Contingent Award agreement approved by the Committee provides otherwise,
      Awards made under this Plan are intended to meet the requirements for
      exclusion from coverage under Code Section 409A and all Awards shall be
      construed and administered
accordingly.

              


      

    

    
      


    

    
      


    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    
      ARTICLE
5

    

    
      Termination,
Transfers and Leaves of Absence

    

    
      


    

    
      
        	
                5.1

              	
                Termination. A
      Contingent Award or unearned portion thereof will terminate without
      payment of an Award upon the termination of employment of the Participant
      during the Performance Period for any reason except as provided for under
      this section. In the event of a Participant's employment with the Company
      or its Affiliates terminates by reason of his or her death, Disability or
      Retirement, the terms and conditions for payment of an Award will be
      determined at the sole discretion of the Committee, and will be set forth
      under the Contingent Award
Agreement.

              


      

    

    
      


    

    
      
        	
                5.2

              	
                Transfer of Participant.
      For purposes of this Plan, the transfer of a Participant among the
      Company and its Affiliates is deemed not to be a termination of
      employment.

              


      

    

    
      


    

    
      
        	
                5.3

              	
                Effect of Leaves of Absence.
      For purposes of this Plan, the following leaves of absence are
      deemed not to be a termination of
employment:

              


      

    

    


    
      
        	
              	
                (a)

              	
                a
      leave of absence, approved in writing by the Company, for sickness or any
      other purpose approved by the Company, if the period of such leave does
      not exceed 90 days;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                a
      leave of absence in excess of 90 days, approved in writing by the Company,
      but only if the employee's right to reemployment is guaranteed either by a
      statute (e.g., military service) or by contract, and provided that, in the
      case of any such leave of absence, the employee returns to work within 30
      days after the end of such leave;
and

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                any
      other absence determined by the Committee in its discretion not to
      constitute a termination of
employment.

              


      

    

    
      


    

    
      


    

    
      ARTICLE
6

    

    
      Effect
of Change in Control

    

    
      


    

    
      	
              6.1

            	
              Change in Control Defined.
      "Change in Control" shall mean a “Change in Ownership” as defined
      in (a) hereof; a “Change in Effective Control” as defined in (b), hereof;
      or a “Change in Ownership of a Substantial Portion of Assets” as defined
      in (c) hereof.

            


    

    


    
      	
               
      

            	
              (a)

            	
              Change in
      Ownership. For purposes of this Agreement, a change in the
      ownership of the Company occurs on the date that any one person, or more
      than one person acting as a group (as defined in subsection (d) hereof),
      acquires ownership of stock of the Company that, together with stock held
      by such person or group, constitutes more than 50 percent of the
      total fair market value or total voting power of the stock of the Company.
      However, if any one person, or more than one person acting as a group, is
      considered to own more than 50 percent of the total fair market value
      or total voting power of the stock of the Company,
  the

            


    


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    acquisition
of additional stock by the same person or persons is not considered to cause a
change in the ownership of the Company (or to cause a change in the effective
control of the Company within the meaning of subsection (b) hereof). An increase
in the percentage of stock owned by any one person, or persons acting as a
group, as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock for purposes of
this section.

    


    
      	
               
      

            	
              (b)

            	
              Change in the
      Effective Control. For purposes of this Agreement, a change in the
      effective control of the Company occurs on the date that either
      –

            


    

    


    
      	
               
      

            	
              (i)

            	
              Any
      one person, or more than one person acting as a group (as determined under
      subsection (d) hereof), acquires (or has acquired during the 12-month
      period ending on the date of the most recent acquisition by such person or
      persons) ownership of stock of the Company possessing 35 percent or more
      of the total voting power of the stock of the Company;
  or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              a
      majority of members of the Company’s board of directors is replaced during
      any 12-month period by directors whose appointment or election is not
      endorsed by a majority of the members of the Company’s board of directors
      prior to the date of the appointment or
  election.

            


    

    


    In the
absence of an event described in subsection (b)(i) or (ii) above, a change in
the effective control of a Company will not have occurred.

    


    
      	
               
      

            	
              (c)

            	
              Change in the
      Ownership of a Substantial Portion of the Company’s Assets. For
      purposes of this Agreement, a change in the ownership of a substantial
      portion of the Company’s assets occurs on the date that any one person, or
      more than one person acting as a group (as determined in subsection(d)
      hereof), acquires (or has acquired during the 12-month period ending on
      the date of the most recent acquisition by such person or persons) assets
      from the Company that have a total gross fair market value equal to or
      more than 40 percent of the total gross fair market value of all of the
      assets of the Company immediately prior to such acquisition or
      acquisitions. For this purpose, gross fair market value means the value of
      the assets of the Company, or the value of the assets being disposed of,
      determined without regard to any liabilities associated with such
      assets.

            


    

    


    There is
no Change in Control Event under this subsection (c) when there is a transfer to
an entity that is controlled by the shareholders of the Company immediately
after the transfer, as provided in this paragraph. A transfer of assets by the
Company is not treated as a change in the ownership of such assets if the assets
are transferred to –

    


    
      	
               
      

            	
              (i)

            	
              A
      shareholder of the Company (immediately before the asset transfer) in
      exchange for or with respect to its
stock;

            


    


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (ii)

            	
              An
      entity, 50 percent or more of the total value or voting power of which is
      owned, directly or indirectly, by the
Company;

            


    

    


    
      	
               
      

            	
              (iii)

            	
              A
      person, or more than one person acting as a group, that owns, directly or
      indirectly, 50 percent or more of the total value or voting power of all
      the outstanding stock of the Company;
or

            


    

    


    
      	
               
      

            	
              (iv)

            	
              An
      entity, at least 50 percent of the total value or voting power of which is
      owned, directly or indirectly, by a person described in section (iii)
      above.

            


    

    


    For
purposes of this subsection (c) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets. For example,
a transfer to a corporation in which the transferor corporation has no ownership
interest before the transaction, but which is a majority-owned subsidiary of the
transferor corporation after the transaction is not treated as a change in the
ownership of the assets of the transferor corporation.

    


    
      	
               
      

            	
              (d)

            	
              Persons Acting as a
      Group. Persons will not be considered to be acting as a group
      solely because they purchase assets or purchase or own stock of the same
      corporation at the same time, or as a result of the same public offering.
      However, persons will be considered to be acting as a group if they are
      owners of a corporation that enters into a merger, consolidation, purchase
      or acquisition of stock, purchase or acquisition of assets, or similar
      business transaction with the Company. If a person, including an entity
      shareholder, owns stock in both corporations that enter into a merger,
      consolidation, purchase or acquisition of stock, or similar transaction,
      such shareholder is considered to be acting as a group with other
      shareholders in a corporation only to the extent of the ownership in that
      corporation prior to the transaction giving rise to the change and not
      with the ownership interest in the other
  corporation.

            


    

    
      


    

    
      
        	
                6.2

              	
                Effect of Change in Control.
      Unless otherwise determined by the Committee in connection with the
      Contingent Award and set forth in the Contingent Award Agreement, in the
      event of a Change in Control of the Company an Award shall be made in an
      amount determined by taking the product of (A) the Award that would have
      been due if performance, measured as of the transaction date, were to
      continue at the same rate through the Performance Period; and (B) a
      fraction, the numerator of which is the number of whole months that have
      elapsed from the beginning of the Performance Period to the date of the
      transaction, and the denominator of which is the number of whole months in
      the Performance Period

              


      

    

    
      


    

    
      
        	
                6.3

              	
                Code Section 409A.
      Unless a Contingent Award Agreement approved by the Committee
      provides otherwise, each Contingent Award made under this Plan is intended
      to meet the requirements for exclusion from coverage under Code Section
      409A. If the Committee provides than a Contingent Award shall be subject
      to Code Section 409A, then, notwithstanding the other provisions of this
      Article 6, the Committee may provide in the Contingent Award agreement for
      such changes to the definition of Change in Control
  from

              


      

    


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    
      the
definition set forth in this Article 6, and for such changes to the Committee's
rights upon a Change in Control, as the Committee may deem necessary in order
for such Award to comply with Code Section 409A.

    

    
      


    

    
      


    

    ARTICLE
7

    Transferability
of Awards

    


    
      
        	
                7.1

              	
                Awards Are Non-Transferable.
      Contingent Awards or Awards are non-transferable and any attempts
      to assign, pledge, hypothecate or otherwise alienate or encumber (whether
      by operation of law or otherwise) any Contingent Award or Award shall be
      null and void.

              


      

    

    
      


    

    
      


    

    
      ARTICLE
8

    

    
      Amendment
and Discontinuation

    

    
      


    

    
      
        	
                8.1

              	
                Amendment or Discontinuation
      of this Plan. The Board of Directors may amend, alter, or
      discontinue this Plan at any time, provided that no amendment, alteration,
      or discontinuance may be made, which would materially and adversely affect
      the rights of a Participant under any Contingent Award made prior to the
      date such action is adopted by the Board of Directors without the
      Participant's written consent
thereto.

              


      

    

    
      


    

    
      Notwithstanding
the foregoing, this Plan may be amended without Participants' consent to: (i)
comply with any law; (ii) preserve any intended favorable tax effects for the
Company, the Plan or Participants; or (iii) avoid any unintended unfavorable tax
effects for the Company, the Plan or Participants.

    

    
      


    

    
      


    

    
      ARTICLE
9

    

    
      Satisfaction
of Tax Liabilities

    

    
      


    

    
      
        	
                9.1

              	
                In General. The Company
      shall withhold any taxes which the Committee determines the Company is
      required by law or required by the terms of this Plan to withhold in
      connection with any Awards incident to this Plan. The Participant or other
      recipient shall provide the Committee with such additional information or
      documentation as may be necessary for the Company to discharge its
      obligations under this Section. The Company may withhold cash, in an
      amount equal to the amount which the Committee determines is necessary to
      satisfy the obligation of the Company, a Subsidiary or a Parent to
      withhold federal, state and local income taxes. Alternatively, the Company
      may require the holder to pay to the Company such amounts, in cash,
      promptly upon demand.

              


      

    

    
      


    

    
      


    


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    
      ARTICLE
10

    

    
      General
Provisions

    

    
      


    

    
      
        	
                10.1

              	
                No Implied Rights to Awards or
      Employment. No potential Participant has any claim or right to a
      Contingent Award under this Plan, and there is no obligation of uniformity
      of treatment of Participants under this Plan. Neither this Plan nor any
      Award thereunder shall be construed as giving any individual any right to
      continued employment with the Company or any Affiliate. The Plan does not
      constitute a contract of employment, and the Company and each Affiliate
      expressly reserve the right at any time to terminate employees free from
      liability, or any claim, under this Plan, except as may be specifically
      provided in this Plan or in an Award
agreement.

              


      

    

    
      


    

    
      
        	
                10.2

              	
                Other Compensation Plans.
      Nothing contained in this Plan prevents the Board of Directors from
      adopting other or additional compensation arrangements, subject to
      shareholder approval if such approval is required, and such arrangements
      may be either generally applicable or applicable only in specific
      cases.

              


      

    

    
      


    

    
      
        	
                10.3

              	
                Successors. All
      obligations of the Company with respect to Contingent Awards made under
      this Plan are binding on any successor to the Company, whether as a result
      of a direct or indirect purchase, merger, consolidation or otherwise of
      all or substantially all of the business and/or assets of the
      Company.

              


      

    

    
      


    

    
      
        	
                10.4

              	
                Severability. In the
      event any provision of this Plan, or the application thereof to any person
      or circumstances, is held illegal or invalid for any reason, the
      illegality or invalidity shall not affect the remaining parts of this
      Plan, or other applications, and this Plan is to be construed and enforced
      as if the illegal or invalid provision had not been
    included.

              


      

    

    
      


    

    
      
        	
                10.5

              	
                Governing Law. To the
      extent not preempted by Federal law, this Plan and all Award agreements
      pursuant thereto are construed in accordance with and governed by the laws
      of the State of Ohio. This Plan is not intended to be governed by the
      Employee Retirement Income Security Act and shall be so construed and
      administered.

              


      

    

    
      


    

    
      
        	
                10.6

              	
                Legal Requirements. No
      Awards shall be made and the Company shall have no obligation to make any
      payment under the Plan, unless such payment is, without further action by
      the Committee, in compliance with all applicable Federal and state laws
      and regulations.

              


      

    

    
      


    

    
      
        	
                10.7

              	
                Forfeiture by Employees in
      Connection with Termination for Cause. Notwithstanding any other
      provision of this Plan, upon the termination of employment of a
      Participant for Cause, such Participant shall forfeit all entitlements
      associated with any Contingent Award made by the Committee under this
      Plan.

              


      

    

    
      


    

    
      


    


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    ARTICLE
11

    Effective
Date and Term

    


    
      
        	
                11.1

              	
                Effective Date. The
      effective date of this First Defiance Financial Corp. 2008 Long Term
      Incentive Compensation Plan is the date on which the Board approves the
      Plan.

              


      

    

    
      


    

    
      
        	
                11.2

              	
                Termination Date. This
      Plan will continue in effect until amended or terminated by the
      Board

              


      

    

     

     

     

     

     

     

     

    15