FARMERS & MERCHANTS BANCORP

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SECTION 1.	ESTABLISHMENT AND PURPOSE.	1

SECTION 2.

DEFINITIONS

1

	(a)	“Affiliate”	1
	(b)	“Award”	1
	(c)	“Award Agreement”	1
	(d)	“Board of Directors” or “Board”	1
	(e)	“Change of Control”	1
	(f)	“Code”	2
	(g)	“Committee”	2
	(h)	“Company”	2
	(i)	“Employee”	2
	(j)	“Exchange Act”	2
	(k)	“Fair Market Value”	2
	(l)	“Outside Director”	3
	(m)	“Parent”	3
	(n)	“Participant”	3
	(o)	“Plan”	3
	(p)	“Purchase Price”	3
	(q)	“Retirement”	3
	(r)	“Restricted Share”	3
	(s)	“Securities Act”	3
	(t)	“Service”	4
	(u)	“Share”	4
	(v)	“Stock”	4
	(w)	“Subsidiary”	4

SECTION 3.	ADMINISTRATION.	4

	(a)	Committee Composition	4
	(b)	Committee Appointment	4
	(c)	Committee Responsibilities	4

SECTION 4.	ELIGIBILITY	6

	(a)	General Rule	6

SECTION 5.	STOCK SUBJECT TO PLAN	6

	(a)	Basic Limitation	6
	(b)	Additional Shares	6
	(c)	Substitution and Assumption of Awards	6
	(d)	Limit on Grants to Outside Directors	7

SECTION 6.	RESTRICTED SHARES	7

	(a)	Restricted Share Award Agreement	7
	(b)	Payment for Awards	7
	(c)	Vesting	7
	(d)	▇▇▇▇▇▇ and Dividend Rights	7
	(e)	Restrictions on Transfer of Shares	7

SECTION 7.	PAYMENT FOR SHARES	8

	(a)	General Rule	8
	(b)	Services Rendered	8
	(c)	Promissory Note	8
	(d)	Other Forms of Payment	8
	(e)	Limitations under Applicable Law	8

SECTION 8.	ADJUSTMENT OF SHARES	8

	(a)	Adjustments	8
	(b)	Merger or Reorganization	8
	(c)	Reservation of Rights	9

SECTION 9.	AWARDS UNDER OTHER PLANS	9

SECTION 10.

PAYMENT OF DIRECTOR’S FEES IN SECURITIES

9

	(a)	Effective Date	9
	(b)	Elections to Receive Restricted Shares	9
	(c)	Number and Terms of Restricted Shares	9

SECTION 11.

LEGAL AND REGULATORY REQUIREMENTS

10

SECTION 12.	TAXES	10

(a)

Withholding Taxes

10

	(b)	Share Withholding	10

SECTION 13.	TRANSFERABILITY.	10

SECTION 14.	PERFORMANCE BASED AWARDS	10

SECTION 15.	NO EMPLOYMENT RIGHTS	11

SECTION 16.	DURATION AND AMENDMENTS	11

	(a)	Term of the Plan	11
	(b)	Right to Amend the Plan	11
	(c)	Effect of Termination	11

SECTION 17.	GOVERNING LAW	11

SECTION 18.	SUCCESSORS AND ASSIGNS	11

SECTION 19.

EXECUTION.

11

(i)

individuals, who were members of the Board immediately prior to a meeting of the stockholders of the Company which meeting involved a contest for the election of directors, do not constitute a majority of the Board following such election or meeting;

(ii)

an acquisition, directly or indirectly, of more than thirty percent (30%) of the outstanding shares of any class of voting securities of the Company by any “person” (as defined below);

(iii)

a merger, consolidation or sale of all, or substantially all, of the assets of the Company, wherein the Company’s stockholders immediately before such transaction shall own of record (immediately after such transaction) equity securities, other than any warrant or right to purchase such equity securities, of the Company or an acquiring entity or any parent entity thereof, possessing less than seventy percent (70%) of the voting power of the Company or such acquiring entity or any parent entity thereof (in making the determination of ownership of such equity securities immediately after such transaction, equity securities owned by stockholders of the Company immediately prior to the transaction as stockholders to another party to the transaction shall be disregarded); or

(iv)

there is a change, during any period of one (1) year, of a majority of the Board as constituted as of the beginning of such period, unless the election of each director who is not a director at the beginning of such period was approved by a vote of at least a majority of the directors then in office who were directors at the beginning of such period.

(i)

If the Stock was traded over-the-counter on the date in question, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the Pink Quote system;

(ii)

If the Stock was traded on any established stock exchange (such as the New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market) or national market system on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable exchange or system; or

(iii)

If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

(i)

To interpret the Plan and to apply its provisions;

(ii)

To adopt, amend, or rescind rules, procedures, and forms relating to the Plan;

(iii)

To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

(iv)

To determine when Awards are to be granted under the Plan;

(v)

To select the Participants to whom Awards are to be granted;

(vi)

To determine the type of Award and number of Shares subject to each Award;

(vii)

To prescribe the terms and conditions of each Award, including (without limitation) the Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), and to specify the provisions of the agreement relating to such Award;

(viii)

To amend any outstanding Award Agreement, subject to applicable legal restrictions and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired;

(ix)

To prescribe the consideration for the grant of each Award and to determine the sufficiency of such consideration;

(x)

To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage;

(xi)

To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business;

(xii)

To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award Agreement;

(xiii)

To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting, and/or ability to retain any Award; and

(xiv)

To take any other actions deemed necessary or advisable for the administration of the Plan.

(i)

The class(es) and number of securities available for future Awards and the limitations set forth under Section 5; and

(ii)

The class(es) and number of securities covered by each outstanding Award.

(i)

The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation;

(ii)

The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary;

(iii)

The substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards; and/or

(iv)

Cash or equity settlement of outstanding Awards followed by the cancellation of such Awards upon or immediately prior to the effectiveness of such transaction.

	Farmers & Merchants Bancorp
	By:
	Name:	▇▇▇▇ ▇▇▇▇▇
	Title:	Corporate Secretary
	Date:

	By:
	Name:	▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
	Title:	Chairman of the Personnel Committee
	Date: