0001144204-13-069548.txt : 20131230 0001144204-13-069548.hdr.sgml : 20131230 20131230170310 ACCESSION NUMBER: 0001144204-13-069548 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20131223 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20131230 DATE AS OF CHANGE: 20131230 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST DEFIANCE FINANCIAL CORP CENTRAL INDEX KEY: 0000946647 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 341803915 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26850 FILM NUMBER: 131303552 BUSINESS ADDRESS: STREET 1: 601 CLINTON ST CITY: DEFIANCE STATE: OH ZIP: 43512 BUSINESS PHONE: 4107825015 MAIL ADDRESS: STREET 1: 601 CLINTON ST CITY: DEFIANCE STATE: OH ZIP: 43512 8-K 1 v364190_8k.htm 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 23, 2013

FIRST DEFIANCE FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

OHIO		0-26850		34-1803915
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

	601 Clinton Street, Defiance, Ohio 43512
	(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (419) 782-5015

	Not Applicable
	(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))

Section 5 – Corporate Governance and Management

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c) On December 23, 2013, the Board of Directors (the “Board”) of First Defiance Financial Corp. (“First Defiance”) approved the appointment of Kevin T. Thompson, 60 years old, to the position of Executive Vice President and Chief Financial Officer of First Defiance, to be effective as of January 1, 2014. Mr. Thompson started with First Defiance on August 12, 2013 in the role of Executive Vice President of Finance.

Mr. Thompson has more than thirty years of banking experience, specializing in finance. Most recently, he served as a consultant to the financial services industry since July 2009. Mr. Thompson previously served as Executive Vice President and Chief Financial Officer with Sky Financial Group until its merger in July 2007, and then as Senior Vice President and Line of Business Chief Financial Officer for Huntington Bancshares, Inc. He is a graduate of Clemson University and the Stonier Graduate School of Banking.

(e) On December 23, 2013, the Compensation Committee of the Board approved an employment agreement for each of Mr. Thompson and Donald P. Hileman in their new roles as Executive Vice President and Chief Financial Officer of First Defiance and President and Chief Executive Officer of First Defiance, respectively. The agreement with Mr. Hileman replaces his existing employment agreement.

The agreements provide a one year term of employment commencing on January 1, 2014, which term shall be extended for one day each day so that the term is always twelve months. The term shall continue until the Board or the executive officer provides written notice of non-renewal to the other, in which case renewals will cease and the term will become fixed, ending twelve months after the date of receipt of any such written notice. The term shall not extend past December 31, 2017.

The agreements provide for base salary of $360,000 for Mr. Hileman and $200,000 for Mr. Thompson. The executives are also entitled to receive bonuses based on the terms and conditions set forth in the First Defiance incentive bonus program, to participate in all company retirement and stock benefit plans, and to receive annual vacation in accordance with First Defiance policies, which shall in no case be less than four weeks per year. First Defiance also shall pay dues for the executive officers for memberships, including professional organizations, as are approved by First Defiance, and shall provide the use of an automobile or an automobile expense reimbursement.

In the event that an executive officer’s employment is terminated for other than Cause, Disability, Retirement, each as defined in the agreements, or the executive officer’s death or such employment is terminated by the executive officer for Good Reason, as defined in the agreements, First Defiance shall pay to the executive officer, in a lump sum payment on the first business day of the first month following the date of termination, an amount equal to his then current base salary plus the average annual payment made to the executive officer under the short-term incentive bonus plan over the last completed five year period; provided, however, if the date of termination is immediately prior to, or within six months after a Change in Control, as defined in the agreements, First Defiance shall instead pay to Mr. Thompson an amount equal to 1.99 times his annual compensation and to Mr. Hileman an amount equal to 2.99 times his annual compensation. Payments are subject to certain limitations as described more fully in the agreements. The executive officers also have agreed to certain non-compete provisions as outlined in the agreements.

The above summary of the material terms of the employment agreements are qualified by reference to the text of the agreements, which are filed herewith as Exhibits 10.1 and 10.2 and incorporated herein by reference.

On December 23, 2013, the Compensation Committee of the Board approved a form of restricted stock award agreement, pursuant to which the Compensation Committee will grant Mr. Hileman shares of restricted stock in an amount equal to $150,000, which amount shall be determined by the average closing price for the last twenty business days in December 2013. Mr. Hileman’s award agreement provides for vesting of all shares of restricted stock on the third anniversary of the grant date. The terms of the form of award agreement provide that vesting of such award shall be accelerated upon the death or disability of the recipient or upon a Change in Control of First Defiance, as such term is defined in the agreement. This summary of the material terms of the form of restricted stock award agreement is qualified by reference to the text of the agreement, which is filed herewith as Exhibit 10.3 and incorporated herein by reference.

On December 23, 2013, the Compensation Committee of the Board also approved a consulting agreement for William J. Small. Mr. Small currently serves as President and Chief Executive Officer of First Defiance and will be retiring effective as of December 31, 2013. The Compensation Committee has approved the consulting agreement so that Mr. Small may provide consulting services to First Defiance following the date of his retirement.

The initial term of the consulting agreement is twelve months, beginning on January 1, 2014, with an option to renew for two additional one-year terms at the sole discretion of the Board. During the initial term of the agreement, First Defiance shall pay Mr. Small in monthly installments for a total annual fee of $100,000. During any subsequent term, First Defiance shall pay Mr. Small in monthly installments for a total annual fee of $85,000. The Board or Mr. Small may terminate the agreement at anytime upon 30 days’ prior notice. During the term of the agreement, Mr. Small shall perform such consulting services as an independent contractor as the Board may request to assist in (i) the transition of Mr. Small’s former duties and responsibilities; (ii) analysis of potential merger and acquisition opportunities; (iii) building relationships with customers, the community and potential acquisition targets; (iv) business development; (v) succession planning; and (vi) other projects as the Board may reasonably request from time to time. This summary of the material terms of the consulting agreement is qualified by reference to the text of the agreement, which is filed herewith as Exhibit 10.4 and incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
10.1		Employment Agreement with Donald P. Hileman
10.2		Employment Agreement with Kevin T. Thompson
10.3		Form of Restricted Stock Award Agreement
10.4		Consulting Agreement with William J. Small

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST DEFIANCE FINANCIAL CORP.

	By:	/s/ Donald P. Hileman
		Donald P. Hileman, Executive Vice President &
		Chief Financial Officer

Date: December 30, 2013

EX-10.1 2 v364190_ex10-1.htm EXHIBIT 10.1

EMPLOYMENT AGREEMENT

AGREEMENT, dated this 1st day of January, 2014, 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, and Donald P. Hileman (the “Executive”). First Defiance and First Federal are referred to jointly herein as the “Companies.”

WITNESSETH:

WHEREAS, the Executive previously served as Chief Financial Officer and Executive Vice President of First Defiance and as Chief Financial Officer of First Federal;

WHEREAS, the Executive is serving the Companies pursuant to the terms of a previous Employment Agreement dated December 14, 2009 (the “Prior Agreement”);

WHEREAS, the Companies desire to promote the Executive to serve as the President and Chief Executive Officer of First Defiance and as Chief Administration Officer of First Federal; and

WHEREAS, the parties desire to supersede the Prior Agreement;

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereby agree as follows:

1. Definitions. The following words and terms shall have the meanings set forth below for the purposes of this Agreement:

(a) Annual Compensation. The Executive’s “Annual Compensation” for purposes of this Agreement shall be deemed to mean the average annual Compensation paid to the Executive by the Companies during the five most recent taxable years ending prior to the date of termination.

(b) Base Salary. ”Base Salary” shall have the meaning set forth in Section 3(a) hereof.

(d) Cause. ”Cause” shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or material breach of any provision of this Agreement. For purposes of this paragraph, no act or failure to act on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Companies.

(e) Change in Control of First Defiance. “Change in Control” of First Defiance shall have the meaning set forth in Section 409A(a)(2)(A)(v) of the Code.

(f) Code. ”Code” shall mean the Internal Revenue Code of 1986, as amended.

(g) Compensation. ”Compensation” shall have the meaning set forth in Section 3(a) hereof.

(h) Date of Termination. ”Date of Termination” shall mean the date of the Executive’s Separation from Service, as that term is defined under Section 409A(a)(2)(A)(i) of the Code.

(i) Disability. “Disability” shall mean any physical or mental impairment that qualifies the Executive for disability benefits under the applicable long-term disability plan maintained by the Companies or any subsidiary or, if no such plan applies, which would qualify the Executive for disability benefits under the Federal Social Security System.

(j) Good Reason. ”Good Reason” shall mean:

(i) Without the Executive’s express written consent:

(a) the assignment by the Companies to the Executive of any duties that are materially inconsistent with the Executive’s positions, duties, responsibilities and status with the Companies immediately prior to such assignment, or in the event of a Change in Control, immediately prior to such a Change in Control of First Defiance;

(b) a material change in the Executive’s reporting responsibilities, titles or offices as an employee and as in effect immediately prior to such change or, in the event of a Change in Control, immediately prior to such a Change in Control of First Defiance; or

(c) any removal of the Executive from or any failure to re-elect the Executive to the offices of President and Chief Executive Officer of First Defiance and Chief Administration Officer of First Federal, except in connection with Cause, Disability, Retirement, or the Executive’s death;

(ii) Without the Executive’s express written consent, a reduction by the Companies in the Executive’s Base Salary, as the same may be increased from time to time, or fringe benefits;

(iii) The principal executive office of the Companies is relocated outside of the Defiance, Ohio area or, without the Executive’s express written consent, the Companies require the Executive to be based anywhere other than an area in which the Companies’ principal executive office is located, except for required travel on business of the Companies to an extent substantially consistent with the Executive’s present business travel obligations;

(iv) Without the Executive’s express written consent, the Companies fail to provide the Executive with the same fringe benefits that were provided to the Executive immediately prior to a Change in Control of First Defiance, or with a package of fringe benefits (including paid vacations) that, though one or more of such benefits may vary from those in effect immediately prior to such Change in Control, is substantially comparable in all material respects to such fringe benefits taken as a whole;

(v) The failure by First Defiance to obtain the assumption of and agreement to perform this Agreement by any successor as contemplated in Section 10 hereof; or

(vi) Without the Executive’s express written consent, the Companies fail to comply with any material provision of this Agreement.

(k) IRS. ”IRS” shall mean the Internal Revenue Service.

(l) Notice of Termination. ”Notice of Termination” shall mean a dated notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) is given in the manner specified in Section 11 hereof.

(m) Retirement. ”Retirement” shall mean voluntary termination by the Executive in accordance with the Companies’ retirement policies, including early retirement, generally applicable to their salaried employees.

2. Term of Employment.

(a) The Companies hereby employ the Executive as President and Chief Executive Officer of First Defiance and Chief Administration Officer of First Federal. The Executive hereby accepts said employment and agrees to render such services to the Companies on the terms and conditions set forth in this Agreement. The term of employment under this Agreement shall commence on January 1, 2014 and continue for a period of 12 months (together with any renewal period described in Section 2(b), the “Term”).

(b) The Term of this Agreement shall be extended for one day each day so that the Term is always 12 months. The Term shall continue until the Companies’ Boards of Directors or the Executive provide written notice of non-renewal to the other, in which case renewals will cease and the Term will become fixed, ending 12 months after the date of receipt of any such written notice. Notwithstanding the foregoing, no Term shall extend past December 31, 2017.

(c) During the Term of this Agreement, the Executive shall perform such executive services for the Companies as may be consistent with his titles and written job description and from time to time assigned to him by the Companies’ Boards of Directors; provided, however, that the Executive shall not be precluded from (i) vacations and other leave time in accordance with Section 3(c) below; (ii) reasonable participation in community, civic, charitable, or similar organizations; (iii) reasonable participation in industry-related activities; or (iv) pursuing personal investments that do not interfere or conflict with the performance of the Executive’s duties to the Companies.

3. Compensation and Benefits.

(a) The Companies shall compensate and pay the Executive for his services during the Term of this Agreement at a minimum base annual salary of $360,000.00 (“Base Salary”), which may be increased from time to time in such amounts as may be determined by the Companies’ Boards of Directors and may not be decreased without the Executive’s express written consent. In addition to his Base Salary, the Executive shall be entitled to receive during the Term of this Agreement a bonus based on such terms and conditions as are set forth from time to time in the Companies’ incentive bonus program (the “Bonus”). The Executive’s Base Salary and Bonus, if any, are referred to herein as his “Compensation.”

(b) During the Term of the Agreement, the Executive shall be entitled to participate in and receive the benefits of any pension or other retirement benefit plan, deferred compensation, profit sharing, stock option, management recognition, employee stock ownership, or other plans, benefits and privileges given to employees and executives of the Companies, to the extent commensurate with his then duties and responsibilities, as fixed by the Boards of Directors of the Companies including, but not limited to, the following: (i) the Companies shall pay membership dues for the Executive for membership in such organizations, including professional organizations, as are approved by the Companies from time to time; and (ii) the Companies shall, at their discretion, provide the use of an automobile (the terms and conditions for the Executive’s use and possession of the automobile and the quality of the automobile provided for the Executive’s use shall be consistent with, or not less favorable than, the past practices of the Companies) or an automobile expense reimbursement. The Companies shall not make any changes in such plans, benefits or privileges that would adversely affect the Executive’s rights or benefits thereunder, unless such change occurs pursuant to a program applicable to all executive officers of the Companies and does not result in a proportionately greater adverse change in the rights of or benefits to the Executive as compared with any other executive officer of the Companies. Nothing paid to the Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the salary payable to the Executive pursuant to Section 3(a) hereof.

(c) During the Term of this Agreement, the Executive shall be entitled to paid annual vacation in accordance with the policies as established from time to time by the Boards of Directors of the Companies, which shall in no event be less than four weeks per annum. The Executive shall not be entitled to receive any additional compensation from the Companies for failure to take a vacation, nor shall the Executive be able to accumulate unused vacation time from one year to the next, except to the extent authorized by the Boards of Directors of the Companies.

4. Expenses. The Companies shall reimburse the Executive or otherwise provide for or pay for all reasonable expenses incurred by the Executive in furtherance or in connection with the business of the Companies, including, but not by way of limitation, traveling expenses and all reasonable entertainment expenses (whether incurred at the Executive’s residence, while traveling or otherwise), subject to such reasonable documentation and other limitations as may be established by the Boards of Directors of the Companies. If such expenses are paid in the first instance by the Executive, the Companies shall reimburse the Executive therefor.

5. Termination.

(a) The Companies shall have the right, at any time to terminate the Executive’s employment hereunder for any reason, including without limitation termination for Cause, Disability or Retirement.

(b) The Executive shall have the right to terminate his employment hereunder for any reason.

(c) In the event that (i) the Executive’s employment is terminated by the Companies for Cause, Disability or Retirement or in the event of the Executive’s death, or (ii) the Executive terminates his employment hereunder other than for Good Reason, the Executive shall have no right pursuant to this Agreement to compensation or other benefits for any period after the applicable Date of Termination.

(d) In the event that the Executive’s employment is terminated by the Companies for other than Cause, Disability, Retirement or the Executive’s death or such employment is terminated by the Executive for Good Reason, which has not been cured within a period of thirty (30) days after a written notice of non- compliance has been given by the Executive to the Companies, and provided that Executive has executed a Release pursuant to Section 5(f) below, then the Companies shall pay to the Executive, in a lump sum payment on the first business day of the first month following the Date of Termination, an amount equal to his then current Base Salary plus the average annual payment made to the Executive under the short term incentive plan over the last completed five year period.

(e) Notwithstanding Section 5(d) above, in the event that (A) the Executive’s employment is terminated by the Companies for other than Cause, Disability, Retirement or the Executive’s death or such employment is terminated by the Executive for Good Reason, which has not been cured within a period of thirty (30) days after a written notice of non-compliance has been given by the Executive to the Companies, (B) the Date of Termination is immediately prior to, or within six months after a Change in Control of First Defiance, and (C) Executive has executed a Release pursuant to Section 5(f) below, then the Companies shall, subject to the provisions of Section 6 hereof, if applicable:

(i) pay to the Executive, in a lump sum payment on the first business day of the first month following the Date of Termination, an amount equal to 2.99 times the Annual Compensation; and

(ii) maintain and provide for a period ending at the earlier of (1) the expiration of the remaining Term of employment pursuant hereto prior to the Notice of Termination or (2) the date of the Executive’s full-time employment by another employer (provided that the Executive is entitled under the terms of such employment to benefits substantially similar to those described in this subparagraph (iii)), at no cost to the Executive, the Executive’s continued participation in all group insurance, life insurance, health and accident, disability and other employee benefit plans, programs and arrangements in which the Executive was entitled to participate immediately prior to the Date of Termination (other than retirement plans or stock compensation plans of the Companies), provided that in the event that the Executive’s participation in any plan, program or arrangement as provided in this subparagraph (iii) is barred, or during such period any such plan, program or arrangement is discontinued or the benefits thereunder are materially reduced, the Companies shall arrange to provide the Executive with benefits substantially similar to those that the Executive was entitled to receive under such plans, programs and arrangements immediately prior to the Date of Termination. Notwithstanding the forgoing, the Companies may in lieu of providing for continuation of the forgoing benefits, pay to the Executive in a lump sum cash payment an amount equal to the Companies’ cost of providing such benefits to the Executive during the month immediately prior to the Executive’s termination of employment, times the number of months that were remaining in the Term of the Executive’s employment prior to the Notice of Termination.

(f) As a condition to receiving any payments under Section 5(d) or (e) of this Agreement, the Executive shall agree to release the Companies and all of their affiliates and subsidiaries, employees and directors from any and all claims that the Executive may have against the Companies and all of their affiliates and subsidiaries, employees and directors through the date of such release (the “Release”) in a form similar to the attached Exhibit A, and no payments shall be made under Section 5(d) or (e) until such Release has become irrevocable, effective and enforceable.

6. Limitation of Benefits under Certain Circumstances. If the payments and benefits pursuant to Section 5 hereof, either alone or together with other payments and benefits that the Executive has the right to receive from the Companies, would constitute a “parachute payment” under Section 280G of the Code, such payments and benefits shall be reduced by the amount, if any, that is the minimum necessary to result in no portion of the payments or benefits constituting a parachute payment under Section 280G of the Code. The determination of any reduction in the payments and benefits made pursuant to this Section 6 shall be based upon the opinion of tax counsel selected by the Companies’ independent public accountants, paid by the Companies and reasonably acceptable to the Companies and the Executive. Such counsel shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the Date of Termination or applicable severance from employment, and may use such technical advisors as such counsel deems necessary or advisable for this purpose.

7. Mitigation; Exclusivity of Benefits.

(a) The Executive shall not be required to mitigate the amount of any benefits hereunder by seeking other employment or otherwise, nor shall the amount of any such benefits be reduced by any compensation earned by the Executive as a result of employment by another employer after the Date of Termination or otherwise.

(b) The specific arrangements referred to herein are not intended to exclude any other benefits that may be available to the Executive upon a termination of employment with the Companies pursuant to employee benefit plans of the Companies or otherwise.

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

9. Covenant Not to Compete and Confidential Information.

(a) Throughout the employment of the Executive under this Agreement and for a period of one year after termination of employment for any reason, the Executive agrees that he will not, except on behalf of the Companies or with the written consent of the Companies:

(i) engage in any business activity, directly or indirectly, on his own behalf or as a partner, stockholder (except by ownership of less than 1% of the outstanding stock of a publicly held corporation), director, trustee, principal, agent, employee, consultant or otherwise of any person, firm or corporation, which is engaged in any activity in which the Companies or any parent, subsidiary or affiliate of the Companies is engaged at the time;

(ii) allow the use of his name by or in connection with any business that is competitive with any activity in which the Companies or any parent, subsidiary or affiliate of the Companies is engaged; or

(iii) offer employment to or employ, for himself or on behalf of any competitor of the Companies or any parent, subsidiary or affiliate, any person who at any time within the prior three years shall have been employed by the Companies or any parent, subsidiary or affiliate of the Companies.

(b) The parties acknowledge that this Section 9 is fair and reasonable under the circumstances. It is the desire and intent of the parties that the provisions of this Section 9 shall be enforced to the fullest extent permitted by law. Accordingly, if any particular portion of this Section 9 shall be adjudicated to be invalid or unenforceable, this Section 9 shall be deemed amended to:

(i) reform the particular portion to provide for such maximum restrictions as will be valid and enforceable, or if that is not possible,

(ii) delete the portion found invalid or unenforceable, such reformation or deletion to apply only with respect to the operation of this Section 9 in the particular jurisdiction in which such adjudication is made.

(c) During the Term of the Executive’s employment, the covenants contained in this Section 9 shall apply without regard to geographic location. Upon the termination of the Executive’s employment, the covenants contained in this Section 9 shall be limited to a twenty-five (25) mile radius of any office of the Companies.

(d) Notwithstanding any other provision of this Agreement to the contrary, in the event the Executive violates the above restrictive covenants, all amounts otherwise owing to the Executive by the Companies shall be forfeited by the Executive and the Companies, in addition to any other remedy, shall be under no further obligation to the Executive.

(e) The Executive shall not at any time, in any manner, while employed by the Companies or thereafter, either directly or indirectly, except in the course of carrying out the Companies business or as previously authorized in writing on behalf of the Companies, disclose or communicate to any person, firm, or corporation, any information of any kind concerning any matters affecting or relating to the Companies’ business or any of its data, figures, projections, estimates, customer lists, tax records, personnel histories, and accounting procedures, without regard to whether any or all of such information would otherwise be deemed confidential or material.

10. Assignability. The Companies may assign this Agreement and their rights hereunder in whole, but not in part, to any corporation, bank or other entity with or into which either of the Companies may hereafter merge or consolidate or to which either of the Companies may transfer all or substantially all of their respective assets, if in any such case said corporation, bank or other entity shall by operation of law or expressly in writing assume all obligations of the Companies hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

11. Notice. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective address set forth below:

To First Defiance:	First Defiance Financial Corp.
	601 Clinton Street
	Defiance, Ohio 43512

To First Federal:	First Federal Bank of the Midwest
	601 Clinton Street
	Defiance, Ohio 43512

To the Executive:	Donald P. Hileman
	____________________
	____________________

12. Supersedes Prior Agreement; Amendment; Waiver. This Agreement supersedes the Prior Agreement. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer or officers as may be specifically designated by the Boards of Directors of the Companies to sign on their behalf. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

13. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the substantive laws of the State of Ohio.

14. Nature of Obligations. Nothing contained herein shall create or require the Companies to create a trust of any kind to fund any benefits that may be payable hereunder, and to the extent that the Executive acquires a right to receive benefits from the Companies hereunder, such right shall be no greater than the right of any unsecured general creditor of the Companies.

15. Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

16. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect.

17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

18. Regulatory Actions. The following provisions shall be applicable to the parties to the extent that they are required to be included in the employment agreements between a savings association and its employees pursuant to Section 163.39 (b) of the regulations applicable to all savings associations, 12 C.F.R. 163.39(b), or any successor thereto, and shall be controlling in the event of a conflict with any other provision of this Agreement, including without limitation Section 5 hereof.

(a) If the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Companies’ affairs pursuant to notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818 (e)(3) and 1818(g)(1)), the Companies’ obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Companies may, in their discretion: (i) pay the Executive all or part of the compensation withheld while its obligations under this Agreement were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

(b) If the Executive is removed from office and/or permanently prohibited from participating in the conduct of the Companies’ affairs by an order issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Companies under this Agreement shall terminate as of the effective date of the order, but vested rights of the Executive and the Companies as of the date of termination shall not be affected.

(c) If the Companies are in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C. 1813(x)(l)), all obligations under this Agreement shall terminate as of the date of default, but vested rights of the Executive and the Companies as of the date of termination shall not be affected.

(d) All obligations under this Agreement shall be terminated pursuant to 12 C.F.R. 163.39(b)(5), except to the extent that it is determined that continuation of the Agreement is necessary for the continued operation of the Companies: (i) by the Office of the Comptroller of the Currency (the “Comptroller”), or his/her designee, at the time the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of First Federal under the authority contained in Section 13(c) of the FDIA (12 U.S.C. 1823(c)); or (ii) by the Comptroller, or his/her designee, at the time the Comptroller, or his/her designee, approves a supervisory merger to resolve problems related to operation of the Companies or when the Companies are determined by the Comptroller to be in an unsafe or unsound condition, but vested rights of the Executive and the Companies as of the date of termination shall not be affected.

19. Regulatory Prohibition. Notwithstanding any other provision of this Agreement to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. 1828(K) and any regulations promulgated thereunder to the extent such laws and regulations are applicable to the Companies and the Executive.

20. Additional Restriction on Distributions to Key Executives.

(a) Notwithstanding the provisions of this Agreement providing for payment of benefits upon termination of employment, if at the time a benefit would otherwise be payable, the Executive is a “specified employee” (as defined below), and the payment provided for would be deferred compensation with the meaning of Section 409A of the Code, the distribution of the Executive’s benefit may not be made until six months after the date of the Executive’s separation from service with the Company (as that term may be defined in Section 409A(a)(2)(A)(i) of the Code and relevant regulations), or, if earlier the date of death of the Executive. This requirement shall remain in effect only for periods in which the stock of the Company is publicly traded on an established securities market.

(b) For purposes of this Section 20 a “specified employee” shall mean any executive of the Company who is a “key employee” of the Company within the meaning of Section 416(i) of the Code as of the last day of the calendar year preceding the date of the termination of employment. This shall include any executive who is (i) a 5-percent owner of the Company’s common stock, or (ii) an officer of the Company with annual compensation from the Company of $130,000.00 or more, or (iii) a 1-percent owner of Company’s common stock with annual compensation from the Company of $150,000.00 or more (or such higher annual limit as may be in effect for years subsequent to 2005 pursuant to indexing Section 416(i) of the Code).

(c) The provisions of this Section 20 have been adopted only in order to comply with the requirements added by Section 409A of the Code. These provisions shall be interpreted and administered in a manner consistent with the requirements of Section 409A of the Code, together with any regulations or other guidance which may be published by the Treasury Department or Internal Revenue Service interpreting such Section 409A of the Code.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

Attest:		FIRST DEFIANCE FINANCIAL CORP.

		By:
		Name:
		Title:

Attest:		FIRST FEDERAL BANK OF THE MIDWEST

		By:
		Name:
		Title:


Witness:

		Donald P. Hileman

EXHIBIT A

FINAL AND BINDING GENERAL RELEASE

This General Release (hereinafter referred to as the "Release") is executed on ____, ____ by Donald P. Hileman, ___ [address], Social Security Number ending in _________(hereinafter referred to as "Executive"), pursuant to Section 5(f) of the Employment Agreement (hereinafter referred to as the "Agreement") dated January 1, 2014, entered into among First Defiance Financial Corp. (“First Defiance”), First Federal Bank of the Midwest (“First Federal”), both of which are located in Defiance, Ohio, (collectively hereinafter referred to as the "Company") and Executive.

1. In consideration for receiving the termination payments describe in Section 5(d) or 5(e) of the Agreement, Executive does hereby fully release, discharge, compromise and settle any and all charges, claims, demands, judgments, causes of action, damages, expenses, liabilities or obligations (including all attorney's fees and costs actually incurred), whether known or unknown, matured or unmatured, vested or contingent, of whatever nature and whether or not presently known that exist as of the execution date of this Release, in law, equity or otherwise, including but not limited to all claims under Title VII of the Civil Rights Act of 1964, all claims under the Fair Labor Standards Act, all claims under the Occupational Safety and Health Act, all claims under the Worker Adjustment and Retraining Notification Act, all claims under the Equal Pay Act, all claims under the Ohio Revised Code Sections 4112.01 through 4112.99 and any other provisions of Ohio law, all claims under the Americans with Disabilities Act, all claims under the Family and Medical Leave Act, all claims arising under the Age Discrimination in Employment Act of 1967, all claims arising under the Older Worker Benefit Protection Act and all claims under the Employee Retirement Income Security Act of 1974, all as amended; all statutory or common law claims under state or federal law, whether in contract, in tort, or in equity; and any other claim arising out of Executive's employment with the Companies and his separation from that employment, as against the Companies and their directors, officers, employees, owners, attorneys, consultants, agents, insurers and volunteers, and any and all related and affiliated entities and corporations, including any and all parent, brother-sister, and subsidiary corporations and the parent, brother-sister and subsidiary corporations of any of them, unincorporated employers, partnerships, alliances, joint ventures, and companies, and each and every employee, agent, consultant, volunteer, insurer, officer, director, owner, and trustee of any of them (collectively the “Released Entities”).

2. Executive acknowledges that he has been and is hereby advised in writing to consult with an attorney concerning this Agreement and that he had the opportunity to seek the advice of legal counsel in connection with the negotiation and execution of this Agreement. Executive further acknowledges that he has had the opportunity to ask questions about each and every provision of this Agreement and that he fully understands the effect of the provisions contained in this Agreement upon his legal rights. Executive acknowledges that he has been given at least 21 days to consider the terms of this Agreement before signing it, and that he may revoke his signature at any time before the expiration of seven (7) days after he signs and returns this Agreement. This Agreement does not take effect until eight (8) days after he signs it. If Executive intends to revoke his signature, he shall notify the Corporation pursuant to section 11 of the Agreement.

3. Executive agrees and acknowledges that he has received all compensation, including minimum wage and overtime pay, to which he may have been entitled under the Fair Labor Standards Act and/or Ohio law for work performed through the date of his termination from employment. He further agrees and acknowledges that he has been accorded all time off from work and any other rights to which he has been entitled pursuant to the Family and Medical Leave Act.

4. This Release shall be binding upon Executive and his heirs, administrators, representatives, executors, successors and assigns.

5. It is the intention of the parties hereto that this Release is and shall be a complete and absolute defense to anything released hereunder. Executive expressly and knowingly waives his rights to assert any claims against the Released Entities that are released hereunder, and covenants not to sue any Released Entity based upon any claims released hereunder.

6. Executive agrees that he has read this Release in its entirety and that his agreement to all of its provisions is made freely, voluntarily, and with full knowledge and understanding of its contents.

7. This Release shall be interpreted and enforced under the laws of the State of Ohio.

EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL THE PROVISIONS OF THIS RELEASE AND SETTLEMENT AGREEMENT, THAT HE HAS BEEN GIVEN AT LEAST TWENTY-ONE DAYS WITHIN WHICH TO CONSIDER SIGNING THIS AGREEMENT, THAT HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY, THAT HE MAY REVOKE THIS AGREEMENT WITHIN SEVEN DAYS AFTER HE SIGNS IT AND THAT HE KNOWINGLY AND VOLUNTARILY HAS ENTERED INTO THIS AGREEMENT IN EXCHANGE FOR VALUABLE CONSIDERATION, INCLUDING THE PAYMENTS IDENTIFIED IN PARAGRAPH 2 , TO WHICH HE WOULD NOT OTHERWISE BE ENTITLED ABSENT THIS AGREEMENT.

[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, I have set my hand this ___ day of _______, ____.

WITNESSES:

	Executive

STATE OF _______________	)
	)SS:
COUNTY OF _____________	)

Subscribed to and sworn before me this ____ day of ________, ____.


	Notary Public

	My Commission Expires:

EX-10.2 3 v364190_ex10-2.htm EXHIBIT 10.2

EMPLOYMENT AGREEMENT

AGREEMENT, dated this 1st day of January, 2014, 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, and Kevin T. Thompson (the “Executive”). First Defiance and First Federal are referred to jointly herein as the “Companies.”

WITNESSETH:

WHEREAS, the Companies desire to hire the Executive to serve as Chief Financial Officer and Executive Vice President of First Defiance and as Chief Financial Officer of First Federal; and

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereby agree as follows:

1. Definitions. The following words and terms shall have the meanings set forth below for the purposes of this Agreement:

(b) Base Salary. ”Base Salary” shall have the meaning set forth in Section 3(a) hereof.

(e) Change in Control of First Defiance. “Change in Control” of First Defiance shall have the meaning set forth in Section 409A(a)(2)(A)(v) of the Code.

(f) Code. ”Code” shall mean the Internal Revenue Code of 1986, as amended.

(g) Compensation. ”Compensation” shall have the meaning set forth in Section 3(a) hereof.

(h) Date of Termination. ”Date of Termination” shall mean the date of the Executive’s Separation from Service, as that term is defined under Section 409A(a)(2)(A)(i) of the Code.

(j) Good Reason. ”Good Reason” shall mean:

(i)

Without the Executive’s express written consent:

(c) any removal of the Executive from or any failure to re-elect the Executive to the offices of Chief Financial Officer and Executive Vice President of First Defiance and Chief Financial Officer of First Federal, except in connection with Cause, Disability, Retirement, or the Executive’s death;

(ii) Without the Executive’s express written consent, a reduction by the Companies in the Executive’s Base Salary, as the same may be increased from time to time, or fringe benefits;

(v) The failure by First Defiance to obtain the assumption of and agreement to perform this Agreement by any successor as contemplated in Section 10 hereof; or

(vi) Without the Executive’s express written consent, the Companies fail to comply with any material provision of this Agreement.

(k) IRS. ”IRS” shall mean the Internal Revenue Service.

2. Term of Employment.

(a) The Companies hereby employ the Executive as Chief Financial Officer and Executive Vice President of First Defiance and Chief Financial Officer of First Federal. The Executive hereby accepts said employment and agrees to render such services to the Companies on the terms and conditions set forth in this Agreement. The term of employment under this Agreement shall commence on January 1, 2014 and continue for a period of 12 months (together with any renewal period described in Section 2(b), the “Term”).

3. Compensation and Benefits.

(a) The Companies shall compensate and pay the Executive for his services during the Term of this Agreement at a minimum base annual salary of $200,000 (“Base Salary”), which may be increased from time to time in such amounts as may be determined by the Companies’ Boards of Directors and may not be decreased without the Executive’s express written consent. In addition to his Base Salary, the Executive shall be entitled to receive during the Term of this Agreement a bonus based on such terms and conditions as are set forth from time to time in the Companies’ incentive bonus program (the “Bonus”). The Executive’s Base Salary and Bonus, if any, are referred to herein as his “Compensation.”

5. Termination.

(a) The Companies shall have the right, at any time to terminate the Executive’s employment hereunder for any reason, including without limitation termination for Cause, Disability or Retirement.

(b) The Executive shall have the right to terminate his employment hereunder for any reason.

(d) In the event that the Executive’s employment is terminated by the Companies for other than Cause, Disability, Retirement or the Executive’s death or such employment is terminated by the Executive for Good Reason, which has not been cured within a period of thirty (30) days after a written notice of non-compliance has been given by the Executive to the Companies, and provided that Executive has executed a Release pursuant to Section 5(f) below, then the Companies shall pay to the Executive, in a lump sum payment on the first business day of the first month following the Date of Termination, an amount equal to his then current Base Salary plus the average annual payment made to the Executive under the short term incentive plan over the last completed five year period.

(i) pay to the Executive, in a lump sum payment on the first business day of the first month following the Date of Termination, an amount equal to 2.99 times the Annual Compensation; and

7. Mitigation; Exclusivity of Benefits.

9. Covenant Not to Compete and Confidential Information.

(i) reform the particular portion to provide for such maximum restrictions as will be valid and enforceable, or if that is not possible,

To First Defiance:	First Defiance Financial Corp.
	601 Clinton Street
	Defiance, Ohio 43512

To First Federal:	First Federal Bank of the Midwest
	601 Clinton Street
	Defiance, Ohio 43512

To the Executive:	Kevin T. Thompson
	__________________
	__________________

12. Amendment; Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officer or officers as may be specifically designated by the Boards of Directors of the Companies to sign on their behalf. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

15. Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

(a) If the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Companies’ affairs pursuant to notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)(12 U.S.C. 1818 (e)(3) and 1818(g)(1)), the Companies’ obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Companies may, in their discretion: (i) pay the Executive all or part of the compensation withheld while its obligations under this Agreement were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

20. Additional Restriction on Distributions to Key Executives.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.


Attest:	FIRST DEFIANCE FINANCIAL CORP.

	By:
		Name:
		Title:

Attest:	FIRST FEDERAL BANK OF THE MIDWEST

	By:
		Name:
		Title:

Witness:


		Kevin T. Thompson

EXHIBIT A

FINAL AND BINDING GENERAL RELEASE

This General Release (hereinafter referred to as the "Release") is executed on ____, ____ by Kevin T. Thompson, [address], Social Security Number ending in _________(hereinafter referred to as "Executive"), pursuant to Section 5(f) of the Employment Agreement (hereinafter referred to as the "Agreement") dated January 1, 2014, entered into among First Defiance Financial Corp. (“First Defiance”), First Federal Bank of the Midwest (“First Federal”), both of which are located in Defiance, Ohio, (collectively hereinafter referred to as the "Company") and Executive.

4. This Release shall be binding upon Executive and his heirs, administrators, representatives, executors, successors and assigns.

7. This Release shall be interpreted and enforced under the laws of the State of Ohio.

[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, I have set my hand this ___ day of _______, ____.

WITNESSES:

Executive

STATE OF ______________	)
	)SS:
COUNTY OF ____________	)

Subscribed to and sworn before me this ____ day of ________, ____.


	Notary Public

	My Commission Expires:

EX-10.3 4 v364190_ex10-3.htm EXHIBIT 10.3

FIRST DEFIANCE FINANCIAL CORP.

2010 EQUITY INCENTIVE PLAN

RESTRICTED STOCK

AWARD AGREEMENT

First Defiance Financial Corp. (the “Company”) hereby grants the undersigned Participant an Award consisting of Shares of Restricted Stock in the Company, subject to the terms and conditions described in the First Defiance Financial Corp. 2010 Equity Incentive Plan (the “Plan”) and this Restricted Stock Award Agreement (this “Award Agreement”).

Name of Participant: ___________________ (the “Participant”).

Grant Date: _________________ (the “Grant Date”).

Award of Restricted Stock: The Award consists of ______ Shares of Restricted Stock.

Vesting: Subject to the provisions of this Award Agreement, the Award shall vest _________________ (the “Vesting Date”).

Limitations on Vesting: If the Participant’s employment terminates for any reason prior to the Vesting Date, the Participant shall forfeit the Award. Notwithstanding the foregoing:

(a)

Death or Disability: In the event of the Participant’s death or Disability prior to the Vesting Date, the Award shall become immediately vested as of the date of death or Disability.

(b)

Change in Control: If a Change in Control of the Company occurs prior to the Vesting Date and the Participant is terminated by the Company, other than for Cause, immediately prior to or within six months after such Change in Control, the Award shall become immediately vested.

Settlement: If the applicable terms and conditions of this Award Agreement are satisfied, the Shares of Restricted Stock shall be released from any transfer restrictions or delivered to the Participant as soon as practicable, but not later than 30 days after all applicable restrictions have lapsed.

Miscellaneous:

(a)

Non-Transferability. The Shares of Restricted Stock subject to the Award may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, except by will or the laws of descent and distribution.

(b)

Beneficiary. Unless otherwise specifically designated by the Participant in writing, the Participant’s beneficiary shall be the Participant’s spouse or, if no spouse survives the Participant, the Participant’s estate.

(c)

No Right to Continued Service or to Awards. The granting of an Award shall impose no obligation on the Company or any Affiliate to continue the employment of the Participant or interfere with or limit the right of the Company or any Affiliate to terminate the employment of the Participant at any time, with or without Cause, which right is expressly reserved.

(d)

Tax Withholding. The Company or an Affiliate, as applicable, shall have the power and right to deduct, withhold or collect any amount required by law or regulation to be withheld with respect to any taxable event arising with respect to the Award. To the extent permitted by the Committee, in its sole discretion, this amount may be: (i) withheld from other amounts due to the Participant, (ii) withheld from the value of any Award being settled or any Shares transferred in connection with the exercise or settlement of an Award, (iii) withheld from the vested portion of any Award (including Shares transferable thereunder), whether or not being exercised or settled at the time the taxable event arises, or (iv) collected directly from the Participant. Subject to the approval of the Committee, the Participant may elect to satisfy the withholding requirement, in whole or in part, by having the Company or an Affiliate, as applicable, withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction; provided that such Shares would otherwise be distributable to the Participant at the time of the withholding and if such Shares are not otherwise distributable at the time of the withholding, provided that the Participant has a vested right to distribution of such Shares at such time. All such elections shall be irrevocable and made in writing and shall be subject to any terms and conditions that the Committee, in its sole discretion, deems appropriate.

(e)

Requirements of Law. The grant of the Award shall be subject to all applicable laws, rules and regulations (including applicable federal and state securities laws) and to all required approvals of any governmental agencies or national securities exchange, market or other quotation system.

(f)

Governing Law. The Plan and the Award Agreement shall be governed by and construed in accordance with the laws of (other than laws governing conflicts of laws) the State of Ohio.

(g)

Award Subject to Plan. The Award is subject to the terms and conditions described in this Award Agreement and the Plan, which is incorporated by reference into and made a part of this Award Agreement. In the event of a conflict between the terms of the Plan and the terms of this Award Agreement, the terms of the Plan will govern. The Committee has the sole responsibility of interpreting the Plan and this Award Agreement, and its determination of the meaning of any provision in the Plan or this Award Agreement will be binding on the Participant. Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.

(h)

Section 409A of the Code. This Award Agreement is intended, and shall be construed and interpreted, to comply with Section 409A of the Code and if necessary, any provision shall be held null and void to the extent such provision (or part thereof) fails to comply with Section 409A of the Code or the Treasury Regulations thereunder. For purposes of Section 409A of the Code, each payment of compensation under the Award Agreement shall be treated as a separate payment of compensation. Any amounts payable solely on account of an involuntary termination shall be excludible from the requirements of Section 409A of the Code, either as separation pay or as short-term deferrals to the maximum possible extent. Nothing herein shall be construed as the guarantee of any particular tax treatment to the Participant, and the Company shall have no liability with respect to any failure to comply with the requirements of Section 409A of the Code. Any reference to the Participant’s “termination” shall mean the Participant’s “separation from service”, as defined in Section 409A of the Code. In addition, if the Participant is determined to be a “specified employee” (within the meaning of Section 409A of the Code and as determined under the Company’s policy for determining specified employees), the Participant shall not be entitled to payment or to distribution of any portion of an Award that is subject to Section 409A of the Code (and for which no exception applies) and is payable or distributable on account of the Participant’s termination until the expiration of six months from the date of such termination (or, if earlier, the Participant’s death). Such Award, or portion thereof, shall be paid or distributed on the first business day of the seventh month following such termination.

(i)

Signature in Counterparts. This Award Agreement may be signed in counterparts, each of which will be deemed an original, but all of which will constitute one and the same instrument.

[Signature page follows]

PARTICIPANT

		Date:
Signature


Print Name

FIRST DEFIANCE FINANCIAL CORP.

By:			Date:

Its:

EX-10.4 5 v364190_ex10-4.htm EXHIBIT 10.4

CONSULTING AGREEMENT

This Consulting Agreement is made and entered into as of the 1st day of January, 2014 (the “Effective Date”), 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, and William J. Small (the “Consultant”). First Defiance and First Federal are referred to jointly herein as the “Companies.”

WITNESSETH:

WHEREAS, the Consultant previously provided services to the Companies until the Consultant’s termination of employment effective December 31, 2013 (the “Separation Date”) and the Companies desire to enter into this Agreement whereby the Consultant will provide consulting services to the Company following the Separation Date; and

NOW, THEREFORE, in consideration of the mutual agreements herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:

Section 1. Term of the Agreement.

The initial term of this Agreement shall run for the first 12 months following the Effective Date. This Agreement may be renewed in the sole discretion of the Companies’ Boards of Directors for two additional one year terms (together with the initial term, the “Term”). The Companies or the Consultant may terminate this Agreement at anytime upon 30 days’ prior notice. In the event that this Agreement is terminated during a Term, First Defiance shall pay Consultant all consideration due through the date of termination. The Companies may terminate this Agreement immediately for “Cause.” For purposes of this Agreement, “Cause” shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or material breach of any provision of this Agreement. For purposes of this paragraph, no act or failure to act on the Consultant’s part shall be considered “willful” unless done, or omitted to be done, by the Consultant not in good faith and without reasonable belief that the Consultant’s action or omission was in the best interest of the Companies.

Section 2. Consulting Services.

During the Term, the Consultant shall perform such consulting services on behalf of the Companies as may be requested of the Consultant by the Companies’ Boards of Directors to assist in the transition of the Consultant’s former duties and responsibilities to other associates of the Companies; analysis of potential merger and acquisition opportunities; building relationships with customers, the community and potential acquisition targets; business development; succession planning; and such other projects as the Companies may reasonably request from time to time (the “Services”). Consultant will adhere to commercially reasonable standards of professional conduct and performance in carrying out his responsibilities under the terms of this Agreement and in providing the Services. Notwithstanding the foregoing, the parties agree that during the Term, the Companies shall not request that the Consultant perform, and the Consultant shall not be obligated to perform, Services at such a level, as reasonably determined by the Consultant in the Consultant’s sole discretion, that the Consultant would not be deemed to have “separated from service” from the Companies within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

Section 3. Nature of Relationship.

(a) It is expressly understood and agreed by the parties that the Consultant shall provide the Services described above as an independent contractor to the Companies and that the Consultant is not and shall not be considered an associate of the Companies or any affiliate. Nothing in this Agreement shall be construed to confer upon the Consultant the status of an associate or agent of the Companies (or any affiliate) or any of the rights thereof, nor shall either party have any authority to bind the other in any respect, it being intended that each shall remain an independent contractor responsible for their own actions. Nothing contained in this Agreement shall be construed or applied to create a partnership or joint venture between the Companies and the Consultant or their respective affiliates.

(b) The Companies agree not to exert or retain control of, or the right to control, the terms, mode and manner of the services to be performed by the Consultant. Nothing herein shall restrict the right of the Consultant to perform services for any other person or entity as long as the performance of such services does not entail representing any person or entity that may have a conflict of interest with the Companies or one of its affiliates and does not entail or create the possibility of a breach of any ethical or similar obligation the Consultant has or may have to the Companies and their affiliates.

Section 4. Agreement Consideration.

(a) In consideration of the obligations and commitments of the Consultant under this Agreement, First Defiance or First Federal shall pay the Consultant during the initial term $100,000, payable in 12 monthly installments of $8,333.33, and, during any subsequent term, $85,000, payable in 12 monthly installments of $7,083.33.

(b) During the Term, First Defiance or First Federal shall also (i) pay membership dues for the Consultant for membership in professional organizations that are approved by the Board of Directors of First Defiance from time to time; and (ii) provide Consultant with office space, a laptop, IPad and cell phone.

(c) The Consultant shall be solely responsible for the payment of any and all federal, state and local income taxes, employment taxes, workers’ compensation taxes and assessments and any other taxes or assessments required to be paid with respect to this compensation.

-2-

Section 5. Confidentiality.

The Consultant agrees that confidential information of any nature acquired by the Consultant regarding the Companies’ business or business operations, including specifically any information or property acquired or created in connection with providing the Services, is and shall be considered confidential and shall be held in the strictest confidence. Without limiting the generality of the foregoing, any and all information so obtained shall not be divulged, furnished or made accessible to any third party without the prior written permission of the Companies, and the Consultant shall stipulate, consent and agree to protect any such information from disclosure to third parties (including consenting to the sealing of records and the issuance of appropriate protective orders) in the event of a dispute. Upon termination of this Agreement, the terms of this Section 5 shall remain in effect indefinitely.

Section 6. Notices.

Except as otherwise provided in this Agreement, any notice required or permitted to be given under this Agreement shall be deemed properly given if in writing and if mailed by registered or certified mail, postage prepaid with return receipt requested as follows:

To First Defiance:	First Defiance Financial Corp.
	601 Clinton Street
	Defiance, Ohio 43512

To First Federal:	First Federal Bank of the Midwest
	601 Clinton Street
	Defiance, Ohio 43512

To the Consultant:	William J. Small
	__________________
	__________________

or to such other address as either party may provide the other in writing.

Section 7. Waiver.

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by all parties to the Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

-3-

Section 8. Assignment.

This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The rights and obligations of the Consultant hereunder may not be delegated, assigned or otherwise transferred.

Section 9. Entire Agreement.

This Agreement represents the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior understandings, written or oral. The terms of this Agreement may be changed, modified, or discharged only by an instrument in writing signed by each of the parties hereto. Notwithstanding the foregoing, the specific arrangements referred to herein are not intended to exclude any other benefits that may be available to the Consultant upon his termination of employment with the Companies pursuant to employee benefit plans of the Companies or otherwise.

Section 10. Validity.

The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

Section 11. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with laws of the State of Ohio, except to the extent that federal law controls, and applied without regarding to any conflicts of laws principles.

Section 12. Counterparts.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

-4-

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Attest:		FIRST DEFIANCE FINANCIAL CORP.

		By:
		Name:
		Title:

Attest:		FIRST FEDERAL BANK OF THE MIDWEST

		By:
		Name:
		Title:

Witness:		CONSULTANT


		William J. Small

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