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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
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A.
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Employee is employed by FDF or a Subsidiary of FDF in a position
FDF deems to be a key position.
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B.
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FDF’s Board of Directors adopted the First Defiance
Financial Corp. Long-Term Incentive Compensation Plan (the
“Plan”) effective July 21, 2008.
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C.
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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.
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D.
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Capitalized terms used herein, but not defined herein, shall
have the meaning defined for them under the Plan.
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AGREEMENT
Now, therefore, intending to be legally bound and in consideration
of the mutual covenants set forth herein, the parties hereto agree
as follows:
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1.
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Award. Shall mean a cash award paid to the Participant in
accordance with the terms and conditions under this agreement and
the Plan.
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2.
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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.
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3.
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Target Award. The Participant’s Target Award for the
Performance Period referenced under paragraph 4 of this Agreement
shall be $__________.
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4.
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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).
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Schedule A
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Annual EPS Growth Rate During Performance Period
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Three-Year Cumulative Fully Diluted EPS for the Performance
Period
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Percent of Target Award Earned (1)
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15.0%
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$7.98
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150%
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12.5%
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$7.63
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125%
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10.0%
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$7.34
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100%
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9.0%
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$7.15
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75%
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7.0%
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$6.88
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50%
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5.0%
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$6.61
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25%
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Schedule B
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Average Annual ROA over Performance Period
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Percent of EPS Award Paid (1)
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1.20 %
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120 %
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1.10 %
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110 %
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1.00 %
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100 %
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.90 %
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75 %
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.80 %
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50 %
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(1) Subject to interpolation for cumulative EPS or ROA
performance that is between schedule values
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5.
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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
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6.
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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.
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7.
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Tax Withholding Obligations. An Award paid under this Agreement
shall be subject to mandatory federal, state, and local tax
withholding requirements.
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8.
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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
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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.
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9.
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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.
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10.
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Non-compete, Non-solicitation and Business Protection.
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A.
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Noncompetition Agreement and Nonsolicitation.
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1.
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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 consumer
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