Document:

defercomp_agmt-charlesmajors.htm

    Exhibit
10.1

    DEFERRED
COMPENSATION AGREEMENT

    

    As Amended and Restated
Effective December 31, 2008

    

    

    THIS DEFERRED COMPENSATION AGREEMENT,
made this 31st day of
December 2008, by and between AMERICAN NATIONAL BANK AND TRUST COMPANY, a
national banking association (the “Bank”), and CHARLES H. MAJORS (the
“Employee”), provides as follows.

    

    WHEREAS, the Bank values the ability of
the Employee as an important member of management and recognizes that his future
services are vital to its continued growth and profits and that the loss of his
services would result in substantial cost in the efficient and effective
operation of the Bank; and

    

    WHEREAS, on February 22, 1993, the Bank
and the Employee entered into an agreement providing for the payment of certain
deferred compensation benefits to the Employee, which agreement was superseded
by an agreement between the Bank and the Employee dated June 12, 1997;
and

    

    WHEREAS, on December 18, 2001, the
Bank’s Board of Directors (the “Board”) approved certain amendments to the June
12, 1997, agreement, subject to the Employee’s continued service through
December 31, 2001, which were reflected in the Deferred Compensation Agreement
as amended and restated effective January 1, 2002 (the “Prior Agreement”);
and

    

    WHEREAS, the Bank and the Employee wish
to amend and restate the Prior Agreement as set forth herein to assure
compliance with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended;

    

    NOW THEREFORE, it is mutually agreed
that:

    

    
      	
              1.  

            	
              This
      Agreement shall be effective on December 31,
  2008.

            

    

    

    2. The Bank
shall pay the Employee the annual sum of $50,000, payable in annual
installments, for a period of ten years.  The first payment shall be
made not later than three months after the date that the Employee has a
Separation from Service from the Bank; provided, however, that if the Employee
is a Specified Employee on the date of his Separation from Service, the first
payment shall be made on the date that is six months after the date that the
Employee has a Separation from Service from the Bank.  Subsequent
annual installments shall be paid on each of the first through the ninth
anniversaries of the payment date described in the preceding
sentence.

    

    3. If the
Employee dies before receiving any payment under the preceding paragraph, the
Bank shall pay the Employee’s Designated Beneficiary the annual sum of $50,000,
payable in annual installments, for a period of ten years.  The first
payment shall be made not later than three months after the date of the
Employee’s death.  Subsequent annual installments shall be paid on
each of the first through the ninth anniversaries of the payment date described
in the preceding sentence.

    

    4. If the
Employee dies after receiving at least one, but less than ten, payments under
paragraph 1, the Bank shall pay the Employee’s Designated Beneficiary the
remainder of the installments payable under paragraph 1.  Such
payments shall continue on the same schedule as the benefit was being paid under
paragraph 1.

    

    5.           For
purposes of this Agreement, the term “Separation from Service” has the same
meaning as set forth in Treas. Reg. § 1.409A-1(h).

    

    6.           For
purposes of this Agreement, the term “Specified Employee” has the same meaning
as set forth in Treas. Reg. § 1.409A-1(i).

    

    7.           For
purposes of this Agreement, the term “Designated Beneficiary” means the
individual or individuals designated as such by the Employee in writing and
filed with the Bank or, in the absence of such designation, the estate of the
Employee.

     

    8.           During
the ten year period the Employee is receiving payments under this Agreement, the
Employee will not become associated with, or engage in, or render service to any
other business competitive to the business of the Bank within a fifty-mile
radius of any office of the Bank.

     

    9.           The
Employee (or Designated Beneficiary in the case of benefits payable after the
Employee’s death), shall file a claim for the payment of benefits under this
Agreement by notifying the Bank orally or in writing.  If the claim is
wholly or partially denied, the Bank shall provide a written notice within 90
days specifying the reason for the denial, the provisions of the Agreement on
which the denial is based, and additional material or information necessary to
receive benefits, if any.  Also, such written notice shall indicate
the steps to be taken if a review of the denial is desired.

     

    If a claim is denied and a review is
desired, the Employee (or Designated Beneficiary in the case of benefits payable
after the Employee’s death), shall notify the Bank in writing within 60 days
after receipt of the Bank’s written notice of the denial.  In
requesting a review, the Employee or Designated Beneficiary may submit any
written issues and comments he feels are appropriate.  The Bank shall
then review the claim and provide a written decision within 60
days.  This decision shall state the specific reasons for the decision
and shall include references to specific provisions of this Agreement on which
the decision is based.

    

    10.           Neither
the Employee nor any Designated Beneficiary shall have any right to sell,
assign, transfer or otherwise convey the right to receive any payments
hereunder.

     

    11.           Any
payments under this Agreement shall be independent of, and in addition to, those
under any other plan, program or agreement which may be in effect between the
parties hereto, or any other compensation payable by the Bank to the Employee or
the Employee’s Designated Beneficiary.  This Agreement shall not be
construed as a contract of employment nor does it restrict the right of the Bank
to discharge the Employee for cause or without cause or the right of the
Employee to terminate employment.

     

    The Bank shall be under no obligation
whatever to purchase or maintain any contract, policy or other asset to provide
the benefits under this Agreement.  Further, any contract, policy or
other asset which the Bank may utilize to assure itself of the funds to provide
the benefits hereunder shall not serve in any way as security to the Employee
for the Bank’s performance under this Agreement.  The rights accruing
to the Employer or any Designated Beneficiary hereunder shall be solely those of
an unsecured creditor of the Bank.

    

    12.           The
laws of the Commonwealth of Virginia shall govern this Agreement.

     

    13.           This
Agreement may not be altered, amended or revoked except by a written agreement
signed by the Bank and Employee.

     

    14.           This
Agreement shall be binding upon and shall inure to the benefit of any successor
entity of the Bank.

     

    15.           Where
appropriate in this Agreement, words used in the singular shall include the
plural and words used on the masculine shall include the feminine.

     

    16.           This
Agreement replaces and supercedes the Prior Agreement.

     

    IN WITNESS WHEREOF, the parties hereto
have executed this Agreement.

    

    

    
      	
               
      

            	
              AMERICAN
      NATIONAL BANK

            

    

    
      	
               
      

            	
              AND
      TRUST COMPANY

            

    

    

    BY: /s/ Dabney T.P. Gilliam,
Jr

    
      	
               
      

            	
              TITLE:
      Executive Vice
      President

            

    

    

    

    
      	
               
      

            	
              CHARLES
      H. MAJORS

            

    

    

    

    

    
      	
               
      

            	
              /s/ Charles H.
      Majorsseverance_agmt-charlesmajors.htm

    Exhibit 10.2

      EXECUTIVE
SEVERANCE AGREEMENT

      

      As Amended and Restated
Effective December 31, 2008

      

      

      THIS EXECUTIVE SEVERANCE AGREEMENT is
between AMERICAN NATIONAL BANKSHARES INC., a Virginia corporation (the
“Parent”), AMERICAN NATIONAL BANK AND TRUST COMPANY (the “Company”), a national
banking association, and CHARLES H. MAJORS (“Executive”).

      

      WHEREAS, the Company recognizes that
there is a possibility of a Change in Control of the Parent, the Company or
both; and

      

      WHEREAS, the Parent and the Company
recognize that the mere possibility of a Change in Control of the Parent or the
Company may create uncertainty on the part of senior management or a distraction
of senior management from its day-to-day operating responsibilities;
and

      

      WHEREAS, the Parent and the Company
recognize that outstanding management is essential to advancing the interests of
the Parent and the Company and their shareholders and that the Parent and the
Company can better recruit and retain outstanding management by providing
certain assurances in the event of a Change in Control; and

      

      WHEREAS, in the event of a Change in
Control of the Parent, the Company or both, the best interests of the Parent and
the Company and their shareholders require a continuity of the Parent’s and the
Company’s business with a minimum of disruption; and

      

      WHEREAS, the Parent, the Company and
the Executive entered into an Executive Severance Agreement, with an Effective
Date of December 18, 2001 (the “Prior Agreement”); and

      

      WHEREAS, the Parent, the Company and
the Executive wish to amend and restate the Prior Agreement as set forth herein
to assure compliance with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”);

      

      NOW THEREFORE, in consideration of the
foregoing premises and the mutual covenants contained herein, the Parent, the
Company and the Executive agree as follows:

      

      1. Effective
Date.  The Effective Date of this Agreement is December 31,
2008.

       

      2. Term of
Agreement.  The Term of this Agreement shall begin on a Control
Change Date and end on the earlier of (i) the day before the third anniversary
of the Control Change Date and (ii) the date that the Executive attains age
sixty-five (65).

       

      3. Minimum Cash
Compensation.  During the Term of this Agreement, the total
amount payable to the Executive by the Parent and the Company as base salary,
“profit sharing” bonus and “incentive compensation” bonus, on an annualized
basis, shall not be less than the amounts prescribed below:

       

      (a) The
Executive’s total annual base salary from the Parent and the Company shall not
be less than the annualized rate of total base salary payable to the Executive
immediately before the Control Change Date.

       

      (b) The total
annualized “profit sharing” bonus from the Parent and the Company, expressed as
a percentage of the Executive’s then total base salary, shall not be less than
the “profit sharing” bonus, expressed as a percentage of the Executive’s then
total base salary, payable to the Executive for the four quarters immediately
preceding the Control Change Date.

       

      (c) The total
annualized “incentive compensation” bonus from the Parent and the Company,
expressed as a percentage of the Executive’s then total base salary, shall not
be less than the “incentive compensation” bonus, expressed as a percentage of
the Executive’s then total base salary, payable to the Executive for the
calendar year ending immediately preceding the Control Change Date.

       

      4. Termination Without
Cause.  This paragraph 4 describes the amounts payable to the
Executive if the Parent and the Company terminate the Executive’s employment
without Cause during the Term of this Agreement.

       

      (a) If such
termination is effective before the first anniversary of the Control Change
Date, the Executive shall be entitled to receive the Termination Benefits during
the period beginning with the Executive’s termination of employment and ending
on the last day of the twenty-fourth (24th) month thereafter or the last day of
the Term of this Agreement, whichever occurs first.

       

      (b) If such
termination is effective on or after the first anniversary of the Control Change
Date, the Executive shall be entitled to receive the Termination Benefits during
the period beginning with the Executive’s termination of employment and ending
on the last day of the Term of this Agreement.

       

      5. Executive’s
Resignation.  This paragraph 5 describes the amounts payable to
the Executive upon his resignation from the employ of the Parent and the Company
during the Term of this Agreement.

       

      (a) During
the period beginning on the Control Change Date and ending on the last day of
the third month ending after the Control Change Date, the Executive may resign
from the employ of both the Parent and the Company if (i) the Parent or the
Company breaches the obligation set forth in paragraph 3 or (ii) the Parent or
the Company notifies the Executive that he will be required to relocate his
office more than thirty (30) miles from Danville, Virginia.  If the
Executive resigns in accordance with the preceding sentence, he shall be
entitled to receive the Termination Benefits for the period beginning on the
date of the Executive’s termination of employment and ending on the last day of
the twenty-fourth (24th) month
thereafter or the last day of the Term of this Agreement, whichever occurs
first.

       

      (b) During
the period beginning on the first day of the fourth month beginning after the
Control Change Date and ending on the first anniversary of the Control Change
Date, the Executive may resign from the employ of both the Parent and the
Company, for any reason or no reason.  If the Executive resigns in
accordance with the preceding sentence, he shall be entitled to receive the
Termination Benefits for the period beginning on the date of the Executive’s
termination of employment and ending on the last day of the twenty-fourth
(24th) month
thereafter or the last day of the Term of this Agreement, whichever occurs
first.

       

      (c) During
the period beginning on the day after the first anniversary of the Control
Change Date and ending on the last day of the Term of this Agreement, the
Executive may resign from the employ of both the Parent and the Company if (i)
the Parent or the Company breaches the obligation set forth in paragraph 3, (ii)
the Parent or the Company notifies the Executive that he will be required to
relocate his office more than thirty (30) miles from Danville, Virginia or (iii)
the Executive’s duties, title or responsibilities with respect to the Parent or
the Company are reduced from the duties, title or responsibilities assigned to
the Executive as of the first anniversary of the Control Change
Date.  If the Executive resigns in accordance with the preceding
sentence, he shall be entitled to receive the Termination Benefits for the
period beginning on the date of the Executive’s termination of employment and
ending on the last day of the Term of this Agreement.

       

      6. Maximum
Benefit.  No amounts will be payable and no benefits will be
provided under this Agreement to the extent that such payments or benefits,
together with other payments or benefits under other plans, agreements or
arrangements, would make the Executive liable for the payment of an excise tax
under Section 4999 of the Internal Revenue Code of 1986, as amended, or any
successor provision.  The amounts otherwise payable and the benefits
otherwise to be provided under this Agreement shall be reduced to the extent
necessary to avoid the imposition of such excise tax liability; provided,
however, that the Executive shall have the right to direct which payments or
benefits under this Agreement shall be reduced in order to avoid any such excise
tax liability.

       

      7. Cause.  The
Parent and the Company shall be deemed to have “Cause” to terminate the
Executive’s employment under this Agreement if the Parent or the Company
determines that the Executive (i) has failed or refused to perform a material
duty of his position, (ii) is guilty of personal dishonesty, gross incompetence,
willful misconduct, a breach of fiduciary duty involving personal profit,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses), unethical business practices in connection with the
Parent’s or the Company’s business, misappropriation of the Parent’s or the
Company’s assets (determined on a reasonable basis), or is subject to a final
cease-and-desist order, or has been convicted of a felony or a misdemeanor
involving moral turpitude or (iii) is guilty of a material breach of any
employment agreement between the Parent and the Executive or the Company and the
Executive.

       

      8. Change in
Control.  A “Change in Control” of the Parent or the Company
occurs if:

       

      (a) Any
person, including a “group” (as defined in section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, as in effect on the Effective Date (the
“Exchange Act”)) is or becomes, directly or indirectly, the owner or beneficial
owner of Parent or Company securities (other than as a result of an issuance of
securities initiated by the Parent or the Company, or a tender offer initiated
by the Parent or the Company or open market purchases approved by the Parent’s
or the Company’s Board of Director’s (the “Board”), as long as the majority of
the Parent’s or the Company’s Board approving the purchases are directors at the
time the purchases are made), having more than fifty percent (50%) of the
combined voting power of the then outstanding Parent or Company securities that
may be cast for the election of the Parent’s or the Company’s directors;
or

       

      (b) During
any period of twenty-four (24) consecutive months (not including any period
prior to December 18, 2001), individuals who at the beginning of such period
constitute the Parent’s or the Company’s Board and any new director (other than
a director designated by a person who has entered into an agreement with the
Parent or the Company to effect a transaction described in subparagraphs 8(a),
8(c) or 8(d) or any such individual whose initial assumption of office occurs as
a result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents) whose election
by the Parent’s or the Company’s Board or nomination for election by the
Parent’s or the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Parent’s or the Company’s Board; or

       

      (c) There is
consummated a reorganization, merger, or consolidation involving the Parent or
the Company that requires the approval of the Parent’s or the Company’s
shareholders, other than a reorganization, merger or consolidation with respect
to which all or substantially all of the individuals and entities who were
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the combined voting power of the Parent’s or the Company’s
then outstanding securities beneficially own, directly or indirectly,
immediately after such reorganization, merger or consolidation, more than fifty
percent (50%) of the combined voting power of the securities of the corporation
resulting from such reorganization, merger or consolidation in substantially the
same proportions as their respective ownership, immediately prior to such
reorganization, merger or consolidation, of the combined voting power of the
Parent’s or the Company’s securities; or

       

      (d) The
Parent’s or the Company’s shareholders approve (i) the sale or disposition by
the Parent or the Company (other than to a subsidiary of the Parent or the
Company) of more than fifty percent (50%) more of the assets of the Parent or
the Company (including a sale or disposition that is effected through
condemnation proceedings) or (ii) a complete liquidation or dissolution of the
Parent or the Company.

       

      9. Control Change
Date.  A “Control Change Date” is the date on which a Change in
Control of the Parent or the Company occurs.  If a Change in Control
of the Parent or the Company occurs as the result of a series of transactions or
events, the Control Change Date is the date of the last of the transactions or
events in the series.

       

      

      10. Separation from
Service.  For purposes of this Agreement, the term “Separation
from Service” has the same meaning as set forth in Treas. Reg.
§ 1.409A-1(h).

       

      11. Specified
Employee.  For purposes of this Agreement, the term “Specified
Employee” has the same meaning as set forth in Treas. Reg.
§ 1.409A-1(i).

       

      12. Termination
Benefits.  The “Termination Benefits” payable in accordance
with paragraphs 4 and 5 are the following payments and benefits:

       

      (a) Continued
payment of the Executive’s base salary for the applicable period specified in
paragraph 4 or 5 at the rate in effect on the date of the Executive’s
termination of employment (but not less than the rate of base salary required
under paragraph 3).  The benefit payable under this paragraph 12(a)
shall be paid in accordance with the Company’s regular payroll procedure
commencing with the Executive’s Separation from Service; provided, however, that if
the Executive is a Specified Employee, the first payment under this paragraph
12(a) shall be paid on the first day of the seventh month beginning after the
Executive’s Separation from Service and the first payment shall include the
payments of base salary that would have been payable (had the Executive
continued employment) in accordance with the Company’s regular payroll procedure
from the date of the Executive’s termination of employment until the date of the
first payment.  The remaining payments under this paragraph 12(a)
shall be paid in accordance with the Company’s regular payroll
procedure.

       

      (b) Payment
each month during the applicable period specified in paragraph 4 or 5 of a pro rata amount of the
annualized “profit sharing” bonus in the amount required under paragraph
3.  The first payment shall be made in the month following the
Executive’s Separation from Service and shall include the pro rata amount of annualized
“profit sharing” bonus for the months following the Executive’s termination of
employment until the date of the first payment.  The preceding
sentence to the contrary notwithstanding, if the Executive is a Specified
Employee, the first payment under this paragraph 12(b) shall be paid on the
first day of the seventh month beginning after the Executive’s Separation from
Service and the first payment shall include the pro rata amount of annualized
“profit sharing” bonus for the months following the Executive’s termination of
employment until the date of the first payment.

       

      (c) Payment
each month during the applicable period specified in paragraph 4 or 5 of a pro rata amount of the
annualized “incentive compensation” bonus in the amount required under paragraph
3.  The first payment shall be made in the month following the
Executive’s Separation from Service and shall include the pro rata amount of annualized
“incentive compensation” bonus for the months following the Executive’s
termination of employment until the date of the first payment.  The
preceding sentence to the contrary notwithstanding, if the Executive is a
Specified Employee, the first payment under this paragraph 12(c) shall be paid
on the first day of the seventh month beginning after the Executive’s Separation
from Service and the first payment shall include the pro rata amount of annualized
“incentive compensation” bonus for the months following the Executive’s
termination of employment until the date of the first payment.

       

      (d) A single
sum payment equal to the sum of the amounts described in (i), (ii) and (iii)
below:

       

      (i) The product of (x) the lesser of eighteen or
the number of months during the applicable period specified in paragraph 4 or 5
times (y) the excess of
the premium for continued health, dental and vision coverage under Section 4980B
of the Code for the Executive and the Executive’s “qualified beneficiaries” (as
defined in Section 4980B of the Code) (the “COBRA Premium”) over the amount that
the Executive paid for such coverage immediately before his termination of
employment.

      

      (ii) The product of (x) the COBRA Premium and
(y) the number of
months during the applicable period specified in paragraph 4 or 5 in excess of
eighteen months.

      

      (iii) The product of (x) the monthly premium that
the Executive would pay for long-term disability and life insurance coverage
upon conversion to individual policies upon termination of employment times
(y) the number of
months during the applicable period specified in paragraph 4 or 5.

      

      The
benefit payable under this paragraph 12(d) shall be paid on the first day of the
third month beginning after the Executive’s Separation from Service; provided, however, that if
the Executive is a Specified Employee, the payment shall be made on the first
day of the seventh month beginning after the Executive’s Separation from
Service.

      

      (e) A single
sum payment equal to the difference between (i) the present value of the
benefits that the Executive would have accrued under the Parent’s or the
Company’s defined benefit pension plan based on his actual service and assuming
continued service during the applicable period specified in paragraph 4 or 5 and
(ii) the present value of the benefit payable to the Executive under the
Parent’s or the Company’s defined benefit pension plan.  The amount of
the payment required under the preceding sentence shall be calculated by the
actuary of the Parent’s or the Company’s defined benefit pension plan using the
actuarial assumptions and methods in effect for purposes of determining the
funded status of such plan and shall assume that amounts payable under this
Agreement are recognized as compensation for purposes of such
plan.  The benefit payable under this paragraph 12(e) shall be paid on
the first day of the third month beginning after the Executive’s Separation from
Service; provided,
however, that if the Executive is a Specified Employee, the payment shall
be made on the first day of the seventh month beginning after the Executive’s
Separation from Service.

       

      13. Successors.  This
Agreement shall inure to the benefit of, and be enforceable by, the Executive’s
legal representatives and heirs.  This Agreement shall inure to the
benefit of, and be binding upon, the Parent and the Company and their successors
and assigns.  The Parent and the Company shall require any successor
to the Parent or the Company (whether direct or indirect, by merger, purchase,
consolidation or otherwise) to all or substantially all of the business or
assets of the Parent or the Company to assume expressly and agree to perform the
Parent’s and the Company’s obligations under this
Agreement.  References in this Agreement to the “Parent” and to the
“Company” include the Parent and the Company as defined above and any successor
to their business or assets that is obligated to perform this Agreement by
operation or law or otherwise.

       

      14. Entire
Agreement.  This Agreement sets forth the entire agreement of
the parties with respect to the termination of the Executive’s employment on or
after a Control Change Date and supersedes all prior agreements, arrangements
and understandings with respect thereto between the Parent, the Company and the
Executive.  No modification, amendment or termination of this
Agreement, nor any waiver of its provisions, shall be valid or enforceable
unless in writing and signed by both parties.

       

      15. Counterparts.  This
Agreement may be executed in any number of counterparts, each of which will be
deemed an original and all of which constitute on instrument.

       

      16. Headings.  The
headings herein are for convenience only and will not affect the interpretation
of this Agreement.

       

      17. Governing
Law.  This Agreement will be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia (other than its choice
of law provisions to the extent that they would require the application of the
laws of another State).

       

      WITNESS ̧ the following signatures as of
the indicated dates.

      

      

      AMERICAN NATIONAL BANKSHARES
INC.

      

      

      Dated:  12/26/08                                  
By: /s/ Dabney T.P.
Gilliam, Jr.

      

      Title: Senior Vice
President

      

      AMERICAN NATIONAL BANK AND
TRUST

      COMPANY

      

      

      Dated:  12/26/08                                   
By: /s/ Dabney T.P.
Gilliam, Jr.

      

      Title: Executive Vice
President

      
 

      

      CHARLES H. MAJORS

      

      

      Dated:  12/26/08                                  
/s/ Charles H.
Majors

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