BANK OF VIRGINIA 


2011 STOCK INCENTIVE PLAN


 


1.          Purpose.
The purpose of this 2011 Stock Incentive Plan (the “Plan”) is to aid Bank of Virginia (the “Bank”), in
attracting, retaining, motivating and rewarding employees and non-employee directors of the Bank or its Affiliates, to provide
for equitable and competitive compensation opportunities, to recognize individual contributions and reward achievement of Bank
goals, and to promote the creation of long-term value for stockholders by closely aligning the interests of Participants with those
of stockholders.


 


2.          Definitions.
In addition to the terms defined in Section 1 above and elsewhere in the Plan, the following capitalized terms used in the Plan
have the respective meanings set forth in this Section:


 


Affiliate
means any other corporation or other entity that directly, or indirectly through one or more intermediaries, controls, is controlled
by or is under common control with the Bank. For purposes of the Plan, an ownership interest of more than fifty percent (50%) shall
be deemed to be a controlling interest.


 


Award
means any Option, Restricted Stock or Other Stock-Based Award, together with any related right or interest, granted to a
Participant under the Plan.


 


Award
Agreement means the document issued, either in writing or by electronic means, by the Bank to a Participant evidencing
the grant of an Award and setting forth the specific terms, conditions, restrictions and limitations applicable to the Award.


 


Beneficiary
means the person, persons, trust or trusts designated as being entitled to receive the benefits under a Participant’s Award
upon and following such Participant’s death. Unless otherwise determined by the Committee, a Participant may designate one
or more individuals and/or one or more trusts as his or her Beneficiary, and in the absence of a designated Beneficiary the Participant’s
Beneficiary shall be as specified in Section 10(b)(ii). Unless otherwise determined by the Committee, any designation of a Beneficiary
other than a Participant’s spouse, or a trust in which the Participant’s spouse is the sole beneficiary, shall be subject
to the written consent of such spouse.


 


Board
means the Bank’s Board of Directors.


 


Change
in Control shall have the meaning specified in Section 9(b).


 


Code
means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation thereunder shall include
any successor provisions and regulations, and reference to regulations includes any applicable guidance or pronouncement of the
Department of the Treasury and Internal Revenue Service.


 


Committee
means the Compensation Committee of the Board as designated from time to time by the Board. The full Board may perform any function
of the Committee hereunder in which case the term “Committee” shall refer to the Board.


 


Disability
means an event which results in the Participant being (i) unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, or (ii) by reason of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving
income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees
of the Bank or any Affiliate.


 



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Effective
Date means the date of approval of the Plan by the Bank’s stockholders, as specified in Section 10(l).


 


Eligible
Person has the meaning specified in Section 5.


 


Exchange
Act means the Securities Exchange Act of 1934, as amended. References to any provision of the Exchange Act or rule (including
a proposed rule) thereunder shall include any successor provisions and rules.


 


Fair
Market Value means (i) the closing price of a share of Stock on the date of calculation (or on the last preceding trading
date if the Stock was not traded on such date) if Stock is readily tradeable on a national securities exchange or other market
system or (ii) if the Stock is not readily tradeable, the amount determined by the Committee in a manner consistent with Section
409A of the Code, or, in the case of shares of Stock underlying Incentive Stock Options, the amount determined by the Committee
in a manner consistent with Section 422 of the Code.


 


Incentive
Stock Option or ISO means an Option granted under
Section 6(b) that meets the requirements of Code Section 422 and any regulations or rules promulgated thereunder, and is designated
as an Incentive Stock Option in the Award Agreement.


 


Nonqualified
Stock Option means any Option granted under Section 6(b) that is not an Incentive Stock Option.


 


Option
means a right to purchase Stock granted under Section 6(b).


 


Other
Stock-Based Award means an Award (other than an Option or Restricted Stock Award) granted to a Participant under Section
6(d) that consists of, or is denominated in, payable in, valued in whole or in part by reference to, or otherwise based on or related
to, Stock or factors that influence the value of Stock.


 


Participant
means a person who has been granted an Award under the Plan that remains outstanding, including a person who is no longer an Eligible
Person.


 


Restricted
Stock means Stock granted under this Plan that is subject to such restrictions and risks of forfeiture that the Committee,
in its discretion, shall impose at the time of grant and set out in the Award Agreement.


 


Restriction
Period means the period of time during which Restricted Stock Awards will remain subject to restrictions imposed by
the Committee and set out in the Award Agreement.


 


Separation
from Service means the date of cessation of a Participant’s employment or service relationship with the Bank and
any Affiliate for any reason, with or without cause, as determined by the Bank. A transfer of a Participant between and among the
Bank or an Affiliate shall not be deemed a Separation from Service for purposes of the Plan. Notwithstanding the forgoing, the
date on which a participant incurs a Separation from Service shall be determined in accordance with Code Section 409A(a)(2)(A)(i)
and Treasury Regulation Section 1.409A-1(h).


 



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Stock
means the Bank’s common stock, par value $1.00 per share, and any other equity securities of the Bank that may be substituted
or resubstituted for Stock pursuant to Section 10(c).


 


3.          Administration.



 


(a)          Authority
of the Committee. The Plan shall be administered by the Committee, which shall have full and final authority
and discretion, in each case subject to and consistent with the provisions of the Plan and any applicable laws or regulations,
to:


 


(i)          select
Eligible Persons to become Participants;


 


(ii)         grant
Awards under the Plan and determine the form of an Award, the amount of Stock subject to an Award, and all terms, conditions and
other matters relating to an Award, including without limitation, the dates on which Awards may be exercised or become vested and
the Restriction Period, if any, relating to an Award, the expiration date of an Award, and whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Stock, other Awards, or other property;


 


(iii)        subject
to any express provision of the Plan, waive or amend any terms, conditions, restrictions or limitations on an Award;


 


(iv)        prescribe
the terms of any Award Agreements evidencing Awards (such Award Agreements need not be identical for each Participant or each Award),
amendments thereto, and rules and regulations for the administration of the Plan and amendments thereto;


 


(v)         make
any adjustments permitted by the Plan (including but not limited to adjustment of the number of shares of Stock available under
the Plan or any Award) and any Award granted under the Plan as may be appropriate pursuant to Section 10(c);


 


(vi)        construe
and interpret the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein; and


 


(vii)       make
all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan.


 


(b)          Committee
Determinations. Decisions of the Committee with respect to the administration and interpretation of the Plan
shall be final, conclusive and binding upon all persons interested in the Plan, including Participants, Beneficiaries, transferees
under Section 10(b) and other persons claiming rights from or through a Participant, and stockholders. The foregoing notwithstanding,
either the Board, the Committee, or another committee of the Board may perform the functions of the Committee for purposes of granting
Awards under the Plan to non-employee directors, as the Board may at any time direct.


 


(c)          Delegation
of Authority. The Committee may delegate to one or more officers or managers of the Bank or any
Affiliate, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such administrative
functions as the Committee may determine.


 



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(d)          Limitation
of Liability. The Committee and each member thereof, and any person acting pursuant to authority delegated by
the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive
officer, other officer or employee of the Bank or any Affiliate, the Bank’s independent auditors or consultants or any other
agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to authority delegated
by the Committee, and any officer or employee of the Bank or any Affiliate acting at the direction or on behalf of the Committee
or a delegee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan
and shall, to the fullest extent permitted by law and the Bank’s By-Laws, be fully indemnified and protected by the Bank
with respect to any such action or determination.


 


4.          Stock
Subject to Plan. 


 


(a)          Overall
Number of Shares Available for Delivery. Subject to adjustment as provided under Section 10(c), the total number
of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be _____________
shares. Any shares of Stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares.


 


(b)          Share
Counting Rules. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid
double counting and make adjustments in accordance with this Section 4(b). Shares shall be counted against those reserved to the
extent such shares have been delivered and are no longer subject to a substantial risk of forfeiture. Accordingly, to the extent
that an Award under the Plan is canceled, expired, forfeited, exchanged, settled in cash, settled by delivery of fewer shares
than the number underlying the Award, or otherwise terminated without delivery of shares to the Participant, the shares retained
by or returned to the Bank will not be deemed to have been delivered under the Plan Shares that are withheld from an Award or separately
surrendered by the Participant in payment of the exercise price or taxes relating to such Award shall be deemed to constitute shares
delivered and will be not available under the Plan. All shares are available for the grant of ISOs.


 


5.          Eligibility.
Awards may be granted under the Plan only to Eligible Persons. For purposes of the Plan, an “Eligible Person”
means:


 


(a)          an
employee of the Bank or any Affiliate, or


 


(b)          any
non-employee director of the Bank or any Affiliate.


 


An employee on leave of absence may be
considered as still in the employ of the Bank or an Affiliate, for purposes of eligibility to participate in the Plan.


 


6.          Specific
Terms of Awards. 


 


(a)          General.
Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award
or the exercise thereof, at the date of grant or thereafter, such additional terms and conditions not inconsistent with the provisions
of the Plan as the Committee, in its sole discretion, shall determine, including terms requiring forfeiture of Awards in the event
of Separation from Service by the Participant and terms permitting a Participant to make elections relating to his or her Award
to the extent permitted under the Plan. The Committee shall retain full power and discretion with respect to any term or condition
of an Award that is not mandatory under the Plan, or contained in an Award Agreement. The Committee shall require the payment of
lawful consideration for an Award to the extent necessary to satisfy the requirements of applicable law, and may otherwise require
payment of consideration for an Award, except as limited by the Plan.


 


(b)          Options.
The Committee is authorized to grant Options to those Eligible Persons whom the Committee may from time to time select, in the
amounts and pursuant to such other terms and conditions that the Committee, in its discretion, may determine and set out in the
Award Agreement, subject to the following provisions:


 



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(i)          Form.
Options granted under the Plan may, at the discretion of the Committee, be in the form of Nonqualified Stock Options, Incentive
Stock Options or a combination of the two, subject to the restrictions set forth in paragraph (vii) below with respect to
grants of Incentive Stock Options. The Committee shall designate the form of the Option at the time of grant and such form shall
be specified in the Award Agreement. Where both a Nonqualified Stock Option and an Incentive Stock Option are granted to an Eligible
Person at the same time, such Awards shall be deemed to have been granted in separate grants, shall be clearly identified, and
in no event will the exercise of one such Award affect the right to exercise the other Award.


 


(ii)         Exercise
Price. The exercise price per share of Stock purchasable under an Option (including both ISOs and Nonqualified Stock
Options) shall not be less than the Fair Market Value of a share of Stock on the date of grant of such Option. Notwithstanding
the foregoing, any substitute Award granted in assumption of or in substitution for an outstanding award granted by a Bank or business
acquired by the Bank or any Affiliate, or with which the Bank or any Affiliate combines may be granted with an exercise price per
share of Stock other than as required above, provided that exercise price set by the Committee for such substitute Award satisfies
the requirements of Treasury Regulation Section 1.409A-1(b)(5)(v)(D) so that the grant of such substitute Award will not be treated
as the grant of a new Stock right or a change in the form of payment of the original outstanding award for purposes of Code Section
409A. No adjustment will be made for a dividend or other right for which the record date is prior to the date on which the stock
is issued, except as provided in Section 10(c) of the Plan.


 


(iii)        Option
Term. In no event shall the term of any Option exceed a period of ten years from the date of grant.


 


(iv)        Time
of Exercise. The Committee shall determine and set out in the Award Agreement the time or times at which, or the circumstances
under which, an Option may be exercised in whole or in part; provided, however, that the Committee may provide, by rule or regulation
or in any Award Agreement, or may determine in any individual case, that forfeiture conditions or restrictions on exercise relating
to Options will lapse in whole or in part in the event of a Separation from Service resulting from specified causes, but only to
the extent that such action will not cause the Option to become subject to the requirements of Code Section 409A.


 


(v)         Method
of Exercise. Unless the Committee provides otherwise in an Award Agreement, an Option may be exercised by giving written
notice to the Bank specifying the number of shares to be purchased, which shall be accompanied by full payment of the exercise
price plus applicable taxes, if any. No Stock certificates shall be registered and delivered, and no Participant shall have any
rights to dividends or other rights of a shareholder with respect to shares subject to the Option, until the Participant has given
written notice of exercise and made full payment of the exercise price for such shares (including taxes). The Committee may set
out in the Award Agreement such other conditions and limitations on the exercise of Options as it, in its sole discretion, shall
determine.


 


(vi)        Payment
of Exercise Price. Unless the Committee provides otherwise in an Award Agreement, payment of the exercise price of an
Option may be made in cash or by certified check, bank draft, wire transfer, or postal or express money order. In addition, at
the discretion of the Committee, the Committee may provide that payment of all or a portion of the exercise price may be made by:


 


(A)         Tendering
(actually or by attestation) to the Bank previously acquired shares of Stock that have been held by the Participant for at least
six (6) months and that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the
exercise price being so paid;


 



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(B)         Provided
such payment method has been expressly authorized by the Board or the Committee in advance in a writing delivered to the Participant
with respect to a specific Option exercise and subject to any requirements of applicable law and regulations, instructing the Bank
to reduce the number of shares that would otherwise be issued on exercise by such number of shares having in the aggregate a Fair
Market Value on the date of exercise equal to the applicable portion of the exercise price being so paid; or


 


(C)         To
the extent permitted by law, by means of a broker-assisted cashless exercise transaction.


 


(vii)       Incentive
Stock Options. Incentive Stock Options granted under the Plan shall be subject to the following additional conditions,
limitations and restrictions.


 


(A)         Eligibility.
Incentive Stock Options may be granted only to employees of the Bank or an Affiliate that is a “subsidiary” or “parent
corporation,” within the meaning of Code Section 424, of the Bank. In no event may an Incentive Stock Option be granted to
an employee who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of
the Bank or such Affiliate.


 


(B)         Timing
of Grant. No Incentive Stock Option shall be granted under the Plan after the 10-year anniversary of the earlier
of the date the Plan (in the form in effect prior to this Amendment and Restatement) was originally approved by the Bank’s
stockholders in accordance with Section 10(o).


 


(C)         Amount
of Award. The aggregate Fair Market Value on the date of grant of the shares with respect to which such Incentive
Stock Options first become exercisable during any calendar year under the terms of the Plan for any Participant may not exceed
$100,000. For purposes of this $100,000 limit, the Participant’s Incentive Stock Options under this Plan and all Plans maintained
by the Bank and any Affiliate shall be aggregated. To the extent any Incentive Stock Option first becomes exercisable in a calendar
year and such limit would be exceeded, such Incentive Stock Option shall thereafter be treated as a Nonqualified Stock Option for
all purposes.


 


(D)         Timing
of Exercise. In the event that an Incentive Stock Option is exercised by a Participant more than three (3) months
after a Participant’s Separation from Service (or more than twelve (12) months after the Participant dies or becomes Disabled),
such Incentive Stock Option shall thereafter be treated as a Nonqualified Stock Option for all purposes. For this purpose, an employee’s
employment relationship shall be treated as continuing intact while the employee is on military leave, sick leave or other bona
fide leave of absence (such as temporary employment with the Government) duly authorized in writing by the Bank if the period of
such leave does not exceed three (3) months or, if longer, so long as the employee’s right to reemployment with the Bank
or an Affiliate is guaranteed either by statute or by contract. If the period of leave exceeds three (3) months and the employee’s
right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to terminate
on the first date immediately following such three-month period.


 


(E)         Transfer
Restrictions. In no event shall the Committee permit an Incentive Stock Option to be transferred by a Participant
other than by will or the laws of descent and distribution, and any Incentive Stock Option granted hereunder shall be exercisable,
during his or her lifetime, only by the Participant.


 



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(c)          Restricted
Stock. The Committee is authorized to grant Restricted Stock to those Eligible Persons whom the Committee may
from time to time select, in the amounts and pursuant to such other terms and conditions that the Committee, in its discretion,
may determine and set out in the Award Agreement, subject to the following provisions:


 


(i)          Grant
and Restrictions. Restricted Stock shall be subject to such restrictions on transferability, risks of forfeiture, Restriction
Periods and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination
at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements),
in such installments or otherwise and under such other circumstances as the Committee may determine at the date of grant or thereafter.
Except to the extent restricted under the terms of the Plan and any Award Agreement relating to the Restricted Stock, a Participant
granted Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the
right to receive dividends thereon; provided, however, that the Committee may require mandatory reinvestment of dividends in additional
Restricted Stock, may provide that no dividends will be paid on Restricted Stock or retained by the Participant, or may impose
other restrictions on the rights attached to Restricted Stock.


 


(ii)         Forfeiture.
Except as otherwise determined by the Committee, upon Separation from Service during the applicable Restriction Period, Restricted
Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Bank; provided that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock will lapse in whole or in part, including in the event of a Separation from Service resulting
from specified causes, such as Retirement.


 


(iii)        Certificates
for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such
certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock,
that the Bank retain physical possession of the certificates, and that the Participant deliver a stock power to the Bank, endorsed
in blank, relating to the Restricted Stock.


 


(iv)        Dividends
and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may require and provide in the
Award Agreement that any dividends paid on a share of Restricted Stock shall be either (A) paid with respect to such Restricted
Stock at the dividend payment date in cash, in kind, or in a number of shares of unrestricted Stock having a Fair Market Value
equal to the amount of such dividends, or (B) automatically reinvested in additional Restricted Stock or held in kind, which shall
be subject to the same terms as applied to the original Restricted Stock to which it relates. Unless otherwise determined
by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend,
shall be subject to restrictions and risks of forfeiture to the same extent as the Restricted Stock with respect to which such
Stock or other property has been distributed.


 


(d)          Other
Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to those
Eligible Persons whom the Committee may from time to time select such other Awards that may be denominated or payable in, valued
in whole or in part by reference to, or otherwise based on, or related to, Stock or factors that may influence the value of Stock,
including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock,
purchase rights for Stock, Awards with value and payment contingent upon performance of the Bank or business units thereof or any
other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities
of or the performance of specified Subsidiaries or Affiliates or other business units. The Committee shall determine and provide
in the Award Agreement the terms and conditions of such Awards. Cash awards, as an element of or supplement to any other Award
under the Plan, may also be granted pursuant to this Section 6(c).


 



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7.          Certain
Provisions Applicable to Awards. 


 


(a)          Stand-Alone,
Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee,
be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted
under another plan of the Bank or any Affiliate, or any business entity to be acquired by the Bank or any Affiliate, or any other
right of a Participant to receive payment from the Bank or any Affiliate. Awards granted in addition to or in tandem with other
Awards may be granted either as of the same time as or a different time from the grant of such other Awards. Any transaction otherwise
authorized under this Section 7(a) remains subject to the restriction on repricing under Section 10(e).


 


(b)          Term
of Awards. The term of each Award shall be for such period as may be determined by the Committee, subject to
the express limitations set forth elsewhere in the Plan.


 


(c)          Effect
of Termination for Cause. If a Participant’s termination of employment or service is for “Cause”,
a Participant’s unvested Awards and all vested Options shall be forfeited as of the date of termination. A termination for
“Cause” shall mean a termination on account of (i) the commission by the Participant of willful misconduct (including,
without limitation, a dishonest or fraudulent act) or a grossly negligent act, or the willful or grossly negligent omission to
act by the Participant, which is intended to cause, causes or is reasonably likely to cause material harm to the Bank or an Affiliate
(including harm to its business reputation), (ii) the conviction of the Participant for the commission or perpetration by
the Participant of any felony or any crime involving dishonesty, moral turpitude or fraud, (iii the receipt of any form of
notice, written or otherwise, that any regulatory agency having jurisdiction over the Bank or an Affiliate intends to institute
any form of formal or informal regulatory action against the Participant (provided that the Board determines in good faith
that the subject matter of such action involves acts or omissions by or under the supervision of the Participant or that termination
of the Participant would materially advance the Bank's or an Affiliate’s compliance with the purpose of the action or
would materially assist the Bank or an Affiliate in avoiding or reducing the restrictions or adverse effects of the regulatory
action); (iv) the exhibition by the Participant of a standard of behavior within the scope of the Participant’s
employment or service that is materially disruptive to the orderly conduct of the Bank’s business operations (including,
without limitation, substance abuse or sexual misconduct) to a level which, in the Board’s good faith and reasonable judgment,
is materially detrimental to the Bank's best interest, that, if susceptible of cure remains uncured ten days following written
notice to the Participant of such specific inappropriate behavior; or (v) in the case of a Participant who is an employee,
the failure of the Participant to devote the Participant’s full business time and
attention to Participant’s employment that, if susceptible of cure, remains uncured
30 days following written notice to the Participant of such failure. 


 


(d)          Acceleration
of Vesting. Unless otherwise determined by the Committee at the time an Award is made, a Participant’s
Award(s) shall be fully vested upon the Participant’s death or Disability.


 


8.          Change
in Control. 


 


(a)          Effect
of Change in Control. In the event that there occurs a Change in Control, the following provisions shall apply
to a Participant’s Awards, unless otherwise provided by the Committee in the Award Agreement (in language specifically negating
the effect of this Section 8(a)):


 



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(i)          In
the case of an Award, all forfeiture conditions and other restrictions applicable to such Award shall lapse and such Award shall
be fully payable as of the effective date of the Change in Control without regard to vesting or other conditions, and any such
Award carrying a right to exercise that was not previously vested and exercisable shall become fully vested and exercisable as
of the effective date of the Change in Control.


 


(ii)         The
Committee may unilaterally determine that all outstanding Awards are cancelled upon a Change in Control and that the value of such
Awards, as determined by the Committee, be paid out in cash in an amount based on the “Change in Control Price” within
a reasonable period of time after the Change in Control effective date. For purposes of this paragraph, the “Change in Control
Price” shall mean the highest price per share offered for a share of Stock in connection with any transaction constituting
a Change in Control (as determined in good faith by the Committee if any part of such price is payable other than in cash) or,
if the Change in Control event relates to a change in Board composition, the Fair Market Value of the Stock as of such event (as
determined in good faith by the Committee).


 


(iii)        If
a Participant’s employment with the Bank or an Affiliate is terminated within 12 months of Change in Control, then, notwithstanding
any other provision of the Plan or the Participant’s Award Agreement(s), the Participant shall have until the first to occur
of (i) the first anniversary of the Participant’s termination date or (ii) the expiration of the term of the Participant’s
Option(s), to exercise such Option(s).


 


(b)          Definition
of “Change in Control.” “Change in Control” means the occurrence of any one of the following
events after the Effective Date:


 


(i)          Any
Person (as defined in Section 13(d)(3) of the Securities and Exchange Act) shall have become the direct or indirect beneficial
owner of twenty five percent (25%) or more of the then outstanding common shares of the Bank;


 


(ii)         The
consummation of a merger, consolidation, share exchange, division, sale or other disposition of all or substantially all of the
assets of the Bank (each, a “Corporate Event”), immediately following which the shareholders of the Bank immediately
prior to such Corporate Event do not hold, directly or indirectly, a majority of the voting power of (i) in the case of a merger
or consolidation, the surviving or resulting corporation, (ii) in the case of a share exchange, the acquiring corporation, or (iii)
in the case of a division or a sale or other disposition of assets, each surviving, resulting or acquiring corporation which, immediately
following the relevant Corporate Event, holds more than twenty-five percent (25%) of the consolidated assets of the Bank immediately
prior to such Corporate Event.


 


(iii)        The
consummation of a plan of complete liquidation of the Bank or an agreement for the sale or disposition by the
Bank of all or substantially all the Bank’s assets;


 


(iv)        The
date there shall have been a change in the composition of the Board within a two-year period such that a majority of the Board
does not consist of directors who were serving at the beginning of such period together with directors whose initial nomination
for election by the Bank’s stockholders or, if earlier, initial appointment to the Board, was approved by the vote of two-thirds
of the directors then still in office who were in office at the beginning of the two-year period together with the directors who
were previously so approved.


 



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(c)          Alternative
Awards. Notwithstanding anything in this Article 8 to the contrary, no cash settlement or other payment
shall occur with respect to any Award if the Committee reasonably determines in good faith prior to the occurrence of a Change
in Control that such Award shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted
Award hereinafter called an “Alternative Award”) by any successor to the Bank; provided that any such Alternative Award
must:


 


(i)          Be
based on stock which is traded on an established U.S. securities market, or that the Committee reasonably believes will be so traded
within sixty (60) days after the Change in Control;


 


(ii)         Provide
such Participant with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable
under such Award, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing
and methods of payment;


 


(iii)        Have
substantially equivalent economic value to such Award (determined at the time of the Change in Control); and


 


(iv)        Have
terms and conditions which provide that in the event that the Participant’s employment is involuntarily terminated or constructively
terminated, any conditions on a Participant’s rights under, or any restrictions on transfer or exercisability applicable
to, each such Alternative Award shall be waived or shall lapse, as the case may be.


 


9.          Additional
Award Forfeiture Provisions. The Committee may provide in an Award Agreement that a Participant’s right to
receive a grant of an Award, to exercise the Award, to receive a settlement or distribution with respect to the Award or to retain
cash, Stock, other Awards, or other property acquired in connection with an Award, shall be conditioned upon the Participant’s
compliance with specified conditions that protect the business interests of the Bank and the Subsidiaries and Affiliates from harmful
actions of the Participant, including, without limitation, conditions relating to non-competition, confidentiality of information
relating to or possessed by the Bank, non-solicitation of customers, suppliers, and employees of the Bank, cooperation in litigation,
non-disparagement of the Bank, the Subsidiaries and Affiliates, and the officers and directors of the Bank and the Subsidiaries
and Affiliates, and other restrictions upon or covenants of the Participant, including during specified periods following Separation
from Service with the Bank. Accordingly, an Award Agreement may include terms providing for a “clawback” or forfeiture
from the Participant of the profit or gain realized by a Participant in connection with an Award, including cash or other proceeds
received upon sale of Stock acquired in connection with an Award.


 


10.         General
Provisions. 


 


(a)          Compliance
with Legal and Other Requirements. The Bank may, to the extent deemed necessary or advisable by the Committee,
postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or
qualification of such Stock or other required action under any federal or state law, rule or regulation, listing or other required
action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Bank are
listed or quoted, or compliance with any other obligation of the Bank, as the Committee may consider appropriate. The Committee
may require any Participant to make such representations, furnish such information and comply with or be subject to such other
conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in
compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. The terms and conditions
of each Award granted shall comply with applicable banking laws and regulations. Awards are subject to exercise or forfeiture upon
the direction of the Federal Deposit Insurance Corporation if the Bank’s capital falls below applicable minimum regulatory
requirements.


 



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(b)          Limits
on Transferability; Beneficiaries. 


 


(i)          No
Award or other right or interest of a Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject
to any lien, obligation or liability of such Participant to any party (other than the Bank or any Affiliate thereof), or assigned
or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the
death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant
only by the Participant or his or her guardian or legal representative, except that, during a Participant’s lifetime, Awards
and other rights (other than ISOs) may be transferred to one or more of the following:


 


(A)         the
Participant’s spouse, children (including adopted and step children) or grandchildren (including adopted and step grandchildren),
parents, grandparents or siblings,


 


(B)         a
trust for the benefit of one or more of the Participant or the persons referred to in clause (A), or


 


(C)         a
partnership, limited liability company or corporation in which the Participant or the Persons referred to in clause (A) are the
only partners, members or shareholders.


 


(ii)         If
a Participant has died and then or thereafter a payment or benefit becomes distributable under an Award, such payment or benefit
will be distributed to the Participant’s Beneficiary; provided, however, that an individual or trust will be deemed a Beneficiary
only if he, she or it is surviving or in existence on the date of death of the Participant and if the Participant has designated
such individual or trust as a Beneficiary in his or her most recent written and duly filed Beneficiary designation (i.e.,
any new Beneficiary designation under the Plan cancels a previously filed Beneficiary designation). If no Beneficiary is living
or in existence at the time of Participant’s death, any subsequent payment or benefit will be distributable to the person
or persons in the first of the following classes of successive preference:


 


(A)         widow
or widower, if then living,


 


(B)         surviving
children, equally,


 


(C)         surviving
parents, equally,


 


(D)         surviving
brothers and sisters, equally,


 


(E)         executors
or administrators; and the term “Beneficiary” as used in the Plan shall include such individuals. This provision applies
to payments and benefits distributable upon vesting or after expiration of any mandatory or elective deferral period, and also
to the right to exercise any Option during any period in which the Award is outstanding and exercisable.


 


(iii)        A
Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to
all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by
the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.


 



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(c)          Adjustments.
In the event that any large, special and non-recurring dividend or other distribution (whether in the form of cash or property
other than Stock), recapitalization, forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock
in such a way that an adjustment is appropriate or, in the case of any outstanding Award, which is necessary in order to prevent
dilution or enlargement of the rights of the Participant, then the Committee shall, in an equitable manner as determined by the
Committee, adjust any or all of:


 


(i)          the
number and kind of shares of Stock that may be delivered in connection with Awards granted thereafter, including the number of
shares available under Section 4,


 


(ii)         the
number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards and


 


(iii)        the
exercise price, grant price or purchase price relating to any Award.


 


(d)          Tax
Provisions. 


 


(i)          Withholding.
The Bank and any Affiliate is authorized to withhold from any Award or payment relating to an Award under the Plan, including,
without limitation, from a distribution of Stock, amounts of withholding and other taxes due or potentially payable in connection
with such Award or payment, and to take such other action as the Committee may deem advisable to enable the Bank and Participants
to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any such Award or payment. This
authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in
satisfaction of a Participant’s withholding obligations, either on a mandatory or elective basis in the discretion of the
Committee, or in satisfaction of other tax obligations. Other provisions of the Plan notwithstanding, only the minimum amount of
Stock deliverable in connection with an Award necessary to satisfy statutory withholding requirements will be withheld, unless
withholding of any additional amount of Stock will not result in additional accounting expense to the Bank.


 


(ii)         Required
Consent to and Notification of Code Section 83(b) Election. No election under Section 83(b) of the Code (to include
in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of
a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award Agreement or by action
of the Committee in writing prior to the making of such election. In any case in which a Participant is permitted to make such
an election in connection with an Award, the Participant shall notify the Bank of such election within ten (10) days of filing
notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification
required pursuant to regulations issued under Code Section 83(b) or other applicable provision.


 


(iii)        Requirement
of Notification Upon Disqualifying Disposition Under Code Section 421(b). If any Participant shall make any disposition
of shares of Stock delivered pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (i.e.,
a disqualifying disposition), such Participant shall notify the Bank of such disposition within ten (10) days thereof.


 


(e)          Changes
to the Plan. The Board may amend, suspend or terminate the Plan or the Committee’s authority to grant
Awards under the Plan without the consent of stockholders or Participants; provided, however, that any amendment to the Plan shall
be submitted to the Bank’s stockholders for approval not later than the earliest annual meeting for which the record
date is at or after the date of such Board action if such stockholder approval is required by any federal or state law or if such
amendment would either:


 



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(i)          materially
increase the number of shares reserved for issuance and delivery under the Plan,


 


(ii)         change
the types of Awards available under the Plan,


 


(iii)        expand
the class of persons eligible to receive Awards under the Plan,


 


(iv)        extend
the term of the Plan, or


 


(v)         decrease
the exercise price at which Options may be granted.


 


The Board may otherwise,
in its discretion, submit other amendments to the Plan to stockholders for approval. The Committee is authorized to amend outstanding
Awards, except as limited by the Plan. The Board and Committee may not amend outstanding Awards (including by means of an amendment
to the Plan) without the consent of an affected Participant if such an amendment would materially and adversely affect the rights
of such Participant with respect to the outstanding Award (for this purpose, actions that alter the timing of federal income taxation
of a Participant will not be deemed material unless such action results in an income tax penalty on the Participant, and any discretion
that is reserved by the Board or Committee with respect to an Award is unaffected by this provision).


 


Subject to Section
10(f), without the approval of stockholders, the Committee will not amend or replace previously granted Options in a transaction
that constitutes a “repricing,” which for this purpose means any of the following or any other action that has the
same effect:


 


(i)          lowering
the exercise price of an Option after it is granted;


 


(ii)         any
other action that is treated as a repricing under generally accepted accounting principles;


 


(iii)        except
as provided in Section 10(f), canceling an Option at a time when its exercise price exceeds the Fair Market Value of the underlying
Stock, in exchange for another Option or Restricted Stock, other equity, cash or other property; provided, however, that the foregoing
transactions shall not be deemed a repricing if pursuant to an adjustment authorized under Section 10(c). With regard to other
terms of Awards, the authority of the Committee to waive or modify an Award term after the Award has been granted does not permit
waiver or modification of a term that would be mandatory under the Plan for any Award newly granted at the date of the waiver or
modification.


 


(f)          Unfunded
Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an
Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general
creditor of the Bank; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards
or other property, or make other arrangements to meet the Bank’s obligations under the Plan. Such trusts or other arrangements
shall be consistent with the “unfunded” status of the Plan, unless the Committee otherwise determines with the consent
of each affected Participant.


 


(g)          Nonexclusivity
of the Plan. Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Bank
for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other
incentive arrangements, apart from the Plan, as it may deem desirable.


 



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(h)          Fractional
Shares. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee
shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.


 


(i)          Limitation
on Rights Conferred under Plan. Neither the Plan nor any action taken hereunder shall be construed as (i) giving
any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the
Bank or any Affiliate, (ii) interfering in any way with the right of the Bank or any Affiliate to terminate any Eligible Person’s
or Participant’s employment or service at any time (subject to the terms and provisions of any separate written agreements),
(iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly
with other Participants and employees, or (iv) conferring on a Participant any of the rights of a stockholder of the Bank unless
and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award. Except as expressly
provided in the Plan and an Award Agreement, neither the Plan nor any Award Agreement shall confer on any person other than the
Bank and the Participant any rights or remedies thereunder. Any Award shall not be deemed compensation for purposes of computing
benefits under any retirement plan of the Bank or any Affiliate and shall not affect any benefits under any other benefit plan
under which the availability or amount of benefits is related to the level of compensation (unless required by applicable law,
or by any such other plan or arrangement with specific reference to Awards under this Plan).


 


(k)          Severability;
Entire Agreement. If any of the provisions of this Plan or any Award document is finally held to be invalid,
illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided,
that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined
to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent
necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and any Award Agreements contain
the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants,
arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject
matter thereof. No rule of strict construction shall be applied against the Bank, the Committee, or any other person in the interpretation
of any terms of the Plan, Award, or Award Agreement or other document relating thereto.


 


(l)          Plan
Effective Date and Termination. The Planis effective upon approval of the Plan by the affirmative votes of the
holders of a majority of the voting securities of the Bank present, or represented, and entitled to vote on the subject matter
at the duly held meeting of the Bank’s stockholders coincident with or next following the date of Board approval of this
Plan. Unless earlier terminated by action of the Board of Directors, the authority of the Committee to make grants under the Plan
will terminate on the date that is ten (10) years after the date upon which stockholders of the Bank approved the Plan will remain
in effect until such time as the Bank has no further rights or obligations with respect to outstanding Awards or otherwise under
the Plan.


 


(m)          Governing
Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and
any Award document shall be determined in accordance with the laws of the Commonwealth of Virginia, without giving effect to conflict
of law principles, and applicable provisions of federal law.


 



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