Document:

EX-10.2

 Exhibit 10.2 

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into this 9th day of September, 2019 by and among First Defiance
Financial Corp. (“First Defiance”), an Ohio-chartered corporation and savings and loan holding company, First Federal Bank of the Midwest (“First Federal”), a federally chartered stock savings bank, both of which
are located in Defiance, Ohio (collectively, the “Company”), and Gary M. Small, an individual (hereinafter referred to as “Executive”). 

WITNESSETH: 
 WHEREAS,
United Community Financial Corp. (“UCFC”), Home Savings Bank, an Ohio-chartered commercial bank (“Home Savings”), and Executive are party to an Employment Agreement, dated as of February 20, 2018 (the
“Prior Employment Agreement”); 
 WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as of
September 9, 2019 (the “Merger Agreement”), by and between the Company and UCFC; 
 WHEREAS, effective as of the
Effective Time (as defined in the Merger Agreement), the Company desires that this Agreement supersede the Prior Employment Agreement and to employ Executive on the terms set forth in this Agreement; and 

WHEREAS, Executive and the Company desire to enter into this Agreement to set forth the terms and conditions of the employment relationship
between the Company and Executive. 
 NOW, THEREFORE, in consideration of the premises and mutual covenants set forth below, and for other
good and valuable consideration, the receipt and sufficiency of which is acknowledged by the parties, the Company and Executive, each party intending to be legally bound, hereby agree as follows: 

1. Employment and Term. 

(a) Term. The Company hereby agrees to employ Executive, and Executive hereby agrees to be employed by the Company, subject to the terms
and subject to the conditions of this Agreement, for the period commencing on the date of the closing of the transactions contemplated by the Merger Agreement (the “Effective Date”) and ending on the third (3rd) anniversary thereof
(the “Initial Term”). Unless a Non-Renewal Notice (as defined below) is given as herein provided or Executive’s employment is earlier terminated in accordance with the terms hereof,
commencing on the first (1st) anniversary of the Effective Date and on each anniversary of the Effective Date thereafter, the term of Executive’s employment under this Agreement shall be extended automatically for an additional twelve
(12)-month period. The Company or Executive may elect to terminate the automatic extension of the Employment Term (as defined below) by giving written notice of such election not less than ninety (90) days prior to the end of the then-current
term (the “Non-Renewal Notice”). The Initial Term and any renewal term are referred to herein as the “Employment Term.” The portion of the Employment Term commencing on the
Effective Date and ending on the second (2nd) anniversary of the Succession Date (as defined below) shall be referred to herein as the “Initial Period.” The Employment Term may be terminated as set forth in
Section 4 of this Agreement. 
  

 (b) Resignation of All Other Positions. Upon termination of Executive’s
employment hereunder for any reason, Executive shall be deemed to have resigned from all positions that Executive holds with the Company and any of its Affiliates (as defined below), including as an officer or member of the Board of Directors of the
Company (the “Board”) or a committee thereof. For purposes of this Agreement, an “Affiliate” shall mean any corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, trust, association or organization that controls, is controlled by or is under common control with the Company. 

2. Duties and Positions of Executive. 

(a) General Duties and Responsibilities. During the Employment Term, Executive shall serve as the President of First Defiance and First
Federal and, until the Bank Merger (as defined in the Merger Agreement), Home Savings (First Federal and Home Savings, collectively, the “Bank”). In addition to the foregoing positions, on a date (the “Succession
Date”) between January 1, 2021 and June 30, 2021 to be determined by the Board following the Effective Date, Executive shall be appointed to the position of Chief Executive Officer; provided that, if Donald P. Hileman (the
“Current CEO”) ceases to serve as Chief Executive Officer of the Company for any reason, the Succession Date shall be the date of the Current CEO’s cessation of service. During the Employment Term, Executive shall also be
nominated and/or appointed as a member of both the Board and the board of directors of the Bank. During the Employment Term, Executive shall report directly to the Current CEO through the Succession Date and solely and directly to the Board
thereafter. In such positions, Executive shall have such duties and authority customarily associated with such positions. Executive will further perform such other duties and hold such other positions related to the business of the Company and its
Affiliates as may from time to time be reasonably requested of Executive by the Board. Executive shall perform his services at such business location(s) as reasonably determined by Executive and the Board, it being understood that Executive will not
be required to move his primary personal residence. 
 (b) Devotion of Entire Time to the Business of the Company. During the
Employment Term, Executive shall devote his full business time, ability and attention during normal business hours to the faithful performance of his duties under this Agreement. Executive shall not directly or indirectly render any services of a
business, commercial or professional nature to any person or organization other than the Company or its Affiliates without the prior written consent of the Board; provided, however, that Executive shall not be precluded from
(i) taking such vacation or sick leave as is applicable to Executive, (ii) pursuing personal investments that do not interfere or conflict with the performance of his duties to the Company, (iii) reasonably participating in community,
civic, charitable or similar organizations, or in industry-related activities, including, but not limited to, attending state and national trade association meetings, and (iv) serving as an officer, director, trustee or committee member of a
state or national trade association or the Federal Home Loan Bank, or such other regulatory governing body. 
 (c) Standards. During
the Employment Term, Executive shall perform his duties in accordance with such reasonable standards expected of executives with comparable positions in comparable organizations and as may be established from time to time by the Board. 

  
 2 

 3. Compensation and Review. 

(a) Base Salary. During the Employment Term, Executive will receive an annual base salary of $480,000 (or if higher, the base salary of
Executive in effect as of immediately prior to the Effective Date), subject to review annually for increase (but not decrease), with the first adjustment (if determined to be appropriate) to occur based on the Peer Review Process (as defined below)
on the timing contemplated under Section 3(h) of this Agreement. For purposes of this Agreement, the initial annual base salary, together with any increase(s), will be referred to herein the “Base Salary.”
The Base Salary will be payable in accordance with the Company’s regular payroll payment practices, but not less frequently than monthly. 

(b) Special Equity Retention Grant. On or as soon as reasonably practicable following the Succession Date (but in no event later than
thirty (30) days following the Succession Date), the Company shall grant to Executive an award (the “Equity Retention Award”) of restricted common stock of the Company having a grant date fair value equal to $750,000. The
Equity Retention Award shall vest in one-fifth (1/5) installments upon each of the first (1st), second (2nd), third (3rd), fourth (4th) and fifth (5th) anniversaries of the Succession Date and shall have
voting rights and be entitled to dividends when paid to shareholders generally. 
 (c) Annual Cash Incentive Awards. During each year
of the Employment Term, Executive shall be eligible to receive an annual cash bonus (the “Annual Bonus”), with a target opportunity of not less than fifty percent (50%) of the Base Salary (the “Target Annual
Bonus”), subject to review annually for increase (but not decrease), with the first such adjustment (if determined to be appropriate) to occur based on the Peer Review Process on the timing contemplated pursuant to
Section 3(h) of this Agreement. The Annual Bonus shall be payable in accordance with the incentive bonus plan applicable to other senior executives that the Company may adopt and implement from time to time. Nothing
contained in this Section 3(c) shall obligate the Company to institute, maintain or refrain from changing, amending or discontinuing any incentive bonus plan, so long as such changes are similarly applicable to other senior
executive employees under such plan. 
 (d) Annual Long-Term Incentive Awards. During each year of the Employment Term, Executive
shall be eligible to be granted annual long-term incentive awards (the “Annual Long-Term Awards”), with a target grant date fair value of not less than forty percent (40%) of the Base Salary, subject to review annually for increase
(but not decrease), with the first such adjustment (if determined to be appropriate) to occur based on the Peer Review Process on the timing contemplated pursuant to Section 3(h) of this Agreement. The grant timing, form
and terms and conditions of such Annual Long-Term Awards shall be no less favorable than those applicable to the Current CEO prior to the Succession Date (with termination protections to be no less favorable than as set forth in this Agreement).

 (e) Fringe Benefits. During the Employment Term, the Company will provide Executive with all health and life insurance coverages,
disability programs, tax-qualified retirement plans, equity compensation programs and similar fringe benefit plans (including, but not limited to, supplemental disability (as described below) and additional
life insurance (on the 

  
 3 

 
same basis and coverage levels as in effect immediately prior to the Effective Date)), paid holidays, paid vacation, perquisites and such other fringe benefits (including, but not limited to, the
payment of Executive’s dues at one (1) or more country clubs or social clubs) of employment on terms that are no less favorable than those provided to Executive immediately prior to the Effective Date (or to the Current CEO prior to the
Succession Date, if more favorable). 
 (f) Supplemental Disability. During the Employment Term, the Company shall provide Executive
with supplemental disability coverage to ensure that total disability benefits are equivalent to sixty percent (60%) of the Base Salary, up to a maximum benefit of $35,000 per month, pursuant to the policy in effect as of immediately prior to the
Effective Date or, as determined by the Company, a replacement policy that provides equivalent benefits. 
 (g) Expenses. The Company
shall reimburse Executive for reasonable travel, industry, entertainment and miscellaneous expenses incurred in connection with the performance of Executive’s duties under this Agreement, including participation in industry-related activities,
in accordance with any policies or procedures of the Company pertaining to reimbursement of such expenses to senior executives, as in effect from time to time. 

(h) Review for New Peer Group. Each year, on or about the anniversary of the Effective Date, the compensation and benefits of Executive
shall be reviewed for upward adjustment to ensure that Executive’s compensation and benefits are commensurate with market practices for his role with the Company relative to the Company’s peer group (determined taking into account the
effect of the transactions contemplated in the Merger Agreement, and updated in the ordinary course thereafter) (the “Peer Review Process”). The first such adjustments (if determined to be appropriate, consistent with the Peer
Review Process) during the Employment Term shall occur as soon as practicable following the Effective Date (and in no event later than thirty (30) days following the Effective Date) with application for the 2020 fiscal year of the Company;
provided that, prior to the Succession Date, the Base Salary shall not be less than eighty percent (80%) of the annual base salary of the Current CEO. The Compensation Committee of the Board shall have sole discretion with respect to all
determinations related to or arising from the Peer Review Process. Any such adjustments shall be made in accordance with the Company’s charter documents and applicable laws, rules or regulations, including those of any listing agency applicable
to the Company, by either the Board or the Compensation Committee of the Board. 
 4. Termination of Employment. 

(a) Death or Disability. Executive’s employment shall terminate automatically upon Executive’s death during the Employment
Term. If the Disability (as defined below) of Executive occurs during the Employment Term, the Company may provide Executive with written notice in accordance with Section 24 of this Agreement of its intention to terminate
Executive’s employment. In such event, Executive’s employment with the Company shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive (the “Disability Effective Date”);
provided that, within the thirty (30) days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, “Disability” shall mean a physical or
mental impairment that renders Executive incapable of performing the essential functions of Executive’s job, on a full-time 

  
 4 

 
basis, taking into account reasonable accommodation as required by law, as determined by a physician who is selected by the agreement of the Executive (or his guardian) and the Company, for a
period of greater than one hundred fifty (150) consecutive days. In the absence of a beneficiary designation by Executive, or if Executive’s designated beneficiary does not survive Executive, payments and benefits described in this
Section 4(a) will be paid to Executive’s estate. 
 (b) Cause. The Company may terminate the Employment
Term and Executive’s employment upon notice at any time with or without Cause. For purposes of this Agreement, “Cause” shall mean any of the following: (i) Executive’s continued intentional failure or refusal to
materially abide by the terms and conditions of this Agreement or perform substantially Executive’s assigned duties (other than as a result of total or partial incapacity due to Disability); (ii) Executive’s engagement in willful
misconduct, including, without limitation, fraud, embezzlement, theft or dishonesty, in the course of Executive’s employment with the Company; (iii) Executive’s conviction of, or plea of guilty or nolo contendere to, a
felony or a crime other than a felony, which felony or crime involves moral turpitude or a breach of trust or fiduciary duty owed to the Company or any of its Affiliates; or (iv) Executive’s disclosure of material trade secrets or material
non-public confidential information of the Company or any of its Affiliates in violation of the Company’s policies that apply to Executive or any agreement with the Company or any of its Affiliates in
respect of confidentiality, nondisclosure or otherwise. No act or failure to act on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that
his action or omission was in the best interests of the Company and its Affiliates. If an action or omission constituting Cause (other than pursuant to clause (iii)) is curable, Executive may be terminated only if Executive has not cured such action
or omission within thirty (30) days following written notice thereof from the Company. Further, Executive will not be deemed to be discharged for Cause unless and until there is delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of a majority (or any higher threshold contemplated by Section 4(e) of this Agreement) of the authorized number of directors on the Board, at a meeting called and duly held for such purpose (after
reasonable notice is provided to Executive and Executive is given an opportunity, together with counsel for Executive, to be heard before the Board), finding in good faith that Executive is guilty of the conduct set forth above and specifying the
particulars thereof in reasonable detail. 
 (c) Good Reason. Executive’s employment may be terminated by Executive with or
without Good Reason. For purposes of this Agreement, “Good Reason” shall mean a material and adverse change in the terms and conditions of Executive’s employment, without Executive’s written consent, and shall include the
occurrence of the following: 
 (i) absent Executive’s agreement, a failure of the Board to appoint Executive as Chief
Executive Officer of the Company by June 30, 2021 (or, if earlier, the date the Current CEO ceases to be Chief Executive Officer of the Company); 

(ii) a material diminution in Executive’s titles, positions, authority, duties or responsibilities or a failure to appoint
Executive to the positions at the times contemplated herein; 

  
 5 

 (iii) a requirement that Executive report to any person or entity other than
the Current CEO or the Board through the Succession Date or the Board on or after the Succession Date; 
 (iv) a reduction in
the Base Salary, Target Annual Bonus or target Annual Long-Term Awards opportunity; 
 (v) a material change in the
geographic location in which Executive must perform services under this Agreement. For purposes of this Agreement, “a material change in the geographic location” shall mean a location that results in a one
(1)-way commute that is greater than seventy-five (75) miles (based on the distance from Executive’s primary place of residence as of immediately prior to the Effective Date), it being understood
that the need to spend time in Defiance, Ohio shall not be considered a material change; 
 (vi) the Board provides notice to
Executive that it will not renew this Agreement or offer Executive a substantially similar agreement; or 
 (vii) any other
action or inaction that constitutes a material breach of this Agreement, including a reduction in the fringe benefits provided to Executive from those contemplated by this Agreement. 

Executive shall provide written notice to the Company of the existence of one (1) or more of the conditions giving rise to Good Reason
within ninety (90) days following his knowledge of the initial existence of such condition or conditions, and the Company shall have thirty (30) days following receipt of such written notice (the “Cure Period”) during
which it may remedy the condition. In the event that the Company fails to remedy the condition constituting Good Reason during the Cure Period, Executive must terminate employment, if at all, within ninety (90) days following the Cure Period
for such termination to constitute a termination for Good Reason. Executive’s mental or physical incapacity following the occurrence of an event described above shall not affect his ability to terminate employment for Good Reason. 

(d) Notice of Termination. Any termination of employment by the Company for Cause, or by Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in accordance with Section 24 of this Agreement. For purposes of this Agreement, the term “Notice of Termination” means a written notice
that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination shall be not more than thirty
(30) days after the giving of such notice). The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive
or the Company, respectively, hereunder or preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive’s or the Company’s respective rights hereunder. 

  
 6 

 (e) Date of Termination. For purposes of this Agreement, the term “Date of
Termination” means (i) if Executive’s employment is terminated by the Company for Cause, or by Executive for Good Reason, the date of receipt of the Notice of Termination or such later date specified in the Notice of Termination,
as the case may be, (ii) if Executive’s employment is terminated by the Company other than for Cause or Disability, the date on which the Company notifies Executive of such termination, (iii) if Executive resigns without Good Reason,
the date on which Executive notifies the Company of such termination, or (iv) if Executive’s employment is terminated by reason of death or Disability, the date of Executive’s death or the Disability Effective Date, as the case may
be; provided, however, that, notwithstanding the foregoing, any termination of Executive (whether with or without Cause or due to Disability) or the decision to take action that would give rise to a claim by Executive of Good Reason
shall require approval of at least a majority of the authorized number of directors on the Board; provided that, during the Initial Period and the two (2) years following a Change in Control (as defined below), approval of at least
seventy-five percent (75%) of the authorized number of directors on the Board shall be required. Without limiting the generality of the foregoing, Executive need not be invited to participate in the vote. Notwithstanding the foregoing, in no event
shall the Date of Termination occur until Executive experiences a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the date on which such
separation from service takes place shall be the “Date of Termination.” 
 5. Obligations of the Company upon Termination.

 (a) Death or Disability. In the event that during the Employment Term Executive’s employment is terminated due to death or
Disability, Executive or Executive’s beneficiary (as designated in by Executive in writing with the Company prior to Executive’s death) or, in the absence of a beneficiary designation by Executive, subject to
Section 5(f), Executive’s estate shall be entitled to the following payments and benefits: 

(i) any accrued and unpaid base salary and Annual Bonus award, any accrued and unused paid time off and any unreimbursed
business expenses (the “Accrued Obligations”), which shall be paid within thirty (30) days following the Date of Termination, and any benefits payable in accordance with, and at the times contemplated by, the terms of any other
benefit plan of the Company or its Affiliates (the “Other Benefits”); 
 (ii) a Target Annual Bonus for the
year of termination, prorated based on the number of days elapsed in the year as of the Date of Termination (the “Prorated Annual Bonus”), which shall be paid within sixty (60) days following the Date of Termination; and 

(iii) (A) accelerated vesting in full of any unvested time-vesting long-term incentive awards, (B) any performance-vesting
long-term incentive awards for which the performance period is complete shall vest in full and any such awards for which the performance period is not complete shall be earned as provided in the applicable award agreement and vest in full and
(C) any vested stock options shall remain exercisable for the full remaining term (collectively, the “LTI Benefit”). 

  
 7 

 In addition, in the event of Executive’s death, Executive’s beneficiary (or
Executive’s estate) shall be paid ninety (90) days of Base Salary in a lump sum within sixty (60) days following the Date of Termination. In the event of Executive’s Disability, Executive shall receive a cash payment equal
to eighteen (18) months of COBRA premiums for the coverage Executive had in place on the Date of Termination (the “COBRA Amount”), which shall be paid in a lump sum within sixty (60) days following the Date of Termination,
and the group and supplemental life insurance applicable to Executive shall be maintained until Executive attains age sixty-five (65) (whether on an insured or self-insured basis). 

(b) Termination Without Cause or for Good Reason. Upon the involuntary termination of Executive’s employment by the
Company other than for Cause, death or Disability, or Executive’s voluntary termination of service for Good Reason during the Employment Term, subject to the terms of this Agreement, including Section 5(f), Executive
shall be entitled to the following payments and benefits: 
 (i) the Accrued Obligations, which shall be paid within thirty
(30) days following the Date of Termination, and Other Benefits; 
 (ii) a cash payment equal to the product of
(A) the Severance Multiple (as defined below) multiplied by (B) the sum of Executive’s (x) Base Salary and (y) Target Annual Bonus (or if higher, the Annual Bonus paid or payable to Executive in respect of the most
recently completed performance year), which shall be paid within sixty (60) days following the Date of Termination; 

(iii) the COBRA Amount, which shall be paid within sixty (60) days following the Date of Termination; 

(iv) the Prorated Annual Bonus, which shall be paid within sixty (60) days following the Date of Termination; and 

(v) the LTI Benefit. 

For purposes of this Agreement, the “Severance Multiple” shall be two (2), other than in the event of a termination of
employment during the Initial Period or the period six (6) months before or two (2) years following a Change in Control (as defined below) occurring after the Effective Date, in which case the Severance Multiple shall be 2.99 (such higher
multiple, the “Change in Control Severance Multiple”). 
 (c) Definition of Change in Control. For purposes of this
Agreement, a “Change in Control” shall mean the occurrence of the following: 
 (i) an acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934) of 30% or more of either (A) the then outstanding shares of common stock of First Defiance (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the then outstanding voting securities of First Defiance entitled to vote generally in the election of directors (the “Outstanding Company Voting 

  
 8 

 
Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any
acquisition directly from First Defiance; (2) any acquisition by First Defiance; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by First Defiance or any entity controlled by First Defiance; or
(4) any acquisition by any entity pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) of this Section 5(c); or 

(ii) a change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that, for purposes of this Section 5(c), any individual who becomes a member of
the Board subsequent to the Effective Date whose election, or nomination for election by First Defiance’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of
the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; provided, further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not
be considered as a member of the Incumbent Board; or 
 (iii) the consummation of a reorganization, merger, statutory share
exchange or consolidation or similar transaction involving First Defiance or any of its subsidiaries or sale or other disposition of all or substantially all of the assets of First Defiance, or the acquisition of assets or securities of another
entity by First Defiance or any of its subsidiaries (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock (or, for a noncorporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or, for a noncorporate entity, equivalent
securities), as the case may be, of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns First Defiance or all or substantially all of First Defiance’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be;
(B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of First Defiance or such entity resulting from such Business Combination) beneficially owns, directly or indirectly,
30% or more of, respectively, the then outstanding shares of common stock (or, for a noncorporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting
securities of such entity except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the 

  
 9 

 
members of the board of directors (or, for a noncorporate entity, equivalent body or committee) of the entity resulting from such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or 

(iv) the approval by the shareholders of First Defiance of a complete liquidation or dissolution of First Defiance. 

(d) Cause; Other than for Good Reason. If, during the Employment Term, Executive’s employment is terminated by the Company for
Cause or Executive terminates his employment other than for Good Reason, this Agreement shall terminate without further obligations to Executive other than the obligation to pay to Executive the Accrued Obligations, which shall be paid within thirty
(30) days following the Date of Termination, and the Other Benefits. 
 (e) Excess Parachute Payment. 

(i) Notwithstanding anything in this Agreement to the contrary, in the event the Accounting Firm (as defined below) shall
determine that receipt of all Payments (as defined below) would subject Executive to the excise tax under Section 4999 of the Code, the Accounting Firm shall determine whether to reduce any of the Payments paid or payable pursuant to the
Agreement (the “Agreement Payments”) so that the Parachute Value (as defined below) of all Payments, in the aggregate, equals the Safe Harbor Amount (as defined below). The Agreement Payments shall be so reduced only if the
Accounting Firm determines that Executive would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Agreement Payments were so reduced. If the Accounting Firm determines that
Executive would not have a greater Net After-Tax Receipt of aggregate Payments if the Agreement Payments were so reduced, Executive shall receive all Agreement Payments to which the Executive is entitled
hereunder. 
 (ii) If the Accounting Firm determines that aggregate Agreement Payments should be reduced so that the
Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under
this Section 5(e) shall be binding upon the Company and Executive and shall be made as soon as reasonably practicable and in no event later than 15 days following the Date of Termination. For purposes of reducing the
Agreement Payments so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. The reduction of the amounts payable hereunder, if
applicable, shall be made by reducing the payments and benefits in the following order: (i) cash payments that may not be valued under Treas. Reg. § 1.280G-1,
Q&A-24(c) (“24(c)”), (ii) equity-based payments that may not be valued under 24(c), (iii) cash payments that may be valued under 24(c), (iv) equity-based payments that may be valued
under 24(c) and (v) other types of benefits. With respect to each category of the foregoing, such reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the
Code and next with respect to payments that are deferred compensation, in each case, beginning with payments or benefits that are to be paid the farthest in time from the Accounting Firm’s determination. All reasonable fees and expenses of the
Accounting Firm shall be borne solely by the Company. 

  
 10 

 (iii) As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of the Executive pursuant to this Agreement that should not
have been so paid or distributed (each, an “Overpayment”) or that additional amounts that will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement could have been so paid or
distributed (each, an “Underpayment”). In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or Executive that the Accounting Firm believes has a high
probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be repaid by Executive to the Company (as applicable) together with interest at
the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such repayment shall be required if and to the extent such deemed repayment would not either reduce the amount on which
Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. 

(iv) To the extent requested by Executive, the Company shall cooperate with Executive in good faith in valuing, and the
Accounting Firm shall take into account the value of, services provided or to be provided by Executive (including, without limitation, Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar
covenant) before, on or after the date of a change in ownership or control of the Company (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such that payments
in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to
Q&A-44 of the final regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of
Q&A-2(a) of the final regulations under Section 280G of the Code in accordance with Q&A-5(a) of the final regulations under Section 280G of the Code.

 (v) The following terms shall have the following meanings for purposes of this Section 5(e):

 (A) “Accounting Firm” shall mean a nationally recognized certified public accounting firm or other
professional organization that is a certified public accounting firm recognized as an expert in determinations and calculations for purposes of Section 280G of the Code that is selected by First Defiance prior to a Change in Control for
purposes of making the applicable determinations hereunder and is reasonably acceptable to Executive, which firm shall not, without Executive’s consent, be a firm serving as accountant or auditor for the individual, entity or group effecting
the Change in Control. 

  
 11 

 (B) “Net After-Tax
Receipt” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on Executive with respect thereto under Sections 1 and 4999 of the Code and
under applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws that applied to Executive’s taxable income for the immediately preceding taxable year, or
such other rate(s) as the Accounting Firm determines to be likely to apply to Executive in the relevant tax year(s). 
 (C)
“Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under
Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the excise tax under Section 4999 of the Code will apply to such Payment. 

(D) “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or payable pursuant to this Agreement or otherwise. 

(E) “Safe Harbor Amount” shall mean 2.99 times Executive’s “base amount,” within the meaning of
Section 280G(b)(3) of the Code. 
 (vi) The provisions of this Section 5(e) shall survive the
expiration of this Agreement. 
 (f) Release. As a condition to receiving any payments, other than payment of the Accrued Obligations
and Other Benefits, pursuant to this Agreement, Executive agrees to release the Company and all of its Affiliates, employees and directors from any and all claims that Executive may have against the Company and all of its Affiliates, employees and
directors up to and including the date Executive (or, in the event of Executive’s death or Disability, his estate or guardian, as applicable) signs a Waiver and Release of Claims (the “Release”), which form shall provide for
such waivers and/or revocation periods as are required by, or advisable under, applicable federal law and/or regulation, and which Release shall be substantially in the form set forth in Appendix A to this Agreement. Notwithstanding anything
to the contrary in this Agreement, Executive acknowledges that Executive is not entitled to receive, and will not receive, any payments pursuant to this Agreement unless and until Executive provides the Company with said Release prior to the first
(1st) date that payment is to be made or is to commence; and if the release execution period begins in one (1) taxable year and ends in another taxable year, payment shall not be made until the beginning of the second (2nd) taxable year. 

  
 12 

 (g) Coordination of Benefits. If Executive’s employment is terminated for
Disability or by the Company without Cause or by Executive for Good Reason and, after such termination, Executive becomes entitled to payments based on the Change in Control Severance Multiple, Executive shall receive the payments pursuant to the
Change in Control Severance Multiple, in a lump sum at the time of the Change in Control, less the amount of any payments previously paid pursuant to Sections 5(a) and 5(b) of this Agreement. 

6. Attorneys’ Fees. It is the intent of the Company that Executive obtain the benefits of this Agreement without
reduction due to the need to expend funds to pay costs or expenses (including attorneys’ fees) to enforce this Agreement. Therefore, in the event Executive determines it is necessary to expend such funds to enforce the terms and conditions of
this Agreement, the Company shall indemnify and hold harmless Executive for all reasonable costs and expenses (including attorneys’ fees) incurred by Executive to enforce this Agreement, and the Company shall, upon demand by Executive, promptly
advance or reimburse Executive for such costs and expenses as incurred. Executive shall repay such funds to such Company if and only if Executive brings a legal action to enforce this Agreement and a final
non-appealable order is entered in such action that all of Executive’s claims are frivolous. 

7. Withholding. All payments required to be made by the Company hereunder to Executive shall be subject to the withholding of such
amounts, if any, relating to federal, state and local tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation. 

8. Indemnification; Insurance. 

(a) Indemnification. The Company agrees to indemnify Executive to the fullest extent permitted under applicable law and regulations and
the organizational documents of the Company, on a basis no less favorable than that applicable to other directors and senior executives of the Company. 

(b) Insurance. During the Employment Term and thereafter for so long as the potential for liability exists, the Company shall provide
Executive (and his heirs, executors and administrators) with coverage under a directors’ and officers’ liability policy at the Company’s expense at least equivalent to such coverage otherwise provided to the other directors and senior
executives of the Company. 
 9. No Duty of Mitigation. Executive shall not be required to mitigate the amount of any payment made
pursuant to Section 5 of this Agreement if Executive accepts other compensation for employment with another entity. 
 10. Special
Regulatory Events. Notwithstanding anything to the contrary contained herein, Executive acknowledges and agrees that any payments made to Executive pursuant to this Agreement are subject to and conditioned on compliance with the provisions of 12
U.S.C. § 1828(k) and Part 359 of the Federal Deposit Insurance Corporation (“FDIC”) regulations (12 C.F.R. Part 359), which contain certain prohibitions and limitations on the making of “golden parachute”
and certain indemnification payments by FDIC-insured institutions and their holding companies. In the event any payments to Executive pursuant to this Agreement are prohibited or limited by the provisions of such statute or regulation, the Company
will use its commercially reasonable efforts to obtain the consent of the appropriate regulatory authorities to the payment to Executive of the maximum amount that is permitted (up to the full amount due under the terms of this Agreement). 

  
 13 

 11. Consolidation, Merger or Sale of Assets. Nothing in this Agreement shall preclude
the Company from consolidating with, merging into or transferring all, or substantially all, of its assets to another corporation that assumes all its obligations and undertakings hereunder. Upon such a consolidation, merger or transfer of assets,
the term “Company” as used herein shall mean such other corporation or entity, and this Agreement shall continue in full force and effect. 

12. Noncompetition and Nonsolicitation Covenant. Executive agrees that, during the Employment Term, including any
extension thereof, and for a period of one (1) year following Executive’s termination of his employment for any reason, Executive shall not, without the express written consent of the Company: 

(a) be engaged, directly or indirectly, within those counties in which the Company is engaged in deposit-taking activities at
the time of Executive’s termination of employment, as a partner, officer, director, employee, consultant, independent contractor, security holder or owner of any entity engaged in any business activity competitive with that of the Company or
its Affiliates; provided, however, nothing in this Agreement shall prevent Executive from owning or acquiring an interest in any entity engaged in any competitive business activity if such interest does not constitute
“control” as defined in 12 C.F.R. Section 303.81(c); 
 (b) call upon or solicit, either for Executive or
for any other person or firm that engages in competition with any business operation actively conducted by the Company or any of its Affiliates during the Employment Term, any customer with whom the Company or any of its Affiliates directly conducts
business during the Employment Term, or interfere with any relationship, contractual or otherwise, between the Company or any of its Affiliates and any customer with whom the Company or any of its Affiliates directly conducts business during the
Employment Term; or 
 (c) induce or solicit any person who is at the date of termination or was during the twelve
(12) months preceding termination an employee, officer or agent of the Company or any Affiliate to terminate said relationship, except as pursuant to Executive’s duties for the Company. 

In the event of a breach by Executive of any covenant set forth in this Section 12, the term of such covenant will
be extended by the period of the duration of such breach and such covenant as so extended will survive any termination of this Agreement, but only for the limited period of such extension. 

The restrictions on competition provided herein may be enforced by the Company and/or any successor thereto by an action to recover payments
made under this Agreement, an action for injunction and/or an action for damages. The provisions of this Section 12 constitute an essential element of this Agreement without which the Company would not have entered into
this Agreement. Notwithstanding any other remedy available to the Company at law or in equity, the parties hereto agree that the Company or any successor thereto will have the right, at any and all times, to seek injunctive relief so as to enforce
the terms and conditions of this Section 12. 

  
 14 

 If the scope of any restriction contained in this Section 12 is
too broad to permit enforcement of such restriction to its fullest extent, then such restriction will be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that such scope may be judicially modified accordingly
in any proceeding brought to enforce such restriction. 
 13. Confidential Information. Executive will hold in a fiduciary capacity,
for the benefit of the Company, all secret or confidential information, knowledge and data relating to the Company and any of its Affiliates (“Confidential Information”) that shall have been obtained by Executive in connection his
employment with the Company and that is not public knowledge (other than by acts by Executive or his representatives in violation of this Agreement). During the Employment Term and after termination of Executive’s employment with the Company,
Executive will not, without the prior written consent of the Company, communicate or divulge any material non-public Confidential Information to anyone other than the Company or those designated by the
Company, unless the communication of such information, knowledge or data is required pursuant to a compulsory proceeding in which Executive’s failure to provide such information, knowledge or data would subject Executive to criminal or civil
sanctions and then only if Executive provides notice to the Company prior to disclosure. 
 The restrictions imposed on the release of
information described in this Section 13 may be enforced by the Company and/or any successor thereto by an action for injunction or an action for damages. The provisions of this Section 13
constitute an essential element of this Agreement without which the Company would not have entered into this Agreement. Notwithstanding any other remedy available to the Company at law or in equity, the parties hereto agree that the Company or any
successor thereto will have the right, at any and all times, to seek injunctive relief so as to enforce the terms and conditions of this Section 13. 

If the scope of any restriction contained in this Section 13 is too broad to permit enforcement of such restriction
to its fullest extent, then such restriction will be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such
restriction. 
 By executing this Agreement, Executive acknowledges that he hereby has been notified by this writing, in accordance with the
Defend Trade Secrets Act of 2016, that (i) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local
government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; (ii) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal; and (iii) an individual who files a lawsuit for retaliation by an employer for reporting a
suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose
the trade secret except pursuant to court order. 

  
 15 

 
Furthermore, and notwithstanding anything to the contrary herein, nothing in this Agreement shall (x) limit Executive’s right to voluntarily communicate with the Equal Employment
Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Securities and Exchange Commission, or any other federal, state or local government agency or to discuss the terms and conditions of Executive’s employment
with others to the extent permitted by Section 7 of the National Labor Relations Act, (y) limit Executive’s ability to communicate with or participate in any investigation or proceeding (including by providing documents or other
information without notice to the Company) regarding possible violations of federal securities laws that may be conducted by the Securities and Exchange Commission, the Department of Justice, the Consumer Financial Protection Bureau or the Commodity
Futures Trading Commission or (z) prohibit Executive from making truthful statements in response to any subpoena or other legal process, or as otherwise required or protected by applicable law. 

14. Non-Assignability. Neither this Agreement nor any right or interest hereunder shall be
assignable by Executive or his beneficiaries or legal representatives without the Company’s prior written consent; provided, however, that nothing in this Section 14 shall preclude Executive from
designating a beneficiary to receive any benefits payable hereunder upon his death or the executors, administrators or legal representatives of Executive or his estate from assigning any rights hereunder to the person or persons entitled thereto.

 15. No Attachment. Except as required by law, no right to receive payment under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process of assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect. 
 16. Binding Agreement. This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Company and their successors and assigns. 
 17. Amendment of Agreement. This Agreement may not be modified or
amended, except by an instrument in writing signed by the parties hereto. 
 18. Waiver. No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than the act
specifically waived. 
 19. Severability. If, for any reason, any provision of this Agreement is held invalid, such invalidity shall
not affect the other provisions of this Agreement not held so invalid, and each such other provision shall, to the full extent consistent with applicable law, continue in full force and effect. 

20. Headings. The headings of the sections herein are included solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement. 

  
 16 

 21. Effect of Prior Agreements. This Agreement contains the entire understanding
between the parties hereto and supersedes and replaces any prior employment agreement between the Company or any of its Affiliates or any predecessor of the Company or any of its Affiliates, on the one hand, and Executive, on the other hand,
including the Prior Employment Agreement, as of the Effective Date. 
 22. Governing Law. This Agreement has been executed and
delivered in the State of Ohio and its validity, interpretation, performance and enforcement shall be governed by the laws of the State of Ohio, without reference to principles of conflict of laws, except to the extent that federal law is governing.

 23. WAIVER OF JURY TRIAL. THE COMPANY AND EXECUTIVE, EACH AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
LEGAL COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF, OR RELATED TO, THIS AGREEMENT. NO PARTY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY
LITIGATION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. 
 24.
Notices. Any notice required or permitted under this Agreement shall be in writing and either delivered personally or sent by nationally recognized overnight courier, express mail or certified or registered mail, postage prepaid, return
receipt requested, at the following respective address unless the party notifies the other party in writing of a change of address: 
 If to
the Company: 
 First Defiance Financial Corp. 

601 Clinton Street 
 Defiance,
Ohio 43512 
 Attn: Chairman of the Board 

With a copy to: 
 Barack
Ferrazzano Kirshbaum & Nagleberg LLP 
 200 West Madison Street 

Suite 3900 
 Chicago, Illinois
60606 
 Attention: Robert M. Fleetwood, Esq. 

Electronic mail: robert.fleetwood@bfkn.com 

If to Executive: 
 Gary M. Small

 At the last address on file with the Company 

A notice delivered personally shall be deemed delivered and effective as of the date of delivery. A notice sent by overnight courier or
express mail shall be deemed delivered and effective one (1) business day after it is deposited with the postal authority or commercial carrier. 

  
 17 

 
A notice sent by certified or registered mail shall be deemed delivered and effective two (2) business days after it is deposited with the postal authority. 

25. Code Section 409A Requirements. 

(a) Treatment of Reimbursements and/or In-Kind Benefits. Notwithstanding anything in this
Agreement to the contrary, any reimbursements or in-kind benefits provided under this Agreement (including any reimbursement for or provision or in-kind medical benefits
beyond the period of time described in Treasury Regulation § 1.409A-1(b)(9)) shall be made or provided in accordance with the requirements of Code Section 409A, including, where applicable, the
requirements that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits
provided, during any taxable year of Executive may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of Executive, (iii) the reimbursement
of an eligible expense will be made no later than the last day of Executive’s taxable year following the year in which the expense is incurred and (iv) the right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit. 
 (b) Six (6)-Month Distribution Delay for Specified Employees.
Notwithstanding anything in this Agreement to the contrary, in the event that Executive is a “specified employee” (as defined in Code Section 409A) of the Company or any of its Affiliates, as determined pursuant to the Company’s
policies for identifying specified employees, on the date of Executive’s termination of employment and Executive is entitled to a payment and/or a benefit under this Agreement that is required to be delayed pursuant to Code
Section 409A(a)(2)(B)(i), then such payment or benefit, as applicable, shall not be paid or provided (or begin to be paid or provided) until the first (1st) day of the seventh (7th) month following the date of Executive’s termination of
employment (or, if earlier, the date of Executive’s death). The first (1st) payment that can be made to Executive following such period shall include the cumulative amount of any payments or benefits that could not be paid or provided during
such period due to the application of Code Section 409A(a)(2)(B)(i). 
 (c) Compliance with Code Section 409A.
The parties intend that this Agreement comply with, or be exempt from, the requirements of Code Section 409A, as applicable, and, to the maximum extent permitted by law, shall administer, operate and construe this Agreement accordingly. For
purposes of the limitations on nonqualified deferred compensation under Code Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the deferral election
rules of Code Section 409A and the exclusion from Code Section 409A for certain “short-term deferrals.” Any amounts payable solely on account of an “involuntary separation from service” within the meaning of Code
Section 409A shall be excludible from the requirements of Code Section 409A, either as “separation pay” or as a “short-term deferral” to the maximum possible extent. Nothing herein shall be construed as the guarantee of
any particular tax treatment to Executive, and none of the Company, its Affiliates or their respective boards of directors shall have any liability with respect to any failure to comply with the requirements of Code Section 409A. 

  
 18 

 26. Survivability. The provisions of this Agreement that by their terms call for
performance subsequent to the termination of either Executive’s employment or this Agreement (including the terms of Sections 5, 6, 8, 12 and 13) shall so survive such termination. 

[Signature page follows] 

  
 19 

 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and Executive has signed this Agreement, each as of the day and year first above written. 
  

			
	FIRST DEFIANCE FINANCIAL CORP.
		
	By:	 	 /s/ Paul Nungester

	Name:	 	Paul Nungester
	Title:	 	CFO
	
	FIRST FEDERAL BANK OF THE MIDWEST
		
	By:	 	 /s/ Paul Nungester

	Name:	 	Paul Nungester
	Title:	 	CFO
	
	EXECUTIVE:
	
	 /s/ Gary M. Small

	Name:	 	Gary M. Small

  

  
 20 

 FORM OF WAIVER AND RELEASE 

The parties to this Waiver and Release (this “Agreement”), First Defiance Financial Corp. (“First
Defiance”), an Ohio-chartered corporation and savings and loan holding company, First Federal Bank of the Midwest (“First Federal”), a federally chartered stock savings bank, both of which are located in Defiance, Ohio, and
their respective affiliates, parents, successors, predecessors and subsidiaries (collectively, the “Company”) and Gary M. Small, an individual (hereinafter referred to as the “Executive”), agree that: 

Executive and the Company now wish to terminate their employment relationship effective _______________, 20__ in a manner that is satisfactory
to both Executive and the Company. 
 Executive and the Company, for the good and valuable consideration stated below, the sufficiency of
which is acknowledged, agree as follows: 
 A. In exchange for the severance payments and benefits under Section [•] of the Employment
Agreement between Executive and the Company, dated as of [•] (the “Employment Agreement”), Executive, including Executive’s heirs, administrators, executors, spouse, if any, successors, estate, representatives and assigns
and all others claiming by or through Executive, voluntarily and knowingly releases the Company, its parent companies and their subsidiaries, divisions, affiliates, related companies, predecessors, successors, partners, members, directors, officers,
trustees, employees, independent contractors, consultants, stockholders, owners, attorneys, agents, benefit plans, subrogees, insurers, representatives and assigns, whether alleged to have acted in their official capacities or personally
(collectively, the “Released Parties”), completely and forever from any and all claims, causes of action, suits, contracts, promises, or demands of any kind that Executive may now have, whether known or unknown, intentional or
otherwise, from the beginning of time to the Effective Date of this Agreement, with the sole and limited exception of the rights and claims reserved in Paragraph B. The “Effective Date” of this Agreement is the date it is
signed by Executive. 
 B. Executive understands and agrees that this Agreement covers all claims described in Paragraph A,
including, but not limited to, any alleged violation of: 
  

	 	•	 	 the Civil Rights Act of 1991; 

 

	 	•	 	 Title VII of the Civil Rights Act of 1964, as amended; 

 

	 	•	 	 the Americans with Disabilities Act; 

 

	 	•	 	 the Employee Retirement Income Security Act; 

 

	 	•	 	 the Worker Adjustment and Retraining Notification Act; 

 

	 	•	 	 the Family Medical Leave Act; 

 

	 	•	 	 the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act;

  
 A-1 

	 	•	 	 the Fair Labor Standards Act, to the extent permitted by law; 

 

	 	•	 	 the Occupational Safety and Health Act of 1970; 

 

	 	•	 	 the Ohio Fair Employment Practices Law, including but not limited to O.R.C. Title 41 § 4112.01 et
seq.; 

  

	 	•	 	 the Ohio Fair Employment Practices Law, ORC, Title 41 § 4112-01
et seq., as amended; 

  

	 	•	 	 the Ohio Civil Rights Commission Policy Statement on AIDS; 

 

	 	•	 	 the Ohio Equal Pay Law, O.R.C. Title 41 § 4111.13, 4111.17, and 4111.99, et seq., as amended;

  

	 	•	 	 the retaliation for exercise of rights under the Ohio Workers’ Compensation Law; 

 

	 	•	 	 the Workers’ Compensation Anti-Retaliation Act, Ohio Rev. Code § 4123.90; 

 

	 	•	 	 the Whistleblower Protection Act for Public Employees, Ohio Rev. Code § 124.341; 

 

	 	•	 	 the Ohio Whistleblower Statute, Ohio Rev. Code § 4113.52; 

 

	 	•	 	 the Ohio State Wage Payment and Work Hour Laws—Ohio Rev. Code Ann. § 4111.01, et
seq.; 

  

	 	•	 	 the Ohio Political Action of Employees Laws; 

 

	 	•	 	 the Ohio Witness and Juror Leave Laws—Ohio Rev. Code Ann. § 2313.18, et seq.;

  

	 	•	 	 the Ohio Voting Leave Laws—Ohio Rev. Code Ann. § 3599.06, et seq.; 

 

	 	•	 	 the Ohio Military Family Medical Leave Act—Ohio Rev. Code Ann. § 5906.01, et seq.;

  

	 	•	 	 any other federal, state or local civil, labor, pension, wage-hour or human rights law, federal or state public
policy, contract or tort law; 

  

	 	•	 	 any claim arising under federal or state common law, including, but not limited to, constructive or wrongful
discharge or intentional or negligent infliction of emotional distress; and 

  

	 	•	 	 any claim for costs or attorneys’ fees, except any claim specifically providing for payment of
Executive’s attorneys’ fees by the Company, including but not necessarily limited to Section 6 of the Employment Agreement. 

  
 A-2 

 This Agreement does not include, and Executive does not waive, any rights or claims
(1) that may arise after Executive signs this Agreement; (2) for alleged workplace injuries or occupational disease that arise under any state’s workers’ compensation laws (Executive does waive and fully release the Released
Parties from any claims under Ohio Rev. Code § 4123.90); (3) for benefits in which Executive has a vested right under any pension plans; (4) that cannot be released by law; (5) to enforce this Agreement and the rights to the
payments and benefits under Section(s) [•] of the Employment Agreement; (6) for indemnification under applicable law, the Company’s governing documents or Section 8 of the Employment Agreement; (7) related to his rights as a
shareholder of the Company; or (8) to participate in any proceedings before an administrative agency responsible for enforcing labor and/or employment laws, e.g., the Equal Employment Opportunity Commission. Executive agrees, however, to
waive and release any right to receive any monetary award from such proceedings. Nothing in this Agreement (including the confidentiality and non-disparagement provisions) shall be construed to limit
Executive’s right to participate in administrative proceedings, as described in this Paragraph B, to provide information to an agency responsible for enforcing unemployment compensation laws or to file an action to
enforce this Agreement. 
 Nothing in this Agreement (including the confidentiality and
non-disparagement provisions) shall be construed to limit Executive’s right to (1) respond accurately and fully to any question, inquiry or request for information when required by legal process or
from initiating communications directly with, or responding to any inquiry from, or providing testimony before, any self-regulatory organization or state or federal regulatory authority, regarding the Company, Executive’s employment, or this
Agreement. Executive is not required to contact the Company regarding the subject matter of any such communications before engaging in such communications; (2) disclose information to an administrative agency responsible for enforcing labor
and/or employment laws; or (3) to provide information to an agency responsible for enforcing unemployment compensation laws. 
 C.
Executive agrees to keep the terms of this Agreement confidential and not to disclose the terms of this Agreement to any third party at any time, other than to Executive’s attorneys, taxing authorities or accountants, or as otherwise required
by law. Executive agrees to use his best efforts to ensure that the terms of this Agreement are kept confidential by his spouse, heirs, assigns, attorneys, etc. 

Executive is not prohibited from disclosing the terms of this Agreement to his spouse, if any, attorney, if any, or accountant, in a
proceeding to enforce its terms or as otherwise required by law or court order. Should Executive receive legal papers or process that he believes would require him to disclose the terms of this Agreement, Executive agrees to notify, in writing and
within seven (7) days of his receipt of such legal papers or process, [•]. 
 D. In exchange for Executive’s promises
contained herein, the Company agrees to pay Executive in accordance with Section [•] of the Employment Agreement. 
 E. The parties
agree that if any provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, including the general release language, the provision declared illegal or
unenforceable will immediately become null and void, leaving the remainder of this Agreement in full force and effect. 

  
 A-3 

 F. Executive is hereby advised to consult with an attorney regarding the terms, meaning and
impact of this Agreement. IN ADDITION, EXECUTIVE UNDERSTANDS AND AGREES THAT (A) BY SIGNING THIS AGREEMENT, EXECUTIVE WAIVES AND RELEASES ANY CLAIMS EXECUTIVE MIGHT HAVE AGAINST ANY OF THE RELEASED PARTIES, INCLUDING, BUT NOT LIMITED TO, ANY
CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967; (B) EXECUTIVE HAS TWENTY-ONE (21) DAYS FROM THE DATE OF RECEIPT OF THIS AGREEMENT TO CONSIDER WHETHER OR NOT TO EXECUTE THIS AGREEMENT, WHICH
EXECUTIVE WAIVES BY VIRTUE OF HIS EXECUTION OF THE AGREEMENT DURING THE CONSIDERATION PERIOD; AND (C) AFTER EXECUTIVE SIGNS THIS AGREEMENT AND IT BECOMES EFFECTIVE, EXECUTIVE HAS SEVEN (7) DAYS FROM THAT DATE TO CHANGE HIS MIND AND REVOKE
THIS AGREEMENT. TO REVOKE THIS AGREEMENT, EXECUTIVE MUST CLEARLY COMMUNICATE EXECUTIVE’S DECISION IN WRITING TO THE COMPANY AS PROVIDED IN PARAGRAPH C BY THE SEVENTH (7th) DAY FOLLOWING THE EFFECTIVE DATE OF THIS AGREEMENT. EXECUTIVE
UNDERSTANDS AND AGREES THAT SHOULD HE REVOKE HIS RELEASE AND WAIVER AS TO CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT WILL BECOME NULL AND VOID. 

G. Executive agrees that he will not, in any way, disparage the Company or any of the Released Parties. The Company agrees that it will not, in
any way, disparage Executive. Further, Executive and the Company agree that they will not make, nor solicit, any comments, statement, or the like to the media, or to others, that may be considered to be derogatory or detrimental to the good name or
business reputation of Executive or the Company. 
 H. Executive acknowledges that, through his employment with the Company, he has acquired
and had access to the Company’s confidential and proprietary business information and trade secrets (“Confidential Information”). Executive acknowledges and agrees that the Company prohibits the use or disclosure of its
Confidential Information and that the Company has taken all reasonable steps necessary to protect the secrecy of such Confidential Information. Executive acknowledges and agrees that “Confidential Information” includes any data or
information that is valuable to the Company and not generally known to competitors of the Company or other outsiders, regardless of whether the Confidential Information is in printed, written or electronic form, retained in Executive’s memory
or has been compiled or created by Executive, including but not limited to business plans; product designs, drawings and formulas; test and development data; customer or prospective customer, vendor, supplier and distributor information; financial
information; marketing strategies; pending projects and proposals; personnel and payroll records; pricing data; contract terms; proprietary production processes; third-party information that the Company has a duty to maintain as confidential; and
other business-related information that, if made available to the Company’s competitors or the public, would be advantageous to such competitors and detrimental to the Company. Executive agrees that Executive has not and in the future will not
use, or disclose to any third party, Confidential Information unless compelled by law after reasonable advance notice to the Company, and 

  
 A-4 

 
further agrees to return all documents, disks, CDs, DVDs, drives, storage devices or any other item or source containing Confidential Information, or any other of the Company’s property, to
the Company upon execution of this Agreement. Executive understands that he shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (1) is made (a) in confidence
to a federal, state or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal. Executive also understands that disclosure of trade secrets to attorneys, made under seal, or pursuant to court order is also protected in certain circumstances under 18 U.S.
Code § 1833. If Executive has any question regarding what data or information would be considered by the Company to be Confidential Information subject to this provision, Executive agrees to contact [•]. 

I. THIS AGREEMENT CONTAINS THE COMPLETE UNDERSTANDING BETWEEN THE PARTIES. THE PARTIES AGREE THAT NO PROMISES OR AGREEMENTS WILL BE BINDING
OR WILL MODIFY THIS UNDERSTANDING UNLESS IN WRITING AND SIGNED BY BOTH PARTIES. THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY PRIOR WRITTEN AGREEMENTS BY AND BETWEEN THE COMPANY AND EXECUTIVE. 

J. This Agreement may be executed in multiple counterparts, each of which will be considered an original, and all of which will be considered a
single memorandum. If Executive signs a facsimile copy of this Agreement, he also will provide the Company with a conforming original copy. 

K. The validity, construction and interpretation of this Agreement and the rights and duties of the parties to this Agreement will be governed
by the laws of the State of Ohio without regard to any state conflict of law rules. 
 [signature page to follow] 

  
 A-5 

 The parties agree that they have read this Agreement, understand and agree to its terms, and
have knowingly and voluntarily signed it on the dates written below. 
  

			
	  
 Gary M.
Small

		
	Date:	 	  

	
	[First Federal Bank of the Midwest]
		
	By:	 	  

		
	Date:	 	  

	
	[First Defiance Financial Corp.]
		
	By:	 	  

		
	Date:	 	  

  
 A-6Exhibit 10.1

   

    

  
    
      EXECUTION VERSION

    

    

    

    

    

    

    

    September 9, 2019

    

    

    PG&E Corporation

    77 Beale Street

    P.O. Box 770000

    San Francisco, California 94177

    

    

    Re: Chapter 11 Plan Backstop Commitment Letter

    

    

    Ladies and Gentlemen:

    

    

    Reference is hereby made to the chapter 11 bankruptcy cases, lead case no. 19-30088 (the “Chapter 11 Cases”), currently pending before the
      United States Bankruptcy Court for the Northern District of California (the “Bankruptcy Court”), in which PG&E Corporation (“PG&E”
      or the “Company”) and Pacific Gas and Electric Company (the “Utility” and together with PG&E, the “Debtors”) are debtors in possession.  Reference is further made to the Chapter 11 plan of reorganization attached hereto as Exhibit A (the “Plan”) to
      implement the terms and conditions of the reorganization of the Debtors as provided therein.  Capitalized terms used in this backstop commitment letter (this “Backstop Commitment Letter”) or
      in the exhibits hereto but not otherwise defined shall have the meanings ascribed to them in the Plan.  The word “including” means “including, without limitation”.

    

    

    In order to facilitate the Debtors’ emergence from Chapter 11, pursuant to this Backstop Commitment Letter, and subject to the terms, conditions and limitations set forth herein and in consideration
      for the Backstop Commitment Premium, the undersigned Backstop Party (the “Backstop Party”) is willing to purchase, on the Effective Date, an amount of New HoldCo Common Stock up to its
      Backstop Commitment Amount (as defined herein) at the Backstop Price (as defined herein).

    

    

    In addition, PG&E has separately solicited and negotiated and expects to enter into substantially similar backstop commitment letters (“Other
        Backstop Commitment Letters”) with other funding sources (“Other Backstop Parties”) pursuant to which such Other Backstop Parties will commit to purchase New HoldCo Common Stock on
      the Effective Date (such commitments, “Other Backstop Commitments,” and together with this Backstop Commitment, the “Aggregate Backstop
        Commitments”).

    

    

    1.         Equity Offerings.

    

    

    a.        Structure.  The Plan, among other things, shall provide that, on the Effective Date, Reorganized HoldCo shall issue shares of New HoldCo Common Stock for up to $14 billion of
      aggregate net cash proceeds to Reorganized Holdco (the “Equity Offering Cap”).  PG&E shall structure the offering of any such shares of New HoldCo Common Stock (or rights pursuant to
      which any such shares may be issued or other securities convertible into any such shares) (the “Equity Offering”) in accordance with the terms of this Section 1, including the following
      parameters:

    

    

    (i)   if the Implied P/E Multiple with respect to such Equity Offering equals or exceeds the greater of (A) 13.5 and (B) 13.5 times one plus any percentage change of the Applicable Utility Index Multiple (as defined herein) as measured on the date of this Backstop Commitment Letter and the Determination Date (as defined herein), then PG&E
      shall be permitted to conduct the Equity Offering in any form of primary equity offering (including any public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction pricing mechanism,
      rights offering, private placement, “PIPE” sale or other registered or  unregistered transaction) upon such terms and conditions as may be determined by the Board (a “Permitted Equity Offering”),

      including such terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation

    

    

    
      1

      
        

    

    

    

    with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their net
      operating loss carryforwards and other tax attributes (collectively, the “NOLs”);

    

    

    (ii)   if the Implied P/E Multiple with respect to the Equity Offering is less than the Implied P/E Multiple required for a Permitted Equity Offering in Section 1(a)(i) above, but equals or exceeds the
      lesser of (A) 12 and (B) 12 times one plus the percentage change of the Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter
      and the Determination Date (the “Rights Offering Threshold Multiple”), then PG&E shall structure the Equity Offering such that (Y) at least 80%, determined assuming the exercise in full
      of all of the Rights, of the aggregate cash proceeds of the Equity Offering is to be raised through the exercise of purchase rights (the “Rights”) distributed to holders of PG&E common
      stock (“Existing Shareholders”) as of a record date to be determined by the Board (the “Record Date”) to purchase shares of New
      HoldCo Common Stock for cash at a price set forth below (the “Rights Offering”) and (Z) the balance of the aggregate cash proceeds of the Equity Offering is to be raised through any other
      form of primary equity offering (including any public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction pricing mechanism, private placement, “PIPE” sale or other registered or 
      unregistered transaction), provided, that entities holding a majority of the Aggregate Backstop Commitments have not objected to the identity of the purchasers and ultimate purchasers, as applicable, in such Equity Offering, to the extent such Equity
      Offering is not a broadly syndicated underwritten public offering, within three business days of receipt of notice from PG&E;

    

    

    (iii)   in both of paragraphs (i) and (ii) above, Reorganized Holdco may also raise equity capital (subject to the Equity Offering Cap) by calling on the Backstop Commitments (after giving effect to
      any reduction of the Backstop Commitments in connection with a Permitted Equity Offering or a Rights Offering, as applicable); and

    

    

    (iv)   if the Implied P/E Multiple with respect to the Equity Offering would be less than the Rights Offering Threshold Multiple or if for any other reason Reorganized Holdco is unable to execute an
      Equity Offering, then Reorganized Holdco shall not utilize either a Permitted Equity Offering or a Rights Offering and shall issue shares at the Backstop Price pursuant to the Backstop Commitments up to the Equity Offering Cap less the proceeds of any Additional Capital Sources.

    

    

    “Implied P/E Multiple” means, with respect to any Equity Offering, (A) the price per share at which shares of New Holdco Common Stock are
      offered to be sold in such Equity Offering (which price (x) in the case of an Equity Offering of rights, shall be the exercise price to acquire a share of New HoldCo Common Stock pursuant to such rights or (y) in the case of an Equity Offering of a
      security convertible into or exchangeable for shares of New HoldCo Common Stock, shall be the per share price implied by the conversion ratio used to convert the principal amount, liquidation preference or other face amount of such security into a
      number of shares of New HoldCo Common Stock) (the “Per Share Price”), times (B) the number of fully diluted shares of PG&E (calculated using the
      treasury stock method) that will be outstanding as of the Effective Date (assuming such Equity Offering and all other equity transactions contemplated by the Plan are consummated and settled on the Effective Date), divided

        by (C) the Normalized Estimated Net Income as of the Determination Date.

    

    

    b.       Additional Capital Sources.  PG&E shall conduct the Equity Offering in accordance with the Plan.  The net cash proceeds to PG&E of the Equity Offering shall not exceed the
      Equity Offering Cap, less the sum of (i) the principal amount of debt that is issued by PG&E in excess of $7 billion in connection with the Plan; (ii) the aggregate liquidation preference of preferred
      stock

    

    

    
      2

      
        

    

    

    

    (“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire Claims, on the terms and conditions set forth on Exhibit

        B pursuant to the Plan; (iii) the principal amount of any Wildfire Victim Recovery Bonds issued in connection with the Plan; (iv) the proceeds of any preferred stock issued by the Utility (excluding any Utility Preferred Interests that are
      Reinstated pursuant to the Plan); (v) the proceeds of any third-party transactions based upon the monetization of any NOLs; and (vi) the principal amount of any other debt that is issued or reinstated by the Utility, excluding any debt that may be
      issued under clause (v) above, in excess of $27.35 billion in connection with the Plan (the “Additional Capital Sources”).

    

    

    c.         Rights Offering.  With respect to the Rights Offering:

    

    

    (i)   the Rights will have a fixed exercise price equal to (a) the Rights Offering Threshold Multiple times (b) the Normalized Estimated Net Income as of the
      Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is raised
      by the exercise of all Rights);

    

    

    (ii)   the Rights shall be transferable;

    

    

    (iii)   the Board shall provide that holders of Rights who fully exercise their Rights will have over-subscription privileges to subscribe for additional shares of New HoldCo Common Stock to the extent
      other Rights are not exercised, with over-subscription procedures (including pro-ration rules) determined by the Board;

    

    

    (iv)   the Board may provide that the Rights or Rights Offering include such terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with
      Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs, including limitations on the amount of
      Rights that are exercisable by holders who, together with persons who have a formal or informal understanding with such holders to make a coordinated acquisition of stock within the meaning of Treasury Regulations 1.382-3(a) (an “Entity”), beneficially own in excess of a specified percentage (e.g., 4.75%) of the outstanding shares of PG&E common stock, subject to exceptions to be determined by the Board; provided,
      however, that such terms and conditions shall not restrict existing holders of PG&E common stock (including any Entity) from acquiring shares that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares
      of PG&E common stock immediately after the completion of the Rights Offering; and

    

    

    (v)   the Rights will have such other terms and conditions as may be determined by the Board, as long as such other terms and conditions  are consistent with the Plan and with every other provision of
      this Backstop Commitment Letter.

    

    

    d.        Subordinated Claims.  To the extent provided in the Plan, the Debtors may issue Rights or New HoldCo Common Stock to holders of Claims against a Debtor that are subject to
      subordination pursuant to section 510(b) of the Bankruptcy Code and that arise from or are related to any equity security of the Debtor.

    

    

    e.       Documentation.  The definitive documentation for any Permitted Equity Offering or any Rights Offering shall be consistent with the Plan.  For the avoidance of doubt, the
      organizational documents of the Reorganized HoldCo (including its charter) may include limitations and other terms that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) in order to avoid an
      “ownership change” within the meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs; provided, however, that the organizational documents
      shall not be modified or amended in a manner

    

    

    
      3

      
        

    

    

    

    

    

    that would restrict existing holders of PG&E common stock (including any Entity) from acquiring shares that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares of
      PG&E common stock immediately after the completion of the Rights Offering.

    

    

    f.          Use of Proceeds.  The Debtors shall only use the proceeds of an Equity Offering to fund obligations to holders of Wildfire Claims under the Plan.

    

    

    g.         Notices.  Promptly, and in any event, within two days of the Board’s determination of final pricing of any Equity Offering, PG&E shall publicly disclose the form, structure,
      amount and terms of such Equity Offering, including the Implied P/E Multiple for such Equity Offering.  PG&E shall give the Backstop Party, as soon as reasonably practicable, but in no event later than two business days prior to the Effective
      Date, (i) written notification setting forth (A) the amount to be funded pursuant to the Backstop Commitment, (B) an estimate of the Backstop Price and (C) the targeted Effective Date and (ii) a subscription form to be completed by the Backstop
      Party, or other instructions, to facilitate the Backstop Party’s subscription for the New HoldCo Common Stock.

    

    

    h.       Cooperation.  As reasonably requested by the Debtors, the Backstop Party shall reasonably cooperate with the Debtors with respect to providing information relevant to the
      preservation of the Debtors’ Tax Attributes, including information regarding (i) the number of shares of PG&E common stock owned by such party (on a holder-by-holder basis) prior to the Rights Offering and (ii) the amount of Rights exercised and
      shares of New HoldCo Common Stock purchased pursuant to the Backstop Commitment by such persons.

    

    

    2.         Backstop.

    

    

    a.        Subject to the terms and conditions set forth herein and to the payment and provision of premium to the Backstop Party as provided in Section 2(c), the Backstop Party, solely on behalf of
      itself, hereby commits to purchase on the Effective Date an amount of shares of New HoldCo Common Stock at the Backstop Price (the “Backstop Commitment”) up to the dollar amounts set forth
      on Exhibit B hereto (the “Backstop Commitment Amount”). 

    

    

    b.        PG&E and the Backstop Party shall cooperate in good faith to prepare and deliver a subscription agreement and any other documentation necessary to effect the private placement of New
      HoldCo Common Stock to the Backstop Party in accordance with the terms of this Backstop Commitment Letter, which documentation shall be consistent with this Backstop Commitment Letter and the Plan.

    

    

    c.        The Debtors agree to pay the Backstop Party the Backstop Commitment Premium to the extent provided on Exhibit B and to reimburse on a regular basis the Backstop Party for the
      reasonable fees and expenses of Jones Day and a financial advisor incurred prior to termination of this Backstop Commitment Letter in connection with the Plan, the Backstop Commitment Letter, and the transactions contemplated herein, provided that
      such reimbursement shall not exceed $17 million for Jones Day in the aggregate and $19 million for the financial advisor in the aggregate.  The provisions for the payment of the Backstop Commitment Premium and the other provisions provided herein are
      an integral part of the transactions contemplated by this Backstop Commitment Letter and without these provisions the Backstop Party would not have entered into this Backstop Commitment Letter, and the Backstop Commitment Premium shall, pursuant to
      an order of the Bankruptcy Court approving this Backstop Commitment Letter, constitute allowed administrative expenses of the Debtors’ estates under sections 503(b) and 507 of the Bankruptcy Code.

    

    

    d.        Reorganized Holdco will enter into a registration rights agreement with the Backstop Party in respect of the shares of New HoldCo Common Stock that the Backstop Party may acquire in
      accordance with the Plan and this Backstop Commitment Letter, which registration rights agreement shall be in form and substance reasonably acceptable to the holders of a majority of the Aggregate Backstop Commitments.

    

    

    e.        To the extent that PG&E agrees to terms that are more favorable to an Other Backstop Party in an Other Backstop Commitment Letter (excluding terms relating to the size of such Other

    

    

    
      4

      
        

    

    

    

    Backstop Party’s backstop commitment), PG&E shall provide notice of such terms to the Backstop Party no later than 10 days after the Allocation Date and, absent a written objection from the Backstop Party no later
      than 10 days after the date of such notice, such terms shall be deemed without further action to be incorporated into this Backstop Commitment Letter.

     

    

    3.       Backstop Party Representations.  The Backstop Party hereby represents and warrants, solely as to itself, that (a) it has all limited partnership, corporate or other power and
      authority necessary to execute, deliver and perform this Backstop Commitment Letter, (b) the execution, delivery and performance of this Backstop Commitment Letter by it has been duly and validly authorized and approved by all necessary limited
      partnership, corporate or other organizational action by it, (c) this Backstop Commitment Letter has been duly and validly executed and delivered by it and, assuming due execution and delivery by the other parties hereto, constitutes a valid and
      legally binding obligation of it, enforceable against it in accordance with the terms of this Backstop Commitment Letter, (d) the execution, delivery and performance by the Backstop Party of this Backstop Commitment Letter do not (i) violate the
      organizational documents of the Backstop Party or (ii) violate any applicable law or judgment applicable to it, (e) as of the date of this Backstop Commitment Letter, its Backstop Commitment is, and as of the date of commencement of any Rights
      Offering and as of the Effective Date its Backstop Commitment will be, less than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the terms of its constituent documents or otherwise, (f) it has, as of the
      date of this Backstop Commitment Letter, and will have, as of the Effective Date, in the aggregate available undrawn commitments and liquid assets at least in the sum of its Backstop Commitment Amount hereunder, and (g) as of September 2, 2019, it
      and its affiliates (excluding any affiliate that is an Other Backstop Party) beneficially owned, directly or indirectly, 17,131,521 shares of PG&E common stock and had a “put equivalent position” (as defined in Rule 16a-1 under the Securities
      Exchange Act of 1934, as amended) of zero shares of PG&E common stock (the number of shares beneficially owned less the number of shares in the put equivalent position being the “Backstop
        Party’s Shares”).

    

    

    In addition, the Backstop Party hereby represents and warrants, solely as to itself, as of the date of this Backstop Commitment Letter and as of the Effective Date, that the Backstop Party (i) is
      acquiring the shares of New HoldCo Common Stock for its own account, solely for investment and not with a view toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or local securities or “blue
      sky” laws, or with any present intention of distributing or selling such shares in violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating
      the merits and risks of its investment in the shares of New HoldCo Common Stock and of making an informed investment decision, and (iii) is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as
      amended (the “Securities Act”).  The Backstop Party understands that Reorganized HoldCo will be relying on the statements contained herein to establish an exemption from registration under
      the Securities Act and under foreign, federal, state and local securities laws and acknowledges that the shares of New HoldCo Common Stock will not be registered under the Securities Act or any other applicable law and that such shares may not be
      transferred except pursuant to the registration provisions of the Securities Act (and in compliance with any other applicable law) or pursuant to an applicable exemption therefrom.

    

    

    4.        Conditions to Backstop Party Commitment.  The obligations of the Backstop Party to fund its Backstop Commitment to PG&E in accordance with this Backstop Commitment Letter are
      further expressly conditioned upon and subject to the satisfaction or written waiver by the Backstop Party, in its sole discretion, at or prior to the Effective Date of each of the following conditions, which PG&E acknowledges are an integral
      part of the transactions contemplated by this Backstop Commitment Letter and without these conditions the Backstop Party would not have entered into this Backstop Commitment Letter.

    

    

    a.   by November 7, 2019, the Debtors shall have received valid and enforceable Other Backstop Commitments on substantially the same terms and conditions as set forth in this Backstop

    

    

    
      5

      
        

    

    

    

    Commitment Letter that in the aggregate with this Backstop Commitment result in Aggregate Backstop Commitments of no less than the Equity Offering Cap;

    

    

    b.        other than the consummation of any Permitted Equity Offering or the Rights Offering, the satisfaction of all of the other conditions to the Effective Date provided for in the Plan or the
      waiver of any such conditions by the Debtors in accordance with the Plan (to the extent the Plan expressly provides for the possibility of such a waiver);

    

    

    c.         the Bankruptcy Court shall have entered the Confirmation Order, which shall confirm the Plan with such amendments, modifications, changes and consents as are approved by those entities
      having no less than a majority of the Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), and such Confirmation Order shall be in full force and effect, and no stay thereof shall be in effect;

    

    

    d.        this Backstop Commitment Letter shall have been approved by an order of the Bankruptcy Court and such order shall be in full force and effect, and no stay thereof shall be in effect;

    

    

    e.        the transactions contemplated herein shall have been authorized by an order of the Bankruptcy Court (which may be the Confirmation Order) such order shall be in full force and effect, and
      no stay thereof shall be in effect;

    

    

    f.         total PG&E weighted average earning rate base (including electric generation, electric transmission, electric distribution, gas distribution, gas transmission and storage) for
      estimated 2021 shall be no less than 95% of $48 billion; and

    

    

    g.        no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth
      in the Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be expected to have a material
      adverse effect on the business, operations, assets, liabilities, capitalization, financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a whole, or (ii) would reasonably be expected to prevent or
      materially delay the ability of the Debtors to consummate the transactions contemplated by this Backstop Commitment Letter or the Plan or perform their obligations hereunder or thereunder (each a “Material

        Adverse Effect”) shall have occurred; provided, however, that none of the following results, occurrences, facts, changes, events, effects, violations,
      penalties, inaccuracies, or circumstances shall constitute or be taken into account in determining whether a Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the filing of the Chapter 11 Cases, and the
      fact that the Debtors are operating in bankruptcy (B) results, occurrences, facts, changes, events, effects, violations, inaccuracies, or circumstances affecting (1) the electric or gas utility businesses in the United States generally or (2) the
      economy, credit, financial, capital or commodity markets, in the United States or elsewhere in the world, including changes in interest rates, monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation
      of California or the United States that is applicable to any electrical utility) or in GAAP or accounting standards, or any changes or prospective changes in the interpretation or enforcement of any of the foregoing, (D)  any decline in the market
      price, or change in trading volume, of any securities of the Debtors, (E) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, credit ratings, budgets or internal or published financial or operating
      predictions of revenue, earnings, cash flow or cash position, (F) any wildfire occurring after the Petition Date and prior to January 1, 2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer than
      500 dwellings or commercial structures (“Structures”) in the aggregate (it being understood that (I) the exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the
      underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect and (II) a Material Adverse Effect shall include the occurrence of one or more wildfires on or after January 1, 2020 destroying or damaging at
      least 500 Structures within PG&E’s service area where none of the following are true with respect any such wildfire

    

    

    
      6

      
        

    

    

    

    (a) the portion of PG&E’s system at the location of such wildfire was not de-energized; (b) there has been no determination by a final order that such wildfire was caused by a person or entity other than the
      Utility; and (c) there has been no determination that such wildfire was not caused by the negligence or intentional misconduct of the Utility by a final order of a court having jurisdiction).

    

    

    5.         Termination by the Backstop Party.  Subject to the last paragraph of this Section 5, the Backstop Party may terminate this Backstop Commitment Letter, solely as to itself, by
      written notice (which shall describe the basis for such termination), on or after the occurrence of any of the following:

    

    

    a.      the Plan has not been filed with the Bankruptcy Court by 11:59 p.m. Pacific Time on September 9, 2019 or the Plan filed with the Bankruptcy Court on or after such date differs from the draft
      of the Plan attached hereto as Exhibit A; 

    

    

    b.      the condition set forth in Section 4(a) is not satisfied as of November 7, 2019;

    

    

    c.      the Bankruptcy Court has not entered an order approving this Backstop Commitment Letter on or before November 20, 2019;

    

    

    d.      subject to Section 11, (i) the Plan has been amended modified or changed, in each case without the consent of the entities holding a majority of the Aggregate Backstop Commitments (such
      consent not to be unreasonably withheld, conditioned or delayed) or (ii) any Plan Supplement or any Plan Document shall have been filed or finalized without the consent of entities holding a majority of the Aggregate Backstop Commitments (such
      consent not to be unreasonably withheld, conditioned or delayed);

    

    

    e.       the Confirmation Order has not been entered by the Bankruptcy Court on or before June 30, 2020 (the “Outside Date”);

    

    

    f.       the Effective Date has not occurred on or before 60 days after entry of the Confirmation Order;

    

    

    g.       the Debtors have failed to perform any of their obligations set forth in this Backstop Commitment Letter, which failure to perform (i) would give rise to the failure of a condition set forth
      in Section 4(b) or 4(c) and (ii) is incapable of being cured or, if capable of being cured by the Outside Date, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice of such failure to perform from the
      Backstop Party stating the Backstop Party’s intention to terminate this Backstop Commitment Letter pursuant to this Section 5(g) and the basis for such termination;

    

    

    h.       the occurrence of a Material Adverse Effect;

    

    

    i.        the occurrence of one or more wildfires in the Debtors’ service territory after the Petition Date and prior to January 1, 2020 that is asserted by any person to arise out of the Debtors’
      activities and that destroys or damages more than 500 Structures; provided, however, that any notice of termination under this clause (i) must be given on or before January 15, 2020;

    

    

    j.       the Debtors’ aggregate liability with respect to Wildfire Claims is determined (whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially withdrawn
      for estimation purposes), (ii) pursuant to an agreement between the Debtors and the holders of Wildfire Claims, or (iii) through a combination thereof) to exceed $17.9 billion (the “Wildfire Claims
        Cap”); provided, however, that for purposes of this clause (j), (A) any Wildfire Claim that the CPUC has approved or agreed to approve for recovery or pass through by the Utility shall not count in
      determining the Wildfire Claims Cap, and (B) the Wildfire Claims Cap shall be increased by an amount equal to the amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court to which the reference has
      been partially withdrawn for estimation purposes) determines to be reasonable;

    

    

    k.       the CPUC fails to issue all necessary approvals, authorizations and final orders to implement the Plan prior to the Outside Date, and to participate in the Go-Forward Wildfire Fund,
      including: (i) provisions satisfactory to entities holding a majority of the Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed) pertaining to authorized return on equity and regulated capital
      structure, (ii) a disposition, satisfactory to entities holding a majority of the

    

    

    
      7

      
        

    

    

    

    

    

    Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of proposals for certain potential changes to PG&E’s corporate structure and authorizations for the Utility to
      operate as a utility, (iii) a resolution, satisfactory to entities holding a majority of the Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of claims for monetary fines or penalties under the
      California Public Utilities Code for conduct prior to the Petition Date, and (iv) approval (or exemption from approval) of the financing structure and securities to be issued under the Plan;

    

    

    l.         if at any time after the first day of the Confirmation Hearing, asserted Administrative Expense Claims exceed $250 million, excluding all (i) ordinary course Administrative Expense Claims,
      (ii) Professional Fee Claims, and (iii) Disallowed Administrative Expense Claims;

    

    

    m.     there is in effect an order of a governmental authority of competent jurisdiction permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions
      contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes consummation of the transactions contemplated by the Plan illegal or otherwise prohibited.

    

    

    PG&E shall promptly provide notice to the Backstop Party of (i) the occurrence of any fact, event, or omission that is not publicly disclosed that gives rise or reasonably can be expected to give
      rise to a termination right under this Section 5 and (ii) the receipt of any termination notice from any Other Backstop Party, including the asserted basis for such termination, whether or not PG&E concurs therewith.

    

    

    Upon valid termination of this Backstop Commitment Letter by the Backstop Party (such terminating Backstop Party, a “Terminating Backstop Party”)

      pursuant to any of Section 5(a) through (m), this Backstop Commitment Letter shall be void and of no further force or effect solely with respect to such Terminating Backstop Party is obligated herein, such Terminating Backstop Party
      shall be released from its Backstop Commitments, undertakings and agreements under or related to this Backstop Commitment Letter, including its Backstop Commitment, except as explicitly provided herein and there shall be no liability or obligation on
      the part of such Terminating Backstop Party hereunder, except as expressly provided herein.  Notwithstanding any termination by a Terminating Backstop Party, PG&E shall remain liable for the payment of all earned Backstop Commitment Premiums and
      expense reimbursement obligations in this Backstop Commitment Letter.

    

    

    The Backstop Party’s obligations under this Backstop Commitment Letter shall automatically terminate in the event that PG&E has not returned a counter-signed copy of this Backstop Commitment
      Letter agreeing to its terms on or before the date that is two weeks from the day the Backstop Party furnished a signed copy of this Backstop Commitment Letter to PG&E.

    

    

    The Backstop Party may not seek to (i) assert the failure of any condition precedent to any of its obligations or agreements under this Backstop Commitment Letter or (ii) terminate this Backstop
      Commitment Letter (including pursuit of any other remedies), in each case unless the Backstop Party has given written notice to PG&E of such assertion or termination.

    

    

    Notwithstanding anything in this Backstop Commitment Letter to the contrary, any notice of termination under clauses (d), (g), (h), (i), (k), (l) and (m) shall not be effective unless PG&E has
      received notices of termination from entities constituting a majority of the outstanding Aggregate Backstop Commitments with respect to the event or circumstance that is the basis for such notice of termination.  PG&E shall provide the Backstop
      Party with a notice of such effective termination within two business days of the effectiveness of the termination.

    

    

    In the event that any fact or circumstance would give the Backstop Party the right to terminate under more than one clause in this Section 5, the exercise of a termination right under any one clause
      shall not prejudice the Backstop Party from exercising a termination right under any other clause based on the same event or circumstance.

    

    

    
      8

      
        

    

    

    

    6.        Termination by PG&E; Defaulting Backstop Party; Extension Options.  PG&E may terminate this Backstop Commitment Letter (including all Backstop Commitments hereunder) (a) at
      any time prior to countersigning such Backstop Commitment Letter, (b) if, on any date after November 7, 2019, the condition set forth in Section 4(a) would not be satisfied if tested on such date, (c) in the event of a material breach of a
      representation or warranty of the Backstop Party set forth in Section 3, (d) in the event that the Backstop Party repudiates this Backstop Commitment Letter, purports to terminate this Backstop Commitment Letter if such purported termination is not a
      valid termination of this Backstop Commitment Letter as determined in a final order of a court with jurisdiction or fails to fund its Backstop Commitment when required to do so in accordance with this Backstop Commitment Letter, (e) if the Backstop
      Commitment Amount has been reduced to zero in accordance with Section 7, (f) if the Backstop Party has the right to terminate this Backstop Commitment Letter under clause (h), (i), (j) or (m) of Section 5, or (g) if (i) a third party makes a binding
      proposal to acquire at least 50% of the outstanding PG&E common stock (including by means of a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business
      combination or similar transaction), (ii) either (x) the implementation of such proposal would require the approval of holders of a majority of the PG&E common stock or (y) the price contemplated by such proposal would exceed 125% of the Equity
      Offering Cap, and (iii) the Board determines in good faith, after consultation with PG&E’s outside legal counsel, that the failure to terminate this Backstop Commitment Letter in response to such proposal would be inconsistent with the exercise
      of its fiduciary duties to the stockholders of PG&E under applicable law.  In the event of a breach, repudiation, purported termination or failure to fund contemplated by the foregoing clause (c) or (d), the Backstop Party shall be deemed to be a
      “Defaulting Backstop Party”.  In the event that the Backstop Party becomes a Defaulting Backstop Party, then PG&E may, upon notice to such Defaulting Backstop Party, require the Backstop
      Party to assign and delegate, without recourse, all its interests, rights (other than any Backstop Commitment Premiums earned prior to the date of such assignment and delegation) and obligations under this Backstop Commitment Letter to a third party
      that shall assume such obligations (which assignee may be an Other Backstop Party, if an Other Backstop Party accepts such assignment and delegation).  Notwithstanding any termination by PG&E under Sections 6(b), (e), (f) or (g), PG&E shall
      remain liable for the payment of all earned Backstop Commitment Premiums and expense reimbursement obligations in this Backstop Commitment Letter.

    

    

    In the event that any fact or circumstance would give PG&E the right to terminate under more than one clause in this Section 6, the exercise of a termination right under any one clause shall not
      prejudice PG&E from exercising a termination right under any other clause based on the same event or circumstance.

    

    

    Notwithstanding anything to the contrary herein, this Backstop Commitment Letter shall automatically terminate on January 20, 2020 (the “Initial
        Termination Date”).  Provided that this Backstop Commitment Letter remains in full force and effect and has not been otherwise terminated, PG&E may extend the Initial Termination Date to April 30, 2020 (the “First Extension Date”) upon providing written notice to the Backstop Party of its intent to exercise this option (the “First Extension Notice”) no later than three days prior to the Initial Termination Date.  In the event that PG&E has provided the Backstop Party a timely and proper First Extension Notice and this Backstop Commitment
      Letter remains in full force and effect, PG&E may extend the First Extension Date to the Outside Date (the “Second Extension Date”) upon providing written notice to the Backstop Party of
      its intent to exercise this option (the “Second Extension Notice”) no later than three days prior to the First Extension Date.  In
      the event that PG&E has provided the Backstop Party a timely and proper Second Extension Notice and this Backstop Commitment Letter remains in full force and effect, PG&E may extend the Second Extension Date to the 60th day following the Outside Date (the “Third Extension Date”) upon providing written notice to the Backstop
      Party of its intent to exercise this option (the “Third Extension Notice”) no later than three days prior to the Second Extension
      Date.

    

    

    7.         Reduction of Commitments by PG&E.

    

    

    
      9

      
        

    

    

    

    a.       In the event that on or prior to November 7, 2019, PG&E receives Aggregate Backstop Commitments that exceed the Equity Offering Cap (such excess, the “Overallotment Amount”), then, on November 8, 2019 (the “Allocation Date”), the Backstop Commitment Amount shall be automatically reduced by an amount equal to
      (i) the Overallotment Amount, times (ii) a fraction, (A) the numerator of which is the Backstop Party’s Shares and (B) the denominator of which is the aggregate number of shares of PG&E common stock held
      by the Backstop Party and the Other Backstop Parties, collectively, as of September 6, 2019 (without double counting any shares beneficially owned, directly or indirectly, by more than one Backstop Party).  Notwithstanding the foregoing, on the
      Allocation Date, in the event there is an Overallotment Amount and for the purpose of curing such Overallotment Amount, PG&E may reduce the Backstop Commitment Amount as to any Backstop Party to the extent such reduction is reasonably advisable
      (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of
      the Debtors to utilize their NOLs; provided that such reduction may not be below the amount of Backstop Commitments at which such Backstop Party would maintain its existing percentage ownership of the total
      outstanding shares of PG&E common stock.  Within three business days of the Allocation Date, PG&E shall provide the Backstop Party with a notice of any adjustment to its Backstop Commitment Amount under this Section 7(a).

    

    

    b.       In the event that, after November 7, 2019, the Debtors (i) receive binding commitments providing for funding from any Additional Capital Sources that (A) have conditions to funding and
      commitment termination rights that are no less favorable to PG&E than those in this Backstop Commitment Letter and (B) are approved by an order of the Bankruptcy Court, or (ii) actually obtain funding from any Additional Capital Sources, then (x)
      in the case of clause (i), PG&E may reduce the Backstop Commitment Amount, and (y) in the case of clause (ii), the Backstop Commitment Amount shall be automatically reduced (if not already reduced pursuant to clause (i)), in each case by an
      amount equal to (A) the amount of such funding, times (B) a fraction, (1) the numerator of which is the Backstop Commitment Amount immediately prior to such reduction and (2) the denominator of which is the Aggregate Backstop Commitments as of
      immediately prior to such reduction.  Any reduction in the Backstop Commitment pursuant to this Section 7(b) shall not reduce any Backstop Commitment Premium earned prior to the date of such reduction.

    

    

    c.        In the event that the Debtors consummate any Permitted Equity Offering or Rights Offering, the Backstop Commitment Amount shall be automatically reduced by an amount equal to (i) the net
      cash proceeds of such Permitted Equity Financing or such Rights Offering plus the proceeds of any Additional Capital Sources, as applicable, times (ii) a fraction, (A) the numerator of which is the Backstop
      Commitment Amount immediately prior to such reduction and (B) the denominator of which is the Aggregate Backstop Commitments as of immediately prior to such reduction.

    

    

    d.      The Debtors shall provide notice to the Backstop Party in the event that the Backstop Commitment Amount is reduced as provided above.  References herein to “Backstop Commitment Amount” or
      “Backstop Commitment” mean such amounts as adjusted in accordance with the terms of this Backstop Commitment Letter. Any Backstop Commitments that have been terminated or reduced shall be terminated or reduced, as applicable, permanently.

    

    

    8.        Assignment.  This Backstop Commitment Letter (a) is not assignable by the Backstop Party, and any purported assignment shall be null and void ab
        initio; provided, however, Backstop Party may assign its Backstop Commitment, in whole or in part, to (i) another Backstop Party, (ii) an affiliate of the
      Backstop Party, or (iii) an investment fund or separately managed account the primary investment advisor or sub advisor to which is a Backstop Party or an affiliate thereof, to the extent such assignee Backstop Party agrees in writing to assume all
      obligations hereunder of such Backstop Party in connection with such Backstop Commitment, and any assignment under this proviso shall not relieve the Backstop Party from its obligations under this Backstop Commitment Letter, and (b) is intended to be
      solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of,

    

    

    
      10

      
        

    

    

    

    any person or entity other than the parties hereto.  Notwithstanding the foregoing, a Backstop Party may assign all or any portion of its obligations hereunder to a “qualified institutional buyer” (as defined in
      Rule 144A under the Securities Act of 1933, as amended), without the consent of any party, provided, however, that (i) absent the prior written consent of PG&E,
      such assignee (including any Entity) does not, and as a result of such assignment will not, beneficially own more than 4.75% of the Aggregate Backstop Commitments and (ii) any assignment under this sentence shall not relieve the Backstop Party from
      its obligations under this Backstop Commitment Letter.

    

    

    9.        Entire Agreement.  This Backstop Commitment Letter, including all exhibits hereto, constitutes the entire understanding among the parties hereto with respect to the subject matter
      hereof and replaces and supersedes all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof and, subject to the terms hereof, shall become effective and binding upon the
      mutual exchange of fully executed counterparts by each of the parties hereto.

    

    

    10.      Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Backstop Commitment Letter shall be governed by, and construed in accordance with, the internal laws of the State
      of New York, without giving effect to the principles of conflict of laws that would require the application of the law of any other jurisdiction.  By its execution and delivery of this Backstop Commitment Letter, each of the parties hereto
      irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Backstop Commitment Letter or for recognition or enforcement of any
      judgment rendered in any such action, suit or proceeding, may be brought only in the Bankruptcy Court.  By execution and delivery of this Backstop Commitment Letter, each of the parties hereto irrevocably accepts and submits itself to the exclusive
      jurisdiction of the Bankruptcy Court with respect to any such action, suit or proceeding.  EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO ABOVE.

    

    

    11.       Amendment; Waiver; Counterparts.  This Backstop Commitment Letter may not be amended or waived by or on behalf of the Backstop Party, and no consent may be given hereunder by or on
      behalf of the Backstop Party (including to an amendment or waiver of any provision of the Plan), except in writing signed by the holders of a majority of the Aggregate Backstop Commitments (whether or not the Backstop Party signs such amendment or
      waiver), and confirmed in writing by the Company; provided, however, that without the prior written consent of the Backstop Party, this Backstop Commitment Letter may not be amended to (a) increase the amount
      of the Backstop Commitment Amount or Backstop Commitment, (b) decrease the Backstop Commitment Premium, (c) extend the Backstop Commitment beyond the Third Extension Date, (d) amend the definition of “Backstop Price” or any component thereof, and (e)
      amend, modify, or waive the condition in Section 4(d).  This Backstop Commitment Letter may be executed in any number of counterparts, each of which will be an original, and all of which, when taken together, will constitute one agreement.  Delivery
      of an executed counterpart of this Backstop Commitment Letter by e-mail or portable document format (PDF) will be effective as delivery of a manually executed counterpart of this Backstop Commitment Letter.

    

    

    12.       Notices.  All notices required or permitted to be given under this Backstop Commitment Letter, unless otherwise stated herein, shall be given by overnight courier at the addresses
      specified below, or at such other address or addresses as a party may designate for itself in writing, or by email (if confirmed) at the email addresses specified below:

    

    

    If to the Backstop Party, to the name, address and email address located on the Backstop Party’s signature page to this Backstop Commitment Letter.

    

    

    	 	
            If to the Debtors:

          	 
	 	 	 
	 	 	
            PG&E Corporation

          
	 	 	
            77 Beale Street

          

    

    

    
      11

      
        

    

    

    

    	 	 	
            P.O. Box 770000

          
	 	 	
            San Francisco, California 94177

          
	 	 	
            Attention: Janet Loduca, Senior Vice President and General Counsel

          
	 	 	
            Email:  J1Lc@pge.com

          
	 	 	 
	 	 	
            with a copy to:

          
	 	 	 
	 	 	
            Cravath, Swaine & Moore LLP

          
	 	 	
            825 Eighth Avenue

          
	 	 	
            New York, New York 10019

          
	 	 	
            Attention:  Richard Hall; Paul Zumbro

          
	 	 	
            Email:  RHall@cravath.com; PZumbro@cravath.com

          
	 	 	 
	 	 	
            Weil, Gotshal & Manges LLP

          
	 	 	
            767 Fifth Avenue

          
	 	 	
            New York, New York  10153

          
	 	 	
            Attention:  Stephen Karotkin

          
	 	 	
            Email:  Stephen.karotkin@weil.com

          

    

    

    13.      No Liability.  Notwithstanding anything that may be expressed or implied in this Backstop Commitment Letter, each party hereto acknowledges and agrees that no person other than the
      Backstop Party (and it permitted assigns) shall have any obligation hereunder (subject to the limitations provided herein) or in connection with the transactions contemplated hereby and that (a) notwithstanding that any Backstop Party may be a
      partnership, limited partnership or limited liability company, no recourse (whether at law, in equity, in contract, in tort or otherwise) hereunder or under any document or instrument delivered in connection herewith, or in respect of any oral
      representations made or alleged to be made in connection herewith or therewith, shall be had against any former, current or future direct or indirect equity holder, controlling person, general or limited partner, shareholder, member, investment
      manager or adviser, manager, director, officer, employee, agent, affiliate, assignee, representative or financing source of any of the foregoing) (any such person or entity, other than such Backstop Party, a “Related Party”) or any Related Party of any such Related Party, including, without limitation, any liabilities arising under, or in connection with, the Plan or this Backstop Commitment Letter and the transactions
      contemplated thereby and hereby, or in respect of any oral representations made or alleged to be made in connection therewith or herewith), whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by virtue
      of any statute, regulation or other applicable law and (b) no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by any Related Party of the Backstop Party or any Related Party of any such Related Party under this
      Backstop Commitment Letter or any document or instrument delivered in connection herewith or with the Plan Term Sheet or the Plan (or in respect of any oral representation made or alleged to be made in connection herewith or therewith) or for any
      action (whether at law, in equity, in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations hereunder or by their creation.

    

    

    14.      Plan Support.  For as long as this Backstop Letter Agreement is in effect, the Backstop Party shall (i) use all reasonable efforts to support the Plan with respect to the treatment
      of HoldCo Common Interests and to act in good faith to consummate the Plan with respect to any Equity Offering and the Backstop Commitments, (ii) to the extent the Backstop Party is entitled to vote on the Plan, timely vote (or cause to be voted) all
      of its HoldCo Common Interests and Claims to accept the Plan (and not to change or withdraw any such vote), and (iii) timely vote (or cause to be voted) its HoldCo Common Interests and Claims to reject any plan of reorganization other than the Plan.

    

    

    
      12

      
        

    

    

    

    15.     The Backstop Party shall not be required, pursuant to the terms of this Backstop Commitment Letter, to acquire or purchase any securities or indebtedness in connection with any Equity
      Offering that, pursuant to the terms of a Backstop Commitment Letter or other agreement, are to be acquired or subscribed for by any other party, nor shall the Backstop Party be required, pursuant to the terms of this Backstop Commitment Letter, to
      pay any money or other consideration, or exchange any claims whatsoever, which are owing from, or to be transferred from or by, any other party pursuant to the terms of another Backstop Commitment Letter or other agreement.  Nothing in this Backstop
      Commitment Letter shall be deemed to constitute an agreement or a joint venture or partnership with or between any other person or entity nor constitute any party as the agent of any other person or entity for any purpose.  For the avoidance of
      doubt, no Backstop Party shall, nor shall any action taken by a Backstop Party hereunder, be deemed to be acting in concert with any other person or entity with respect to the Backstop Commitment or any other matter nor shall the Backstop Commitments
      hereunder create a presumption that the Backstop Party is in any way acting in concert or as a group with any other person or entity whether as a result of this commitment or otherwise.

    

    

    16.     Each party hereto confirms that it has made its own decision to execute this Backstop Commitment Letter based upon its own independent assessment of documents and information available to it,
      as it has deemed appropriate.

    

    

    17.      Except as expressly provided in this Backstop Commitment Letter, (a) nothing herein is intended to, or does, in any manner waive, limit, impair or restrict the ability of each party hereto
      to protect and preserve its rights, remedies and interests, including, without limitation, any claims against or interests in any of the Debtors or other parties, or its full participation in any bankruptcy proceeding, and (b) the parties hereto each
      fully preserve any and all of their respective rights, remedies, claims and interests as of the date hereof and upon a termination of this Backstop Commitment Letter.  Further, nothing in this Backstop Commitment Letter shall be construed to prohibit
      any party hereto from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as such appearance and the positions advocated in connection therewith are consistent with this Backstop Commitment Letter and the
      Plan, and are not for the purpose of, and could not reasonably be expected to have the effect of, hindering, delaying or preventing the consummation of the transactions contemplated by the Plan.

    

    

    [signature page follows]

    

    

    
      13

      
        

    

    

    

    
      	 	Sincerely,	 
	 	 	 	 
	 	Backstop Party:  

            	 
	 	 	 	 
	 	
              Knighthead Capital Management, LLC, solely 

              on behalf of certain funds and accounts it 

              managed and/or advises

            	 
	 	 	 	 
	

            	
              By: 

            	   /s/ Thomas A. Wagner 	 
	 	 	Name:	
              Thomas A. Wagner

            	 
	 	 	Title:	
              Managing Member

            	 
	 	 	 	 
	 	Notice Information:  

            	 
	 	 	 	 
	 	
              Knighthead Capital Management, LLC, solely 

              on behalf of certain funds and accounts it 

              managed and/or advises

            	 
	 	 	 	 
	 	Attention:  

            	
              General Counsel

            	 
	 	
              1140 Avenue of the Americas

              12th Floor

              New York, NY 10036

            	 
	 	

            	

            	 

    

    

    

    
      14

      
        

    

    

    

    Accepted and agreed this 9th day of September, 2019, by:

    

    

    

    

    

    
      	PG&E CORPORATION	 
	 	 	 
	 	 	 
	
              By: 

            	  /s/ Janet C. Loduca 	 
	 	Name:	
              Janet C. Loduca

            	 
	 	Title:	
              Senior Vice President and General Counsel

            	 
	 	 	 

    

    

    
      15

      
        

    

    

    

    

    

    Exhibit A

    Plan of Reorganization1

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

    
      
 

    
      1 Please see Exhibit 99.1 attached to this Current Report on Form 8-K.
        

        

      

    

    
      16

      
        

    

    

    

    Exhibit B

    

    Mandatory Preferred Stock Term Sheet 

    

    

    
      17

      
        

    

    

    

    Term Sheet for

    5.00% Mandatory Convertible Preferred Stock

    

    

    	
            Issuer:

          	
            PG&E Corporation (“PG&E”)

          
	 	 
	
            Title of Securities:

          	
            5.00% Mandatory Convertible Preferred Stock of PG&E (the “Mandatory Convertible Preferred Stock”)

          
	 	 
	
            Shares of Mandatory Convertible

          	 
	
            Preferred Stock Offered by PG&E:

          	
            Up to [●] shares

          
	 	 
	
            Offering Price:

          	
            $1,000 per share of the Mandatory Convertible Preferred Stock

          
	 	 
	
            Issue Date:

          	
            The Effective Date of the Plan

          
	 	 
	
            Liquidation Preference:

          	
            $1,000 per share

          
	 	 
	
            Dividends:

          	
            5.00% of the Liquidation Preference of $1,000 per share of the Mandatory Convertible Preferred Stock per year (equivalent to $50 per annum per share), when, as and if declared by the Board, payable in cash or, by delivery of additional
              shares of Mandatory Convertible Preferred Stock or any combination of cash and shares of Mandatory Convertible Preferred Stock, as determined by PG&E in its sole discretion

          
	 	 
	
            Floor Price:

          	
            100% of the Initial Price, subject to standard anti-dilution adjustments

          
	 	 
	
            Dividend Payment Dates:

          	
            If declared, January 1, April 1, July 1 and October 1 of each year, commencing on (TBD)

          
	 	 
	
            Dividend Record Dates:

          	
            The March 15, June 15, September 15 and December 15 immediately preceding the next dividend payment date

          
	 	 
	
            Redemption:

          	
            The Mandatory Convertible Preferred Stock will be redeemable on terms and conditions to be determined

          
	 	 
	
            Initial Price:

          	
            A per share price equal to (a) the greater of (i) an Implied P/E Multiple of 13.5 or (ii) the Implied P/E Multiple of a Permitted Equity Offering, times (b) the Normalized Estimated Net Income as
              of the Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be outstanding as of the Effective Date.

          
	 	 
	
            Threshold Appreciation Price:

          	
            110% of the Initial Price, subject to standard ant-dilution adjustments

          
	 	 
	
            Mandatory Conversion Date:

          	
            1/8th of the Mandatory Convertible Preferred Stock will convert into PG&E common stock 90, 180, 270, 360, 450, 540, 630, and 720 days from Issue Date

          
	 	 

    

    

    
      18

      
        

    

    

    

    

    

    	
            Conversion Rate:

          	
            Upon conversion on the Mandatory Conversion Date, the conversion rate for each share of the Mandatory Convertible Preferred Stock will be not more than [●] shares of PG&E common stock (the “Maximum Conversion Rate”) and not less than [●] shares of PG&E common stock (the “Minimum Conversion Rate”), depending on the Applicable Market Value of the
              PG&E common stock subject to standard anti-dilution adjustments.  The following table illustrates the conversion rate per share of the Mandatory Convertible Preferred Stock (in each case, subject to standard anti-dilution adjustments):

          

    

    

    	 	
            Applicable Market Value of

            the PG&E Common Stock

          	 	
            Conversion rate (number of shares of PG&E Common Stock to be received upon

            conversion of each share of the Mandatory Convertible Preferred Stock)

          
	 	
            Greater than 110% of the Initial Price (which is the Threshold Appreciation Price)

          	 	
            [●] shares (approximately equal to $1,000 divided by the Threshold Appreciation Price)

          
	 	 	 	 
	 	
            Equal to or less than the Threshold Appreciation Price but greater than or equal to the Floor Price

          	 	
            Between [●] and [●] shares, determined by dividing $1,000 by the Applicable Market Value of the PG&E common stock

          
	 	 	 	 
	 	
            Less than the Floor Price

          	 	
            [●] shares (approximately equal to $1,000 divided by the Floor Price)

          

    

    

    

    

    	
            Applicable Market Value:

          	
            The “Applicable Market Value” shall be the 10-trading day VWAP immediately preceding the applicable Mandatory Conversion Date.

          
	 	 
	
            Conversion at the Option of the Holder:

          	
            At any time prior to final Mandatory Conversion Date, holders of the Mandatory Convertible Preferred Stock have the option to elect to convert their shares of the Mandatory Convertible Preferred Stock in whole or in part (but in no event
              less than one share of the Mandatory Convertible Preferred Stock), into shares of PG&E common stock at the Minimum Conversion Rate of shares of PG&E common stock per share of the Mandatory Convertible Preferred Stock. This Minimum
              Conversion Rate is subject to standard anti-dilution adjustments.

          
	 	 
	
            Limitation on Ownership

          	
            No holder, together with persons who have a formal or informal understanding with such assignee to make a coordinated acquisition of stock, shall acquire beneficial ownership (within the meaning of Section 382 and the Treasury Regulations)
              of more than 4.75% of the outstanding Mandatory Convertible Preferred Stock without the prior written consent of PG&E.

          

    

    

    
      19

      
        

    

    

    

    Exhibit C

    

    Backstop Terms

    

    

    	
            Backstop Party

          	
            Backstop Commitment Amount

          
	
            
              Knighthead Capital Management, LLC solely on behalf of certain funds and accounts it managed and/or advises

            

          	
            $1,000,000,000

          

    

    

    Payments

    

    

    The Backstop Commitment Premium shall be earned as follows:

    

    

    	 	
            ●

          	
            75 basis points of the Backstop Commitment Premium shall be earned on the later to occur of (a) the date that the Backstop Party and PG&E have fully executed this Backstop Commitment Letter and (b) Bankruptcy Court approval of this
              Backstop Commitment Letter, unless this Backstop Commitment Letter shall have earlier been terminated;

          
	 	 	 
	 	
            ●

          	
            125 basis points of the Backstop Commitment Premium shall be earned on the date on which the Backstop Party receives the First Extension Notice;

          
	 	 	 
	 	
            ●

          	
            250 basis points of the Backstop Commitment Premium shall be earned on the date on which the Backstop Party receives the Second Extension Notice; and

          
	 	 	 
	 	
            ●

          	
            50 basis points of the Backstop Commitment Premium shall be earned on the date on which the Backstop Party receives the Third Extension Notice.

          

    

    

    In addition, if PG&E terminates this Backstop Commitment Letter pursuant to Section 6(g), 100% of the Backstop Commitment Premium shall be fully earned and become due and payable in cash three business days after the date of such termination.

    

    

    Except as provided in the immediately preceding paragraph, the Backstop Commitment Premium shall be payable in shares of New HoldCo Common Stock to be issued on the Effective Date, based on the Backstop Price.

    

    

    Certain Defined Terms

    

    

    “Applicable Utility Index Multiple” shall mean the average normalized 2021 estimated price-to-earnings ratio of the U.S. regulated utilities in the S&P 500 Utilities (Sector) Index
      (after excluding AES, AWK, EXC, NRG, PEG, and PPL) over the 20-day trading period before the applicable measurement date per Capital IQ Consensus Estimates.

    

    

    “Backstop Commitment Premium” shall mean a commitment premium equal to 500 basis points on the total amount of Backstop Commitment Amount.  If and when any portion of the Backstop
      Commitment Premium is earned in accordance with the foregoing provisions of this Exhibit C, (a) it shall be calculated by reference to the Backstop Commitment Amount in effect at the time of such earning, and (b) the amount of the Backstop Commitment
      Premium so earned shall not be subject to reduction based upon any subsequent reduction of the Backstop Commitment Amount or termination of this Backstop Commitment Letter, other than termination pursuant to Section 6(c) or 6(d) of this Backstop
      Commitment Letter.

    

    

    “Backstop Multiple” shall mean the lesser of (a) 10 and (b) 10 times one plus the percentage change of
      the Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter and

     

    

    
      20

      
        

    

    

    

    the fifth business day prior to the Effective Date.  For the avoidance of doubt, the Backstop Multiple shall never exceed 10.

    

    

    “Backstop Price” means (a) the Backstop Multiple times (b) the Normalized Estimated Net Income as of the Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is raised by funding all Aggregate
      Backstop Commitments).

    

    

    “Board” means the Board of Directors of PG&E.  With respect to any matter, references to the Board include a committee of the Board that is duly authorized to act with respect to such
      matter.

    

    

    “Code” means the Internal Revenue Code of 1986, as amended.

    

    

    “Determination Date” shall mean the earlier of (a) the first day of the Confirmation Hearing and (b) if (i) the Per Share Price for a Permitted Equity Offering is to be finally determined
      prior to such first day, the date of such determination or (ii) if the exercise price of the Rights is finally determined prior to such first day, the date of such determination.

    

    

    “Normalized Estimated Net Income” shall mean, in each case with respect to the estimated year 2021, (a) on a component-by-component basis (e.g., distribution, generation, gas transmission
      and storage, and electrical transmission), the sum of (i) the Utility’s estimated earning rate base for such component, times (ii) the equity percentage of the Utility’s authorized capital structure, times (iii) the Utility’s authorized rate of return on equity for such component, less (b) the projected post-tax difference in interest expense or preferred dividends for
      the entire company and the authorized interest expense or preferred dividends expected to be collected in rates, less (c) without duplication of any amount included in clause (b), the amount of any post-tax
      offset or credit to any charge imposed in connection with the issuance of Wildfire Victims Recovery Bonds, if any, less (d) the amount of the Utility’s post-tax annual contribution to the Go-Forward Wildfire
      Fund.

    

    

    “Section 382” means Section 382 of the Code, or any successor provision or replacement provision.

    

    

    “Treasury Regulations” means final, temporary and proposed tax regulations promulgated under the Code, as amended.

    

    

    

    

    

    

    
      21

      
        

    

    

    

    
      Schedule 1

      

      

      Equity Backstop Commitment Letters

      

      

      	
              Backstop Party

            	 	
              Backstop Commitment Amount

            	 	
              Backstop Party’s Shares

            
	
              Knighthead Capital Management, LLC*

            	 	
              $1,000,000,000

            	 	
              17,131,521

            
	
              Abrams Capital Partners I, L.P.

            	 	
              $22,461,000

            	 	
              2,064,629

            
	
              Abrams Capital Partners II, L.P.

            	 	
              $337,868,000

            	 	
              21,225,501

            
	
              Whitecrest Partners, LP

            	 	
              $39,671,000

            	 	
              3,110,096

            
	
              Riva Capital Partners V, L.P.

            	 	
              $100,000,000

            	 	
              700,113

            

      

      

    

    

    

    

    

    

    

    
      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      * Denotes that agreement was filed with this Form 8-K.  Other agreements listed on this schedule were omitted in accordance with Instruction 2 to Item 601 of Regulation
        S-K.

      

      

      

    

  

  

  22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00299-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00299-of-00352.parquet"}]]