Document:

Exhibit 10.3

CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (the "Agreement") is entered into as of the 22nd day of November, 2017 (the "Effective Date"), by and between Parkway Acquisition Corp., a Virginia corporation ("Parkway"), and Rebecca M. Melton ("Employee").

WITNESSETH:

WHEREAS, Employee is employed in the senior management position of Chief Commercial Lending Officer for Parkway and its wholly owned subsidiary, the Skyline National Bank ("Bank"). For purposes of this Agreement, Parkway, the Bank, along with any future Successor (defined below), as a result of a future Change in Control Event shall be referred to herein as the "Employer".

WHEREAS, Parkway desires for the Employee to be eligible for severance benefits in the event that a Change of Control Event occurs during the term set forth in Sections 3(A) and 9 of this Agreement, and desires to secure reasonable protections for its legitimate business interests through certain loyalty obligations.

WHEREAS, the Employee desires to continue employment with Parkway and the Bank and to obtain the benefits provided by this Agreement, and finds the loyalty obligations requested to be reasonable

WHEREAS, the Board of Directors of Parkway has authorized and approved the need for and appropriateness of making this Agreement with the Employee.

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which hereby are acknowledged, Parkway and Employee hereby agree as follows:

1. Effective Date of Agreement. This Agreement is effective as of the Effective Date set forth above and shall remain in effect until terminated as provided herein.

2. Employment.  Employee's employment with Employer has been and will remain an "at will" relationship. This Agreement does not in any way alter the "at will" nature of the relationship, nor does it constitute an agreement by Employer to employ Employee for any particular period of time or in any particular capacity. Nothing in this Agreement is intended or should be interpreted to confer upon Employee the right to continued employment by Employer or to interfere with or restrict in any way the right of Employer to discharge Employee or terminate Employee's employment at any time or for any reason whatsoever, with or without Cause (defined below), and without any obligation or liability to Employee, except as herein provided, it being the intent of the parties to provide for payment of the severance benefits specified herein only in the event of the termination of Employee's employment under the circumstances described in Section 3.

3. Severance Benefits in Certain Events. If at the effective time of a "Change in Control Event" (as defined below) or any time within twelve (12) months immediately following a Change in Control Event, (i) the Employer terminates Employee's employment without "Cause" (as defined below) or, (ii) the Employee terminates employment for "Good Reason" (as defined below), then in the event of either (i) or (ii), and subject to each of the following: (x) the limitations set forth herein and in Section 9 below, (y) compliance with the various loyalty obligations set forth in Sections 10 to 13, and (z) the Employee's execution of a comprehensive Waiver and Release prepared by Employer that waives and releases all claims relating to or arising from Employee's employment and the termination of that employment, the Employer shall pay or cause to be paid the following severance benefits: (a) an amount equal to the greater of (i) Employee's annualized base salary for the calendar year preceding the year in which the Termination Date occurs or (ii) the annualized base salary for the calendar year in which the Termination Date occurs, and (b) if the Employee elects COBRA continuation coverage under the Employer's health plan, then the Employer will pay on the Employee's behalf the premiums required for employee-only COBRA coverage for up to a maximum of twelve (12) months.

1

(A) Employee shall not be entitled to any severance benefits under this Agreement if no Change in Control Event occurs on or before December 31, 2018, as the Employer's obligation to pay severance under this Agreement terminates no later than December 31, 2018 as specified in Section 9 below, unless the Employer extends the term by an amendment to this Agreement.  Moreover, to avoid any confusion, Employee will not be entitled to any severance benefits under this Agreement, even if the Employer terminates the Employee without Cause (subject to Section 3(C) below) or the Employee terminates employment for Good Reason during the term of this Agreement if no Change of Control Event has occurred at the time of termination of employment.

(B) If at any time, even if a covered Change in Control Event occurs during the term of this Agreement, (i) the Employer terminates Employee's employment for "Cause," (ii) Employee voluntarily terminates Employee's employment with Employer for Other than Good Reason, or (iii) Employee's employment terminates or is terminated due to Employee's death, Retirement or pursuant to a Determination of Long Term Incapacity, then in any of these situations, the Employee shall have no right to severance benefits under this Agreement.

(C) If however, Employee's employment is terminated by Employer without Cause prior to the effective time of a Change in Control Event, but following the date on which Parkway's Board of Directors has taken action to approve an agreement, including any definitive agreement or an agreement in principle, relating to a Change in Control Event and that event occurs within six (6) months of the Employee's termination from employment with Employer, then for purposes of this Agreement, Employee shall be deemed to be employed by the Employer as of the effective date of that Change of Control Event (should it occur), and such termination of employment shall be deemed to occur at the effective time of the Change in Control Event, and the Employee will be entitled to benefits under this Agreement.

(D) The base salary amount payable under this Section 3 shall be paid over twelve (12) months in equal installments that coincide with the Employer's regular paydays and the COBRA premium payments shall be paid beginning on the first regular pay period of Employer after the Waiver and Release becomes binding.  These payments are subject to all applicable tax withholdings, and the Employee's compliance with the loyalty obligations set forth in Section 10 below.

(E) Further, in order for the Employee to exercise the right to terminate for Good Reason, and to be eligible for severance benefits under this Agreement, Employee must first give the Employer written notice of the condition believe to constitute Good Reason and must provide the Employer at least thirty (30) days to remedy such condition, and if the Employer fails to remedy the condition, the Termination Date shall be on the thirty-first (31st) day after the notice is given.

4. Possible Reduction in Payment and Benefits. If the payments and benefits payable to Employee pursuant to this Agreement, either alone or together with other payments and benefits which Employee has the right to receive from Employer, would constitute a "parachute payment" under Section 280G of the Internal Revenue Code ("Code"), the payments and benefits payable by Employer pursuant to this Agreement shall be reduced, in the manner determined by Employee, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits payable by the Employer under this Agreement being non-deductible to the Employer pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code.  The determination of any reduction in the payments and benefits to be made pursuant to this Section 4 shall be based upon the opinion of the Employer's independent public accountants and the fee for such calculation shall be borne by the Employer.  Such accountants shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the Termination Date, and may use such actuaries such as accountants deemed necessary or advisable for the purpose.

5. Compliance with Code Section 409A.

(A) It is intended that this Agreement comply with the provisions of Section 409A of the Code and the regulations and guidance of general applicability issued thereunder (referred to herein as "Section 409A") so as to not subject the Employee to the payment of additional interest and taxes under Section 409A.  In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent Section 409A would result in the Employee being subject to the payment of an excise tax or any other additional income taxes or interest under Section 409A, the parties agree to amend this Agreement to avoid the application of such taxes and interest.

(B) Notwithstanding any provision in this Agreement to the contrary, as needed to comply with Section 409A, if the Employee is a "specified employee" (within the meaning of Section 409A), payments due under this Agreement shall be subject to a six (6) month delay such that amounts otherwise payable during the six (6) month period following the Employee's separation from service (as defined in Treasury Reg. §1.409A-1(h)) shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh month following the Employee's separation from service (or, if earlier, the date of the Employee's death). To the extent that the Employee is required to pay for the cost of any benefits to keep them in full force and effect during the six (6) month delay period, the Employee shall also be reimbursed for such out-of-pocket expenses as of the same date provided above.

(C) This Section 5 shall not apply to the extent such payments can be considered to be separation pay that is not part of a deferred compensation arrangement under Section 409A.

2

6. Legal Fees and Costs and Interest. If the Employee files suit to enforce rights or receive benefits under this Agreement, and substantially prevails, then the court shall award the Employee a dollar amount sufficient to cover the Employee's reasonable attorney fees and expenses incurred in the litigation.  If however, the Employer prevails in such action, then the Employee shall be liable to reimburse the Employer for its attorney fees and costs, but not to exceed a total amount of $50,000.  In the event that Employee is entitled to any payment under Section 3 or Section 6 hereof and such payment is not made within ten (10) days after it was due or is determined to have been due, it shall bear interest at the rate of three (3%) percent per annum from the date it was due until paid.

7. Documents. All documents, record, tapes and other media of any kind or description relating to the business of Employer or any of its subsidiaries and affiliates (the "Documents"), whether or not prepared by Employee, shall be the sole and exclusive property of Employer. The Documents (and any copies) shall be returned to Employer upon Employee's termination of employment for any reason or at such earlier time or times as Employer may specify. Employee and Employee's legal counsel shall have access to all records of Employer, upon reasonable notice and during normal business hours, related to determining whether and when a Change in Control Event has occurred and the commencement of consideration thereof.

8. Regulatory Requirements & Limitations. Notwithstanding anything contained in this Agreement to the contrary, it is understood and agreed that Employer shall not be required to make any payment or take any action under this Agreement if:

(A) Employer is declared by any Regulatory Agency or Authority to be insolvent, in default or operating in an unsafe or unsound manner, or if

(B) in the opinion of counsel to Employer such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to Employer, (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 Agency or Authority, or (iii) otherwise is prohibited by any Regulatory Agency or Authority.

9. Termination of Right to Severance. The Employee's right to severance benefits under Section 3 of this Agreement shall terminate automatically and become null and void upon the earlier of (a) December 31, 2018, unless the circumstances described Section 3(C) occur or this Agreement is amended to extend the time period as permitted under Section 19, or (b) the Employee's employment is terminated for any reason other than a termination that triggers the Employer's obligation to provide severance benefits under Section 3. Following any such termination of severance rights under this Agreement, Employee shall have no further rights or entitlement to severance benefits under this Agreement, except as provided in Section 3(C).  However, while the right to severance benefits may terminate, the remaining provisions of this Agreement shall survive and shall continue to apply in full force and effect at all times during the Employee's employment with the Employer and thereafter as set forth below.

10. Loyalty Obligations.  Employee acknowledges and agrees that by virtue of the senior position held and his/her detailed involvement with the business and affairs of the Employer, Employee will develop substantial expertise and knowledge with respect to all aspects of the Employer's business, affairs and operations and will have access to all significant aspects of the business, plans and operations of Employer, including the Confidential Information (defined in Section 14(E)).  As such, Employee acknowledges that she/he owes a fiduciary duty of loyalty to the Employer to act in its best interests at all times, and Employee agrees that the provisions of this Section 10, as well as Sections 11 to 13 below (collectively the "Loyalty Obligations") are reasonable and necessary in order to protect the best interests of the Employer and survive any termination of the right to receive severance benefits under Section 3 above.

(A) Confidential Information. At all times, even after termination of employment (regardless of the circumstances), but subject to the limitations of Section 10(E), Employee shall hold in strictest confidence, and shall not use or disclose any of the Confidential Information (defined in Section 14(E)) to any Person or Entity, except to fulfill his/her employment obligations and while acting for the benefit and best interest of Employer, unless expressly authorized to do so by the President and CEO of Employer.  This duty to protect, and not use or disclose Confidential Information shall remain in full force and effect until such time as the information becomes available to the public by lawful and proper means, and without a breach of duty of confidentiality by the Employee or another.

(i) Third Party Information.  Employee also recognizes that Parkway, the Bank and their affiliates have received, and in the future will receive, information from third parties that the third party considers to be confidential or proprietary information and which is, or may be, subject to a duty on the part of Parkway, the Bank or their affiliates not to disclose to others and to restrict its use only for certain limited purposes.  Employee agrees to hold all such confidential or proprietary information from third parties in the strictest confidence and not to disclose it to any Person or Entity to use it except as necessary in carrying out Employee's work for the Employer consistent with the obligations of Employer to such third party.

(ii) Security and Access.  At all times, Employee agrees to (a) comply with and enforce the security policies and procedures which seek to protect and safeguard the data, equipment, systems and all other facilities, IT resources and communication technologies of the Employer, Bank or its Affiliates ("Facilities and IT Resources"), and (b) not access or use any of the Facilities and IT Resources in any manner after termination of employment (regardless of the circumstances).  Employee further agrees to promptly notify the Employer, Bank or Affiliates, as applicable, in the event he/she learns of a violation of any security policies or procedures by others, or of any other misappropriation or unauthorized access, use, or tampering with any of the Facilities and IT Resources by others.

3

(B) Conflicting Employment.  During employment by Employer, unless otherwise specifically approved by the Board after full disclosure in writing, (i) Employee shall not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Employer is now involved or becomes involved during Employee's employment; and (ii) Employee shall not engage in any other activities that conflict with the business of the Employer or that materially interfere with her ability to devote the time necessary to fulfill her obligations to the Employer.

(C) Notification of New Employer.  In the event that Employee leaves the employ of the Employer and begins employment elsewhere, Employee agrees the Employer may send notice to Employee's new employer (whether Employee is employed as an employee, consultant, independent contractor, director, partner, officer, advisor or manager) informing the new employer about Employee's loyalty obligations and restrictions contained in this Agreement.

(D) Post-Employment Duty of Cooperation. By virtue of Employee's employment, Employee will know information, including but not limited to Confidential Information, that is or may be material to and necessary for the Employer to appropriately and successfully conclude matters that involve third parties.  As a result, following termination of employment (regardless of the circumstances)) Employee agrees to assist, and cooperate fully with, the Employer upon reasonable request, and to do so voluntarily (without legal compulsion) when such matters arise. This duty of cooperation is intended to allow the Employer to meet its legal obligations and satisfactorily conclude matters in a manner that achieves the best result possible for the Employer.

(i) The matters on which cooperation may be requested include, but is not limited to, the actual or contemplated defense, prosecution, or investigation of claims involving the Parkway, Bank or an affiliate, by a third party (including employees who may assert claims) as well as responding to any other civil, criminal, administrative or investigative action, suit, proceeding, or inquiry, whether formal or informal, by a federal, state, or law enforcement or regulatory department, agency or authority, where the matter arises from or is related to events, acts, or omissions involving or pertaining to the operations, activities, employees or customers of the Employer that occurred during the period of Employee's employment by the Employer ("Third Party Claims").

(ii) The Employee's duty to cooperate includes, without limitation, Employee making himself/herself reasonably available upon reasonable notice, without subpoena, to meet with the Employer and/or their counsel to provide complete, truthful and accurate information in interviews, depositions, and trial testimony as well as other related support activity. If the Employee provides cooperation under this Section 10(d) during a period in which the Employer is paying severance pay to the Employee, then the Employer will only reimburse the Employee for all out-of-pocket travel expenses reasonably incurred at the Employer's request.

(iii) If the cooperation provided occurs when no severance pay or benefits is due the Employee, then in addition to reimbursing the Employee for out-of-pocket travel expenses, the Employer will also reimburse Employee for his time expended on the Employer's behalf at a rate of $300/day, or a pro-rata portion thereof. The Employer will make reasonable efforts to accommodate the scheduling needs of Employee so as to avoid, to the maximum extent possible, interference with the Employee's then current duties and responsibilities.

(E) Limitations/Permitted Disclosures.  Nothing in this Section 10 or any other provision of this Agreement shall be construed to prevent, interfere with, limit or restrict the Employee from making disclosures, reports or complaints as authorized, permitted or required by federal or state law, including without limitation pursuant to the provisions of the Sarbanes-Oxley Act or Dodd-Frank Wall Street Reform Act and Consumer Protection Act or by regulations, rules or orders issued by federal or state regulatory agencies, including without limitations, Virginia Bureau of Financial Institution, Office of Comptroller of the Currency, U.S. Treasury, Bureau of Financial Protection or Securities and Exchange Commission, provided the disclosure does not exceed the extent of disclosure required by such law, regulation, rules or order.

Further, nothing in this Agreement shall prevent, limit, impede or interfere (nor shall it be construed to prevent, limit, impede or interfere) with (i) Employee's obligation to provide full, complete and truthful testimony when so required in response to a subpoena or order from a court or government agency; (ii) Employee's right to report (including pursuant to whistleblower laws) possible violations of federal, state or local law or other improper actions/omissions to government agencies, to file a charge or complaint of discrimination, harassment or retaliation with government agencies, or to participate or cooperate in any investigation conducted by any government agency; or (iii) the Employee's right to make confidential disclosures of information (including trade secrets) to a government agency, or to an attorney who is advising the Employee, for the purpose of reporting or as part of an investigation into a suspected violation of law, nor shall it prohibit the Employee from filing a lawsuit, complaint or other document that contains a trade secret, so long as the information containing the trade secret is filed under seal and is not otherwise disclosed except pursuant to court order.  Employee further understands that his rights when making such protected disclosures are more fully spelled out in 18 U.S.C. § 1833, as amended, include immunity from criminal and civil liability from making protected disclosures of trade secrets under the Defend Trade Secrets Act of 2016.  Finally, nothing in this Agreement authorizes the Employer to terminate Employee's employment or otherwise retaliate against Employee for engaging in any of the foregoing activities.

(F) Notice of Third Party Request/Order.  Unless prohibited by law, regulation or order from doing so, the Employee shall provide written notice of the receipt of a third party request or order to disclose Confidential Information to the designated senior officers of the Parkway or its Successor within two (2) business days of receiving this request or order, but in any event sufficiently in advance of making any disclosure so as to permit the Employer to contest the disclosure ore seek confidentiality protections.

4

11. Non-Solicitation Restriction.  During employment with the Employer and for the twelve (12) month period that immediately follows the Termination Date (regardless of the circumstances), or such time period as the Employer is obligated to pay severance benefits under this Agreement (whichever is longer) ("Restricted Period"), Employee shall not unfairly compete with the Employer by attempting to disrupt business relationships that the Employer has with either: (i) a Customer (see Section 14(F)) with whom Employee either had communications within the twelve (12) months prior to the Termination Date, or as to which Employee received Confidential Information during that twelve (12) month period.

In this regard, Employee shall refrain during the Restricted Period from engaging in any of the following activities, whether Employee alone, or as an officer, director, stockholder, partner, member, investor, employee, consultant or agent for or on behalf of any other person or legal entity:

(i) Attempting to disrupt or interfere with the business relationship with a Customer (as limited above) by directly or indirectly requesting, suggesting, encouraging or advising that Customer to withdraw, curtail, limit, cancel, terminate or not renew all or any portion of the Customer's business with the Employer.

(ii) Solicit the business of a Customer (as limited above) by communicating directly with that Customer (regardless of who initiates the communication and in what form it occurs) when as part of the communication Employee discusses or offers a Competitive Service or Product.

12. Non-Compete Restriction.  At all times during employment with the Employer and immediately following the Termination Date (regardless of the circumstances) and throughout the Restricted Period (defined above), Employee shall not accept employment with or provide services to or on behalf of any Competing Financial Services Organization if (i) the position or the services to be performed by Employee involve the same or substantially similar duties and responsibilities as those performed by Employee on behalf of the Employer during Employee's last twelve (12) months of employment with the Employer, or (ii) Employee is providing consulting, advisory or contract services (whether as a director, officer, independent contractor, member, owner or shareholder) related to the design, development, marketing or delivery of Competitive Services or Products that are intended to be directly competitive with offerings by the Employer.

(A) Clarification.  This restrictive covenant applies only if (a) the Competing Financial Services Organization operates, or is seeking to open, one or more branch facilities, within a sixty (60) mile radius of Floyd, Virginia or within a twenty (20) mile radius of any branch or office operated by the Employer ("Restrictive Territory") where its Competitive Services and/or Products are offered to the public, and (b) Employee will be performing services for the Competing Financial Services Organization in the Restricted Territory, or will be supervising or providing assistance to others who will be offering or providing Competitive Services or Products in the Restricted Territory on behalf of the Competing Financial Services Organization.

(B) Limitation.  Nothing in this Section 12 shall prevent Employee from owning stock in a publicly traded company that offers Competitive Services or Products in the areas serviced by Employer, provided Employee's ownership constitutes less than five percent (5%) of the outstanding shares of the publicly traded company.

13. Anti-Piracy Restriction.  At all times during employment with the Employer, and immediately after the Termination Date (regardless of the circumstances) throughout the Restricted Period (defined above), Employee shall refrain from inducing, soliciting or encouraging a Key Employee (defined herein) of the Employer to quit employment with the intent, hope or purpose of having the Key Employee join a Competing Financial Services Organization in a similar capacity, if that competitive organization has customer service facilities located within the Restricted Territory (defined above).  As used in this Section 13, "Key Employee" means anyone who holds a position of Vice President or higher with the Employer or any individuals who have reported to, or worked directly with, the Employee within the last six (6) months of Employee's employment with the Employer.

 

5

14. Definitions. For purposes of this Agreement:

(A) Cause.  "Cause" means the termination of Employee's employment by the Employer as a result of a finding by a majority vote of the Board (excluding Employee if s/he is a Board member) that any of the following have occurred: (i) Employee has engaged in or has directed others to engage in an act or omission, or series of actions, deemed to be fraudulent, dishonest or unlawful; (ii) any knowing and material breach of this Agreement by Employee; (iii) any knowing and material violation by Employee of corporate policies and procedures that result in damage to the business or reputation of the Employer, including, without limitation, the Bank's Professional Code of Conduct, Code of Ethics and Conflict of Interest Policy and  policies prohibiting discrimination, harassment and/or retaliation; (iv) Employee has engaged in, or has directed others to engage in, a criminal act (other than a minor traffic offense) or other willful misconduct determined to be substantially detrimental to the best interests of the Employer; (v) knowing breach of fiduciary duty by Employee; (vi) Employee fails to follow the directions of the CEO or Board, is grossly neglectful of Employee's duties or continues to fail to perform assigned duties, which are not cured within twenty-one (21) days after the CEO or Board provides written notice of the issue; (vii) Employee engages in conduct which violates any material law, rule or standard of regulatory agencies governing the Employer, including but not limited to the Virginia Bureau of Financial Institutions, the Office of the Comptroller of the Currency, the U.S. Financial Stability Oversight Council, U.S. Treasury Department, Bureau of Consumer Financial Protection, and the Securities and Exchange Commission; or (viii) demonstrated incompetence of Employee.

(B) A "Change of Control Event" shall have occurred at such time as:

(i) any person or entity, including a "group" as defined in Section 13(d)(3) of the  Securities  Exchange  Act  of  1934,  a  wholly-owned subsidiary thereof, or any employee benefit plan of the Parkway or any of its subsidiaries becomes the beneficial owner of Parkway securities having fifty percent (50%) or more of the combined voting power of the then outstanding securities of Parkway that may be cast for the election of directors of Parkway (other than as a result of the issuance of securities initiated by Parkway in the ordinary course of business); or

(ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the holders of all Parkway's securities entitled to vote generally in the election of directors of the Parkway immediately prior to such transaction constitute, following such transaction, less than a majority of the combined voting power of the then-outstanding securities of the Parkway or any of their respective successor corporations or entities entitled to vote generally in the election of the directors of Parkway or such other corporation or entity after such transactions; or

(iii) such other change of ownership or control event as defined in Treasury Regulation §1.409A-3(i)(5) or any subsequent, applicable Treasury Regulation.

(C) Competing Financial Services Organization. "Competing Financial Services Organization" means an entity unaffiliated with the Employer that is engaged in the commercial, retail or mortgage banking or lending business, wealth management business, investment advisory business, or trust service business that provides services and products that are the same as or competitive with the services and products offered by the Employer immediately prior to the Termination Date or were approved to be offered within ninety (90) days of the Termination Date.

(D) Competitive Service or Product.  "Competitive Service or Product" means those services or products offered by a Competing Financial Services Organization that are the same as or competitive with those services or products offered by the Employer at the Termination Date or which have been approved by the Employer to be offered within ninety (90) days of the Termination Date.

(E) Confidential Information. "Confidential Information"  means all non-public information, technical or financial data, materials, computer records or data, trade secrets and/or know-how regarding Employer or its internal operations, policies that is treated as confidential, that is not generally known by persons who are not employed by the Employer or are not a member of the Boards of Directors of Parkway, the Bank, or the Successor and that is not otherwise available to the public by lawful and proper means.  Confidential Information also includes all information regarding shareholders of Parkway, or a Successor, all information received from customers of the Bank, and any affiliates, or Successors as well as the nature of the products and the terms of the services provided to those customers.  All such non-public information is considered Confidential Information regardless of the manner which such information is conveyed or stored (orally, written, electronically or digitally) as well as information or materials designated or treated as confidential by a federal or state regulatory or enforcement agency  Confidential Information includes, but is not limited to, strategic plans and forecasts; product or service plans or research; customer records and lists; marketing research, plans and/or forecasts; compilations and databases of customers, business or marketing information that are developed by or for the Employer; budget and/or financial information; customer contact, account and mailing information; pricing, costs or profitability analysis; sales and marketing techniques and programs; incentive compensation plans; account information (including loan terms, expiration or renewal dates, fee schedules and commissions); software, access codes, passwords, databases and source codes; inventions; processes, formulas, designs, drawings or engineering information; hardware configuration, and all other financial or other business information or systems of the Employer, as well as the following non-public and sensitive information regarding the employees of the Employer: Social Security numbers, date of birth, names of family members, home addresses and email addresses, telephone numbers, health-related information and compensation information.  This definition applies to information generated by Employee or others who work for the Employer, as well as information received from a customer or another third party.  The above list is not exhaustive, and Confidential Information also includes other information that is identified, marked or treated as confidential or proprietary, or that would appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used.  For purposes of this definition, the term "not available to the public" shall include all information or material in the public domain by virtue of improper disclosure by Employee or by another with his/her permission.  Notwithstanding the foregoing, information shall not be considered Confidential Information if (i) such information is already known to others not bound by a duty of confidentiality with respect thereto, (ii) such information is or becomes publicly available through no fault of Employee, or (iii) the furnishing or use of such information is compelled by or in connection with legal or administrative proceedings.

6

(F) Customer.  "Customer" means a Person or Entity that has an account with, loan from, an investment or deposit with the Employer, or that has received or used other financial or investment products or services from the Employer at any time within the twelve (12) months immediately prior to the Termination Date.

(G) Determination of Long Term Incapacity.  "Determination of Long Term Incapacity" shall mean a good faith determination by Employer that, as a result of mental or physical illness or injury Employee has failed to perform Employee's assigned duties with Employer on a full time basis for a period exceeding six (6) consecutive months.

(H) Employer.  "Employer" means any or all of the following: Parkway Acquisition Corp., it's subsidiary Skyline National Bank and all of Parkway or the Bank's other existing or future affiliates or subsidiaries, as well as any Successor (see Section 14(L) below.

(I) Good Reason.  "Good Reason," subject to compliance with the provisions of Section 3(F), shall mean the existence of one or more of the following conditions, in the good faith judgment of Employee, which arises in connection with or within twelve (12) months after the effective time of a Change in Control Event absent the express consent of Employee:

(i) a reduction in Employee's base compensation below the sum of 90% of the Employee's Base Salary as of the date of this Agreement;

(ii) a material reduction in the Employee's position such that the Employee is no longer considered an officer-level employee of either a bank or bank holding company; or

(iii) a change in the geographic location at which Employee must perform services over 120 miles from the location at which Employee was serving immediately prior to the Change in Control Event.

To avoid any confusion under this Section 14 (I)(ii), the Employee, who currently holds a senior executive position with both Parkway and the Bank has no right to insist on the same position at the same level with the Employer after a Change in Control Event.  Employee will have no right to claim a Good Cause termination under Section 14(I)(ii),  if Employee is retained after the Change in Control Event but is demoted and given a lower-level officer position (e.g., CFO to Controller, or CLO to Regional Market Manager) so long as the base salary for the new position remains at or above the guaranteed amount in Section 14(I)(i).  If however, in connection with the change in position and status, the Employer also imposes either a reduction in the Employee's guaranteed base salary or requires a material geographic relocation, then Good Cause may be declared to exist under Sections 14(I)(i) and/or (iii).

(J) Other than Good Reason.  "Other than Good Reason" shall mean any voluntary termination by Employee which is not for Good Reason.

(K) Person/Entity.  "Person" shall mean any Entity or individual, and the heirs, executors, administrators, legal representatives, successors, and assigns of such "Person" where the context so permits.  The term "Entity" shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative or association or any foreign trust or foreign business organization.

(L) Successor.  "Successor" shall mean any person or entity (corporate or otherwise) into which, after a Change in Control Event, Parkway, the Bank and/or their subsidiaries and affiliates (or their successors or assigns) shall be merged or consolidated or to which all or substantially all of the assets (including, but not limited to, a sale of substantially all of Parkway, the Bank or the Bank's loan assets) shall be transferred in any manner as provided in Section 14(B) or which by agreement assumes Parkway's obligations under this Agreement, or which in connection with and after a Change in Control Event becomes (by agreement, operation of law or otherwise) the employer of Employee.

(M) Retirement.  "Retirement" shall mean Employee's retirement from employment with the Employer on or after reaching age 65.

7

(N) Termination Date.  "Termination Date" means the effective date as of which Employee's employment with Employer is terminated or is deemed terminated.

15. Enforcement.  Employee acknowledges that each of the restrictive covenants set forth above in Section 10 through 14 is a stand-alone restriction and can be separately enforced as each is reasonable and necessary in order to protect the legitimate business interests of the Employer.  A violation of any one of the covenants in Sections 10–14 will result in irreparable injury to the Employer.  In the event of a breach or a threatened breach of this Agreement, in addition to all other remedies (legal or equitable), the Employer shall be entitled to specific performance of these provisions and the issuance of a restraining order and/or injunction prohibiting Employee from violating one or more of these restrictions.  Nothing contained herein shall be construed as limiting or prohibiting the Employer from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of amounts paid in severance or other money damages.  Should an injunction be issued, Employee waives the right to require that the court require a bond to be posted in excess of $500.00.

16. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or subsection of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, then such invalidity, illegality or unenforceability cannot be reformed by the court to cause it to be enforceable, then the offending provision shall be stricken from this Agreement, the remainder of this Agreement shall be construed and enforced as if the invalid, illegal or unenforceable provision had never been contained herein.

17. Governing Law/Forum This agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, with the exception of its conflict of laws provisions.  The parties agree that any lawsuit arising under this Agreement, relating to the Employee's employment or its termination shall be brought and decided exclusively either in the Circuit Court for the City of Roanoke, Virginia or the U.S. District Court for the Western District of Virginia, Roanoke Division.  Employee waives any objection to venue or jurisdiction in these courts regardless of where she/he may live when a suit is filed.

18. Notices. All written notices required by this Agreement shall be deemed given when delivered personally or sent by registered or certified mail, return receipt requested, to the parties at their addresses set forth on the signature page of this Agreement. Each party may, from time to time, designate a different address to which notices should be sent by giving notice thereof in writing to the other party at least three days before the effective date of such change in address.

19. Amendment. This Agreement may not be varied, altered, modified or in any way amended except by an instrument in writing executed by the parties hereto or their legal representatives.  In this regard, the Employer may, in its sole discretion, elect to amend this Agreement to extend (but not reduce) the time period or term within which of severance benefits may be due by changing the date from December 31, 2018 to a later date.  To be effective, any such change to increase the time period or term in which severance benefits may become payable must be memorialized in writing, approved by the Board of Parkway or its Successor, and signed by President & CEO of the Employer and the Employee.

20. Binding Effect. This Agreement shall be binding upon Employee and Parkway, the Bank, its Successor and their successors and assigns effective on the date first above written.

21. No Construction Against Any Party. If any part of this Agreement is deemed to be unclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. Employee and Employer agree that neither party was in a superior bargaining position regarding the substantive terms of this Agreement.

22. Entire Agreement. This Agreement constitutes the complete, final and entire agreement of the parties with respect to the matters addressed herein and it supersedes and replaces all other prior agreements and understandings, written and oral, express or implied, with respect to the subject matter of this Agreement. No promises, representations or warranties have been made by any party to or for the benefit of the other with respect to such matters which are not expressly set forth herein.

8

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written herein.

	 	
Parkway Acquisition Corp.

	 
	 	 	 	 
	 	
By:

	 /s/ Thomas M. Jackson, Jr.	 
	 	 	 Thomas M. Jackson, Jr.	 
	 	 	
Chairman of Board of Directors

	 
	 	 	 	 
	 	
Employee:

	 
	 	 	 
	 	
/s/ Rebecca M. Melton

	 
	 	
 Rebecca M. Melton

	 
	 	 	 
	 	
Address:

	 
	 	 	 
	 	 	 

9Exhibit 10.4

SKYLINE NATIONAL BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

This Supplemental Executive Retirement Plan (the "Plan")   is   adopted   as of this 22nd day of November, 2017 with an effective date of October 1, 2017   (the   "Effective   Date") by Skyline National Bank, a federally chartered national bank (the "Employer" or the "Bank") for the benefit of Allan Funk (the "Executive").

WHEREAS, the purpose of the Plan is to provide certain supplemental nonqualified pension benefits to certain executives who have contributed substantially to the success of the Employer and the Employer desires to incentivize the executives to continue in its employ;

WHEREAS, the experience of the Executive, his knowledge of the affairs of the Bank, and his reputation and contacts in the industry are so valuable that assurance of his continued services is essential for the future growth and profits of the Bank and it is in the best interests of the Bank to arrange terms of continued employment for the Executive so as to reasonably assure his remaining in the Bank's employment during his lifetime or until the age of retirement; and

WHEREAS, this Plan is intended to be and shall be administered as an income tax nonqualified, unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), Sections 201(2), 301(a)(3), and 401(a)(1). This Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and, accordingly, the intent of the parties hereto is that the Plan shall be operated and interpreted consistent with the requirements thereof.

ARTICLE 1 DEFINITIONS

Whenever used in this Plan, the following terms have the meanings specified:

1.1. "Account Balance" means, as of any date, the liability that should be accrued by the Bank under generally accepted accounting principles ("GAAP") on behalf of the Executive.

1.2 "Annuity Contract" means the following annuity contract(s) purchased and solely owned by the Bank:  Flexible Premium Indexed Deferred Annuity Contracts issued by Great American Life Insurance Company, contract #1195075927, and Life Insurance Company of the Southwest, contract #1091324X, and any such other annuity contracts or other asset as the Bank may purchase from time to time as a Replacement Annuity under this Plan.

1.3 "Beneficiary" means the person or entity designated, or otherwise determined in accordance with Article 4, in writing by the Executive to receive death benefits pursuant to this Plan in the event of his death.

1.4 "Beneficiary Designation Form" means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

1.5 "BHC" means Parkway Acquisition Corp., a Virginia corporation.

1.6 "Board" means the Board of Directors of the Bank.

1

1.7 A "Change in Control" shall be deemed to have taken place if any of the following takes place with respect to the Bank or the BHC:

(a) any person or entity, including a "group" as defined in Section 13(d)(3) of the  Securities  Exchange  Act  of  1934,  a  wholly-owned subsidiary thereof, or any employee benefit plan of the Employer or the BHC or any of its subsidiaries becomes the beneficial owner of Employer or BHC securities having fifty percent (50%) or more of the combined voting power of the then outstanding securities of the Employer or BHC that may be cast for the election of directors of the Employer or the BHC (other than as a result of the issuance of securities initiated by the Employer or the BHC in the ordinary course of business); or

(b) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the holders of all Employer's or the BHC's securities entitled to vote generally in the election of directors of the Employer or the BHC immediately prior to such transaction constitute, following such transaction, less than a majority of the combined voting power of the then-outstanding securities of the Employer or the BHC or any of their respective successor corporations or entities entitled to vote generally in the election of the directors of Employer or the BHC or such other corporation or entity after such transactions; or

(c) such other change of ownership or control event as defined in Treasury Regulation §1.409A-3(i)(5) or any subsequent, applicable Treasury Regulation.

(d) An event described in items (a) through (c) above shall constitute a Change in Control only if the event constitutes a change in control event as defined in Treasury Regulations §1.409A-3(i)(5) or any subsequent, applicable Treasury Regulation.

1.8 "Normal Retirement Age" means age sixty-five (65).

1.9 "Replacement Annuity" means an annuity policy that is comparable to the Annuity Contract, or an asset of comparable value, in either case with a lifetime withdrawal feature and benefit value comparable to the lifetime withdrawal feature and benefit value of the Annuity Contract as in effect immediately prior to a transfer or surrender of the Annuity Contract.

1.10 "Rider" means the income rider attached to the Annuity Contract, if any, as an endorsement or other product feature that operates as an income rider, with such feature providing for a withdrawal or payment feature for the life of the annuitant.

1.11 "Separation from Service" means separation from service as that term is defined and interpreted in Section 409A of the Code and Treasury Regulation §1.409A-1(h) or in subsequent regulations or other guidance issued by the Internal Revenue Service.

 

ARTICLE 2

DEFERRED COMPENSATION AND VALUATION OF ACCOUNT

2.1 Annuity Contract and Other Investments. For purposes of satisfying its obligations to provide benefits under this Plan, the Bank has initially invested in the Annuity Contract and may invest in other investments. However, nothing in this Section shall require the Bank to invest in any particular form of investment.

2.2 Ownership of the Annuity Contract. The Bank is the sole owner of the Annuity Contract, and other such investments, and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the death proceeds of the Annuity Contract. The Bank shall at all times be entitled to the Annuity Contract's cash surrender value, as that term, or a functionally similar term, is defined in the Annuity Contract.

2.3 Right to Annuity Contract. Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender any Annuity Contract without terminating this Plan, provided the Bank replaces the Annuity Contract with a Replacement Annuity at the time of sale or surrender. Without limitation, the Annuity Contract at all times shall be the exclusive property of the Bank and shall be subject to the claims of the Bank's creditors

2.4 Rabbi Trust. Employer may establish a "rabbi trust" to which contributions may be made to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan. The trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan. The Executive and his Beneficiary shall have no beneficial ownership interest in any assets held in the trust.

 

2

ARTICLE 3

RETIREMENT AND OTHER BENEFITS

3.1 Retirement Benefit. Upon the Executive's Separation from Service for any reason other than death or Cause (defined below), the Executive will be entitled to benefit payments under this Agreement.  The amount of the benefit will be the vested portion, according to the Vesting Schedule below, of the amount that is payable at Normal Retirement Age from the Annuity Contract designated under this Plan to benefit the Executive through the Rider (the "Retirement Benefit"), whether designated as a single life payment or joint and survivor payment as elected by the Executive, which Annuity Contract shall not be changed in a manner which would adversely affect the interests of the Executive without written approval from the Executive. The Retirement Benefit will commence on the first (1st) day of the month following the date of the later of (a) Executive's Separation from Service; or (b) Executive attaining the Normal Retirement Age, payable monthly and continuing for his or her lifetime.  This shall be the Executive's benefit in lieu of any other benefit under this Plan.

         The following vesting schedule begins as of the Effective Date of the plan:

	 	
Vesting Schedule

	 
	 	
End of

Year

	
Vested Percentage

	 
	 	
1

	
14.29%

	 
	 	
2

	
28.57%

	 
	 	
3

	
42.86%

	 
	 	
4

	
57.14%

	 
	 	
5

	
71.43%

	 
	 	
6

	
85.71%

	 
	 	
7

	
100.00%

	 

 

3.2 Preretirement Death Benefit. Upon death of the Executive while in service to the Employer, the Employer shall pay to the Executive's Beneficiary the Retirement Benefit as if the Executive had survived to Normal Retirement Age, payable in one hundred eighty (180) equal monthly payments commencing no later than sixty (60) days from the date of death.

3.3 Postretirement Death Benefit.

(a) If a single life benefit payment was elected by the Executive, upon death of the Executive after benefit payments have commenced under the Plan, but before receiving a total of one hundred eighty (180) payments, the Employer shall continue to pay to the Executive's Beneficiary the Retirement Benefit until one hundred eighty (180) payments have been made. If the Executive dies after receiving one hundred eighty (180) or more payments of benefit payments, this Agreement will terminate and no additional payments will be made to the Executive's Beneficiary under the Plan.

(b) If a joint and survivor benefit payment was elected by the Executive, upon death of the Executive after benefit payments have commenced under the Plan, the benefit payments due to his or her survivor will continue until the death of such survivor and no other death benefit will be payable under this Agreement.

3.4 Change in Control Benefit. Upon a Change in Control, the Executive will fully vest in the Retirement Benefit as provided for in paragraph 3.1 with such benefit payable as provided as if Executive Separated from Service at his Normal Retirement Age with payments commencing upon reaching such Normal Retirement Age.  The Retirement Benefit will commence on the first (1st) day of the month following the date the Executive attains age sixty five (65), payable monthly and continuing for his or her lifetime.  The Employer will establish a "rabbi trust," if one has not already been established, for the purposes of this Plan, to which assets will be contributed to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan.  The amount of the contribution to the "rabbi trust" will be the amount sufficient to satisfy the obligation of the Employer under paragraph 3.1.

3.5 Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Plan regarding timing of payments, the special rules contained in this Section 3.7 shall apply. If the stock of the Employer is publicly traded at the time of the Executive's Separation  from Service in order for this Plan to comply with Section 409A of the Code: (i) to the extent the Executive is a "specified employee" (as defined under Section 409A of the Code) at the time of a distribution and to the extent such applicable provisions of Section 409A of the Code  and the regulations thereunder require a delay of such distributions by a six-month period after the date of such Executive's Separation from Service with the Employer, no such distribution shall be made prior to the date that is six months after the date of the Executive's Separation from Service with the Employer, and (ii) any such delayed payments shall be paid to the Executive in a single lump sum within five (5) business days after the end of the six (6) month delay.

    3.6 Termination for Cause. Notwithstanding anything to the contrary contained herein, in the event of the Executive's termination for Cause, this Plan shall terminate and no benefits shall be payable under the Plan.  For this purpose, "Cause" shall be determined in accordance with the definition of "Cause" and the process for determining such Cause in the Employment Agreement by and between the Bank and the Executive dated November 22, 2017.

3

ARTICLE 4

BENEFICIARIES

4.1 Beneficiary Designations. The Executive shall have the right to designate, at any time, a Beneficiary to receive any benefits payable under this Plan upon the death of the Executive. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.

4.2 Beneficiary Designation; Changes. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive's Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator's rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive's death.

4.3 Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received in writing by the Plan Administrator or its designated agent.

4.4 No Beneficiary Designation. If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive's spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be distributed to the personal representative of the Executive's estate.

4.5 Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Employer may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Employer from all liability for the benefit.

 

ARTICLE 5

GENERAL LIMITATIONS

5.1. Limits on Payments. It is the intention of  the  parties  that  none  of  the  payments to which the Executive is entitled under this Plan will constitute a "golden parachute payment" within the meaning of 12 USC Section 1828(k) or implementing regulations of the FDIC, the payment of which is prohibited (collectively, "Section 1828(k)"). Notwithstanding any other provision of this Plan to the contrary, any payments due to be made by Employer for the benefit of the Executive pursuant to this Plan, or otherwise, are subject to and conditioned on compliance with Section 1828(k) and any regulations promulgated thereunder including the receipt of all required approvals thereof by Employer's primary federal banking regulator and/or the FDIC.

In addition, Employer and its successors retain the legal right to demand the return of any payment made hereunder which constitutes a "golden parachute payment" within the meaning of Section 1828(k) or implementing regulations of the FDIC should Employer or its successors later obtain information indicating that the Executive committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a)(4).

4

ARTICLE 6

CLAIMS AND REVIEW PROCEDURES

6.1 Claims Procedure. A person or Beneficiary (a "claimant") who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows:

(a) Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after the notice was received by the claimant. All other claims must be made within one hundred eighty (180) days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant.

(b) Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

(c) Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i) The specific reasons for the denial,

(ii) A reference to the specific provisions of the Plan on which the denial is based,

(iii) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(iv) An explanation of the Plan's review procedures and the time limits applicable to such procedures, and

(v) A statement of the claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

6.2 Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows

5

(a) Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Plan Administrator's notice of denial, must file with the Plan Administrator a written request for review.

(b) Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant's claim for benefits.

(c) Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d) Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

(e) Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i) The specific reasons for the denial,

(ii) A reference to the specific provisions of the Plan on which the denial is based,

(iii) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant's claim for benefits, and

(iv) A statement of the claimant's right to bring a civil action under ERISA Section 502(a).

ARTICLE 7

MISCELLANEOUS

7.1 Amendments and Termination. Subject to paragraph 7.12 of this Plan, this Agreement may be amended or terminated solely by a written agreement signed by the Bank and by the Executive.

7.2 No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Executive the right to remain an employee of the Employer, nor does it interfere with the Employer's right to discharge the Executive. It also does not require any Executive to remain an employee nor interfere with any Executive's right to terminate employment at any time.

7.3 Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.

7.4 Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.

7.5 Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction and performance of this Plan shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to the principles of conflict of laws of such Commonwealth.

6

7.6 Unfunded Arrangement. The Executive and his Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Plan. The benefits represent the mere promise by the Employer to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance, annuity contract or other asset purchased by Employer to fund its obligations under this Plan shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.

7.7. Benefit Provision.  Notwithstanding the provisions of this Plan in the payment of the benefits under Article 3, any benefits payable under this Plan are contingent solely upon the amount that is provided by the Annuity Contract(s), including a Replacement Annuity, as identified in the Plan.

7.8 Severability. If any provision of this Plan is held invalid, such invalidity shall not affect any other provision of this Plan, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Plan is held invalid in part, such invalidity shall not affect the remainder of the provision, and the remainder of such provision together with all other provisions of this Plan shall continue in full force and effect to the full extent consistent with law.

7.9 Headings. The headings of articles herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.

7.10 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board, at 101 Jacksonville Circle Floyd, VA 24091.

7.11 Payment of Legal Fees. In the event litigation ensues between the parties concerning the enforcement of the obligations of the parties under this Plan, the non-prevailing party, in addition to all other remedies the court may award, shall also pay the prevailing party's costs and reasonable attorney's fees incurred in such an action.

7.12 Termination or Modification of Plan Because of Changes in Law, Rules or Regulations. The Employer is entering into this Plan on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form. If that assumption materially changes and the change has a material detrimental effect on this Plan, then the Employer reserves the right to terminate or modify this Plan accordingly.

ARTICLE 8

ADMINISTRATION OF AGREEMENT

8.1 Plan Administrator Duties. This Plan shall be administered by a Plan Administrator consisting of the Board or such committee or person(s) as the Board shall appoint. The Plan Administrator shall have the sole and absolute discretion and authority to interpret and enforce all appropriate rules and regulations for the administration of this Plan and the rights of the Executive under this Plan, to decide or resolve any and all questions or disputes arising under this Plan, including benefits payable under this Plan and all other interpretations of this Plan, as may arise in connection with the Plan.

8.2 Agents. In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Employer.

8.3 Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. Without limiting the foregoing, it is acknowledged that the value of the benefits payable hereunder may be difficult to determine in the event the Employer does not actually purchase and maintain the Annuity Contract as contemplated hereunder; therefore, in such event, the Employer shall have the right to make any reasonable assumptions in determining the benefits payable hereunder and any such determination made in good faith shall be binding on the Executive.

8.4 Indemnity of Plan Administrator. The Plan Administrator shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless such action or omission is attributable to the willful misconduct of the Plan Administrator or any of its members. The Employer shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Plan Administrator or any of its members.

8.5 Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.

7

This Supplemental Executive Retirement Plan Agreement is hereby adopted as of the date written above.

	 	
SKYLINE NATIONAL BANK

	 
	 	 	 	 
	 	
By:

	
/s/ Thomas M. Jackson, Jr.

	 
	 	
Name:

	
Thomas M. Jackson, Jr.

	 
	 	
Title:

	
Chairman

	 

	 	
/s/ Jerry Allan Funk

	 
	 	
Jerry Allan Funk

	 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}]]