NOTE 11:

STOCK-BASED COMPENSATI

The Company maintains an equity incentive plan (the “Plan”) pursuant to

which restricted stock units (“RSUs”) may be

granted to executive officers and key employees. Each

RSU represents the right to receive one share of the Company’s

common stock upon vesting. RSUs do not represent an ownership interest

in the Company’s common

stock and do not

provide voting rights prior to vesting. Awards

are evidenced by individual award agreements and are subject to the terms of

the Plan.

On July 24, 2025, the Company granted

3,030

RSUs with a grant-date fair value of $

28.34

per unit, based on the closing

market price of the Company’s common

stock on Nasdaq on the date of grant, for aggregate grant-date fair value of $

thousand. The RSUs vest in full on March 10, 2026 (the “Vesting

Date”), subject to continued employment through the

esting Date.

The award agreement provides for dividend equivalents. Dividend equivalents

are additional RSUs credited upon the

payment of cash dividends on the Company’s

common stock. The number of RSUs issued as dividend equivalents is

determined based on the number of RSUs held on the dividend payment

date multiplied by the cash dividend per share,

divided by the closing price of the Company’s

common stock on the dividend payment date. RSUs issued as dividend

equivalents vest on the same terms and conditions as the underlying RSUs.

The incremental compensation cost associated

with such dividend equivalents was not material to the Company’s

consolidated financial statements.

The vesting of RSUs, including any dividend equivalents, may be

accelerated upon certain events, including death or

disability (100% vesting), retirement (pro rata vesting), termination without

cause (pro rata vesting), or a change in control

in which the awards are not assumed by the surviving entity.

Except as provided in the award agreement, unvested RSUs

are forfeited upon termination of employment. In the event of termination

for cause, the Compensation Committee may

require the return of shares or other amounts received in respect of RSUs that vested

during the period constituting cause.

RSUs are nontransferable and are subject to the Company’s

insider trading policy and other restrictive covenants contained

in the applicable

award agreement.

Compensation cost for RSUs is recognized on a straight-line basis over the

requisite service period. The Company accounts

for forfeitures as they occur. There

were no forfeitures related to these RSUs during the year ended December 31, 2025.

For the year ended December 31, 2025, the Company recognized $

thousand of stock-based compensation expense

related to these RSUs. Such expense is included in salaries and benefits expense

in the Consolidated Statements of

Earnings, with a corresponding increase to additional paid-in capital.

As of December 31, 2025, unrecognized compensation cost related to these RSUs totaled $

thousand, which is expected

to be recognized through the vesting date of March 10, 2026.

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

AUBURN NATIONAL BANCORPORATION, INC Stock Compensation Disclosure

About Stock Compensation Disclosures

Other Available Disclosures