UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 19, 2005
Ohio 0-26850 34-1803915
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
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601 Clinton Street, Defiance, Ohio 43512
(Address of principal executive offices) (Zip Code)
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 (17-CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On December 19, 2005 the First Defiance Financial Corp. board of directors approved the amended and restated First Defiance Financial Deferred Compensation Plan, effective December 31, 2005 (the "Plan"). The Plan will be available for members of First Defiance's Board of Directors and to a select group of management or highly compensated employees. The Plan shall be administered by a committee appointed by the Board of Directors for such purpose (the "Committee"). Under the Plan, participants will be eligible to elect to defer receipt of part of their current compensation to a later date as part of their personal retirement or financial planning. Participants may elect to defer, as applicable, portions of their director fees, base salary, commission, bonus, or long-term incentive plan awards. Deferral elections will be made annually and will expire at the end of each plan year. Deferral elections are irrevocable once made.
Deferrals are subject to minimum and maximum amount requirements, as defined in the Plan. An employee Participant that elects to participate in the Plan in a given year must defer at least an aggregate amount of $2,000 from his or her base salary, bonus and/or long-term incentive plan awards. Directors are not subject to a minimum deferral amount. An employee participant may defer up to 80% of base salary and commission amount and up to 100% of his or her bonus and/or long-term incentive plan awards. Directors may defer up to 100% of their director fees.
Participants are at all times 100% vested in their deferral accounts. For deferrals, participants may elect one or more measurement funds selected by the Committee (which are based on certain mutual funds) for the purpose of crediting or debiting additional amounts to a Participant's deferral account balance. Directors may also elect to allocate a portion of their deferral to a First Defiance Stock Unit Fund, which will be invested in First Defiance Financial Corp. stock. Only new deferral amounts can be allocated to the First Defiance Stock Unit Fund and once amounts are allocated to the First Defiance Stock Unit Fund, they cannot be reallocated to other measurement funds.
Amounts deferred may be paid out to Participants in scheduled distributions, which may not be any sooner than three plan years after the year to which the deferral election relates. A participant may also elect to receive a distribution if such participant experiences an unforeseeable financial emergency (as defined in the Plan). Distributions may also be made upon a participant's retirement, termination, disability or death.
Benefit security for the Plan will be provided by a funded rabbi trust. First Defiance may terminate the Plan at any time; however, benefits will be paid as defined in the Plan.
A copy of the Plan is filed as Exhibit 10.1 to this report and is incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of businesses acquired. Not Applicable
(b) Pro forma financial information. Not Applicable
(c) Exhibits
10.1 First Defiance Deferred Compensation Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
First Defiance Financial Corp.
By: /s/ John C. Wahl
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John C. Wahl
Executive Vice President/ Chief Financial Officer
Date: December 23, 2005
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Effective December 31, 2005
Copyright (C) 2005
By Clark Consulting, Inc.
Executive Benefits Practice
All Rights Reserved
First Defiance
Deferred Compensation Plan
Master Plan Document
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TABLE OF CONTENTS
Page
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ARTICLE 1 Definitions.............................................................1
ARTICLE 2 Selection, Enrollment, Eligibility......................................6
2.1 Selection by Committee..................................................6
2.2 Enrollment and Eligibility Requirements; Commencement of Participation..6
2.3 Termination of a Participant's Eligibility..............................7
ARTICLE 3 Deferral Commitments/Company Contribution Amounts/
Vesting/Crediting/Taxes.................................................7
3.1 Minimum Deferrals.......................................................7
3.2 Maximum Deferral........................................................8
3.3 Election to Defer; Effect of Election Form..............................8
3.4 Withholding and Crediting of Annual Deferral Amounts....................9
3.5 Company Contribution Amount.............................................9
3.6 Crediting of Amounts after Benefit Distribution........................10
3.7 Vesting................................................................10
3.8 Crediting/Debiting of Account Balances.................................10
3.9 FICA and Other Taxes...................................................12
ARTICLE 4 Scheduled Distribution; Unforeseeable Financial Emergencies............13
4.1 Scheduled Distribution.................................................13
4.2 Postponing Scheduled Distributions.....................................13
4.3 Other Benefits Take Precedence Over Scheduled Distributions............14
4.4 Payout/Suspensions for Unforeseeable Financial Emergencies.............14
ARTICLE 5 Retirement Benefit.....................................................15
5.1 Retirement Benefit.....................................................15
5.2 Payment of Retirement Benefit..........................................15
ARTICLE 6 Termination Benefit....................................................16
6.1 Termination Benefit....................................................16
6.2 Payment of Termination Benefit.........................................16
ARTICLE 7 Disability Benefit.....................................................16
7.1 Disability Benefit.....................................................16
7.2 Payment of Disability Benefit..........................................16
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First Defiance
Deferred Compensation Plan
Master Plan Document
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ARTICLE 8 Death Benefit..........................................................17
8.1 Death Benefit..........................................................17
8.2 Payment of Death Benefit...............................................17
ARTICLE 9 Beneficiary Designation................................................17
9.1 Beneficiary............................................................17
9.2 Beneficiary Designation; Change; Spousal Consent.......................17
9.3 Acknowledgement........................................................17
9.4 No Beneficiary Designation.............................................17
9.5 Doubt as to Beneficiary................................................17
9.6 Discharge of Obligations...............................................18
ARTICLE 10 Leave of Absence.......................................................18
10.1 Paid Leave of Absence..................................................18
10.2 Unpaid Leave of Absence................................................18
ARTICLE 11 Termination of Plan, Amendment or Modification.........................19
11.1 Termination of Plan....................................................19
11.2 Amendment..............................................................19
11.3 Plan Agreement.........................................................19
11.4 Effect of Payment......................................................20
ARTICLE 12 Administration.........................................................20
12.1 Committee Duties.......................................................20
12.2 Administration Upon Change In Control..................................20
12.3 Agents.................................................................20
12.4 Binding Effect of Decisions............................................20
12.5 Indemnity of Committee.................................................21
12.6 Employer Information...................................................21
ARTICLE 13 Other Benefits and Agreements..........................................21
13.1 Coordination with Other Benefits.......................................21
ARTICLE 14 Claims Procedures......................................................21
14.1 Presentation of Claim..................................................21
14.2 Notification of Decision...............................................21
14.3 Review of a Denied Claim...............................................22
14.4 Decision on Review.....................................................22
14.5 Legal Action...........................................................23
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First Defiance
Deferred Compensation Plan
Master Plan Document
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ARTICLE 15 Trust..................................................................23
15.1 Establishment of the Trust.............................................23
15.2 Interrelationship of the Plan and the Trust............................23
15.3 Distributions From the Trust...........................................23
ARTICLE 16 Miscellaneous..........................................................23
16.1 Status of Plan.........................................................23
16.2 Unsecured General Creditor.............................................23
16.3 Employer's Liability...................................................23
16.4 Nonassignability.......................................................24
16.5 Not a Contract of Employment...........................................24
16.6 Furnishing Information.................................................24
16.7 Terms..................................................................24
16.8 Captions...............................................................24
16.9 Governing Law..........................................................24
16.10 Notice.................................................................24
16.11 Successors.............................................................25
16.12 Spouse's Interest......................................................25
16.13 Validity...............................................................25
16.14 Incompetent............................................................25
16.15 Court Order............................................................25
16.16 Insurance..............................................................25
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FIRST DEFIANCE
DEFERRED COMPENSATION PLAN
Effective December 31, 2005
The purpose of this Plan is to provide specified benefits to Directors and a select group of management or highly compensated Employees who contribute materially to the continued growth, development and future business success of First Defiance Financial Corp., an Ohio corporation, and its subsidiaries and affiliates, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.
Effective December 31, 2005 (the "Restatement Date"), the provisions of this Plan shall amend and restate the plan provisions of each Salary Deferral Plan, effective as of September 1, 2002, entered into between First Federal Bank of the City of Defiance, State of Ohio, and the applicable individual identified in such agreement, including such agreements as have been attested to by the First Federal Bank of the Midwest (each, a "Salary Deferral Plan"), with respect to amounts credited to such Salary Deferral Plan. Any and all such balances accrued by a Participant under a Salary Deferral Plan shall be credited to the Participant's "Transfer Account" (subject to the terms and conditions of this Plan) on or around the Restatement Date.
The Plan is intended to comply with all applicable law, including Code
Section 409A and related Treasury guidance and Regulations, and shall be
operated and interpreted in accordance with this intention. Consistent with the
foregoing, and in order to transition the arrangements described above to the
requirements of Code Section 409A and related Treasury guidance and Regulations,
the Committee has made available to Participants certain limited transition
relief described more fully in Appendix A of this Plan, in accordance with
Notice 2005-1 promulgated pursuant to Code Section 409A.
For the purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, an entry on the records of the Employer equal to the sum of (i) the Deferral Account balance, (ii) the Company Contribution Account balance and (iii) the Participant's Transfer Account balance. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
1.2 "Annual Deferral Amount" shall mean that portion of a Participant's Base Salary, Bonus, Commissions, Director Fees and LTIP Amounts that a Participant defers in accordance with Article 3 for any one Plan Year, without regard to whether such amounts are withheld and credited during such Plan Year. In the event of a Participant's Retirement, Disability, death or
Termination of Employment prior to the end of a Plan Year, such year's Annual Deferral Amount shall be the actual amount withheld prior to such event.
1.3 "Annual Installment Method" shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: (i) for the first annual installment, the Participant's vested Account Balance shall be calculated as of the close of business on or around the Participant's Benefit Distribution Date, as determined by the Committee in its sole discretion, and (ii) for remaining annual installments, the Participant's vested Account Balance shall be calculated on every anniversary of such calculation date, as applicable. Each annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due to the Participant. By way of example, if the Participant elects a ten (10) year Annual Installment Method for the Retirement Benefit, the first payment shall be 1/10 of the vested Account Balance, calculated as described in this definition. The following year, the payment shall be 1/9 of the vested Account Balance, calculated as described in this definition. Shares of Stock that shall be distributable from a Participant's Deferral Account shall be distributable in shares of actual Stock in the same manner previously described. However, the Committee may, in its sole discretion, adjust the annual installments in order to distribute whole shares of actual Stock.
1.4 "Base Salary" shall mean the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee's gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee.
1.5 "Beneficiary" shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under this Plan upon the death of a Participant.
1.6 "Beneficiary Designation Form" shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.
1.7 "Benefit Distribution Date" shall mean the date that triggers distribution of a Participant's vested Account Balance. A Participant's Benefit Distribution Date shall be determined upon the occurrence of any one of the following:
election in accordance with Section 5.2(b), his or her Benefit Distribution Date shall be postponed in accordance with Section 5.2(b); or
(b) If the Participant experiences a Termination of Employment, his or her Benefit Distribution Date shall be the last day of the six-month period immediately following the date on which the Participant experiences a Termination of Employment; or
(c) The date on which the Committee is provided with proof that is satisfactory to the Committee of the Participant's death, if the Participant dies prior to the complete distribution of his or her vested Account Balance; or
(d) The date on which the Participant becomes Disabled.
1.8 "Board" shall mean the board of directors of the Company.
1.9 "Bonus" shall mean any compensation, in addition to Base Salary, Commissions and LTIP Amounts, earned by a Participant for services rendered during a Plan Year, under any Employer's annual bonus and cash incentive plans, or other arrangement designated by the Committee, as further specified on an Election Form.
1.10 "Change in Control" shall mean any "change in control event" as defined in accordance with Treasury guidance and Regulations related to Code Section 409A, including but not limited to Notice 2005-1 and such other Treasury guidance or Regulations issued after the effective date of this Plan.
1.11 "Claimant" shall have the meaning set forth in Section 14.1.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.
1.13 "Commissions" shall mean the cash commissions earned by a Participant from any Employer for services rendered during a Plan Year, excluding Bonus, LTIP Amounts or other additional incentives or awards earned by the Participant.
1.14 "Committee" shall mean the committee described in Article 12.
1.15 "Company" shall mean First Defiance Financial Corp., an Ohio corporation, and any successor to all or substantially all of the Company's assets or business.
1.16 "Company Contribution Account" shall mean (i) the sum of the Participant's Company Contribution Amounts, plus (ii) amounts credited or debited to the Participant's Company Contribution Account in accordance with this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant's Company Contribution Account.
1.17 "Company Contribution Amount" shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5.
1.18 "Death Benefit" shall mean the benefit set forth in Article 8.
1.19 "Deferral Account" shall mean (i) the sum of all of a Participant's Annual Deferral Amounts, plus (ii) amounts credited or debited to the Participant's Deferral Account in accordance with this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.
1.20 "Director" shall mean any member of the board of directors of any Employer.
1.21 "Director Fees" shall mean the annual fees earned by a Director from any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors.
1.22 "Disability" or "Disabled" shall mean that a Participant is (i) 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, or (ii) 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 or health plan covering employees of the Participant's Employer.
1.23 "Disability Benefit" shall mean the benefit set forth in Article 7.
1.24 "Election Form" shall mean the form, which may be in electronic format, established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.
1.25 "Employee" shall mean a person who is an employee of any Employer.
1.26 "Employer(s)" shall mean the Company and/or any of its subsidiaries or affiliates (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.
1.27 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
1.28 "LTIP Amounts" shall mean any portion of the compensation attributable to a Plan Year that is earned by a Participant as an Employee under any Employer's long-term incentive plan or any other long-term incentive arrangement designated by the Committee.
1.29 "Participant" shall mean any Employee or Director (i) who is selected to participate in the Plan, (ii) who submits an executed Plan Agreement, Election Form and Beneficiary Designation Form, which are accepted by the Committee, and (iii) whose Plan Agreement has not terminated.
1.30 "Plan" shall mean the First Defiance Deferred Compensation Plan, which shall be evidenced by this instrument and by each Plan Agreement, as they may be amended from time to time.
1.31 "Plan Agreement" shall mean a written agreement, as may be amended from time to time, which is entered into by and between an Employer and a Participant. Each Plan Agreement executed by a Participant and the Participant's Employer shall provide for the entire benefit to which such Participant is entitled under the Plan; should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement. The terms of any Plan Agreement may be different for any Participant, and any Plan Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Employer and the Participant.
1.32 "Plan Year" shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
1.33 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an Employee, separation from service with all Employers for any reason other than a leave of absence, death or Disability, as determined in accordance with Code Section 409A and related Treasury guidance and Regulations, on or after the attainment of age fifty-five (55) with five (5) Years of Service; and shall mean with respect to a Director who is not an Employee, separation from service as a Director with all Employers. If a Participant is both an Employee and a Director, Retirement shall not occur until he or she Retires as both an Employee and a Director.
1.34 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.35 "Scheduled Distribution" shall mean the distribution set forth in Section 4.1.
1.36 "Stock" shall mean First Defiance Financial Corp. common stock, $0.01 par value, or any other equity securities of the Company designated by the Committee.
1.37 "Terminate the Plan", "Termination of the Plan" shall mean a determination by an Employer's board of directors that (i) all of its Participants shall no longer be eligible to participate in the Plan, (ii) all deferral elections for such Participants shall terminate, and (iii) such Participants shall no longer be eligible to receive company contributions under this Plan.
1.38 "Termination Benefit" shall mean the benefit set forth in Article 6.
1.39 "Termination of Employment" shall mean the separation from service with all Employers, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence, as determined in accordance with Code Section 409A and related Treasury guidance and Regulations. If a Participant is both an Employee and a Director, a Termination of Employment shall occur only upon the termination of the last position held.
1.40 "Trust" shall mean one or more trusts established by the Company in accordance with Article 15.
1.41 "Unforeseeable Financial Emergency" shall mean an unforeseeable emergency
that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting
from (i) a sudden and unexpected illness or accident of the Participant,
the Participant's spouse, or a dependent (as defined in Code Section
152(a)) of the Participant, (ii) a loss of the Participant's property due
to casualty, or (iii) such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Committee.
1.42 "Years of Service" shall mean the total number of full years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first year of employment, commences on the Employee's date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date. The Committee shall make a determination as to whether any partial year of employment shall be counted as a Year of Service.
(a) As a condition to participation, each Director or selected Employee who is eligible to participate in the Plan effective as of the first day of a Plan Year shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form, prior to the first day of such Plan Year, or such other earlier deadline as may be established by the Committee in its sole discretion. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary.
(b) A Director or selected Employee who first becomes eligible to participate in this Plan after the first day of a Plan Year must complete these requirements within thirty (30) days after he or she first becomes eligible to participate in the Plan, or within such other earlier deadline as may be established by the Committee, in its sole discretion, in order to participate for that Plan Year. In such event, such person's participation in this Plan shall not commence earlier than the date determined by the Committee pursuant to Section 2.2(c) and such person shall not be permitted to defer under this Plan any portion of his or her Base Salary, Bonus, LTIP Amounts, Commissions and/or Director Fees that are paid with respect to services performed prior to his or her participation commencement date, except to the extent permissible under Code Section 409A and related Treasury guidance or Regulations.
(c) Each Director or selected Employee who is eligible to participate in the Plan shall commence participation in the Plan on the date that the Committee determines, in its sole discretion, that the Director or Employee has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period. Notwithstanding the foregoing, the Committee shall process such Participant's deferral election as soon as administratively practicable after such deferral election is submitted to and accepted by the Committee.
(d) If a Director or an Employee fails to meet all requirements contained in this Section 2.2 within the period required, that Director or Employee shall not be eligible to participate in the Plan during such Plan Year.
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Deferral Minimum Amount
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Base Salary, Bonus, Commissions $2,000 aggregate
and/or LTIP Amounts
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Director Fees $0
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If the Committee determines, in its sole discretion, prior to the beginning of a Plan Year that a Participant has made an election for less than the stated minimum amounts, or if no election is made, the amount deferred shall be zero. If the Committee determines, in its sole discretion, at any time after the beginning of a Plan Year that a Participant has deferred less than the stated minimum amounts for that Plan Year, any amount credited to the Participant's Account Balance as the Annual Deferral Amount for that Plan Year shall be distributed to the Participant within sixty (60) days after the last day of the Plan Year in which the Committee determination was made.
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Deferral Maximum Percentage
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Base Salary 80%
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Bonus 100%
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Commissions 80%
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LTIP Amounts 100%
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Director Fees 100%
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(a) For each Plan Year, the Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus, Commissions, LTIP Amounts and/or Director Fees portion of the Annual Deferral Amount shall be withheld at the time the Bonus, Commissions, LTIP Amounts or Director Fees are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts shall be credited to a Participant's Deferral Account at the time such amounts would otherwise have been paid to the Participant.
(b) Notwithstanding any provision or election under this Plan to the contrary, if necessary to comply with Code Section 409A or to facilitate administration of the Company's payroll system, the Committee, in its sole discretion, may choose to either (i) not withhold Base Salary or Commissions during any payroll period in which any portion of such Base Salary or Commissions relates to services performed in a prior Plan Year, or (ii) withhold Base Salary or Commissions during any payroll period in which any portion of such Base Salary or Commissions relates to services performed in a prior Plan Year in accordance with the Participant's deferral election submitted for the prior Plan Year. Accordingly, in order to carry out the intent of this provision, the Committee may adjust a Participant's Base Salary or Commissions deferral election submitted pursuant to this Article 3.
(a) For each Plan Year, an Employer may be required to credit amounts to a Participant's Company Contribution Account in accordance with employment or other agreements entered into between the Participant and the Employer. Such amounts shall be credited on the date or dates prescribed by such agreements.
(b) For each Plan Year, an Employer, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant's Company Contribution Account under this Plan, which amount shall be for that Participant the Company Contribution Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a
Plan Year may be zero, even though one or more other Participants receive a Company Contribution Amount for that Plan Year. The Company Contribution Amount described in this Section 3.5(b), if any, shall be credited on a date or dates to be determined by the Committee, in its sole discretion.
(a) A Participant shall at all times be 100% vested in his or her Deferral Account and Transfer Account.
(b) A Participant shall be vested in his or her Company Contribution Account in accordance with the vesting schedule(s) set forth in his or her Plan Agreement, employment agreement or any other agreement entered into between the Participant and his or her Employer. If not addressed in such agreements, a Participant shall vest in his or her Company Contribution Account in accordance with a vesting schedule declared by the Committee in its sole discretion.
(c) Notwithstanding anything to the contrary contained in this Section
3.7, upon a Participant's (i) death while employed by an Employer,
(ii) Disability, or (iii) Retirement that occurs on or after the
Participant's attainment of age sixty-five (65), the Participant's
Company Contribution Account shall immediately become 100% vested
(if it is not already vested in accordance with the above vesting
schedules).
(i) The Committee, in its sole discretion, may permit a Participant to initially elect to irrevocably allocate all or a portion of his or her future Director Fees, in accordance with the terms of this Plan, to the First Defiance Stock Unit Fund. Any deferrals of Director Fees allocated to the First Defiance Stock Unit Fund by such Participant cannot be re-allocated to any other Measurement Fund and shall only be distributable in actual shares of Stock.
(ii) Any stock dividends, cash dividends or other non-cash dividends that would have been payable on the Stock credited to such Participant's Account Balance shall be credited to the Participant's Account Balance in the form of additional shares of Stock and shall automatically and irrevocably be deemed to be re-invested in the First Defiance Stock Unit Fund until such amounts are distributed to the Participant. The number of shares credited to the Participant for a particular stock dividend shall be equal to (a) the number of shares of Stock credited to the Participant's Account Balance as of the payment date for such dividend in respect of each share of Stock, multiplied by (b) the number of additional or fractional shares of Stock actually paid as a dividend in respect of each share of Stock. The number of shares credited to the Participant for a particular cash dividend or other non-cash dividend shall be equal to (a) the number of shares of Stock credited to the Participant's Account Balance as of the payment date for such dividend in respect of each share of Stock, multiplied by (b) the fair market value of the
dividend, divided by (c) the "fair market value" of the Stock on the payment date for such dividend.
(iii) The number of shares of Stock credited to the Participant's Account Balance may be adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of Participants' rights with respect to the portion of his or her Account Balance allocated to the First Defiance Stock Unit Fund in the event of any reorganization, reclassification, stock split, or other unusual corporate transaction or event which affects the value of the Stock, provided that any such adjustment shall be made taking into account any crediting of shares of Stock to the Participant under Section 3.8.
(iv) For purposes of this Section 3.8(c), the "fair market value" of the Stock shall be determined by the Committee in its sole discretion.
(a) Such Scheduled Distribution Election Form must be submitted to and
accepted by the Committee in its sole discretion at least twelve
(12) months prior to the Participant's previously designated
Scheduled Distribution Date;
(b) The new Scheduled Distribution Date selected by the Participant must be the first day of a Plan Year, and must be at least five years after the previously designated Scheduled Distribution Date; and
(c) The election of the new Scheduled Distribution Date shall have no effect until at least twelve (12) months after the date on which the election is made.
(a) If the Participant experiences an Unforeseeable Financial Emergency,
the Participant may petition the Committee to suspend deferrals of
Base Salary, Bonus, Commissions, Director Fees and LTIP Amounts to
the extent deemed necessary by the Committee to satisfy the
Unforeseeable Financial Emergency. If suspension of deferrals is not
sufficient to satisfy the Participant's Unforeseeable Financial
Emergency, or if suspension of deferrals is not required under Code
Section 409A and other applicable tax law, the Participant may
further petition the Committee to receive a partial or full payout
from the Plan. The Participant shall only receive a payout from the
Plan to the extent such payout is deemed necessary by the Committee
to satisfy the Participant's Unforeseeable Financial Emergency, plus
amounts necessary to pay taxes reasonably anticipated as a result of
the distribution.
(b) The payout shall not exceed the lesser of (i) the Participant's vested Account Balance, calculated as of the close of business on or around the date on which the amount becomes payable, as determined by the Committee in its sole discretion, or (ii) the amount necessary to satisfy the Unforeseeable Financial Emergency, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution. Notwithstanding the foregoing, a Participant may not receive a payout from the Plan to the extent that the Unforeseeable Financial Emergency is or may be relieved (A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (C) by suspension of deferrals under this Plan, if the Committee, in its sole discretion, determines that suspension is required by Code Section 409A and other applicable tax law.
(c) If the Committee, in its sole discretion, approves a Participant's petition for suspension, the Participant's deferrals under this Plan shall be suspended as of the date of such
approval. If the Committee, in its sole discretion, approves a Participant's petition for suspension and payout, the Participant's deferrals under this Plan shall be suspended as of the date of such approval and the Participant shall receive a payout from the Plan within sixty (60) days of the date of such approval.
(d) Notwithstanding the foregoing, the Committee shall interpret all provisions relating to suspension and/or payout under this Section 4.4 in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to Treasury guidance and Regulations issued after the effective date of this Plan.
(a) A Participant, in connection with his or her commencement of participation in the Plan, shall elect on an Election Form to receive the Retirement Benefit in a lump sum or pursuant to an Annual Installment Method of up to fifteen (15) years. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such Participant shall be deemed to have elected to receive the Retirement Benefit in a lump sum.
(b) A Participant may change the form of payment of the Retirement Benefit by submitting an Election Form to the Committee in accordance with the following criteria:
(i) The election to modify the Retirement Benefit shall have no effect until at least twelve (12) months after the date on which the election is made; and
(ii) The first Retirement Benefit payment shall be delayed at least five (5) years from the Participant's originally scheduled Benefit Distribution Date described in Section 1.7(a).
Notwithstanding the foregoing, the Committee shall interpret all provisions relating to changing the Retirement Benefit election under this Section 5.2 in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to Treasury guidance or Regulations issued after the effective date of this Plan. Accordingly, if a Participant's subsequent Retirement Benefit distribution election would result in the shortening of the length of the Retirement Benefit payment period (e.g., a Participant changes an existing distribution election from annual installments to a lump sum payment; from 15 annual installments to 5 annual installments, etc.), and the Committee determines such election to be inconsistent with Code Section 409A or other applicable tax law, the election shall not be effective.
The Election Form most recently accepted by the Committee shall govern the payout of the Retirement Benefit.
(c) The lump sum payment shall be made, or installment payments shall commence, no later than sixty (60) days after the Participant's Benefit Distribution Date. Remaining installments, if any, shall be paid no later than sixty (60) days after each anniversary of the Participant's Benefit Distribution Date.
(a) Any Employer may, at any time, amend or modify the Plan in whole or
in part with respect to that Employer. Notwithstanding the
foregoing, (i) no amendment or modification shall be effective to
decrease the value of a Participant's vested Account Balance in
existence at the time the amendment or modification is made, and
(ii) no amendment or modification of this Section 11.2 or Section
12.2 of the Plan shall be effective.
(b) Notwithstanding any provision of the Plan to the contrary, in the event that the Company determines that any provision of the Plan may cause amounts deferred under the Plan to become immediately taxable to any Participant under Code Section 409A, and related Treasury guidance or Regulations, the Company may (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company determines necessary or appropriate to preserve the intended tax treatment of the Plan benefits provided by the Plan and/or (ii) take such other actions as the Company determines necessary or appropriate to comply with the requirements of Code Section 409A, and related Treasury guidance or Regulations.
12.5 Indemnity of Committee. All Employers shall indemnify and hold harmless the members of the Committee, any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator.
12.6 Employer Information. To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the compensation of its Participants, the date and circumstances of the Retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require.
(a) that the Claimant's requested determination has been made, and that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:
(i) the specific reason(s) for the denial of the claim, or any part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
(iii) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;
(iv) an explanation of the claim review procedure set forth in
Section 14.3 below; and
(v) a statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
(a) may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claim for benefits;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion, may grant.
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which the decision was based;
(c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant's claim for benefits; and
(d) a statement of the Claimant's right to bring a civil action under ERISA Section 502(a).
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.
IN WITNESS WHEREOF, the Company has signed this Plan document as of ___________________, 2005.
"Company" First Defiance Financial Corp., an Ohio corporation
By: __________________________________ Title: _______________________________
APPENDIX A
Unless otherwise provided below, the capitalized terms below shall have the same meaning as provided in the Plan.
For purposes of clarification, any payment election made in accordance with this Section is intended to comply with the requirements of Q&A-19(c) of Notice 2005-1, and shall not be considered a change to any Participant's prior payment election made under a Salary Deferral Plan, for purposes of Code Section 409A or this Plan. Following the deadline established by the Committee, in its sole discretion, for exercising the right described above, a Participant may only change his or her election for the Retirement Benefit, including for the portion of the Retirement Benefit attributable to the Transfer Account, in accordance with the terms and conditions of Section 5.2(b).