<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>k96821exv10w1.txt
<DESCRIPTION>CHANGE OF CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                      FARMERS & MERCHANTS STATE BANK, INC.
                               CHANGE IN CONTROL -
                        SEVERANCE COMPENSATION AGREEMENT

      This is a Change in Control - Severance Compensation Agreement (the
"Agreement") made by and between Farmers & Merchants State Bank ("Company") and
James Burkhart ("Executive").

                                    RECITALS

      WHEREAS, Company is a bank which is engaged in the business of banking and
businesses incidental thereto.

      WHEREAS, Executive possesses unique skills, knowledge and experience
relating to the business of the Company.

      WHEREAS, Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be assured that, in the
event of a change in the control of Company, Executive will be provided with an
adequate severance payment for termination without cause or as compensation for
Executive's Severance because of a material change in his duties and functions.

      WHEREAS, Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or not a potential
change of control is in the best interest of Company and its shareholders.

      WHEREAS, Company desires to induce Executive to remain in the employ of
the Company (as hereinafter defined) following a change of control to provide
for continuity of management.

      NOW, THEREFORE, in consideration of the premises and of their mutual
covenants expressed in this Agreement, the parties hereto make the following
agreement, intending to be legally bound thereby:

SECTION 1 - DEFINITIONS

A.    Board - "Board" shall mean the Board of Directors of Company.

B.    Cause - "Cause" shall mean and be limited to Executive's (a) criminal
      dishonesty, (b) failure to perform his duties on an exclusive and
      substantially full-time basis (unless unable to so perform by reason of
      disability), (c) failure to act in accordance with any specific
      substantive instructions given by Company with respect to Executive's
      performance of duties normally associated with his position prior to the
      Change in Control (unless unable to so perform by reason of disability),
      or (d) engaging in conduct which could be materially damaging to Company
      without a reasonable good

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      faith belief that such conduct was in the best interest of Company.

C.    Change in Control - A "Change" in Control" shall result if, and shall be
      deemed to have occurred on the date of, a transaction pursuant to which:

      1.    Any person or group (as such terms are used in connection with
            Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
            "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5) under
            the Exchange Act), directly or indirectly, of securities of the
            Company representing 35% or more of the combined voting power of the
            Company's then outstanding securities;

      2.    A merger, consolidation, sale of assets, reorganization, or proxy
            contest is consummated and, as a consequence of which, members of
            the Board in office immediately prior to such transaction or event
            constitute less than a majority of the Board thereafter;

      3.    During any period of 24 consecutive months, individuals who at the
            beginning of such period constitute the Board (including for this
            purpose any new director whose election or nomination for election
            by the Company's stockholders was approved by a vote of at least
            one-half of the directors then still in office who were directors at
            the beginning of such period) cease for any reason to constitute at
            least a majority of the Board; or

      4.    A merger, consolidation or reorganization is consummated with any
            other corporation pursuant to which the shareholders of the Company
            immediately prior to the merger, consolidation or reorganization do
            not immediately thereafter directly or indirectly own more than
            fifty percent (50%) of the combined voting power of the voting
            securities entitled to vote in the election of directors of the
            merged, consolidated or reorganized entity.

      Notwithstanding the foregoing, no trust Department or designated fiduciary
      or other trustee of such trust department of the Company or a subsidiary
      of the Company, or other similar fiduciary capacity of the Company with
      direct voting control of the stock shall be treated as a person or group
      within the meaning of subsection C.1. hereof. Further, no profit-sharing,
      employee stock ownership, employee stock purchase and savings, employee
      pension, or other employee benefit plan of the Company or any of its
      subsidiaries, and no Trustee of any such plan in its capacity as such
      Trustee, shall be treated as a person or group within the meaning of
      subsection C.1. hereof.

D.    Code - "Code" shall mean the Internal Revenue Code of 1986, as amended
      from time to time.

E.    Company - "Company" shall include Farmers & Merchants Bancorp, Inc. and
      any members of its Affiliated Group, as that term is defined in Section
      1504 of the Code, and shall include any predecessor corporations of the
      Company and its Affiliated Group.

F.    Disability - "Disability" shall mean disability as determined under the
      plans, policies or programs applicable to the Executive and if no such
      plan, policy or program exists, "disability" shall mean the Executive is
      unable to perform the material and substantial

<PAGE>

      functions or duties of the Executive's position due a medical condition
      (including mental conditions).

G.    Exchange Act - "Exchange Act" means The Securities Exchange Act of 1934.

H.    One Year of Compensation - "One Year of Compensation" means the annual
      equivalent of the highest rate of the Executive's salary in effect during
      the one-year period ending with the date of the Change in Control, and the
      average amount paid in bonus and other incentive compensation for the
      three year period ending with the date of the Change in Control.

SECTION 2 - TERM OF AGREEMENT

This Agreement shall be effective from the date of this Agreement until the
Agreement Termination Date, which is the later of: (i) Company's payment of any
amounts due under Sections 4 and 6, and (ii) the earliest of:

A.    The date this Agreement is mutually rescinded.

B.    The date prior to a Change in Control on which the Executive's employment
      with the Company is terminated by death, retirement, disability,
      resignation, or dismissal for any reason.

C.    The date Executive's employment is terminated for Cause after a Change in
      Control.

D.    The date which is two (2) years after the date of a Change in Control.

E.    The date which the Company or any other member of its Affiliated Group,
      and over which Executive has managerial control, or which employs
      Executive, and which is a depository institution that is insured by an
      agency of any state or the United States Federal Government:

      1.    becomes insolvent; or

      2.    has appointed any conservator or receiver; or

      3.    is determined by an appropriate federal banking agency to be in a
            troubled condition, as defined in the applicable law and
            regulations; or

      4.    is assigned a composite rating of 4 or 5 by the appropriate federal
            banking agency or is informed in writing by the Federal Deposit
            Insurance Corporation that it is rated a 4 or 5 under the Uniform
            Financial Institution's Rating System of the Federal Financial
            Institutions Examination Council; or

      5.    has initiated against it by the Federal Deposit Insurance
            Corporation a proceeding to terminate or suspend deposit insurance;
            or

      6.    reasonably determines in good faith and with due care that the
            payments called for under this Agreement, or the obligations and
            promises assumed and made

<PAGE>

            under this Agreement have become proscribed under applicable law or
            regulations. Provided, however, if such law or regulations apply
            prospectively only, or for some other reason do not apply to this
            Agreement, then this Agreement shall not be deemed by Company to be
            proscribed.

SECTION 3 - REDUCTION IN COMPENSATION PROSCRIBED AFTER A CHANGE IN CONTROL

During the term of this Agreement from the date of a Change in Control forward,
Executive shall receive as compensation, while still employed by Company, a
salary at a rate no less than the highest rate in effect during the one-year
period before the Change in Control, and shall, in addition, be entitled to
receive a bonus equal to at least the average of the last three years of bonuses
paid before the Change in Control. In addition, during such period, the Company
shall provide for Executive all of the fringe benefits and other perquisites as
provided to any similarly situated employee of the Company, including but not
limited to retirement benefits, health, disability, dental, life insurance, club
memberships, etc., all of which shall be at levels and amounts no less favorable
than levels and amounts in effect as of the Change in Control and at the same
cost to Executive as provided to any similarly situated employee of Company.

SECTION 4 - PAYMENTS AND BENEFITS FOR TERMINATION OF EMPLOYMENT RELATED TO A
CHANGE IN CONTROL

A.    If during the term of this Agreement and:

      1.    Within four (4) months before the date of a Change in Control, as
            defined in Agreement Section 1.C. (1, 2 and 4), Executive resigns
            because he has: (i) had his compensation reduced, or (ii) had his
            principal place of employment transferred away from Fulton County,
            Defiance County or a county contiguous to Fulton County Ohio;

      2.    Within two (2) years after the date of a Change in Control,
            Executive is discharged without Cause or Executive resigns because
            he has: (i) had his compensation reduced or, (ii) had his principal
            place of employment transferred away from Fulton County, Defiance
            County or a county contiguous to Fulton County Ohio ; or

      3.    Within one year before the date of a Change in Control, the
            Executive is discharged by Company other than for Cause;

      Then the Company shall make the payments to Executive set forth in
      subsection B of this Section 4.

B.    In the event of the termination of Executive's employment as described in
      Section 4.A. Executive shall be entitled to receive One Year of
      Compensation paid in either of the following methods as determined in the
      sole discretion of the Company:

      1.    in one lump sum payment within fourteen (14) days of the later of
            termination or Change in Control; or

      2.    in twenty-four (24) semi-monthly payments of 1/24 of One Year of
            Compensation

<PAGE>

            beginning within fourteen (14) days of the later of termination or
            Change in Control.

      C.    IF EXECUTIVE'S EMPLOYMENT IS TERMINATED AS DESCRIBED IN SECTION 4.A.
            (1 OR 2), THEN IN ADDITION TO THE ABOVE CASH PAYMENT(S), COMPANY
            SHALL CONTINUE AT NO COST TO EXECUTIVE FOR THE TERM OF THE BENEFIT
            PERIOD AS DEFINED BELOW, EXECUTIVE'S COVERAGE IN COMPANY'S HEALTH,
            DISABILITY, DENTAL, AND LIFE INSURANCE AT THE SAME LEVELS THAT HAD
            BEEN PROVIDED IMMEDIATELY PRIOR TO HIS TERMINATION OF EMPLOYMENT.
            THE BENEFIT PERIOD SHALL COMMENCE ON THE DATE OF TERMINATION OF THE
            EXECUTIVE'S EMPLOYMENT AND SHALL END ON THE LAST DAY OF THE 12TH
            CONSECUTIVE WHOLE MONTH THEREAFTER.

D.    In the event Executive dies before collecting all amounts and benefits due
      under this Section, any payments owed shall be paid to the person or
      persons as stated in the last designation of beneficiary concerning this
      Agreement signed by Executive and filed with Company, and if no such
      designation has been made, then to the surviving spouse, and if there is
      no surviving spouse, to his/her estate.

E.    The payments and benefits provided for herein are in lieu of compensation,
      benefits or amounts the Executive might otherwise be entitled to from the
      Company by reason of termination of employment (except as required or
      mandated by law).

F.    In the event the payments required under this Agreement, when added
      together with any other amounts required to be included by Executive under
      the provisions of the Code, result in an "Excess Parachute Payment," as
      that term is defined in Section 280G of the Code, then the amount of the
      payments provided for in this Agreement shall be increased in an amount
      equal to 140% of any excise tax imposed under Section 4999 (or any
      successor thereto) of the Code and otherwise payable by the Executive.

G.    Any subsequent employment by Executive shall not reduce the obligation of
      the Company to make the full payments and provide the full benefits
      specified herein and Executive shall have no obligation to seek other
      employment or otherwise mitigate the effect of his discharge from
      employment.

SECTION 5 - PROVISION FOR OUTPLACEMENT SERVICES

In the event of the termination of employment of Executive as specified in
Section 4.A. (1 and 2) of this Agreement, Executive shall be entitled to six
months of out-placement services following termination of employment. Such
services shall include employment counseling, resume services, executive
placement services and similar services generally provided to executives by
professional executive out placement service providers. All costs of such out
placement services shall be paid for by the Company.

SECTION 6 - ARBITRATION

Subject to the Company's right to seek injunctive relief under Section 8 of this
Agreement, the parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this Agreement
before an arbitrator or an arbitration panel as hereinafter. The parties may
agree to one mutually acceptable arbitrator. If the parties have been unable to
agree upon one arbitrator, then each party may appoint one

<PAGE>

arbitrator and the two appointed arbitrators shall appoint a third neutral
arbitrator. If the arbitrators selected by the parties are unable or fail to
agree upon the third arbitrator, an Ohio common pleas court judge located in
Fulton County Ohio chosen at random shall select the third arbitrator. Failure
by a party to appoint an arbitrator, within 30 days of receipt of notice of the
appointment of an arbitrator by the other party, shall be deemed as acceptance
of arbitration by such single arbitrator. The arbitration shall occur in
Archbold, Ohio, or such other place as mutually agreed upon. The prevailing
party shall be entitled to recover any and all costs associated with any
arbitration proceeding (and any subsequent proceeding to enforce rights
thereunder) including the recovery of reasonable attorneys fees. Judgment on the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.

SECTION 7 - RIGHT TO OTHER BENEFITS

Nothing in this Agreement shall abridge, eliminate, or cause Executive to lose
Executive's right or entitlement to any other Company benefit to which Executive
may be entitled due to his status as an employee under any plan or policy of
Company on such terms and conditions as are required of any employee under any
plan or policy of Company. Further, nothing in this Agreement shall create in
Executive any greater rights or entitlements, except as specified in this
Agreement. The plans and policies referred to in this Section 7 include, but are
not limited to, qualified and nonqualified retirement plans, life insurance
plans, dental, disability or health insurance benefits, severance policies, and
accrued vacation pay.

SECTION 8 - MISCELLANEOUS

A.    Notice and Payments

ALL PAYMENTS REQUIRED OR PERMITTED TO BE MADE UNDER THE PROVISIONS OF THIS
            AGREEMENT, AND ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR
            PERMITTED TO BE GIVEN OR DELIVERED UNDER THIS AGREEMENT TO COMPANY
            OR TO EXECUTIVE, WHICH NOTICES OR COMMUNICATIONS MUST BE IN WRITING,
            SHALL BE DEEMED TO HAVE BEEN GIVEN IF DELIVERED BY HAND, OR MAILED
            BY FIRST-CLASS MAIL, ADDRESSED AS FOLLOWS:

<PAGE>

      1.    If to Company:

            Farmers & Merchants State Bank
            Attn: Chairman, Compensation Committee
            307-11 N. Defiance Street
            Box 216
            Archbold, OH  43502

      2.    If to Executive:

            James Burkhart
            431 S.  Squire St.
            Holgate, OH 43527

      Company or Executive may, by notice given to the other from time to time
      and at any time, designate a different address for making payments
      required to be made, and for the giving of notices or other communications
      required or permitted to be given, to the party designating such new
      address.

B.    Payroll Taxes

ANY PAYMENT REQUIRED OR PERMITTED TO BE MADE OR GIVEN TO EXECUTIVE UNDER THIS
            AGREEMENT SHALL BE SUBJECT TO THE WITHHOLDING AND OTHER REQUIREMENTS
            OF APPLICABLE LAWS, AND TO THE DEDUCTION REQUIREMENTS OF ANY BENEFIT
            PLAN MAINTAINED BY COMPANY IN WHICH EXECUTIVE IS A PARTICIPANT, AND
            TO ALL REPORTING, FILING AND OTHER REQUIREMENTS IN RESPECT OF SUCH
            PAYMENTS, AND COMPANY SHALL USE ITS BEST EFFORTS PROMPTLY TO SATISFY
            ALL SUCH REQUIREMENTS.

C.    Governing Law

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
            THE STATE OF OHIO.

D.    Duplicate Originals

THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICH SHALL
            BE DEEMED TO BE A DUPLICATE ORIGINAL, BUT ALL OF WHICH, TAKEN
            TOGETHER, SHALL CONSTITUTE A SINGLE INSTRUMENT.

E.    Captions

THE CAPTIONS CONTAINED IN THIS AGREEMENT ARE INCLUDED ONLY FOR CONVENIENCE OF
            REFERENCE AND DO NOT DEFINE, LIMIT, EXPLAIN OR MODIFY THIS AGREEMENT
            OR ITS INTERPRETATIONS, CONSTRUCTION OR MEANING AND ARE IN NO WAY TO
            BE CONSTRUED AS A PART OF THIS AGREEMENT.

<PAGE>

F.    Severability

IF ANY PROVISION OF THIS AGREEMENT OR THE APPLICATION OF ANY PROVISION TO ANY
            PERSON OR ANY CIRCUMSTANCES SHALL BE DETERMINED TO BE INVALID OR
            UNENFORCEABLE, SUCH PROVISION OR PORTION THEREOF SHALL NEVERTHELESS
            BE EFFECTIVE AND ENFORCEABLE TO THE EXTENT DETERMINED REASONABLE.
            SUCH DETERMINATION SHALL NOT AFFECT ANY OTHER PROVISION OF THIS
            AGREEMENT OR THE APPLICATION OF SAID PROVISION TO ANY OTHER PERSON
            OR CIRCUMSTANCE, ALL OF WHICH OTHER PROVISIONS SHALL REMAIN IN FULL
            FORCE AND EFFECT, AND IT IS THE INTENTION OF COMPANY AND EXECUTIVE
            THAT IF ANY PROVISION OF THIS AGREEMENT IS SUSCEPTIBLE OF TWO OR
            MORE CONSTRUCTIONS, ONE OF WHICH WOULD RENDER THE PROVISION
            ENFORCEABLE AND THE OTHER OR OTHERS OF WHICH WOULD RENDER THE
            PROVISIONS UNENFORCEABLE, THEN THE PROVISIONS SHALL HAVE THE MEANING
            WHICH RENDERS IT ENFORCEABLE.

G.    Number and Gender

WHEN USED IN THIS AGREEMENT, THE NUMBER AND GENDER OF EACH PRONOUN SHALL BE
            CONSTRUED TO BE SUCH NUMBER AND GENDER AS THE CONTEXT, CIRCUMSTANCES
            OR ITS ANTECEDENT MAY REQUIRE.

H.    Successors and Assigns

THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE BINDING UPON THE SUCCESSORS
            AND ASSIGNS (INCLUDING SUCCESSIVE, AS WELL AS IMMEDIATE, SUCCESSORS
            AND ASSIGNS) OF COMPANY; PROVIDED, HOWEVER, THAT COMPANY MAY NOT
            ASSIGN THIS AGREEMENT OR ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER
            TO ANY PARTY OTHER THAN A CORPORATION WHICH SUCCEEDS TO
            SUBSTANTIALLY ALL OF THE BUSINESS AND ASSETS OF COMPANY BY MERGER,
            CONSOLIDATION, SALE OF ASSETS OR OTHERWISE. THIS AGREEMENT SHALL
            INURE TO THE BENEFIT OF AND BE BINDING UPON THE SUCCESSOR AND
            ASSIGNS (INCLUDING SUCCESSIVE, AS WELL AS IMMEDIATE, SUCCESSORS AND
            ASSIGNS) OF EXECUTIVE; PROVIDED, HOWEVER, THAT THE RIGHT OF
            EXECUTIVE UNDER THIS AGREEMENT MAY BE ASSIGNED ONLY TO HIS PERSONAL
            REPRESENTATIVE OR TRUSTEE OR BY WILL OR PURSUANT TO APPLICABLE LAWS
            OF DESCENT AND DISTRIBUTION.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on and to be effective on June 27, 2005.

      SECTION 1 IN THE PRESENCE OF: EXECUTIVE

                                                     /s/ James Burkhart
________________________________________             -------------------------
                                                     James Burkhart

________________________________________

IN THE PRESENCE OF:                                  FARMERS & MERCHANTS
                                                     STATE BANK

                                                     By: /s/ Joe E. Crossgrove
________________________________________                -----------------------
________________________________________             Its: Chairman of the Board
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</DOCUMENT>
