Document:

Exhibit 10.1

 EXHIBIT 10.1 
 Employment Agreement 
 EMPLOYMENT AGREEMENT 

MICHAEL LARROWE 

AND 
 CARDINAL
BANKSHARES CORPORATION 

 INDEX 
  

							
	 Section 1.
	    	Term of Agreement	  	 	1	  
			
	 Section 2.
	    	Employment Period and Positions	  	 	1	  
			
	 Section 3.
	    	Position and Duties	  	 	1	  
			
	 Section 4.
	    	Compensation	  	 	2	  
			
	 Section 5.
	    	Termination	  	 	3	  
			
	 Section 6.
	    	Obligation of the Holding Company upon Termination	  	 	4	  
			
	 Section 7.
	    	Payment in Certain Events	  	 	5	  
			
	 Section 8.
	    	Definitions	  	 	5	  
			
	 Section 9.
	    	Possible Reduction in Payment and Benefits	  	 	9	  
			
	 Section 10.
	    	Documents	  	 	9	  
			
	 Section 11.
	    	Regulatory Requirements	  	 	10	  
			
	 Section 12.
	    	Non-exclusivity of Rights	  	 	10	  
			
	 Section 13.
	    	Proprietary Information	  	 	10	  
			
	 Section 14.
	    	Board Positions	  	 	10	  
			
	 Section 15.
	    	Successors	  	 	11	  
			
	 Section 16.
	    	Miscellaneous	  	 	11	  

  

	*	The headings in this Agreement are for convenience only. 

 EMPLOYMENT AGREEMENT 

THIS AGREEMENT dated July 20, 2011 is by and between Cardinal Bankshares Corporation, a Virginia corporation (the “Holding
Company”) and Michael Larrowe (the “Executive”). 
 W I T N E S S E T H: 

WHEREAS, the Holding Company wishes to attract and retain a well-qualified executive to assure itself and its wholly owned subsidiary,
the Bank of Floyd (“Bank”), of the services of the Executive for the period provided in this Agreement and the Executive is willing to serve as an executive officer of the Holding Company and Bank for the period provided herein on the
terms and conditions of this Agreement. 
 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained
in this Agreement, the Holding Company and the Executive agree as follows: 
 1. Term of Agreement. The term
(“Employment Period”) of this Agreement shall commence on July 20, 2011 (the “Effective Date”) and shall continue for a period of three (3) years from the Effective Date unless otherwise terminated or extended as
provided herein (“Termination Date”). Subsequent to the initial three (3) year Employment Period, unless sooner terminated, the Employment Period (and corresponding Termination Date) shall automatically extend for additional one year
period(s) unless either party provides the other with written notice at least 30 days prior to the then current Termination Date that the Employment Period shall not be extended for an additional one year period and the Employment Period shall
automatically and without further notice end on the then current Termination Date unless terminated sooner as provided herein. 

2. Employment Period and Positions. The Executive shall be employed as Executive Vice President of Holding Company and Bank and
the Executive accepts such employment for the period beginning with the Effective Date; provided, however, that by the end of January, 2012, the Boards of Directors of the Holding Company and Bank, respectively, will determine whether, in their sole
discretion and judgment, to promote Executive to the position of President and Chief Executive Officer of Bank and Holding Company or to such other positions as such Boards of Directors, in their respective sole discretion and judgment, may
determine. 
 3. Duties. 
 (a) The Executive’s position, authority and responsibilities: (i) as Executive Vice President of the Holding Company, shall be to exercise overall executive authority with respect to Holding
Company subject to the direction of the Holding Company’s Board of Directors and Chief Executive Officer; and (ii) as Executive Vice President of the Bank, shall be to exercise overall executive authority with respect to the Bank subject
to the direction of the Bank’s Board of Directors and Chief Executive 

  
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Officer. Executive’s services shall be performed at the Holding Company and Bank’s principal offices in Floyd, Virginia. If Executive is offered and accepts the position of Holding
Company’s and Bank’s President and Chief Executive Officer, Executive shall have the additional responsibilities with the Holding Company and Bank commensurate with those of the president and chief executive of a community bank holding
company and bank. Nothing herein shall require the Executive to be offered additional positions within either the Bank or the Holding Company and all obligations of the Holding Company hereunder and decisions required to be made by the Bank in
connection with this Agreement shall be subject to the compliance with the legal and fiduciary duties of the officers and directors of the Holding Company and Bank, respectively and the sole discretion and judgment of the respective Boards of
Directors of Holding Company and Bank. Continued employment hereunder with the Bank or Holding Company shall be contingent upon Executive’s continued employment with the other. 

(b) The Executive shall devote his full business time during normal business hours to the business and affairs of the Holding Company and
the Bank, and use his best efforts to perform faithfully and efficiently the responsibilities assigned to him hereunder, to the extent necessary to discharge such responsibilities, except for (i) services to corporate, civic or charitable
boards or committees or organizations not significantly interfering with the performance of such responsibilities, (ii) such other civic or corporate activities as the Holding Company or Bank reasonably requests and are acceptable to the
Executive and (iii) periods of vacation, professional or sick leave to which the Executive is entitled. 
 4.
Compensation. 
 (a) Base Salary. Executive shall receive a base salary of $180,000 per annum, payable in twice
monthly installments which base salary shall be increased to $200,000 per annum effective January 1, 2012 (the “Base Salary”). The Base Salary shall be reviewed for adequacy and appropriateness at least once each calendar year by the
Board of Directors of the Holding Company or any designated committee thereof. Notwithstanding the foregoing, during any period when the Executive is disabled from performing his responsibilities hereunder but his employment has not been terminated
pursuant to Section 5(a), Executive’s Base Salary shall be reduced by the amount of any payments received by Executive from disability insurance provided by the Holding Company or Bank. 

(b) Incentive and Retirement Plans. During the Employment Period, the Executive shall be entitled to fully participate in all
incentive, stock option and retirement plans sponsored by the Holding Company and/or the Bank, including (i) a bank-owned life insurance policy (“BOLI”) under the same terms and conditions as provided to other executive officers of
the Holding Company and Bank and providing a death benefit to Executive’s estate equal to 25% of the total policy death benefit with the balance of the death benefit paid to the Bank; and (ii) a Supplemental Executive Retirement Plan
(“SERP”) not to exceed $50,000 per year for      years. The level of participation or benefits under all incentive, stock option and retirement plans shall be subject to the discretion of the relevant Board of
Directors. 

  
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 (c) Benefit Plans. The Executive and his eligible family shall be entitled to
participate in all medical, dental, disability, life, accidental death and travel accident insurance plans sponsored by the Holding Company and/or the Bank for its employees generally, as the same may be altered from time to time by the Holding
Company or Bank. 
 (d) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in accordance with the policies and procedures of the Holding Company which shall include normal expenses for attendance at one meeting a year of the Virginia Bankers Association
and American Bankers Association and reasonable moving expenses from Galax to Floyd, Virginia at such time as Executive elects to move his residence to Floyd, Virginia. 
 (e) Vacation and Fringe Benefits. The Executive shall be entitled to paid time off and fringe benefits in accordance with the policies of the Holding Company, as the same may be altered from time
to time by the Holding Company. Included as a part of the Executive’s benefits will be the purchase of an automobile of the Executive’s selection at a cost not to exceed $26,000 with the approval of the Board of Directors or a committee
thereof. 
 5. Termination. 
 (a) Death or Disability. This Agreement shall terminate automatically and without notice upon the Executive’s death. The Holding Company with the concurrence of the Bank may terminate this
Agreement by giving to the Executive written notice of its intention to terminate his employment for disability and his employment with the Holding Company and Bank shall terminate effective on the 90th day after receipt of such notice if within 90
days after such receipt the Executive shall fail to return to full-time performance of his duties and if the Executive’s disability has been established pursuant to the definition of “disability” set forth below. For purposes of this
Agreement, “disability” means (i) disability which after the expiration of more than 26 consecutive weeks after its commencement is determined to be total and permanent by a physician selected and paid for by the Holding Company or
its insurers, with the consent of the Executive or his legal representative, which consent shall not be unreasonably withheld or (ii) disability as defined in the policy of disability insurance maintained by the Holding Company and/or the Bank
for the benefit of the Executive, whichever shall be more favorable to the Executive. 
 (b) Other Termination. The
Holding Company, pursuant to action of its Board of Directors, may terminate the Agreement and the Executive’s continued employment with the Holding Company and the Bank, pursuant to the action of its Board of Directors, may terminate the
Agreement and Executive’s continued employment with Bank. 

  
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 (c) Notice of Termination. Any termination by the Holding Company, by the Bank or by
the Executive shall be communicated by a “notice of termination” to the other party hereto given in accordance with Section 16 of this Agreement. For purposes of this Agreement, a “notice of termination” means a written
notice which (i) indicates the specific termination provision in this Agreement relied upon, and (ii) if the accelerated Termination Date is other than the date of receipt of such notice, specifies the Termination Date of this Agreement
(which date shall not be more than 15 days after the giving of such notice).  
 (d) Termination Date. In the case
of termination of this Agreement pursuant to a provision of this Section 5, “Termination Date” shall mean the date of death, the date Executive’s employment is terminated for disability pursuant to Section 5(a) or the date
Executive’s employment is terminated pursuant to the provisions of Sections 5(b) and (c). 
 6. Obligation of the
Holding Company Upon Termination. 
 (a) Death. If the Executive’s employment is terminated by reason of the
Executive’s death, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement other than those obligations accrued hereunder at the date of his death and the benefits provided
in Section 4 of this Agreement. 
 (b) Disability. If the Executive’s employment is terminated by reason of the
Executive’s disability, this Agreement shall terminate except that the Executive shall be entitled to receive after the Termination Date, disability and other health insurance as provided to employees generally together with such
Executive’s Base Salary as then in effect, (less any payments received by the Executive from disability insurance provided by the Holding Company or Bank) in each case for a period of six (6) months following termination. 

(c) Cause. If the Executive’s employment shall be terminated for Cause, this Agreement shall terminate as of the accelerated
Termination Date and the Holding Company shall pay the Executive his full Base Salary through the Termination Date at the rate in effect at the time notice of termination is given, and the Holding Company and Bank shall have no further obligation to
the Executive under this Agreement other than to provide insurance benefits as may be required by applicable law. 
 (d)
Without Cause. This Agreement shall terminate upon the accelerated Termination Date, but the Executive shall be entitled to receive (i) an uninterrupted continuation of all compensation and benefits provided under Section 4 of this
Agreement for the remainder of the then existing Employment Period without giving effect to its accelerated termination, and (ii) the right to purchase the vehicle currently assigned to the Executive at its then-current book value as shown on
the Holding Company’s or the Bank’s records. 

  
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 7. Payment in Certain Events. If at the effective time of a Change in Control Event
or any time within three (3) years following a Change in Control Event (A) Executive’s employment hereunder is terminated without Cause or, (B) Executive terminates his employment hereunder for Good Reason, provided that
(i) Executive gives Holding Company notice of the condition constituting Good Reason and at least thirty (30) days to remedy such condition and (ii) such termination occurs within one (1) year following the initial existence the
condition constituting Good Reason, then in either event (subject to the limitations set forth herein) Executive shall be entitled to receive from Holding Company, and Holding Company shall be obligated to pay or cause to be paid to Executive, an
amount equal to two (2) times the lesser of (x) the Executive’s annual Base Salary for the calendar year preceding the year in which the Termination Date occurs or (y) the maximum amount that may be taken into account under a
qualified plan pursuant to Internal Revenue Code Section 401(a)(17) for the year in which the Termination Date occurs. If Executive’s employment is terminated without Cause prior to the effective time of a Change in Control Event but
following the date on which the Holding Company’s Board of Directors takes action to approve an agreement (including any definitive agreement or an agreement in principle) relating to a Change in Control Event, then for purposes of this
Agreement, such termination of employment shall be deemed to occur at the effective time of the Change in Control Event. Otherwise, if Executive’s employment is terminated prior to the effective time of a Change in Control Event, Executive
shall have no rights hereunder. Amounts payable under this Section 7 shall be paid in a lump sum payable on the first day of the seventh month following the Termination Date. 

8. Definitions. 
 (a) “Change of Control Event” shall mean: a change in the ownership of the Holding Company, a change in the effective control of the Holding Company, or a change in the ownership of a
substantial portion of the assets of the Holding Company, consistent with and interpreted in accordance with Internal Revenue Code Section 409A and regulations issued thereunder, and specifically defined as follows: 

In order to constitute a Change in Control Event as to the Executive, the Change in Control Event shall relate to: 

(1) the corporation for whom the Executive is performing services at the time of the Change in Control Event; or 

(2) the corporation that is liable for the payment of the deferred compensation (or all corporations liable for the payment if more than
one corporation is liable) but only if either the deferred compensation is attributable to the performance of service by the Executive for such corporation (or corporations) or there is a bona fide business purpose for such corporation or
corporations to be liable for such payment and, in either case, no significant purpose of making such corporation or corporations liable for such payment is the avoidance of Federal income tax; or 

  
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 (3) a corporation that is a majority shareholder of a corporation identified in either
subparagraph (1) or (2), or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in either subparagraph (1) or
(2) above. 
 (i) Change In Ownership. A change in the ownership of a corporation shall occur on the date that any one
person, or more than one person acting as a group, acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of
such corporation. However, if any person, or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of a corporation, then the acquisition of additional stock by
the same person or persons shall not be considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation). 
 (ii) Change In Effective Control. Notwithstanding the fact that a corporation has not undergone a change in ownership as described above, a change in the effective control of a corporation shall occur
only on the date that either: 
 (x) any one person or more than one person acting as a group acquires (or has acquired during
the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing 30% or more of the total voting power of the stock of such corporation; or 

(y) a majority of members of the corporation’s Board of Directors is replaced during any 12-month period by Directors whose
appointment or election is not endorsed by a majority of the members of the corporation’s Board of Directors prior to the date of the appointment or election, provided that for purposes of this subparagraph, the term “corporation”
refers solely to the relevant corporation identified above, for which no other corporation is a majority shareholder. 
 (iii)
Change In Ownership of Assets. A change in the ownership of a substantial portion of the assets of a corporation shall occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the
twelve-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the
assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, “gross fair market value” shall mean the value of the assets of the corporation, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets. 

  
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 A transfer of assets by a corporation shall not be treated as a change in the ownership of
such assets if the assets are transferred to: 
 (x) a shareholder of the corporation (immediately before the asset transfer) in
exchange for or with respect to its stock; 
 (y) an entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the corporation; or 
 (z) a person, or more than one person acting as a group, that owns, directly
or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the corporation; or 
 (xx) an
entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person who is a “related person” under applicable Treasury Regulations. 

There shall be no Change in Control Event when there is a transfer to an entity that is controlled by the shareholders of the
transferring corporation immediately after the transfer. 
 (b) “Successor” shall mean for purposes of Sections 7, 8
and 9: as to Holding Company, any person or entity (corporate or otherwise) into which, after a Change in Control Event, Holding Company (or any such Successor) shall be merged or consolidated or to which all or substantially all of Holding
Company’s (or any such Successor’s) assets shall be transferred in any manner as provided in Section (a) or which by agreement assumes Holding Company’s obligations. 

(c) “Cause” or “for Cause” shall mean for purposes of this Agreement: 

(1) neglect by Executive in the performance of his material duties and responsibilities or the Executive’s failure to follow
reasonable instructions or policies of Holding Company or Bank as determined in the good faith judgment of the respective Board of Directors, after being notified of such failure and being given a reasonable opportunity and period (not to exceed 30
days) to remedy such failure, provided such failure is remediable in the good faith judgment of the Holding Company or Bank’s Board of Directors; 
 (2) with respect to Executive, conviction of, indictment for (or its procedural equivalent), entering of a guilty plea or plea of no contest with respect to a felony, a crime of moral turpitude or any
other crime with respect to which imprisonment is a possible punishment or of any other crime which, in the good faith discretion of the Holding Company’s Board of Directors, adversely affects or could be expected to adversely affect the
reputation of the Holding Company or Bank, or the commission of an act of embezzlement or fraud whether or not related to the business, activities or assets of the Holding Company or Bank; 

  
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 (3) any breach or violation by Executive in any material respect of any code or standard of
behavior generally applicable to employees of Holding Company or Bank, as determined in the good faith judgment of the respective Board of Directors, after being advised in writing of such breach or violation and being given a reasonable opportunity
and period (not to exceed 30 days) to remedy such breach or violation, provided such breach or violation is remediable in the good faith discretion of the Board of Directors of the Holding Company or Bank; 

(4) dishonesty of Executive in any aspect of his or her employment, or breach of a fiduciary duty to Holding Company or its subsidiaries
or affiliates, in each case, in the good faith judgment of the Board of Directors of the Holding Company or Bank; 
 (5) the
engaging by Executive in conduct that is reasonably likely to result, in the good faith judgment of the Board of Directors of the Holding Company, in material injury to Holding Company or any of its subsidiaries or affiliates, monetarily or
otherwise; 
 (6) the violation by Executive of any applicable federal or state law, or any applicable rule, regulation, order
or statement of policy promulgated by any governmental agency or authority having jurisdiction over Holding Company or any of its affiliates or subsidiaries (a “Regulatory Authority,” including without limitation the Federal Deposit
Insurance Corporation, the Virginia Bureau of Financial Institutions, Office of the Comptroller of the Currency, the Federal Reserve Board, the Securities and Exchange Commission or any other regulatory agency), which results from Executive’s
negligence, willful misconduct or intentional disregard of such law, rule, regulation, order or policy statement and results in any substantial damage, monetary or otherwise, to Company or any of its affiliates or subsidiaries or to their
reputation; 
 (7) the occurrence of any event described in Section 19 of the Federal Deposit Insurance Act or any other
event or circumstance which disqualifies Executive from serving as an employee or executive officer of, or a party affiliated with, Holding Company or any of its affiliates or subsidiaries; or, in the event Executive becomes unacceptable to, or is
removed, suspended or prohibited from participating in the conduct of the affairs of Holding Company or any of its affiliates or subsidiaries (or if proceedings for that purpose are commenced) by, any Regulatory Authority; or 

(8) the exclusion of Executive by the carrier or underwriter from coverage under Holding Company’s then current “blanket
bond” or other fidelity bond or insurance policy covering its or its affiliates’ or subsidiaries’ directors, officers or employees, or the occurrence of any event which Holding Company believes, in good faith, will result in Executive
being excluded from such coverage, or having coverage limited as to Executive as compared to other covered officers or employees, pursuant to the terms and conditions of such “blanket bond” or other fidelity bond or insurance policy.

  
 8 

 (d) “good faith” shall mean honesty in fact. 

(e) “Good Reason” shall mean the existence of one or more of the following conditions which arises in connection with or after
the effective time of a Change in Control Event without the consent of the Executive: 
 (1) a material diminution in the
Executive’s base compensation; 
 (2) a material diminution in the Executive’s authority, duties or responsibilities;

 (3) a material diminution in the authority, duties or responsibilities of the supervisor to whom the Executive is required
to report, including a requirement that the Executive report to a corporate officer or employee instead of reporting directly to the board of directors of a corporation (or similar governing body with respect to an entity other than a corporation);

 (4) a material diminution in the budget over which the Executive retains authority; 

(5) a material change in the geographic location at which the Executive must perform services; or 

(6) any other action or inaction that constitutes a material breach by the Successor of the agreement under with the Executive provides
services. 
 (f) “Other than Good Reason” shall mean, after the effective time of a Change in Control Event, any
voluntary termination by the Executive which is not for Good Reason. 
 9. Possible Reduction in Payment and Benefits.
Following any Change in Control Event, to the extent that any amount of pay or benefits provided under to Executive under this Agreement would cause Executive to be subject to excise tax under sections 280G and 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), and after taking into consideration all other amounts payable to Executive under other plans, programs, policies, and arrangements, then the amount of pay and benefits provided under this Agreement shall be
reduced to the extent necessary to avoid imposition of any such excise taxes. Executive may select the payments and benefits to be limited or reduced, including an election not to have the vesting of certain benefits, including stock options,
accelerate as a result of a Change in Control Event. 
 10. Documents. All documents, record, tapes and other media of
any kind or description relating to the business, activities, finances, plans, operations or any other aspect of the affairs of Holding Company or any of its subsidiaries and affiliates (the 

  
 9 

 
“Documents”), whether or not prepared by Executive, shall be the sole and exclusive property of the Holding Company. The Documents (and any copies) shall be returned to the Holding
Company upon Executive’s termination of employment for any reason or at such earlier time or times as the Holding Company may specify. 
 11. Regulatory Requirements. Notwithstanding anything contained in this Agreement to the contrary, it is understood and agreed that Holding Company or Bank shall not be required to make any payment
or take any action under this Agreement if: 
 (A) Holding Company or Bank is declared by any Regulatory Authority to be
insolvent, in default or operating in an unsafe or unsound manner, or if 
 (B) in the opinion of counsel to Holding Company or
Bank such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to Holding Company or Bank, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or
formal statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise is prohibited by any Regulatory Authority. 
 12. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program
provided by the Holding Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the
Holding Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Holding Company at or subsequent to the date of termination shall be
payable in accordance with such plan or program. 
 13. Proprietary Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Holding Company and its subsidiaries and affiliates all secret, confidential or proprietary information, knowledge or data relating to the Holding Company or any of its subsidiaries and affiliates, and their
respective businesses, which shall have been obtained by the Executive during his employment hereunder and which shall not be public knowledge. After termination of the Executive’s employment, he shall not, without the prior written consent of
the Holding Company, communicate or divulge any such information, knowledge or data to anyone other than the Holding Company or any of its subsidiaries and affiliates and anyone designated by such entities. In no event shall an asserted violation of
the provisions of this Section 13 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement or prevent the Executive from obtaining employment in the financial services field.

 14. Board Positions. The Executive shall be initially elected to the Board of the Holding Company by its Board of
Directors and thereafter nominated by such Board for election by the shareholders of the Holding Company subject to the normal 

  
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requirements and procedures then in effect for such nominations. The Holding Company, as sole shareholder of the Bank, agrees to elect Executive to the Board of Directors of the Bank. Executive
shall be entitled to all standard director fees for his Board or committee participation. Executive agrees to resign from the Boards of Directors of both the Holding Company and the Bank in the event that his employment with either is terminated.

 15. Successors. This Agreement is personal to the Executive and shall not be assignable by the Executive. This
Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives. 
 This Agreement
shall inure to the benefit of and be binding on the Holding Company and its Successors. The Holding Company shall require any Successor by an agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the Holding Company would be required to perform if no such succession had taken place. At the Executive’s request, the Successor must reasonably demonstrate to the Executive
its ability to pay and perform the obligations of the Holding Company under this Agreement. 
 16. Miscellaneous. This
Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without reference to principles of conflicts of law. The captions of this Agreement are not part of the provisions hereof and shall have no
force and effect. This Agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 

All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 
 If to the Executive:

 If to the Holding Company or Bank: 
 Cardinal Bankshares Corp. 
 101 Jacksonville Circle 

Floyd, VA 24091 

  
 11 

 or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective upon the earlier of receipt or three days after mailing. 
 The
invalidity of unenforceability of any provision of this Agreement shall not effect the validity or enforceability of any other provision of this Agreement. 
 The Holding Company may withhold from any amounts payable under this Agreement only such federal, state or local taxes which are required to be withheld pursuant to applicable law or regulation.

 This Agreement contains the entire understanding with the Executive concerning terms of employment with the Holding Company
and its affiliates. 
 The following provisions of this Agreement survive its termination to the extent necessary to give them
effect: Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16. 
 This Agreement has been duly approved by the Board of Directors
of the Holding Company. 
 WITNESS the following signatures: 

 

			
	EXECUTIVE:
	
	 /s/ Michael D. Larrowe

	Michael Larrowe
	
	HOLDING COMPANY:
	
	CARDINAL BANKSHARES CORP.
		
	By :	 	 /s/ Ronald Leon Moore

	Title:	 	Chairman, President,CEO

  
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 COMMONWEALTH OF VIRGINIA 
 COUNTY OF FLOYD, to wit: 
 The foregoing instrument was acknowledged before me this
20th day of August, 2011, by Michael Larrowe. 
  

					
	My commission expires:
	
	January 31,
2013                    
			
		  		  	 /s/ Annette V. Battle

		  		  	Notary Public

 COMMONWEALTH OF VIRGINIA 
 COUNTY OF FLOYD, to wit: 
 The foregoing instrument was acknowledged before me this
20th day of August, 2011 by Ronald Leon Moore, the Chairman, President & CEO of Cardinal Bankshares Corporation, on behalf of the Corporation. 
 My commission expires:             
 January 31, 2013                     

 

			
		 	 /s/ Annette V. Battle

		 	Notary Public

  
 13Exhibit 10.2

 EXHIBIT 10.2 
 SERP 
 Bank of Floyd 

Supplemental Executive Retirement Plan 
 409 Restatement 
 Participation Agreement 

This 409 Restatement Bank of Floyd Supplemental Executive Retirement Plan Participation Agreement (the ‘Participation
Agreement”) is entered into as of this 31st day of December, 2008 by and between Bank of Floyd (the “Employer”), and Leon Moore, an executive of the Employer (the “Participant”), as evidence of the Participant’s prior
participation in the Bank of Floyd Supplemental Executive Retirement Plan (“Prior Plan”) and/or the commencement of Participant’s participation in an Internal Revenue Code section 409A compliant supplemental executive retirement plan.

 RECITALS: 
 WHEREAS, the Employer has adopted the (“Plan”) effective as January 1, 2005, and the Administrator has determined that the Participant shall be eligible to participate in the Plan on the
terms and conditions set forth in this Participation Agreement and the Plan. 
 NOW, THEREFORE, in consideration of the
foregoing and the agreements covenants set forth herein, the parties agree as follows: 
  

	1.	Definitions. Except as otherwise provided, or unless the context otherwise requires, the terms used in this Participation Agreement shall have the same meanings
as set forth in the Plan. 

  

	2.	Plan. Plan means the 409A Restatement Bank of Floyd Supplemental Executive Retirement Plan, as the same may be altered or supplemented in any validly executed
Participation Agreement. 

  

	3.	Incorporation of Plan. The Plan, a copy of which is attached hereto as Exhibit A, is hereby incorporated into this Participation Agreement as if fully set
forth herein, and the parties hereby agree to be bound by all of the terms and provisions contained in the Plan. The Participant hereby acknowledges receipt of a copy of the Plan and, subject to the foregoing, confirms his understanding and
acceptance of all of the terms and conditions contained therein. 

  

	4.	Effective Date of Participation. The effective date of the Participant’s participation in the Prior Plan, with the continuation of participation in the Plan
shall be February 21, 2001 (the “Participation Date”). 

  

	5.	Normal Retirement Age. The Participant’s Normal Retirement Age for purposes of the Plan and this Participation Agreement is age 65.

  

	6.	Year of Participation. For each full calendar year a Participant participates in the Prior Plan or this Plan, such Participant shall be credited with one
(1) year of participation. 

  

	7.	 Prohibition Against Funding. Should any investment be acquired in connection with the liabilities assumed under this Plan and Participation
Agreement, it is expressly understood and agreed that the Participants and Beneficiaries shall not have any right with respect to, or claim against, such assets nor shall any such purchase be construed to create a trust of any kind or a fiduciary
relationship between the Employer and the Participants, their Beneficiaries, or any other person. Any such assets shall be and remain a part of the general, unpledged, unrestricted assets of the Employer, subject to the claims of its general
creditors. It is the express intention of the parties 

  
 1 

	 	
hereto that this arrangement shall be unfunded for tax purposes and for purposes of Title I of ERISA. The Participant shall be required to look to the provisions of the Plan and to the Employer
itself for enforcement of any and all benefits due under this Participation Agreement, and, to the extent the Participant acquires a right to receive payment under the Plan and this Participation Agreement, such right shall be no greater than the
right of any unsecured general creditor of the Employer. The Employer shall be designated the owner and beneficiary of any investment acquired in connection with its obligation under the Plan and this Participation Agreement.

  

	8.	Provisions Related to SERP Benefit. 

  

	 	(a)	SERP Benefit. Upon Participants Normal Retirement, such Participant shall be entitled to an annual SERP Benefit equal to forty-five thousand dollars ($45,000)
per year, subject to the vesting requirements as provided for herein below. 

  

	 	(b)	Vesting. Subject to Article IV and Article VI of the Plan, and Sections 8(f) and 8(g) of this Participation Agreement, Participant shall vest in their SERP
Benefit in the following manner: 

  

					
	 Years of Participation
	  	Participant’s vested SERP Benefit	 
	 1
	  	 	20	% 
	 2
	  	 	40	% 
	 3
	  	 	60	% 
	 4
	  	 	80	% 
	 5
	  	 	100	% 

 Participant shall be 100% vested in his or her SERP Benefit upon Participant’s attainment of Normal
Retirement Age if then in the employ of Employer. 
  

	 	(c)	Normal Retirement SERP Benefit Payment. Subject to the restrictions found in Plan Section 4.3 regarding distributions to Specified Employees, the vested
annual SERP Benefit shall be paid in substantially equal monthly installments as of the first day of each calendar month for twenty (20) years following the Participant’s Separation from Service. The monthly distribution in any given year
in which a SERP Benefit is distributed, shall be equal to one-twelfth of the above-described SERP Benefit each year for a total of twenty (20) years. 

  

	 	(d)	Post Retirement Death Benefit. In the event of the Participant’s death during the twenty (20) year SERP Benefit distribution period, Participant’s
Beneficiary, as designated pursuant to this Participation Agreement, will continue to receive the balance of the remaining SERP Benefit distributions, up to and including, the distributions in year twenty (20). 

 

	 	(e)	 Disability. A Participant who incurs a Separation from Service due to Disability shall be one hundred percent (100%) vested in his or her
SERP Benefit as of the date of Disability. A Participant shall be considered disabled if (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s
Employer; or (iii) determined to be totally disabled by the Social Security Administration. Upon a Participant’s Separation from Service due to Disability, 

  
 2 

	 	
Participant shall be entitled to receive the accrued liability of Participant’s SERP Benefit balance in a lump sum distribution as soon as administratively feasible, but no later than 90
days. For purposes of this Plan and Participation Agreement, accrued liability of Participant’s SERP Benefit shall mean the amount accrued by the Employer to fund the future benefit expense associated with this Plan and Participation Agreement.
The Employer shall account for this benefit using Generally Accepted Accounting Principles, regulatory accounting guidance of the Employer’s primary federal regulator, and other applicable accounting guidance, including APB 12 and FAS 106.
Accordingly, the Employer shall establish a liability retirement account for the Executive into which appropriate accruals shall be made using a reasonable discount rate, which is at least equal to the Applicable Federal Rate (AFR), and which may be
adjusted from time to time. 

  

	 	(f)	Change in Control. A Participant shall be one hundred percent (100%) vested in his or her SERP Benefit upon a Change in Control. 

 

	 	(g)	Death Benefit Prior to Attaining Normal Retirement Age. Upon Participant’s death prior to attaining Normal Retirement Age, Participant’s estate shall
be entitled to receive the accrued liability of Participant’s SERP Benefit in a lump sum distribution as soon as administratively feasible, but no later than 90 days, following the Participant’s death. For purposes of this Plan and
Participation Agreement, accrued SERP liability shall mean the amount accrued by the Employer to fund the future benefit expense associated with this Plan and Participation Agreement. The Employer shall account for this benefit using Generally
Accepted Accounting Principles, regulatory accounting guidance of the Employer’s primary federal regulator, and other applicable accounting guidance, including APB 12 and FAS 106. Accordingly, the Employer shall establish a liability retirement
account for the Executive into which appropriate accruals shall be made using a reasonable discount rate, which is at least equal to the Applicable Federal Rate (AFR), and which may be adjusted from time to time. 

 

	9.	General Provisions. 

  

	 	(a)	No Assignment. No benefit under the Participation Agreement shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any such action shall be void for all purposes of the Participation Agreement. No benefit shall in any manner be subject to the debts, contracts, liabilities, engagements, or torts of any person, nor shall it be subject
to attachments or other legal process for or against any person, except to such extent as may be required by law. 

  

	 	(b)	Headings. The headings contained in the Participation Agreement are inserted only as a matter of convenience and for reference and in no way define, limit,
enlarge, or describe the scope or intent of this Plan nor in any way shall they affect this Participation Agreement or the construction of any provision thereof. 

 

	 	(c)	Terms. Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice
versa, as appropriate. 

  

	 	(d)	Successors. This Participation Agreement shall be binding upon each of the parties and shall also be binding upon their respective successors the Employer’s
assigns. 

  

	 	(e)	Amendments. This Participation Agreement may not be modified or amended except by a duly executed instrument in writing signed by the Employer and the
Participant. 

  
 3 

 IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be
executed as of the day first above written. 
  

									
	Employer:	 		 	Participant:
					
	By:	 	 /s/ William R. Gardner, Jr.
	 		 	By:	  	 /s/ Ronald Leon Moore

		 	William R. Gardner, Jr. – Vice-Chairman	 		 		  	Ronald Leon Moore
		 	Printed Name	 		 		  	Printed Name

  
 4 

 LIST OF COLLATERAL DOCUMENTS 

EXHIBIT A  

409A RESTATEMENT 

BANK OF FLOYD 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 
 EXHIBIT B  
 409A RESTATEMENT 

BANK OF FLOYD 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 
 BENEFICIARY DESIGNATION 

  
 5 

 EXHIBIT B 
 BANK OF FLOYD 
 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 

409A RESTATEMENT 

BENEFICIARY DESIGNATION 
 In the
event of the Participant’s death, any benefits to which the Participant may be entitled shall be paid to the Beneficiary designated below. This Beneficiary Designation shall be subject to the terms and conditions set forth in the Plan and shall
supersede all prior Beneficiary Designations made by the Participant. This Beneficiary Designation shall be attached to and become part of that certain Participation Agreement, dated as of December 31, 2008, between the Employer and the
Participant. 
 Primary Beneficiary: Kathy S. Moore 
 Secondary Beneficiary:                      

IN WITNESS WHEREOF, the Participant has executed this Beneficiary Designation as of the date indicated. 

 

			
	Participant:
		
	By:	 	 /s/ Ronald Leon Moore

	Printed Name: Ronald Leon Moore
	
	Date: December 31, 2008

  
 6 

 BANK OF FLOYD 
 SUPPLEMENTAL EXECUTIVE RETIREMENT 
 409A RESTATEMENT 

RECITALS: 

WHEREAS, Bank of Floyd, a Virginia corporation, (the “Employer”), pursuant to Article 6 of the Bank of Floyd Supplemental
Executive Retirement Plan (the “Prior Plan”), hereby amends and restates the Prior Plan for the benefit of a select group of management or highly compensated employees pursuant to those requirements for a compliant document under Internal
Revenue Code Section 409A and the regulations promulgated thereto,. This Plan amendment and restatement is effective January 1, 2005 and adopted by the Employer on December 31, 2008, and shall represent the restatement and
continuation of the Employer’s Prior Plan with the administration of such Prior Plan performed in compliance with Internal Revenue Code Section 409A and the regulations promulgated thereto. The benefits hereunder are the continuation of
Prior Plan benefits and shall not be construed or administered in a fashion which would provide for benefits in addition to or different than those benefits provided for under the Prior Plan. This Plan is an unfunded arrangement and is intended to
be exempt from the participation, vesting, funding, and fiduciary requirements set forth in Title I of the Employee Retirement Income Security Act of 1974, as amended. It is intended to comply with Internal Revenue Code Section 409A.

 NOW THEREFORE, the following shall constitute the Plan. 

ARTICLE I 

GENERAL 
  

	1.1	Purpose of the Plan. The purpose of this Plan is to reward certain management and highly compensated employees of the Employer who have contributed to the
Employer’s success and are expected to continue to contribute to such success in the future. 

  

	1.2	Plan Benefits Generally. Pursuant to the Plan, the Employer may provide to each Participant such benefit as provided on the terms and conditions contained in the
Plan and the Participant’s individual Participation Agreement. 

  

	1.3	Effective Date. The adoption date of the Plan is December 31, 2008, with this restatement being effective January 1, 2005. 

ARTICLE II 

DEFINITIONS 
  

	2.1	Administrator. Administrator shall mean the Employer as defined herein. 

 

	2.2	Beneficiary. Beneficiary means the person or persons designated by a Participant as his beneficiary in accordance with the provisions of Article V and subject to
the Participation Agreement. 

  

	2.3	Board. Board means the Board of Directors of the Employer. 

  

	2.4	Cause. Cause shall have the meaning set forth in Section 4.2. 

  

	2.5	Change in Control. Provided that such definition shall be interpreted in a manner that is consistent with Code Section 409A and regulations thereunder, a
“Change-in-Control” of the Employer (which, for purpose of this Section 2.6 shall mean Bank of Floyd but not any of its affiliates or subsidiaries) shall mean the first to occur of any of the following: 

 

	 	(a)	the date that any one person or persons acting as a group acquires ownership of Employer stock constituting more than fifty percent (50%) of the total fair market
value or total voting power of the Employer; 

  
 7 

	 	(b)	the date that any one person or persons acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of the stock of the Employer possessing thirty percent (30%) or more of the total voting power of the stock of the Employer; 

 

	 	(c)	the date that any one person or persons acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such
person or persons) assets from the Employer that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Employer immediately prior to such acquisition; or

  

	 	(d)	the date that a majority of members of the Employer’s Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or elections. 

  

	2.6	Employer. Bank of Floyd. 

  

	2.7	ER1SA. The Employee Retirement Income Security Act of 1974, as amended from time to time. 

 

	2.8	Executive. Executive means an employee of the Employer who is considered part of a select group of management or highly compensated employee of the Employer and
is designated by the Administrator as eligible to participate in the Plan. 

  

	2.9	Normal Retirement. Normal Retirement means Participant’s Separation of Service for any reason, other than for Cause, after such Participant has reached his
Normal Retirement Age. 

  

	2.10	Normal Retirement Age. Normal Retirement Age means the normal retirement age set forth in the Participant’s Participation Agreement.

  

	2.11	Participant. Participant means any Executive who elects to participate in the Plan by entering into a Participation Agreement in accordance herewith. The
Administrator may, from time to time in its sole discretion, with Cause, revoke a Participant’s participation in the Plan upon ninety (90) days’ written notice. The Administrator may from time to time, in its sole discretion without
Cause, revoke a Participant’s participation upon the mutual consent of the Participant and Administrator. 

  

	2.12	Participation Agreement. Participation Agreement means a written agreement between the Employer and a Participant, pursuant to which the Employer agrees to make
a SERP Benefit payment, or payments, in accordance with the Plan and the Participation Agreement. Each Participation Agreement shall contain such information, terms and conditions as the Administrator in its discretion may specify, including without
limitation, the following: 

  

	 	(a)	the effective date of the Participant’s participation in the Plan; 

  

	 	(b)	the Participant’s Normal Retirement Age; 

  

	 	(c)	the SERP Benefits to which the Participant is entitled under the Plan and, the form such benefits are to be paid in (i.e. installments or lump sum);

  

	 	(d)	the identity of the Participant’s Beneficiary; and 

  

	 	(e)	any other provisions which supplement the terms and conditions contained in the Plan and which are not inconsistent with the terms and conditions of the Plan.

  

	2.13	Plan. Plan means the 409A Restatement Bank of Floyd Supplemental Executive Retirement Plan, as the same may be amended from time to time.

  
 8 

	2.14	Separation from Service. As provided by regulations promulgated under the Internal Revenue Code Section 409A, a Participant shall incur a Separation from
Service with the Service Recipient due to death, retirement or other termination of employment with the Service Recipient unless the employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or
other bona fide leave of absence if the period of such leave does not to exceed six months, or if longer, so long as the individual retains a right to reemployment with the Service Recipient Tinder an applicable statute or by contract.

  

	2.15	SERP Benefit. SERP Benefit means, with respect to each Participant, an amoral cash benefit in the amount determined pursuant to the Participle’s
Participation Agreement, minus any offset amounts specified therein. 

  

	2.16	Service Recipient. As provided by regulations promulgated under Code Section 409A, Service Recipient shall mean the Employer or person for whom the services
are performed and with respect to whom the legally binding right to compensation arises, and all persons with whom such person would be considered a single employer under Code Section 414(b) (employees of controlled group of corporations), and
all persons with whom such person would be considered a single employer under Code Section 4I4(c) (employees of partnerships, proprietorships, etc., under common control). 

 

	2.17	Vesting. The Participant’s ownership rights in the SERP Benefit shall arise, or vest, solely with the occurrence of those conditions precedent to Vesting as
contained in the Participation Agreement. 

  

	2.18	Year of Participation. Year of Participation shall have the meaning as set forth in the Participant’s Participation Agreement. 

ARTICLE III 

ELIGIBILITY AND PARTICIPATION 
  

	3.1	Eligibility. The Administrator, in its sole discretion, shall from time to time determine those Executive(s) who shall be eligible to participate in the Plan.

  

	3.2	Participation. Each Executive who is eligible to participate in the Plan shall enroll in the Plan by entering into a Participation Agreement and completing such
other forms and furnishing such other information as the Administrator may request. An Executive’s participation in the Plan shall commence as of the date specified in the Participation Agreement. 

ARTICLE IV 

BENEFITS 
  

	4.1	SERP Benefit. Each Participant, subject to the terms and conditions of his Participation Agreement, shall become entitled to receive such benefits as set forth
in the executed Participation Agreement. 

  

	4.2	No Benefits Payable Upon Separation from Service for Cause. Notwithstanding anything herein or in the Participation Agreement to the contrary, no benefits shall
be payable, at the discretion of the Employer, to any Participant who has a Separation from Service for Cause. For purposes hereof a Participant who has a Separation from Service for any of the following reasons shall be regarded as having been
terminated for Cause: 

  

	 	(a)	engaging in willful or grossly negligent misconduct that is materially injurious to the Employer; 

 

	 	(b)	embezzlement or misappropriation of funds or property of the Employer; 

  

	 	(c)	conviction of a felony or the enhance of a plea of guilty or nolo contendere to a felony; 

 

	 	(d)	conviction of any crime involving fraud, dishonesty, moral turpitude or breach of trust or the entrance of a plea of guilty to such a crime; 

  
 9 

	 	(e)	failure or refusal by the Participant to devote full business time and attention to the performance of his or her duties and responsibilities if such breach has not
been cured within fifteen (15) days after notice is given to the Participant; or 

  

	 	(f)	issuance of a final non-appealable order or other direction by a Federal or state regulatory agency prohibiting the Participant’s employment in the business of
banking. 

  

	4.3	Distributions to Specified Employee. Notwithstanding anything herein to the contrary, if any Participant is a Specified Employee upon a Separation from Service
for any reason other than death, distributions to such Participant shall not commence until the first day of the seventh month following the date of Separation from Service (or, if earlier, the date of death of the Participant). If distributions are
to be made in annual installments, the second installment and all those thereafter will be made on the applicable anniversaries of the Participant’s Separation from Service. A “Specified Employee” means a key employee (as defined in
Code Section 416(i) without regard to paragraph (5) thereof) of a corporation any stock which is publicly traded on an established securities market or otherwise. 

ARTICLE V 

BENEFICIARY 
  

	5.1	Beneficiary. For purposes of this section, the Participant’s executed Participation Agreement shall dictate the Participant’s rights and
responsibilities regarding the Participant’s Beneficiary. 

 ARTICLE VI 

PLAN ADMINISTRATION 
  

	6.1	Administration. 

  

	 	(a)	General. The Plan shall be administered by the Administrator. The Administrator shall have sole and absolute discretion to interpret where necessary all
provisions of the Plan and each Participation Agreement (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of the Plan, a Participation Agreement, or
between the Plan and a Participation Agreement), to determine the rights and status under the Plan of Participants or other persons, to resolve questions or disputes arising under the Plan and to make any determinations with respect to the benefits
payable under the Plan and the persons entitled thereto as may be necessary for the purposes of the Plan. The Administrator’s determination of the rights of any Executive or former Executive hereunder shall be final and binding on all persons,
subject only to the claims procedures outlined in Article 7 hereof. 

  

	 	(b)	Delegation of Duties. The Administrator may delegate any of its administrative duties, including, without limitation, duties with respect to the processing,
review, investigation, approval and payment of benefits payable hereunder, to a named administrator or administrators. 

  

	6.2	Regulations. The Administrator may promulgate any rules and regulations it deems necessary in order to carry out the purposes of the Plan or to interpret the
provisions of the Plan; provided, however, that no rule, regulation or interpretation shall be contrary to the provisions of the Plan. The rules, regulations and interpretations made by the Administrator shall, subject only to the claims procedure
outlined in Article 7 hereof, be final and binding on all persons. 

  

	6.3	Revocability of Administrator/Employer Action. Any action taken by the Administrator with respect to the rights or benefits under the Plan of any Executive or
former Executive shall be revocable by the Administrator as to payments not yet made to such person in order to correct any incorrect payment to a Participant or a Beneficiary, and then only to the extent necessary to correct such error. Acceptance
of any benefits under the Plan constitutes acceptance of, and agreement to, the Administrator’s making any appropriate adjustments in future payments to such person (or to recover from such person) any excess payment or underpayment previously
made to such person. 

  
 10 

	6.4	Amendment or Modification. The Employer may, at any time, in its sole discretion, amend or modify the Plan in whole or in part, except that no such amendment or
modification shall have any retroactive effect to reduce any amounts allocated to a Participant’s Accounts, and provided that such amendment or modification complies with Codes Section 409A and related regulations thereunder.

  

	6.5	Plan Suspension and Termination. The Employer further reserves the right to suspend or terminate the Plan in whole or in part, in the following manner, except
that no such suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s vested SERP Benefit account and provided that such suspension or termination complies with Code Section 409A and
related regulations thereunder: 

  

	 	(a)	The Employer, in its sole discretion, may terminate the Plan and distribute Participants’ vested SERP Benefit amounts no earlier than twelve (12) calendar
months from the date of the Plan termination and no later than twenty-four (24) calendar months from the date of the Plan termination, provided however that all other similar arrangements are also terminated by the Employer and no other similar
arrangements are adopted by the Employer within a three (3) year period from the date of termination; or 

  

	 	(b)	The Employer may decide, in its discretion, to terminate the Plan in the event of a Change-in-Control and distribute the Participant’s vested SERP Benefit no
earlier than thirty (30) days prior to the Change-in-Control and no later than twelve (12) months after the effective date of the Change-in-Control, provided however that the Employer terminates all other similar arrangements. Any
corporation or other business organization that is a successor to the Employer by reason of a Change-in-Control shall have the right to become a party to the Plan by appropriate entity action. If within thirty (30) days from the effective date
of the Change-in-Control such new entity does not become a party hereto, as above provided, the full amount of the Participant’s SERP Benefit shall become immediately distributable in a single lump sum to the Participant pursuant to this
subsection; or 

  

	 	(c)	The Employer may decide, in its sole discretion, to terminate the Plan in the event of a corporate dissolution taxed under Code Section 331, or with the approval
of a • bankruptcy court, provided that the Participant’s vested SERP Benefit are distributed to Participants and are included in the Participants’ gross income in the latest of (i) the calendar year in which the termination
occurs; (ii) the calendar year in which the amounts deferred are no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which payment is administratively practicable. 

 

	6.6	Withholding. The Employer shall deduct from any distributions hereunder any taxes or other amounts required by law to be withheld therefrom.

 ARTICLE VII 
 CLAIMS ADMINISTRATION 
  

	7.1	General. If a Participant, Beneficiary or his or her representative is denied all or a portion of an expected Plan benefit for any reason and the Participant,
Beneficiary or his or her representative desires to dispute the decision of the Administrator, he/she must file a written notification of his or her claim with the Administrator. 

 

	7.2	 Claims Procedure. Upon receipt of any written claim for benefits, the Administrator shall be notified and shall give due consideration to the
claim presented. If any Participant or Beneficiary claims to be entitled to benefits under the Plan and the Administrator determines that the claim should be denied in whole or in part, the Administrator shall, in writing, notify such claimant
within ninety (90) days of receipt of the claim that the claim has been denied. The Administrator may extend the period of time for making a determination with respect to any claim for a period of up to ninety (90) days, provided that the
Administrator determines that such an extension is necessary because of special circumstances and notifies 

  
 11 

	 	
the claimant, prior to the expiration of the initial ninety (90) day period, of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision.
If the claim is denied to any extent by the Administrator, the Administrator shall furnish the claimant with a written notice setting forth: 

  

	 	(a)	the specific reason or reasons for denial of the claim; 

  

	 	(b)	a specific reference to the Plan provisions on which the denial is based; 

  

	 	(c)	a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is
necessary; and 

  

	 	(d)	an explanation of the provisions of this Article. 

  

	7.3	Right of Appeal. A claimant who has a claim denied under Section 7.2 may appeal to the Administrator for reconsideration of that claim. A request for
reconsideration under this section must be filed by written notice within sixty (60) days after receipt by the claimant of the notice of denial under Section 7.2. 

 

	7.4	Review of Appeal. Upon receipt of an appeal the Administrator shall promptly take action to give due consideration to the appeal. Such consideration may include
a hearing of the parties involved, if the Administrator feels such a hearing is necessary. In preparing for this appeal the claimant shall be given the right to review pertinent documents and the right to submit in writing a statement of issues and
comments. After consideration of the merits of the appeal the Administrator shall issue a written decision which shall be binding on all parties subject to Section 7.7 below. The decision shall specifically state its reasons and pertinent Plan
provisions on which it relies. The Administrator’s decision shall be issued within sixty (60) days after the appeal is filed, except that the Administrator may extend the period of time for making a determination with respect to any claim
for a period of up to sixty (60) days, provided that the Administrator determines that such an extension is necessary because of special circumstances and notifies the claimant, prior to the expiration of the initial sixty (60) day period,
of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. In the case of a claim on account of Disability: (i) the review of the denied claim shall be conducted by an employee who is
neither the individual who made the initial determination or a subordinate of such person; and (ii) no deference shall be given to the initial determination. For issues involving medical judgment, the employee must consult with an independent
health care professional who may not be the health care professional who rendered the initial claim. 

  

	7.5	Designation. The Administrator may designate any other person of its choosing to make any determination otherwise required under this Article. Any person so
designation shall have the same authority and discretion granted to the Administrator hereunder. 

  

	7.6	Litigation Costs. If a claimant brings a lawsuit for benefits hereunder, to enforce any right hereunder or for other relief arising out of the terms of the Plan,
the costs and expenses of litigation by any party shall be borne by the losing party. The prevailing party shall recover as expenses all reasonable attorney fees incurred by it in connection with the proceedings or any appeals therefrom.

 ARTICLE VIII 
 MISCELLANEOUS 
  

	8.1	 Administrator. The Administrator is expressly empowered to interpret the Plan and to determine all questions arising in the administration,
interpretation, and application of the Plan; to employ actuaries, accountants, counsel, and other persons it deems necessary in connection with the administration of the Plan; to request any information from the Employer it deems necessary to
determine whether the Employer would be considered insolvent or subject to a proceeding in bankruptcy; and to take all other necessary and proper actions to fulfill its duties as Administrator. The Administrator is relieved of all responsibility in
connection with its duties hereunder to the fullest extent permitted by law, except any breach of duty to the Participants or Beneficiaries. If any individual person shall have been delegated the duties or responsibilities as Administrator, such
person shall not be liable for any actions by him or her hereunder unless due to his or her own gross negligence or willful misconduct and shall be indemnified and saved 

  
 12 

	 	
harmless by the Employer from and against all personal liability to which he or she may be subject by reason of any act done or omitted to be done in his or her official capacity as Administrator
in good faith in the administration of the Plan, including all expenses reasonably incurred in his or her defense in the event the Employer fails to provide such defense upon the request. 

 

	8.2	No Assignment. No benefit under the Plan or a Participation Agreement shall be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any such action shall be void for all purposes of the Plan or a Participation Agreement. No benefit shall in any manner be subject to the debts, contracts, liabilities, engagements, or torts of any person, nor
shall it be subject to attachments or other legal process for or against any person. 

  

	8.3	No Employment Rights. Participation in this Plan and execution of a Participation Agreement shall not be construed to confer upon any Participant the legal right
to be retained in the employ of the Employer, or give a Participant or Beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to
discharge to the same extent as if this Plan had never been adopted and the Participation Agreement had never been executed. 

  

	8.4	Incompetence. If the Administrator determines that any person to whom a benefit is payable under this Plan is incompetent by reason of physical or mental
disability, the Administrator shall have the power to cause the payments becoming due to such person to be made to another individual for the Participant’s benefit without responsibility of the Administrator to see to the application of such
payments. Any payment made pursuant to such power shall, as to such payment, operate as a complete discharge of the Employer, the Administrator, and their representatives. 

 

	8.5	Identity. If at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or the amount or time of such payment, the
Administrator shall be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained. The Administrator shall also be entitled to pay such sum into court in
accordance with the appropriate rules of law. Any expenses incurred by the Employer or Administrator incident to such proceeding or litigation shall be charged against the SERP Benefit of the affected Participant. 

 

	8.6	No Liability. No liability Shall attach to or be incurred by any employee of the Employer or Administrator individually under or by reason of the terms,
conditions, and provisions contained in this Plan, or for the acts or decisions taken or made hereunder or in connection therewith; and, as a condition precedent to the establishment of this Plan or the receipt of benefits hereunder, or both, such
liability, if any, is expressly waived and released by each Participant and by any and all persons claiming under or through any Participant or any other person. Such waiver and release shall be conclusively evidenced by any act or participation in
or the acceptance of benefits or the making of any election under this Plan. 

  

	8.7	Expenses. Except as otherwise provided in the Plan, all expenses incurred in the administration of the Plan shall be paid by the Employer.

  

	8.8	Amendment and Termination. The Employer shall have the sole authority to modify, amend, or terminate this Plan subject to those limitations provided hereinabove.

  

	8.9	Employer Determinations. Any determinations, actions, or decisions of the Employer (including but not limited to, Plan amendments and Plan termination) shall be
made by the Board in accordance with its established procedures or by such other individuals, groups, or organizations that have been properly delegated by the Board to make such determination or decision. 

 

	8.10	Construction. All questions of interpretation, construction or application arising under or concerning the terms of this Plan and any Participation Agreement
shall be decided by the Administrator, in its sole and final discretion, whose decision shall be final, binding and conclusive upon all persons. 

  

	8.11	Governing Law. To the extent not preempted by federal law, this Plan shall be governed by, construed and administered under the laws of the Commonwealth of
Virginia. 

  
 13 

	8.12	Severability. Should any provision of the Plan or any regulations adopted hereunder be deemed or held to be unlawful or invalid for any reason, such fact shall
not adversely affect the other provisions or regulations unless such invalidity shall render impossible or impractical the functioning of the Plan and, in such case, the appropriate parties shall immediately adopt a new provision or regulation to
take the place of the one held illegal or invalid. 

  

	8.13	Headings. The headings contained in the Plan are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the
scope or intent of this Plan nor in any way shall they affect this Plan or the construction of any provision thereof. 

  

	8.14	Terms. Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice
versa, as appropriate. 

  

	8.15	Ownership of Assets; Relationship with Employer. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind or a fiduciary relationship between the Employer and any Participant or any other person. To the extent that any person acquires a right to receive payments from the Employer under this Plan, such right shall be no greater
than the right of an unsecured general creditor of the Employer. 

  

	8.16	Deposits In Trust. The Employer may, at its sole discretion, establish with a corporate trustee a grantor rabbi trust under which all or a portion of the assets
of the Plan are to be held, administered and managed. The trust agreement evidencing the trust shall conform with the terms of Revenue Procedure 92-64 or any successor procedure. The Employer in its sole discretion may make deposits to augment the
principal of such trust. 

  

	8.17	Right of Setoff. The Employer may, to the extent permitted by applicable law, deduct from and setoff against any amounts payable to a Participant from this Plan
such amounts as may be owed by a Participant to the Employer, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff provided, however, that this setoff
may occur only at the date on which the amount would otherwise be distributed to the Participant as required by Code Section 409A. By electing to participate in the Plan and deferring compensation hereunder, the Participant agrees to any
deduction or setoff under this Section 8.17 which is allowed by law. 

  

	8.18	409A Compliance. This Plan will, at all times, be operated in good faith compliance with Code Section 409A of the Code and regulations thereunder (and any
subsequent IRS notices or guidance). In the event that any provision of this Plan is inconsistent with Code Section 409A or such guidance, then the applicable provisions of Code Section 409A shall supersede such provision. Nothing herein
shall be construed as an entitlement to our guarantee of any particular tax treatment to a Participant. 

 Executed this 31st day
of December, 2008. 
 BANK OF FLOYD 
  

			
	By:	 	 /s/ William R. Gardner, Jr.

	Title:	 	Vice Chairman

  
 14

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