Company: FMFG
Filing Date: 2025-03-24
Form Type: DEFC14A
Source: 0001437749-25-008883
Chunk: 41

Company: Farmers & Merchants Bancshares, Inc.
Filing Date: 2025-03-24
Form: DEFC14A
Chunk 41
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 Severance Agreement) or if he terminates his employment for Good Reason (as defined in the Harris Severance Agreement) within 12 months of a Change in Control (as defined in the Severance Harris Agreement), subject to any reduction necessary to ensure that such severance payment would not trigger the excise tax under Section 4999 of the Code. Mr. Harris’ entitlement to the severance payment would be conditioned on his execution, delivery, and non-revocation of a separation agreement and general release pursuant to which, among other things, he must agree to customary business protection and non-disparagement covenants for a period of two years following the termination of his employment.

As of December 31, 2024, Mr. Harris’ “base amount” was $325,681 and the gross amount to which Mr. Harris would have been entitled under the Severance Agreement as of such date is approximately $973,787. Because, however, both the Harris SERP Agreement and the Harris Severance Agreement were in effect as of December 31, 2024, the total amount due under those agreements upon a Change in Control followed by a Separation from Service would have been reduced, in the aggregate, by approximately $310,977 to prevent the sum of those payments from constituting an excess parachute payment under Section 280G of the IRC.

The Bank and Mr. Krebs are parties to a Severance Agreement, dated as of February 19, 2013, that was amended by a First Amendment to Severance Agreement on November 15, 2021 (collectively, the “Krebs Severance Agreement”). The term of the Krebs Severance Agreement will automatically renew for successive one-year periods for so long as Mr. Krebs continues to be elected as an officer of the Bank. The Krebs Severance Agreement provides that Mr. Krebs will be entitled to a severance payment if (i) he terminates his employment in connection with or within 30 days of a Change in Control (as defined in the Krebs Severance Agreement); (ii) he terminates his employment for Good Reason (as defined in the Krebs Severance Agreement) within 12 months of a Change in Control; or (iii) the Bank terminates his employment without Just Cause (as defined in the Krebs Severance Agreement) within 12 months of a Change in Control. The amount of the severance payment would be 2.99 times Mr. Krebs’ then-current “base amount” (as