Company: FMFG
Filing Date: 2025-03-24
Form Type: DEFC14A
Source: 0001437749-25-008883
Chunk: 40

Company: Farmers & Merchants Bancshares, Inc.
Filing Date: 2025-03-24
Form: DEFC14A
Chunk 40
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 that occurs while Mr. Krebs is employed (and whether or not he also experiences a Separation from Service), the Deferral Account will be paid in one lump sum within 30 days after the Change in Control; or |

| ● | If Mr. Krebs dies while employed, then Mr. Krebs’ designated beneficiaries will receive a lump sum payment, within 90 days of his death, in an amount equal to the greater of (i) $273,051 and (ii) the Deferral Account balance. |

The Retirement Agreement permits the Bank Board to agree to make early “Hardship Distributions” under limited circumstances. As a general rule, distributions may not be accelerated for any reason. Certain restrictions apply to any amendment to the Retirement Agreement that would change the timing or form of payment.

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Mr. Krebs will forfeit his right to receive the amount in the Deferral Account if the Bank terminates his employment for Cause (as defined in the Retirement Agreement). In addition, Mr. Krebs will forfeit his right to receive the amount in the Deferral Account if he engages in certain competitive activities described in the Retirement Agreement. Finally, in the event that any distribution would be treated as an “excess golden parachute payment” under Section 280G of the IRC, such distribution will be reduced to the extent necessary to avoid that characterization, and Mr. Krebs will forfeit the excess portion of that distribution.

At December 31, 2024, the balance of the Deferral Account was $273,051. As of December 31, 2024, the gross amount to which Mr. Krebs would have been entitled under the Retirement Agreement in connection with a Change in Control is approximately $339,766. Because, however, both the Retirement Agreement and the Severance Agreement were in effect as of December 31, 2024, Mr. Krebs would have received approximately $67,162 under the Retirement Agreement in connection with a Change in Control as of such date because the balance would have constituted an “excess golden parachute payment” under Section 280G of the IRC.

Severance Agreements

The Company and Mr. Harris are parties to a Change in Control Severance Agreement (the “Harris Severance Agreement”) pursuant to which Mr. Harris will be entitled to receive a lump sum cash payment equal to 2.99 times his then-current annual base salary rate if the Company terminates his employment without Cause (as defined in the Harris