Exhibit 10.12

                           Summary of Cash Bonus Plan

      The  Compensation  Committee of the Board of  Directors of First  Defiance
Financial Corp.  ("First  Defiance")  administers  First Defiance's  annual cash
bonus plan for officers of First Defiance and its subsidiary, First Federal Bank
of the  Midwest.  The  annual  cash  bonus  paid to  officers  is based on First
Defiance's  annual  performance as measured by three key  performance  measures:
earnings per share,  growth in revenue,  and cost controls.  In determining  the
amount of cash bonus to be  awarded,  each of the target  measures is assigned a
weighting factor:  50% for earnings per share and 25% for each of revenue growth
and the efficiency ratios.

      Within each of these three  components,  there are  threshold,  target and
maximum  goals.  Performance  below the threshold  results in no payout for that
component.  Performance  at the threshold  level results in a 50% payout of that
component.  Performance  at the target  level  results in a 100%  payout of that
component.  Performance at or above the maximum goal results in a 150% payout of
that  component.  Exact payout  percentages  for payouts  within the 50% to 150%
range are calculated based on actual results. The payout percentage achieved for
each component is then multiplied by the weighting factor (50% or 25%) and those
three  components  are added  together to determine the  percentage of potential
bonus that will be paid.  For 2004 bonus  purposes,  the payout  percentage  was
72.4%.

      This payout  percentage  is then applied to the bonus  potential  for each
officer.  Mr.  William J. Small has a  potential  bonus equal to 45% of his base
salary,  Mr.  James L. Rohrs and Mr.  John C. Wahl each have a  potential  bonus
equal to 35% of base salary,  and Mr. Gregory R. Allen's bonus  potential is 30%
of base salary.  This other  officers with the rank of Senior Vice  President or
higher have bonus potential ranging between 20% and 30% of base salary depending
upon the officer's level of responsibility.