Document:

ex10-1.htm

    EXHIBIT
10.1

    

    
      FIRST
DEFIANCE FINANCIAL CORP.

    

    
      2008
LONG TERM INCENTIVE COMPENSATION PLAN

    

    
      

    

    
      ARTICLE
1

    

    
      General
Purpose of Plan; Definitions

    

    
      

    

    
      
        	
                1.1

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

              

      

    

    
      

    

    
      
        	
                1.2

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

              

      

    

    

    
      
        	
              	
                (a)

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

              

      

    

    
      

    

    
      
        	
              	
                (b)

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

              

      

    

    
      

    

    
      
        	
              	
                (c)

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

              

      

    

    
      

    

    
      
        	
              	
                (d)

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

              

      

    

    
      

    

    
      
        	
              	
                (e)

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

              

      

    

    
      

    

    
      
        	
              	
                (f)

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

              

      

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
       

    

    
      

    

    
      
        	
              	
                (g)

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

              

      

    

    
      

    

    
      
        	
              	
                (h)

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

              

      

    

    
      

    

    
      
        	
              	
                (i)

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

              

      

    

    
      

    

    
      
        	
              	
                (j)

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

              

      

    

    
      

    

    
      
        	
              	
                (k)

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

              

      

    

    
      

    

    
      
        	
              	
                (l)

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

              

      

    

    
      

    

    
      
        	
              	
                (m)

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

              

      

    

    
      

    

    
      
        	
              	
                (n)

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

              

      

    

    
      

    

    
      
        	
              	
                (o)

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

              

      

    

    
      

    

    
      
        	
              	
                (p)

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

              

      

    

    
      

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    ARTICLE
2

    Administration

    

    
      
        	
                2.1

              	
                Authority and Duties of the
      Committee.

              

      

    

    
      

    

    
      
        	
              	
                (a)

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

              

      

    

    
      

    

    
      
        	
              	
                (b)

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

              

      

    

    
      

    

    
      
        	
              	
                (i)

              	
                select
      the Eligible Participants to whom Contingent Awards are
    made;

              

      

    

    
      

    

    
      
        	
              	
                (ii)

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

              

      

    

    
      

    

    
      
        	
              	
                (iii)

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

              

      

    

    
      

    

    
      
        	
              	
                (iv)

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

              

      

    

    
      

    

    
      
        	
              	
                (v)

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

              

      

    

    
      

    

    
      
        	
              	
                (vi)

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

              

      

    

    
      

    

    
      
        	
              	
                (vii)

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

              

      

    

    
      

    

    
      
        	
              	
                (viii)

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

              

      

    

    
      

    

    
      
        	
              	
                (ix)

              	
                otherwise
      supervise the administration of this
Plan.

              

      

    

    
      

    

    
      
        	
              	
                (c)

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

              

      

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      
        	
                2.2

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

              

      

    

    
      

    

    
      
        	
                2.3

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

              

      

    

    

    

    
      ARTICLE
3

    

    
      Participants

    

    
      

    

    
      
        	
                3.1

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

              

      

    

    
      

    

    
      
        	
                3.2

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

              

      

    

    
      

    

    
      

    

    ARTICLE
4

    Performance
Based Awards

    

    
      
        	
                4.1

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

              

      

    

    
      

    

    
      
        	
                4.2

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

              

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

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

    

    
      

    

    
      
        	
                4.3

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

              

      

    

    
      

    

    
      
        	
                4.4

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

              

      

    

    
      

    

    
      
        	
                4.5

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

              

      

    

    
      

    

    
      
        	
                4.6

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

              

      

    

    
      

    

    
      

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      ARTICLE
5

    

    
      Termination,
Transfers and Leaves of Absence

    

    
      

    

    
      
        	
                5.1

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

              

      

    

    
      

    

    
      
        	
                5.2

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

              

      

    

    
      

    

    
      
        	
                5.3

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

              

      

    

    

    
      
        	
              	
                (a)

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

              

      

    

    
      

    

    
      
        	
              	
                (b)

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

              

      

    

    
      

    

    
      
        	
              	
                (c)

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

              

      

    

    
      

    

    
      

    

    
      ARTICLE
6

    

    
      Effect
of Change in Control

    

    
      

    

    
      	
              6.1

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

            

    

    

    
      	
               
      

            	
              (a)

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

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

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

    

    
      	
               
      

            	
              (b)

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

            

    

    

    
      	
               
      

            	
              (i)

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

            

    

    

    
      	
               
      

            	
              (ii)

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

            

    

    

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

    

    
      	
               
      

            	
              (c)

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

            

    

    

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

    

    
      	
               
      

            	
              (i)

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

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)

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

            

    

    

    
      	
               
      

            	
              (iii)

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

            

    

    

    
      	
               
      

            	
              (iv)

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

            

    

    

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

    

    
      	
               
      

            	
              (d)

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

            

    

    
      

    

    
      
        	
                6.2

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

              

      

    

    
      

    

    
      
        	
                6.3

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

              

      

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

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

    

    
      

    

    
      

    

    ARTICLE
7

    Transferability
of Awards

    

    
      
        	
                7.1

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

              

      

    

    
      

    

    
      

    

    
      ARTICLE
8

    

    
      Amendment
and Discontinuation

    

    
      

    

    
      
        	
                8.1

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

              

      

    

    
      

    

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

    

    
      

    

    
      

    

    
      ARTICLE
9

    

    
      Satisfaction
of Tax Liabilities

    

    
      

    

    
      
        	
                9.1

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

              

      

    

    
      

    

    
      

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    
      ARTICLE
10

    

    
      General
Provisions

    

    
      

    

    
      
        	
                10.1

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

              

      

    

    
      

    

    
      
        	
                10.2

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

              

      

    

    
      

    

    
      
        	
                10.3

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

              

      

    

    
      

    

    
      
        	
                10.4

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

              

      

    

    
      

    

    
      
        	
                10.5

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

              

      

    

    
      

    

    
      
        	
                10.6

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

              

      

    

    
      

    

    
      
        	
                10.7

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

              

      

    

    
      

    

    
      

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    ARTICLE
11

    Effective
Date and Term

    

    
      
        	
                11.1

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

              

      

    

    
      

    

    
      
        	
                11.2

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

              

      

    

     

     

     

     

     

     

     

    15ex10-2.htm

    EXHIBIT
10.2

    

    FIRST
DEFIANCE FINANCIAL CORPORATION

     

    LONG
TERM INCENTIVE COMPENSATION PLAN

     

    CONTINGENT
AWARD AGREEMENT

     

    

     

    

    CONTINGENT
AWARD AGREEMENT (the “Agreement”) made as of the 21st day of July, 2008, between
First Defiance Financial Corporation (“FDF”), an Ohio corporation, and
_______________ (the “Participant”).

    

    RECITALS

    

    
      	
              A.

            	
              Employee
      is employed by FDF or a Subsidiary of FDF in a position FDF deems to be a
      key position.

            

    

    

    
      	
              B.

            	
              FDF’s
      Board of Directors adopted the First Defiance Financial Corp. Long-Term
      Incentive Compensation Plan (the “Plan”) effective July 21,
      2008.

            

    

    

    
      	
              C.

            	
              FDF
      desires to provide long term incentive compensation (“LTIC”) to
      Participant under the Plan subject to the terms and conditions of the Plan
      and this Agreement as set forth
below.

            

    

    

    
      	
              D.

            	
              Capitalized
      terms used herein, but not defined herein, shall have the meaning defined
      for them under the Plan.

            

    

    

    AGREEMENT

    

    Now,
therefore, intending to be legally bound and in consideration of the mutual
covenants set forth herein, the parties hereto agree as follows:

    

    
      	
              1.

            	
              Award. Shall mean a cash
      award paid to the Participant in accordance with the terms and conditions
      under this agreement and the Plan.

            

    

    

    
      	
              2.

            	
              Performance
      Period.  The Performance Period for the Contingent Award
      made herein shall be the three year period beginning January 1, 2008 and
      ending December 31, 2010.

            

    

    

    
      	
              3.

            	
              Target Award. The
      Participant’s Target Award for the Performance Period referenced under
      paragraph 4 of this Agreement shall be
  $__________.

            

    

    

    
      	
              4.

            	
              Performance Award
      Schedule. The Award provided for under this Agreement shall be
      determined in accordance with the following schedules A and B based on
      FDF’s three-year cumulative fully diluted earnings per share (“EPS”), and
      average annual Return on Assets (ROA) during the Performance Period,
      computed under Generally Accepted Accounting Principles
      (GAAP).

            

    

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    Schedule
A

    
      	
              Annual
      EPS Growth Rate

              During
      Performance Period

            	
              Three-Year
      Cumulative Fully

              Diluted
      EPS for

              the
      Performance Period

            	
              Percent

              of
      Target Award

              Earned
      (1)

            
	
              15.0%

            	
              $7.98

            	
              150%

            
	
              12.5%

            	
              $7.63

            	
              125%

            
	
              10.0%

            	
              $7.34

            	
              100%

            
	
               
      9.0%

            	
              $7.15

            	
               
      75%

            
	
               
      7.0%

            	
              $6.88

            	
               
      50%

            
	
               
      5.0%

            	
              $6.61

            	
               
      25%

            

    

     

    

    Schedule
B

    
      	
              Average
      Annual ROA over

              Performance
      Period

            	
              Percent
      of EPS Award Paid (1)

            
	
              1.20
      %

            	
              120
      %

            
	
              1.10
      %

            	
              110
      %

            
	
              1.00
      %

            	
              100
      %

            
	
              .90
      %

            	
              75
      %

            
	
              .80
      %

            	
              50
      %

            

    

     

    (1) Subject to interpolation
for cumulative EPS or ROA performance that is between schedule
values

    

    
      	
              5.

            	
              Award Determination. The
      Participant’s Award under this Agreement shall be determined as a multiple
      of: percent of the Participant’s Target Award earned under Schedule A,
      multiplied by the percent of EPS Award paid under Schedule B, multiplied
      by the Participant’s Target Award. The Participant must be actively
      employed by FDF as of the end of the Performance Period to be eligible to
      receive any Award except as noted in Section 10 of this Agreement. Actual
      Award percentage rates will be interpolated using the actual three-year
      cumulative fully diluted cumulative EPS and average ROA for the
      Performance Period

            

    

    

    
      	
              6.

            	
              Payment of Award.
      Performance Awards earned as provided for under this agreement and in
      accordance with the Plan shall be paid in cash no later than March 15 next
      following the Performance Period.

            

    

    

    
      	
              7.

            	
              Tax Withholding Obligations.
      An Award paid under this Agreement shall be subject to mandatory
      federal, state, and local tax withholding
  requirements.

            

    

    

    
      	
              8.

            	
              Termination and Forfeiture of
      Award. The Participant’s right to receive an Award shall terminate
      in whole and forfeit upon termination of employment with FDF or its
      subsidiaries for any reason, except in the event of Participant’s death,
      Permanent Disability or Retirement. If the Participant’s termination with
      FDF meets one of the listed exceptions, the Participant’s Award
      opportunity will remain subject to the Award determination under paragraph
      5 during the Performance Period provided for in this Agreement and the
      Award earned at the end of the Performance Period will be reduced
      proportionate to the number of months rounded to the
    nearest

            

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    whole
month the Participant was actively employed during the Performance Period.
Payment will be made at the same time as provided for under paragraph 6 of this
Agreement.

    

    
      	
              9.

            	
              Award Earned Upon a Change in
      Control. Upon the effective date of a Change in Control, an Award
      shall be made in an amount determined by taking the product of (A) the
      Award that would have been due if performance, measured as of the
      transaction date, were to continue at the same rate through the
      Performance Period; and (B) a fraction, the numerator of which is the
      number of whole months that have elapsed from the beginning of the
      Performance Period to the date of the transaction, and the denominator of
      which is the number of whole months in the Performance Period. Payment
      will be made before the later of two and one-half months after the
      effective date of a Change-in-Control, or the end of the calendar year in
      which the Change-in-Control occurs.

            
	 	 

    

    
      	
              10.

            	
              Non-compete, Non-solicitation
      and Business Protection.

            

    

    

    
      	
               
      

            	
              A.

            	
              Noncompetition
      Agreement and Nonsolicitation.

            

    

    

    
      	
               
      

            	
              1.

            	
              In
      view of Participant's importance to the success of FDF, Participant and
      FDF agree that FDF would likely suffer significant harm from Participant's
      competing with FDF or an Affiliate during Participant's term of employment
      with FDF or a Subsidiary and for some period of time
      thereafter.  Accordingly, Participant agrees that Participant
      shall not engage in competitive activities while employed by FDF or an
      Affiliate and during the Restricted Period.  Participant shall
      be deemed to engage in competitive activities if he shall, without the
      prior written consent of FDF, render services directly or indirectly, as
      an Participant, officer, director, consultant, advisor, partner or
      otherwise, for any organization or enterprise which competes directly or
      indirectly with the business of FDF or any Affiliate in providing
      financial products or services (including, without limitation, banking,
      insurance, or securities products or services) to consumers and
      businesses, or directly or indirectly acquires any financial or beneficial
      interest in any organization which conducts or is otherwise engaged in a
      business or enterprise which competes directly or indirectly with the
      business of FDF or any Affiliate in providing financial products or
      services (including, without limitation, banking, insurance or securities
      products or services) to consumers and
      businesses.  Notwithstanding the preceding sentence, Participant
      shall not be prohibited from owning less than 1 percent of any publicly
      traded corporation, whether or not such corporation is in competition with
      FDF or an Affiliate.  For purposes of this Section 10 the term
      "Restricted Period" shall be the period of one year following termination
      for any reason of Participant’s employment with FDF or an
      Affiliate.

            

    

    

    During
the Participant's employment by FDF or an Affiliate, the covenants contained in
this Section 10.A.1., shall apply without regard to geographic
location.  Following the termination of Participant's employment and
during the Restricted Period, the covenants contained in this Section 10.A.1.
shall be limited to those counties in which FDF or an Associate has branch
banking insurance and investment or other offices, and all contiguous counties
to any such county.

    

    
      	
               
      

            	
              2.

            	
              While
      employed by FDF or an Affiliate and during the Restricted Period,
      Participant agrees that Participant shall not, in any manner, directly or
      indirectly, (i) solicit by mail, by telephone, by personal meeting, or by
      any other means, either directly or indirectly, any customer or
      prospective customer of FDF or
an

            

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    Affiliate
to whom Participant provided services, or for whom Participant transacted
business, or whose identity becomes known to Participant in connection with
Participant's services to FDF or an Affiliate (including employment with or
services to any predecessor or successor entities), to transact business with a
person or an entity other than FDF or an Affiliate or to refuse or refrain from
doing any business with FDF or an Affiliate or (ii) interfere with or damage (or
attempt to interfere with or damage) any relationship between FDF or an
Affiliate and any such customer or prospective customer.  The term
"solicit" as used in this Agreement means any communication of any kind
whatsoever, inviting, encouraging or requesting any person to take or refrain
from taking any action with respect to the business of FDF or an
Affiliate.

    

    
      	
               
      

            	
              3.

            	
              While
      employed by FDF or an Affiliate and during the Restricted Period,
      Participant agrees that Participant shall not, in any manner, directly or
      indirectly, solicit any person who is an Employee of FDF or any Affiliate
      to apply for or accept employment or a business opportunity with any other
      person or entity.

            

    

    

    
      	
               
      

            	
              4.

            	
              The
      parties agree that nothing herein shall be construed to limit or negate
      the common law of torts or trade secrets where it provides broader
      protection than that provided
herein.

            

    

    

    
      	
               
      

            	
              B.

            	
              Confidential
      Information.

            

    

    

    Participant
has obtained and may obtain confidential information concerning the businesses,
operations, financial affairs, organizational and personnel matters, policies,
procedures and other non-public matters of FDF and its Subsidiaries, and those
of third parties that is not generally disclosed to persons not employed by FDF
or its Subsidiaries.  Such information (referred to herein as the
"Confidential Information") may have been or may be provided in written form or
orally.  Participant shall not disclose to any other person the
Confidential Information at any time during his employment with FDF or a
Subsidiary or after the termination of his employment, provided that Participant
may disclose such Confidential Information only to a person who is then a
director, officer, Participant, partner, attorney or agent of FDF or a
Subsidiary who, in Participant's reasonable good faith judgment, has a need to
know the Confidential Information.

    

    
      	
               
      

            	
              C.

            	
              Effect
      of Breach; FDF’s Remedies

            

    

    

    
      	
               
      

            	
              1.

            	
              Participant’s
      right to any Award or Award opportunity under this Agreement shall
      terminate immediately upon Participant's breach of any of Participant's
      obligations set forth in this Section
10.

            

    

    

    
      	
               
      

            	
              2.

            	
              Participant
      acknowledges that an Award constitutes valuable consideration to
      Participant and that a violation on Participant's part of this Section 10
      would cause immeasurable and irreparable damage to
      FDF.  Accordingly, Participant agrees that FDF shall be entitled
      to injunctive relief in any court of competent jurisdiction for any actual
      or threatened violation of any of the provisions of this Section 10, in
      addition to any other remedies it may
have.

            

    

    

    
      	
               
      

            	
              3.

            	
              In
      addition to FDF’s right to seek injunctive relief as set forth in
      subsection 2 above of this Section 10.C., in the event that Participant
      shall violate the terms and conditions of this Section 10, FDF may: (i)
      make a general claim for

            

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    damages
and (ii) terminate any payments or benefits payable by First Defiance Financial,
if applicable, to Participant.

    

    
      	
               
      

            	
              4.

            	
              The
      Board shall be responsible for determining whether Participant shall have
      violated this Section 10, and in the absence of Participant's ability to
      show that the Board has acted in bad faith and without fair dealing; such
      decision will be final and binding.  Upon the request of
      Participant, FDF shall provide an advance opinion as to whether a proposed
      activity would violate the provisions of Section 10 of this
      Agreement.

            

    

    

    
      	
              11.

            	
              Restriction on
      Transferability. Until an Award is made as provided above, rights
      to such Award may not be sold, transferred, pledged, assigned, or
      otherwise alienated at any time. Any attempt to do so contrary to the
      provisions hereof shall be null and
void.

            

    

    

    
      	
              12.

            	
              Administration. The
      Compensation Committee of FDF shall have the power to interpret the Plan
      and this Agreement and to adopt such rules for the administration,
      interpretation, and application of the Plan as are consistent therewith
      and to interpret or revoke any such rules. All actions taken and all
      interpretations and determinations made by the Committee shall be final
      and binding upon the Participant, FDF, and all other interested persons.
      No member of the Committee shall be personally liable for any action,
      determination, or interpretation made in good faith with respect to the
      Plan or this Agreement.

            

    

    

    
      	
              13.

            	
              Construction. The
      Contingent Award is being made pursuant to the First Defiance Financial
      Corp. 2008 Long Term Incentive Compensation Plan, and is subject to the
      terms of that Plan. A copy of the Plan has been given to the Participant,
      and additional copies of the Plan are available upon request during normal
      business hours at the principal executive offices of FDF. To the extent
      that any provision of this Agreement violates or is inconsistent with an
      express provision of the Plan, the Plan provision shall govern and any
      inconsistent provision in this Agreement shall be of no force or
      effect.

            

    

    

    
      	
              14.

            	
              Effect on Other Employee
      Benefit Plans. The value of any Award pursuant to this Agreement
      shall not be included as compensation, earnings, salaries, or other
      similar terms used when calculating the Participant’s benefits under any
      employee benefit plan sponsored by FDF or any subsidiary except as such
      plan otherwise expressly provides.

            

    

    

    
      	
              15.

            	
              No Employment Rights. An
      Award pursuant to this Agreement shall not give the Participant any right
      to remain employed by FDF or a
subsidiary.

            

    

    

    
      	
              16.

            	
              Severability. Any
      Section of this Agreement (or part of such a Section) so declared to be
      unlawful or invalid shall, if possible, be construed in a manner which
      will give effect to the terms of such Section or part of a Section to the
      fullest extent possible while remaining lawful and
  valid.

            

    

    

    
      	
              17.

            	
              Construction. An Award
      pursuant to this Agreement is subject to the terms of the Plan. A copy of
      the Plan has been given to the Participant. To the extent that any
      provision of this Agreement violates or is inconsistent with an express
      provision of the Plan, the Plan provision shall govern and any
      inconsistent provision in this Agreement shall be of no force or
      effect.

            

    

    

    
      	
              18.

            	
              Miscellaneous.

            

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              A.

            	
              This
      Agreement constitutes the entire agreement among the parties with respect
      to the subject matter hereof and supersedes all prior agreements and
      understandings, whether written or oral.  This Agreement may
      only be amended in writing signed by the parties
  hereto.

            

    

    

    
      	
               
      

            	
              B.

            	
              The
      Board may terminate, amend, or modify the Plan; provided, however, that no
      such termination, amendment, or modification of the Plan may in any way
      adversely affect the Participant’s rights with respect to Contingent
      Awards provided for under this Agreement, without the Participant’s
      written approval.

            

    

    

    
      	
               
      

            	
              C.

            	
              This
      Agreement shall be subject to all applicable laws, rules, and regulations,
      and to such approvals by any governmental agencies or national securities
      exchanges as may be required.  If all or any part of this
      Agreement or the Plan is declared by any court or governmental authority
      to be unlawful or invalid, such unlawfulness or invalidity shall not
      invalidate any portion of this Agreement or the Plan not declared to be
      unlawful or invalid.

            

    

    

    
      	
               
      

            	
              D.

            	
              All
      obligations of FDF under the Plan and this Agreement, with respect to
      Awards made, shall be binding on any successor to FDF, whether the
      existence of such successor is the result of a direct or indirect
      purchase, merger, consolidation, or otherwise, of all or substantially all
      of the business and/or assets of
FDF.

            

    

    

    
      	
               
      

            	
              E.

            	
              To
      the extent not preempted by federal law, this Agreement shall be governed
      by, and construed in accordance with, the laws of the State of
      Ohio.

            

    

    

    IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the day and year first above written.

    

    
      	
              FIRST
      DEFIANCE FINANCIAL CORP.

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	 
      	 
      	
              Date:

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              EMPLOYEE

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	 
      	 
      	
              Date:

            	 
      
	 
      	 
      	 
      	 
      	 
      

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Election to Name
Beneficiary

    

    The
undersigned hereby names _______________________________ as beneficiary of any
Award payable to such beneficiary in accordance with the terms of this agreement
and the Plan in the event of my death prior the end of the referenced
performance period.

    

    

    
      	 
      	 
      	 
      
	
              Signature

            	 
      	
              Date

            
	 
      	 
      	 
      

    

    

    (Note: In the absence of a
beneficiary designation, any award paid under this agreement will be made to the
estate of the deceased participant)

    
 

     

     

     

    22

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