(a) General Duties and Responsibilities .  The Executive shall perform the duties and responsibilities customary for the Executive’s position to the best of the Executive’s ability and in accordance with the policies established by the Corporation’s Board of Directors (the “ Board ”) and all applicable laws and regulations.  The Executive shall perform such other duties not inconsistent with the Executive’s position as may be assigned from time to time by the Board.

(b) Devotion of Time to the Employers ’ Business .  During the Term, the Executive shall devote the Executive’s full business time, ability and attention to the faithful performance of duties under this Agreement, subject to the direction of the Board.  The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any person or organization which competes with the business of the Employers without the prior written consent of the Board; provided, however, that the Executive shall not be precluded from: (i) reasonable participation in community, civic, charitable or similar organizations; (ii) reasonable participation in industry-related activities, including, but not limited to, attending industry trade association (national and state) conventions, conferences and committee meetings and holding positions of responsibility therein; and (iii) the pursuit of personal investments which do not interfere or conflict with the performance of the Executive’s duties for the Employers .  

(a) Salary .  T he Executive shall receive an annual salary in the amount of $ 240 ,000 , payable in equal installments not less often than monthly.  At least annually, the Executive’s annual salary shall be reviewed based upon the performance of the Executive and the Employers over the previous year and may be adjusted by the Board or a committee thereof, determined in its discretion ,   provided that in no event shall the Executive’s annual salary be less than $240,000 unless the Executive consents to a lower amount (the initial base salary as adjusted, if applicable, the “ Base Salary ”). 

(b) Performance Bonus .  T he Executive shall be eligible to receive an annual performance bonus (the “Bonus”) contingent upon the satisfaction of performance goals established by the Employers , the Board or a committee thereof from time to time .

(c) Employee Benefit Plans .  T he Employers will permit the Executive to participate in all health and life insurance coverages, disability programs, tax-qualified retirement plans, paid holidays, perquisites, and such other benefits of employment as the Employers may provide from time to time to employees of the Employers holding similar positions as the Executive, subject to the terms and conditions of such plans, policies and programs.  Notwithstanding any provision contained in this Agreement, the Employers may discontinue or terminate at any time any employee benefit plan, policy or program, now existing or hereafter adopted, to the extent permitted by the terms of such plan, policy or program and shall not be required to compensate the Executive for such discontinuation or termination.  

(a)

Compensation Upon Termination .  Except to the extent that the Executive is terminated following a Change in Control as described in Section 4(b) , dies or becomes Disabled as described in Section 4(c) :

(i)

Upon termination of the Executive’s employment during the Term by the Employers without Cause or by the Executive for Good Reason , subject to the conditions set forth in Section 5, the Bank shall pay to the Executive (or to the Executive’s estate if Executive dies before all severance benefits payable under this Section 4(a)(i) have been paid) (A) an amount equal to   the Executive’s monthly Base Salary as in effect on the date of such termination payable in   equal monthly installments commencing on the first business day of the second month beginning after the Executive’s date of termination (the “ Severance ”) and continuing for the remaining Term, but not less than 12 months and not more than 24 months and (B) the pro rata portion (calculated based on the ratio of the number of days during such bonus performance period that the Executive was employed to the total number of days in the applicable bonus performance period) of any bonus payable to the Executive under the Employers’ incentive compensation plan with respect to the year in which Executive’s employment is terminated, payable when, if and to the extent such bonus otherwise would have been payable had Executive’s employment not been terminated .

(ii)

As additional compensation upon termination of Executive’s employment during the Term by the Employers without Cause or by the Executive for Good Reason :  

(b)

Change of Control Benefit .  If the Bank has a Change of Control (as defined in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “ Code ”)), and the Executive’s employment is terminated by the Bank without Cause , or by the Executive for Good Reason, before the second anniversary of the date of such Change of Control, subject to the conditions set forth in Section 5, the Bank shall pay to the Executive a lump sum cash amount equal to 2 times the sum of the Executive’s Base Salary and the average bonus paid to the Executive over the prior 24 month period . Such lump sum shall be paid within sixty (60) days following the Executive’s termination , provided that, if the sixty (60) day window would span two years, the payment will be made in the second year.  In addition, all stock options and other equity awards granted by the Corporation to the Executive shall be fully vested as of the date of the Change in Control and such stock options shall remain exercisable for the full option exercise period that would have applied had the Executive remained employed .

(c)

Benefit Upon Death or Disability .  Upon termination of the Executive’s employment during the Term due to the Executive’s death or Disability, the Bank shall pay to the Executive or to the Executive ’s estate , as applicable, an amount equal to one times the Executive’s annual Base Salary as in effect on the date of such termination.  Such death or Disability benefit shall be paid in 12 equal monthly installments commencing on the first business day of the second month beginning after the Executive’s date of termination due to death or Disability.  The payments due under this Section 4(c) shall be offset by any benefit or payment provided by the Employers   (or on behalf of the Employers )   to any beneficiary of the Executive (including Executive’s estate) on account of Executive’s death or Disability, regardless of whether such benefit or payment is insured or self-i n s ured.   In addition, a ll stock options granted by the Corporation to the Executive shall be fully vested as of the date of termination of Executive’s employment due to death or Disability and shall remain exercisable in accordance with the terms of the Executive’s applicable option award agreement .

(d)

No Right to Severance for Any Other Reason .  Except as otherwise provided in Section 4(a) ,   (b) or (c) , t he Executive shall have no right to the payment of Severance upon termination of the Executive’s employment by the Employers for Cause, by the Executive for any reason or no reason (other than for Good Reason) , as a result of the Executive’s death or Disability, or upon expiration of the Term.

(e)

Definitions .  For purposes of this Agreement:

(i)

Cause :  The Employers shall have “ Cause ” to terminate the Executive’s  employment upon the occurrence of any of the following events:  (i) willful and continued failure to substantially perform assigned duties; (ii) gross misconduct; (iii) a material breach of any written covenant or of any term of this Agreement or any other agreement with either Employer , as determined by the Audit Committee of the Board ; (iv) commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with either Employer or any affiliate, or commission of a crime other than a felony which involves a breach of trust or fiduciary duty, in each case whether or not involving either Employer or any affiliate; (v) fraud, disloyalty, dishonesty or willful violation of any applicable law, rule or regulation of either Employer’s or any affiliate’s code of conduct or any other policy of either Employer or any affiliate that applies to the Executive, or (vi) issuance of an order for removal of the Executive by any agency which regulates the activities of either Employer or any affiliate.

(ii)

Disability :  The Executive shall be deemed to be “ Disabled ” if  the Executive suffers from (A) any mental or physical condition with respect to which the Executive qualifies for and receives benefits under a long-term disability plan of either Employer or any affiliate, or (B) in the absence of such a long-term disability plan or coverage under such plan, a physical or mental condition which, in the sole discretion of the Board or a committee thereof is reasonably expected to be of indefinite duration and to substantially prevent the Executive from fulfilling the Executive’s duties or responsibilities to the Employers .  

(iii)

Good Reason :  “Good Reason” shall mean the termination of Executive’s employment by Executive that occurs within ninety (90) days after the initial existence of one or more of the following conditions arising without the consent of Executive:

a.

A material decrease in Executive’s Base Salary as compared to the Base Salary paid during the prior twelve (12) month period without Cause;

b.

Employer’s relocation of Executive’s principle office to a location more than twenty-five (25) miles outside of Columbus, Ohio;

c.

Material breach of a provisio n of this Agreement or of the Corporation’s i ncentive c ompensation p lan by Employer ; or

d.

Material diminution in Executive’s duties and responsibilities.

5. Conditions on Receipt of Severance .  The Bank’s obligation to pay Severance pursuant to this Agreement is expressly conditioned upon:

(a)

Execution of Release .  The Executive’s agreement to release the Employers and all of its affiliates and their respective employees and directors from any and all claims that the Executive may have against the Employers and any affiliate and their respective employees and directors, excluding any claims for non-payment of any accrued but unpaid Base Salary or Severance, up to and including the date the Executive signs a waiver and release of claims (“ Release ”) in the form provided by the Bank, which shall include provisions prohibiting the Executive from competing with the Employers or any affiliate as described in and for the duration set forth in Section 6(a) of this Agreement.  The Executive acknowledges that the Executive is not entitled to receive, and shall not receive, any payments of Severance pursuant to this Agreement unless and until the Executive provides the Bank with said Release and the Release has become irrevocable, before the first day of the second month commencing after the date of the Executive’s termination.

(b)

Compliance with Covenants .  The Executive’s compliance with the covenants set forth in Section 6 of this Agreement.  If the Executive breaches any covenants set forth in Section 6 of this Agreement, the Executive shall forfeit any further right to payments of Severance and, upon receipt of written notice from either Employer requesting the same, shall promptly repay any Severance previously received under this Agreement. 

6. Covenants . 

(a)

Non-Solicitation .  During the Executive’s employment by the Employers during the Term of this Agreement and, if applicable, for the Additional Nonsolicitation Period (as defined below) following the termination of the Executive’s employment for any reason prior to the end of the Term, the Executive shall not, directly or indirectly, for himself or through, on behalf of, or in conjunction with, any person(s) or organization, (i) solicit, contact, call upon, communicate with or attempt to communicate with any Customer of the Employers on behalf of a Competing Business for the purpose of providing products and/or services provided to its Customers of the Employers, as hereinafter defined, and/or (ii) solicit any person who is then an employee of either Employer or who has been an employee of either Employer at any time within the six months of such solicitation for the purpose of inducing such person to become an employee of, consultant to, or contractor for a Competing Business. 

(b)

Confidential Information . The Executive acknowledges that during the Executive’s employment he shall learn and shall have access to confidential information regarding the Employers and their customers and business.  The Executive agrees and covenants not to disclose or use for the Executive’s own benefit or the benefit of any other person or entity any confidential information, unless or until the Employers consent to such disclosure or use or such information becomes common knowledge in the industry or is otherwise legally in the public domain. The Executive shall not knowingly disclose or reveal to any unauthorized person any confidential information relating to the Employers , its subsidiaries or affiliates, or to any of the businesses operated by them, and the Executive confirms that such information constitutes the exclusive property of the Employers . The Executive shall not otherwise knowingly act or conduct himself (i) to the material detriment of the Employers or their affiliates or (ii) in a manner which is inimical or contrary to the interests of the Employers .  Notwithstanding anything to the contrary contained in this Agreement, this Section 6(b) shall remain in effect following the termination of this Agreement.

(c)

Non-Disparagement .  The Executive agrees that the Executive shall not make any public statements which disparage the Employers or any of their affiliates or any of their respective directors, officers or employees.  Nothing in the foregoing is intended to prohibit the Executive from making truthful statements required by order of a court, governmental body or regulatory body having appropriate jurisdiction.

(d)

Return of Property .  The Executive agrees that, upon the Executive’s termination of employment, the Executive shall promptly return to the Employers any confidential documents or material or any other property belonging to the Employers , including keys, credits cards, and passes, and the Executive shall also return all writings, files, records, correspondence, notebooks, notes and other documents and things (including any copies thereof) containing confidential information or relating to the business or proposed business of the Employers or any affiliate, except any personal diaries, calendars, rolodexes or personal notes or correspondence.

(e)

Cooperation . The Executive agrees that the Executive shall be reasonably available to testify truthfully on behalf of the Employers or any affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Employers or any affiliate in all reasonable respects in any such action, suit or proceeding, by providing information and meeting and consulting with the Board, or their representatives or counsel, or representatives or counsel of the Employers or any affiliate, as requested; provided, however, that the same does not materially interfere with the Executive’s then-current professional activities, and provided that the Executive is reimbursed for any reasonable costs and expenses associated with such cooperation.

7. Nonassignability . Neither this Agreement nor any right or interest hereunder shall be assignable by the Executive, the Executive’s beneficiaries or legal representatives without the Employers ’ prior written consent; provided, however, that nothing in this Section 7 shall preclude the Executive from designating a beneficiary to receive any benefits payable hereunder upon the Executive’s death.

8. No Attachment . Except as required by law, no right to receive payment under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process of assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

9. Binding Agreement . This Agreement shall be binding upon, and inure to the benefit of, the Executive and the Employers and their respective permitted successors and assigns.  For purposes of clarity, this Agreement shall continue following a Change of Control unless the Executiv e and the Employers (or their successor/assign) agree otherwise.

10. Taxes .  Notwithstanding anything to the contrary in this Agreement, all payments and benefits required to be made or provided by the Employers to the Executive shall be subject to withholding of such amounts relating to taxes as the Employers may reasonably determine that it should withhold pursuant to any applicable law or regulation.

11. Section 409A of the Code .  The compensation and benefits payable pursuant to this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code, to the extent applicable, and, to the maximum extent permitted by law, shall be interpreted in a manner that results in its continued compliance with or exemption from the requirements of that section.  In the event it is determined that any compensation or benefit payable pursuant to this Agreement is deferred compensation subject to Section 409A of the Code and that the Executive is a “specified employee,” within the meaning of Section 409A of the Code, then the payments of such amount or the provisions of such benefits shall not be made until the first business day that is six months following the date of the Executive’s termination or, if earlier, the date of the Executive’s death.  For purposes of applying the provisions of Section 409A of the Code to this Agreement, each separately identified amount to which the Executive is entitled under this Agreement shall be treated as a separate payment.  In addition, to the extent permissible under Section 409A of the Code, any series of installment payments under this Agreement shall be treated as a right to a series of separate payments.   Any reference to the Executive’s “termination” or “termination of employment” shall mean the Executive’s “separation from service” as defined by Section 409A of the Code.

12. Golden Parachute Provisions .  Notwithstanding anything to the contrary in this Agreement, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with any statute, regulation, order or similar limitation in effect at the time the payments would otherwise be paid, including, without limitation, the requirements of 12 U.S.C. §1828(k) and/or 12 C.F.R. Part 359 and the regulations issued thereunder (a “Regulatory Limitation”).  Without limiting the foregoing, any such payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to forfeiture and return to the Employers in the event that the Employers or their successors later obtain information indicating that the Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. §359.4(a)(4). If any amount otherwise payable to Executive pursuant to this Agreement is prohibited or limited by any Regulatory Limitation: (i) Bank shall pay the maximum amount that may be paid under the Regulatory Limitation; and (ii) shall use commercially reasonable efforts to obtain the consent of the appropriate agency or body to pay any amounts that cannot be paid due to the application of the Regulatory Limitation.

13. Clawbacks . Any amounts paid to, credited to an account on behalf of, or vested to the Executive in the prior twenty-four months by either Employer under any short-term incentive compensation program, long-term incentive compensation program (including restricted stock awards under the Corporation’s 2009 Equity Compensation Plan or similar equity based programs maintained by an Employer) or under any nonqualified deferred compensation plan shall be subject to repayment within thirty (30) days upon the request of either Employer in the event that any such amount is shown to be directly attributable to materially misleading financial statements; provided, however, that in order for this Section 13 to be applicable, the Executive must have knowingly prepared such materially misleading financial statements or knowingly contributed materially misleading data which was then incorporated into such materially misleading financial statements. If an overpayment of incentive compensation results from a restatement of financial statements, Employers’ Boards of Directors shall have the discretion to consider the overpayment in awarding future incentive compensation without regard to the Executive’s role with respect to the financial statements which are restated.  In the event that a more extensive clawback right is required by law or by regulation of any exchange on which an Employer’s stock is traded, this Section 13 shall be deemed to require the minimum clawback necessary to comply with such law or regulation .

14. Amendment of Agreement . This Agreement may be amended only by mutual written agreement of the parties.

15. Waiver . No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver, unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than the act specifically waived.

16. Headings; Severability .   The headings used in this Agreement are included solely for convenience of reference, are not part of the provisions of this Agreement and will have no force or effect.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement. 

17. Governing Law . This Agreement will be construed in accordance with, and pursuant to, the laws of the State of Ohio (other than laws governing conflicts of laws), except to the extent that federal law governs. 

18. Survival .  The provisions of Sections 5, 6 and this Section 17 shall survive the termination of this Agreement and the Executive’s termination of employment with the Employers .

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



CENTRAL FEDERAL CORPORATION



By :    /s/ Robert H. Milbourne

Name:     Robert H. Milbourne

Its: Director/Compensation Committee Chairman











C FBANK



By :    /s/ Robert H. Milbourne

Name:     Robert H. Milbourne

Its: Director/Compensation Committee Chairman











EXECUTIVE



/s/ Timothy T. O’Dell

 Timothy T. O’Dell









1.

Employment and Term . The Executive shall serve as the Executive Vice President and Chief Financial Officer of the Bank in accordance with the terms and subject to the conditions of this Agreement from the Effective Date until December 31, 2018 (the “Initial Term”).  Employers’ Board of Directors shall review this Agreement annually commencing in 2017 and determine whether the extension of the Agreement for an additional 12 month period (each a “Renewal Term”) is appropriate in its sole and exclusive discretion.  This Agreement shall be extended for a Renewal Term unless t he Employers provide the Executive with written notice of non-renewal not less than 30 days prior to the end of each calendar year beginning after December 31, 2016 .  The Initial Term and any Renewal Term are collectively, the “ Term .”

2.

Duties of the Executive .

(a) General Duties and Responsibilities .  The Executive shall perform the duties and responsibilities customary for the Executive’s position to the best of the Executive’s ability and in accordance with the policies established by the Corporation’s Board of Directors (the “ Board ”) and all applicable laws and regulations.  The Executive shall perform such other duties not inconsistent with the Executive’s position as may be assigned from time to time by the Board.

(b) Devotion of Time to the Employers’ Business .  During the Term, the Executive shall devote the Executive’s full business time, ability and attention to the faithful performance of duties under this Agreement, subject to the direction of the Board.  The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any person or organization which competes with the business of the Employers without the prior written consent of the Board; provided, however, that the Executive shall not be precluded from: (i) reasonable participation in community, civic, charitable or similar organizations; (ii) reasonable participation in industry-related activities, including, but not limited to, attending industry trade association (national and state) conventions, conferences and committee meetings and holding positions of responsibility therein; and (iii) the pursuit of personal investments which do not interfere or conflict with the performance of the Executive’s duties for the Employers.

3.

Compensation, Benefits and Reimbursements .  During the Executive’s employment by the Employers during the Term:

(a)

Salary .  T he Executive shall receive an annual salary in the amount of $210,000, payable in equal installments not less often than monthly.  At least annually, the Executive’s annual salary shall be reviewed based upon the performance of the Executive and the Employers over the previous year and may be adjusted by the Board or a committee thereof, determined in its discretion , provided that in no event shall the Executive’s annual

salary be less than $ 210 ,000 unless the Executive consents to a lower amount (the initial base salary as adjusted, if applicable, the “ Base Salary ”). 

(b)

Performance Bonus .  T he Executive shall be eligible to receive an annual performance bonus (the “Bonus”) contingent upon the satisfaction of performance goals established by the Employers, the Board or a committee thereof from time to time.

(c)

Employee Benefit Plans .  T he Employers will permit the Executive to participate in all health and life insurance coverages, disability programs, tax-qualified retirement plans, paid holidays, perquisites, and such other benefits of employment as the Employers may provide from time to time to employees of the Employers holding similar positions as the Executive, subject to the terms and conditions of such plans, policies and programs.  Notwithstanding any provision contained in this Agreement, the Employers may discontinue or terminate at any time any employee benefit plan, policy or program, now existing or hereafter adopted, to the extent permitted by the terms of such plan, policy or program and shall not be required to compensate the Executive for such discontinuation or termination.  

(a)

Compensation Upon Termination .  Except to the extent that the Executive is terminated following a Change in Control as described in Section 4(b) , dies or becomes Disabled as described in Section 4(c) :

(i)

Upon termination of the Executive’s employment during the Term by the Employers without Cause or by the Executive for Good Reason , subject to the conditions set forth in Section 5, the Bank shall pay to the Executive (or to the Executive’s estate if Executive dies before all severance benefits payable under this Section 4(a)(i) have been paid) (A) an amount equal to one times the Executive’s monthly Base Salary as in effect on the date of such termination payable in equal monthly installments commencing on the first business day of the second month beginning after the Executive’s date of termination (the “ Severance ”) and continuing for the remaining Term, but not less than 12 months and not more than 18 months and (B) the pro rata portion (calculated based on the ratio of the number of days during such bonus performance period that the Executive was employed to the total number of days in the applicable bonus performance period) of any bonus payable to the Executive under the Employers’ incentive compensation plan with respect to the year in which Executive’s employment is terminated, payable when, if and to the extent such bonus otherwise would have been payable had Executive’s employment not been terminated .

(ii)

As additional compensation upon termination of Executive’s employment during the Term by the Employers without Cause or by the Executive for Good Reason :  

(b)

Change of Control Benefit .  If the Bank has a Change of Control (as defined in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “ Code ”)), and the Executive’s employment is terminated by the Bank without Cause ,   or by the Executive for Good Reason, before the second anniversary of the date of such Change of Control, subject to the conditions set forth in Section 5, the Bank shall pay to the Executive a lump sum cash amount equal to 1.5 times the sum of the Executive’s Base Salary and the average bonus paid to the Executive over the prior 24 month period . Such lump sum shall be paid within sixty (60) days following the Executive’s termination , provided that, if the sixty (60) day window would span two years, the payment will be made in the second year.  In addition, all stock options and other equity awards granted by the Corporation to the Executive shall be fully vested as of the date of the Change in Control and such stock options shall remain exercisable for the full option exercise period that would have applied had the Executive remained employed .

(c)

Benefit Upon Death or Disability .  Upon termination of the Executive’s employment during the Term due to the Executive’s death or Disability, the Bank shall pay to the Executive or to the Executive ’s estate , as applicable, an amount equal to one times the Executive’s annual Base Salary as in effect on the date of such termination.  Such death or Disability benefit shall be paid in 12 equal monthly installments commencing on the first business day of the second month beginning after the Executive’s date of termination due to death or Disability.  The payments due under this Section 4(c) shall be offset by any benefit or payment provided by the Employers (or on behalf of the Employers) to any beneficiary of the Executive (including Executive’s estate) on account of Executive’s death or Disability, regardless of whether such benefit or payment is insured or self-insured.     In addition, a ll stock options granted by the Corporation to the Executive shall be fully vested as of the date of termination of Executive’s employment due to death or Disability and shall remain exercisable in accordance with the terms of the Executive’s applicable option award agreement .

(d)

No Right to Severance for Any Other Reason .  Except as otherwise provided in Section 4(a) , (b) or (c) , the Executive shall have no right to the payment of Severance upon termination of the Executive’s employment by the Employers for Cause, by the Executive for any reason or no reason (other than for Good Reason) , as a result of the Executive’s death or Disability, or upon expiration of the Term.

(e)

Definitions .  For purposes of this Agreement:

(i)

Cause :  The Employers shall have “ Cause ” to terminate the Executive’s  employment upon the occurrence of any of the following events:  (i) willful and continued failure to substantially perform assigned duties; (ii) gross misconduct; (iii) a material breach of any written covenant or of any term of this Agreement or any other agreement with either Employer, as determined by the Audit Committee of the Board; (iv) commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with either Employer or any affiliate, or commission of a crime other than a felony which involves a breach of trust or fiduciary duty, in each case whether or not involving either Employer or any affiliate; (v) fraud, disloyalty, dishonesty or willful violation of any applicable law, rule or regulation of either Employer’s or any affiliate’s code of conduct or any other policy of either Employer or any affiliate that applies to the Executive, or (vi) issuance of an order for removal of the Executive by any agency which regulates the activities of either Employer or any affiliate.

(ii)

Disability :  The Executive shall be deemed to be “ Disabled ” if  the Executive suffers from (A) any mental or physical condition with respect to which the Executive qualifies for and receives benefits under a long-term disability plan of

either Employer or any affiliate, or (B) in the absence of such a long-term disability plan or coverage under such plan, a physical or mental condition which, in the sole discretion of the Board or a committee thereof is reasonably expected to be of indefinite duration and to substantially prevent the Executive from fulfilling the Executive’s duties or responsibilities to the Employers.

(iii)

Good Reason:  “Good Reason” shall mean the termination of Executive’s employment by Executive that occurs within ninety (90) days after the initial existence of one or more of the following conditions arising without the consent of Executive:

a.

A material decrease in Executive’s Base Salary as compared to the Base Salary paid during the prior twelve (12) month period without Cause;

b.

Employer’s relocation of Executive’s principle office to a location more than twenty-five (25) miles outside of Columbus, Ohio;

c.

Material breach of a provisio n of this Agreement or of the Corporation’s incentive compensation plan by Employer ; or

d.

Material diminution in Executive’s duties and responsibilities.

5. Conditions on Receipt of Severance .  The Bank’s obligation to pay Severance pursuant to this Agreement is expressly conditioned upon:

(a)

Execution of Release .  The Executive’s agreement to release the Employers and all of its affiliates and their respective employees and directors from any and all claims that the Executive may have against the Employers and any affiliate and their respective employees and directors, excluding any claims for non-payment of any accrued but unpaid Base Salary or Severance, up to and including the date the Executive signs a waiver and release of claims (“ Release ”) in the form provided by the Bank, which shall include provisions prohibiting the Executive from competing with the Employers or any affiliate as described in and for the duration set forth in Section 6(a) of this Agreement.  The Executive acknowledges that the Executive is not entitled to receive, and shall not receive, any payments of Severance pursuant to this Agreement unless and until the Executive provides the Bank with said Release and the Release has become irrevocable, before the first day of the second month commencing after the date of the Executive’s termination.

(b)

Compliance with Covenants .  The Executive’s compliance with the covenants set forth in Section 6 of this Agreement.  If the Executive breaches any covenants set forth in Section 6 of this Agreement, the Executive shall forfeit any further right to payments of Severance and, upon receipt of written notice from either Employer requesting the same, shall promptly repay any Severance previously received under this Agreement. 

6. Covenants . 

(a)

Non-Solicitation .  During the Executive’s employment by the Employers during the Term of this Agreement and, if applicable, for the Additional Nonsolicitation Period (as defined

below) following the termination of the Executive’s employment for any reason prior to the end of the Term , the Executive shall not, directly or indirectly, for himself or through, on behalf of, or in conjunction with, any person(s) or organization, (i) solicit, contact, call upon, communicate with or attempt to communicate with any Customer of the Employers on behalf of a Competing Business for the purpose of providing products and/or services provided to its Customers of the Employers, as hereinafter defined, and/or (ii) solicit any person who is then an employee of either Employer or who has been an employee of either Employer at any time within the six months of such solicitation for the purpose of inducing such person to become an employee of, consultant to, or contractor for a Competing Business. 

(b)

Confidential Information . The Executive acknowledges that during the Executive’s employment he shall learn and shall have access to confidential information regarding the Employers and their customers and business.  The Executive agrees and covenants not to disclose or use for the Executive’s own benefit or the benefit of any other person or entity any confidential information, unless or until the Employers consent to such disclosure or use or such information becomes common knowledge in the industry or is otherwise legally in the public domain. The Executive shall not knowingly disclose or reveal to any unauthorized person any confidential information relating to the Employers, its subsidiaries or affiliates, or to any of the businesses operated by them, and the Executive confirms that such information constitutes the exclusive property of the Employers. The Executive shall not otherwise knowingly act or conduct himself (i) to the material detriment of the Employers or their affiliates or (ii) in a manner which is inimical or contrary to the interests of the Employers.  Notwithstanding anything to the contrary contained in this Agreement, this Section 6(b) shall remain in effect following the termination of this Agreement.

(c)

Non-Disparagement .  The Executive agrees that the Executive shall not make any public statements which disparage the Employers or any of their affiliates or any of their

respective directors, officers or employees.  Nothing in the foregoing is intended to prohibit the Executive from making truthful statements required by order of a court, governmental body or regulatory body having appropriate jurisdiction.

(d)

Return of Property .  The Executive agrees that, upon the Executive’s termination of employment, the Executive shall promptly return to the Employers any confidential documents or material or any other property belonging to the Employers, including keys, credits cards, and passes, and the Executive shall also return all writings, files, records, correspondence, notebooks, notes and other documents and things (including any copies thereof) containing confidential information or relating to the business or proposed business of the Employers or any affiliate, except any personal diaries, calendars, rolodexes or personal notes or correspondence.

(e)

Cooperation . The Executive agrees that the Executive shall be reasonably available to testify truthfully on behalf of the Employers or any affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Employers or any affiliate in all reasonable respects in any such action, suit or proceeding, by providing information and meeting and consulting with the Board, or their representatives or counsel, or representatives or counsel of the Employers or any affiliate, as requested; provided, however, that the same does not materially interfere with the Executive’s then-current professional activities, and provided that the Executive is reimbursed for any reasonable costs and expenses associated with such cooperation.

7. Nonassignability . Neither this Agreement nor any right or interest hereunder shall be assignable by the Executive, the Executive’s beneficiaries or legal representatives without the Employers’ prior written consent; provided, however, that nothing in this Section 7 shall preclude the Executive from designating a beneficiary to receive any benefits payable hereunder upon the Executive’s death.

8. No Attachment . Except as required by law, no right to receive payment under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process of assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

9. Binding Agreement . This Agreement shall be binding upon, and inure to the benefit of, the Executive and the Employers and their respective permitted successors and assigns.  For purposes of clarity, this Agreement shall continue following a Change of Control unless the Executive and the Employers (or their successor/assign) agree otherwise.

10. Taxes .  Notwithstanding anything to the contrary in this Agreement, all payments and benefits required to be made or provided by the Employers to the Executive shall be subject to withholding of such amounts relating to taxes as the Employers may reasonably determine that it should withhold pursuant to any applicable law or regulation.

11. Section 409A of the Code .  The compensation and benefits payable pursuant to this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code, to the extent applicable, and, to the maximum extent permitted by law, shall be interpreted in a manner that results in its continued compliance with or exemption from the requirements of that section.  In the event it is determined that any compensation or benefit payable pursuant to this Agreement is deferred compensation subject to Section 409A of the Code and that the Executive is a “specified employee,” within the meaning of Section 409A of the Code, then the payments of such amount or the provisions of such benefits shall not be made until the first business day that is six months following the date of the Executive’s termination or, if earlier, the date of the Executive’s death.  For purposes of applying the provisions of Section 409A of the Code to this Agreement, each separately identified amount to which the Executive is entitled under this Agreement shall be treated as a separate payment.  In addition, to the extent permissible under Section 409A of the Code, any series of installment payments under this Agreement shall be treated as a right to a series of separate payments.   Any reference to the Executive’s “termination” or “termination of employment” shall mean the Executive’s “separation from service” as defined by Section 409A of the Code.

12. Golden Parachute Provisions .  Notwithstanding anything to the contrary in this Agreement, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with any statute, regulation, order or similar limitation in effect at the time the payments would otherwise be paid, including, without limitation, the requirements of 12 U.S.C. §1828(k) and/or 12 C.F.R. Part 359 and the regulations issued thereunder (a “Regulatory Limitation”).  Without limiting the foregoing, any such payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to forfeiture and return to the Employers in the event that the Employers or their successors later obtain information indicating that the Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. §359.4(a)(4). If any amount otherwise payable to Executive pursuant to this Agreement is prohibited or limited by any Regulatory Limitation: (i) Bank shall pay the maximum amount that may be paid under the Regulatory Limitation; and (ii) shall use commercially reasonable efforts to obtain the consent of the appropriate agency or body to pay any amounts that cannot be paid due to the application of the Regulatory Limitation.

13. Clawbacks . Any amounts paid to, credited to an account on behalf of, or vested to the Executive in the prior twenty-four months by either Employer under any short-term incentive compensation program, long-term incentive compensation program (including restricted stock awards under the Corporation’s 2009 Equity Compensation Plan or similar equity based programs maintained by an Employer) or under any nonqualified deferred compensation plan shall be subject to repayment within thirty (30) days upon the request of either Employer in the event that any such amount is shown to be directly attributable to materially misleading financial statements; provided, however, that in order for this Section 13 to be applicable, the Executive must have knowingly prepared such materially misleading financial statements or knowingly contributed materially misleading data which was then incorporated into such materially misleading financial statements. If an overpayment of incentive compensation results from a restatement of financial statements, Employers’ Boards of Directors shall have the discretion to consider the overpayment in awarding future incentive compensation without regard to the Executive’s role with respect to the financial statements which are restated.  In the event that a more extensive clawback right is required by law or by regulation of any exchange on which an Employer’s stock is traded, this Section 13 shall be deemed to require the minimum clawback necessary to comply with such law or regulation.

14. Amendment of Agreement . This Agreement may be amended only by mutual written agreement of the parties.

15. Waiver . No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver, unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than the act specifically waived.

16. Headings; Severability .   The headings used in this Agreement are included solely for convenience of reference, are not part of the provisions of this Agreement and will have no force or effect.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement. 

17. Governing Law . This Agreement will be construed in accordance with, and pursuant to, the laws of the State of Ohio (other than laws governing conflicts of laws), except to the extent that federal law governs. 

18. Survival .  The provisions of Sections 5, 6 and this Section 17 shall survive the termination of this Agreement and the Executive’s termination of employment with the Employers.

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





CENTRAL FEDERAL CORPORATION



By:    /s/ Robert H. Milbourne

Name :     Robert H. Milbourne

Its: Director/Compensation Committee Chairman











CFBANK



By:    /s/ Robert H. Milbourne

Name :     Robert H. Milbourne

Its: Director/Compensation Committee Chairman











EXECUTIVE



/s/ John W. Helmsdoerfer

 John W. Helmsdoerfer









I.

PLAN OBJECTIVES

·

provide employees with incentives that appropriately balance risk and reward;

·

are compatible with effective controls and risk management; and

·

are supported by strong corporate governance, including active and effective oversight by the Board.

II.

GRANTING AWARDS

(a)

Selection of Participants.  For each Performance Period, the Compensation Committee shall approve those key employees and officers of the Company who have been selected to be Participants for that Performance Period.

(b)

Selection of Performance Objectives.  For each Performance Period, the Compensation Committee shall approve or establish:

(i)

Performance objectives based on the Performance Criteria described in Section IX of the Plan that will be used to determine the amount payable with respect to Awards, based on recommendations provided by the Company;

(ii)

The requisite level of achievement (which may include “threshold,” “target” and “maximum” levels) of such performance objectives;

(iii)

The method for determining the amount payable based on the achievement of the performance objectives; and

(iv)

Any other terms and conditions of the Award, including, without limitation, a requirement that some portion of the Award be payable in the form of equity or that payment be deferred.

(c)

Timing.  The Compensation Committee shall establish the performance objectives, the level of achievement and the method for determining the amount payable with respect to Awards before the outcome of such performance objectives is substantially certain for such Performance Period and as soon as reasonably practicable. 

(d)

Newly Eligible Participants.  The eligibility of an employee who becomes a Participant during a Performance Period to receive an Award under this Plan for such Performance Period shall be determined by the Compensation Committee in its sole discretion.

(e)

Modifying Performance Objectives.  Performance objectives relating to such Awards may be calculated without regard to extraordinary items or may be adjusted, as the Compensation Committee   deems equitable, in recognition of unusual or non-recurring events affecting the Company (or its Affiliates) or changes in applicable tax laws or accounting principles.

III.

PAYMENT OF AWARDS

(a)

Determination of Amount Payable.  For each Performance Period, the Compensation Committee shall determine the extent to which the performance objectives and other terms and conditions applicable to an Award have been achiev ed, if at all, and based on this determination, shall certify the amount “earned , ” if any, with respect to each Award. 

(b)

Eligibility for Payment.  Except as otherwise determined by the Committee, in order to receive payment with respect to an Award, the Participant must:  

(i)

Have achieved a satisfactory performance level; and

(ii)

Except as otherwise provided herein, remain an active employee of the Company or an Affiliate on the date that payment is made.

(c)

Timing of Payment.  Unless the Participant has forfeited an Award pursuant to Sections IV (b) or VII of the Plan or the Board or Compensation Committee has exercised its discretion to reduce an earned Award pursuant to Section III(e) of the Plan ,   the   entire earned Award shall be paid within two and one-half months following the end of the relevant Performance Period.

(d)

Effect of Death, Disability or Retirement.  Except as otherwise determined by the Board   or Compensation Committee at the time an Award is granted or thereafter, if a Participant dies, becomes Disabled or Retires prior to the date on which an Award is paid, the Participant shall remain eligible for payment with respect to that Award; however, the amount payable with respect to such Award shall be prorated based on the ratio of the number of whole months elapsed during the Performance Period prior to the Participant’s death, Disability or Retirement to the number of whole months in the Performance Period.  Any payment due under this Section III(d) of the Plan in connection with a Participant’s death or Disability shall be paid within 30 days after the later of (i) the date of the Participant’s death or Disability, or (ii) the date the first payment under Section III(c)(i) would otherwise have been payable in connection with an Award had the Participant been employed on that date.  Any payment due under this Section III(d) of the Plan in connection with the Participant’s Retirement shall be paid at the time otherwise provided under Section III(c).

(e)

Negative Discretion.     T he amount actually payable with respect to an Award to a Participant may be less than the amount otherwise payable based on the satisfaction of the performance objectives and other terms and conditions of such Award if the Board or Compensation Committee, in its sole discretion, determines that payment of the full amount would not be consistent with the intent and purposes of the Plan and Award or would otherwise   violate law or regulation of any exchange on which an Company ’s stock is traded .    

IV.

CONTROLS

(a)

Limitations on Payment.  Payments to Participants will be made following an external review and validation of the organization’s financials for the incentive period or any other factors that would impact the financial condition of the organization. No amount will be payable under the Plan if payment with respect to Awards would jeopardize the safety and soundness of the Company or any Affiliate. 

(b)

Forfeiture of Awards. Participants who, in the sole judgment of the Board or Compensation Committee , have willfully engaged in any activity, injurious to the Company or any Affiliate, including the inappropriate manipulation of performance or financial results, will forfeit any Award earned during the Performance Period in which the termination occurred.

V.

ADMINISTRATION

VI.

AMENDMENT AND TERMINATION

VII.

RECOUPMENT OF INCENTIVE COM P ENSATION

VIII.

MISCELLANEOUS

(a)

No Guarantee of Employment.  This Plan is not an employment policy or contract.  It does not give any Participant the right to remain an employee of the Company or an Affiliate, nor does it interfere with the Company’s or an Affiliate’s right to terminate the Participant, with or without case, which right is expressly reserved. 

(b)

Non-Transferability.  The rights of Participants under this Plan cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

(c)

Applicable Law.  The Plan and all rights hereunder shall be governed by the laws of the State of Ohio , without regard to any conflicts of laws principles, except to the extent preempted by the laws of the United States of America.

(d)

Entire Plan.  This Plan (including any written or electronic communication to a Participant setting forth the terms and conditions of an Award for a Plan Year) constitutes the entire agreement between the Company and the Participant as to the subject matter hereof.  No rights are granted to the Participant by virtue of this Plan other than those specifically set forth herein.

(e)

Tax Withholding.  The Company or an Affiliate, as applicable, shall have the power and the 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 an Award granted under the Plan. 

(f)

Section 409A of the Code.  Awards granted pursuant to the Plan that are subject to Section 409A of the Code, or that are subject to Section 409A of the Code but for which an exception from Section 409A of the Code applies, are intended to comply with or be exempt from Section 409A of the Code and the Treasury Regulations promulgated thereunder, and the Plan shall be interpreted, administered and operated accordingly.  If a 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 “separation from service” (within the meaning of Section 409A of the Code) until the expiration of six (6) months from the date of such separation from service (or, if earlier, the Participant’s death).  Such Award, or portion thereof, shall be paid or distributed on the first (1st) business day of the seventh (7th) month following such separation from service.  Nothing in the Plan shall be construed as an entitlement to or guarantee of any particular tax treatment to a Participant and none of the Company, its Affiliates, or members of the Board or Compensation Committee shall have any liability with respect to any failure to comply with the requirements of Section 409A of the Code.

IX.

DEFINITIONS

(a)

Affiliate means any entity that, along with the Company, would be treated as a single employer for purposes of Sections 414(b) or 414(c) of the Code, but as modified under any Code section relevant to the purpose for which the definition is applied.

(b)

Award means the right to a payment of compensation pursuant to this Plan based on the achievement of performance objectives established by the Compensation Committee pursuant to this Plan.

(c)

Board means the Company’s board of directors as constituted from time to time.

(d)

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

(e)

Company means Central Federal Corporation and any successor.

(f)

Compensation Committee means the compensation committee of the Board.

(g)

Disability or Disabled means a Participant’s eligibility for benefits under the Company’s long-term disability plan, or in the absence of any such plan Disability shall mean a physical or mental condition which, in the sole discretion of the Compensation Committee , is reasonably expected to be of indefinite duration and to substantially prevent the Participant from fulfilling his duties or responsibilities to the Company or an Affiliate.

(h)

Participant means, with respect to each Performance Period, each employee approved for participation by the Compensation Committee . 

(i)

Performance Criteria means: ( a) earnings or earnings per share (whether on a pre-tax, after-tax, operational or other basis); (b) return on equity; (c) return on assets; (d) revenues; (e) expenses or expense levels; (f) one or more capital or operating ratios; (g) stock price; (h) stockholder return; (i) market share; (j) cash flow; (k) capital expenditures; (l) net b orrowing, debt, leverage levels or debt ratings; (m) strategic objectives (including, mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions); (n) net asset value per share, (o) growth in deposits or assets; (p) asset or credit quality; (q) economic value added; (r ) regulatory compliance; or ( s ) such other measures as the Board   may select from time to time.

(j)

Performance Period means, unless a different period is established by the Compensation Committee , each 12 month period beginning January 1.

(k)

Plan means this Central Federal Corporation Incentive Compensation Plan, as it may be amended from time to time.

(l)

Retirement or Retires means a Participant’s termination from employment in accordance with the official retirement policies of the Company.

X.

ETHICS AND INTERPRETATION