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                                                                    Exhibit 10.2

                          EXECUTIVE SEVERANCE AGREEMENT

THIS AGREEMENT is made and entered into this 30th day of September, 2003, by and
between PENDLETON COUNTY BANK, a West Virginia corporation (the "Bank") and
WILLIAM A. LOVING, (the "Executive"), and joined in by Allegheny Bancshares,
Inc. ("Allegheny"), parent of "Bank" who agree as follows:

                                    RECITALS:

     A)   The Bank considers it essential to the best interests of its
          shareholders to foster the continuous employment of key management
          personnel.

     B)   In this connection, the Bank recognizes that the possibility of a
          change in Control may arise and that such possibility, and the
          uncertainty which it may raise among management, may result in the
          departure or distraction of management personnel to the detriment of
          the Bank and its shareholders.

     C)   Accordingly, the Bank's Board of Directors (the "Board") has
          determined that appropriate steps should be taken to reinforce and
          encourage the continued attention and dedication of management to
          their assigned duties without distraction in circumstances arising
          from the possibility of a change in Control. In particular, the Board
          believes it important, should the Bank receive a proposal for transfer
          of control, that the Executive be able to assess and advise the board
          whether such proposal would be in the best interests of the Bank and
          its shareholders and to take such other action regarding such proposal
          as the Board might determine to be appropriate, without being
          influenced by the uncertainties regarding the Executive's personal
          situation.

     D)   In order to encourage the Executive to remain in the Bank's employ,
          this Agreement sets forth the severance benefits which the Bank and
          the Executive agree will provide both the Bank and the Executive
          assurances of an orderly transition in the event of a Change in
          Control under the circumstances described below. This Agreement shall
          be in addition to the Employment Agreement ("Employment Agreement") of
          even date herewith.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
     sufficiency of which are acknowledged, the parties hereto agree as follows:

1)   Defined Terms. The definitions of capitalized terms used in this Agreement
     are provided in the last section of this Agreement and, if not defined
     there, are defined elsewhere in this Agreement.

2)   Term of Agreement. This Agreement shall commence on the date hereof and
     shall continue in effect until December 31, 2003; provided, however, that
     commencing on January 1, 2004 and each January 1 thereafter, the term of
     this Agreement shall automatically be extended for one (1) additional year
     unless, at least ninety (90) days prior to such January 1st date, the Bank
     or the Executive shall have given notice that this Agreement shall not be
     extended: and provided further, that, notwithstanding the delivery

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     of any such notice, this Agreement shall continue in effect for a period of
     twenty-four (24) months after a Change in Control, if such change in
     Control shall have occurred while this Agreement is in effect.
     Notwithstanding anything in this Section 2 to the contrary, this Agreement
     shall terminate if the Executive or the bank terminates the Executive's
     employment prior to a Change in Control of the Bank.

3)   Agreement to Provide Services; Right to Terminate.

     A)   Except as otherwise provided in paragraph (B) below and in the
          Executive's Employment Agreement, the Bank or the Executive may
          terminate the Executive's employment at any time following a Change in
          Control, subject to the Bank's providing the benefits hereinafter
          specified in accordance with the terms hereof.

     B)   In the event a Person makes an offer which, if accepted by the Bank
          and subsequently consummated, would constitute a Change in Control,
          the Executive agrees that he will not leave the employ of the Bank
          (other than as a result of Disability or upon Retirement, as such
          terms are hereinafter defined) and will render the services
          contemplated in the recitals to this Agreement until such Change in
          Control offer has been abandoned or terminated or a change in Control
          has occurred.

4)   Termination following change in Control.

     A)   If any of the events constituting a Change in Control of the Bank
          shall have occurred, the Executive shall be entitled to the benefits
          provided in Section 5 hereof upon the termination of the Executive's
          employment with the bank within twenty-four (24) months after such
          Change in Control, unless such termination is (i) because of the
          Executive's death, (ii) by the Bank for Cause or Disability or (iii)
          by the Executive other than for Good Reason.

     B)   Notice of Termination. Any purported termination by the Bank or by the
          Executive following a Change in Control shall be communicated by
          written Notice of Termination to the other party hereto.

5)   Severance Upon Termination or During Disability; Other Agreements.

     A)   During any period following a Change in Control of the Bank that the
          Executive fails to perform his duties as a result of incapacity due to
          physical or mental illness, the Executive shall continue to receive
          his base salary at the rate then in effect and any benefits or awards
          under any Plans shall continue to accrue during such period, to the
          extent not inconsistent with such Plans, until his employment is
          terminated pursuant to and in accordance with Sections 4(B), 15(d) and
          15(g) hereof. Thereafter, the Executive's benefits shall be determined
          in accordance with the Plans then in effect.

     B)   If the Executive's employment is terminated for cause following a
          Change in Control of the Bank, the Bank shall pay to the Executive his
          base salary through the Date of Termination at the rate in effect just
          prior to the time a Notice of Termination is given plus any benefits
          or awards which pursuant to the terms of any Plans have been earned or
          become payable, but which have not yet been paid to the Executive.

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          Thereupon the Bank shall have no further obligations to the Executive
          under this Agreement.

     C)   If, within twenty-four (24) months after a Change in Control of the
          Bank has occurred, the Executive's employment by the Bank is
          terminated (i) by the Bank other than for Cause or Disability or (ii)
          by the Executive for Good Reason, then the Bank shall pay to the
          Executive, no later than the fifth (5th) day following the Date of
          Termination, without regard to any contrary provisions of any Plan,
          the following:

               a)   The Executive's base salary through the Date of Termination
               at the rate in effect just prior to the time a Notice of
               Termination is given plus any benefits or awards which pursuant
               to the terms of any Plans have been earned or become payable, but
               which have not yet been paid to the Executive (including amounts
               which previously had been deferred at the Executive's request);

               b)   An amount in cash equal to two and one-half (2 1/2) times
               (a) the higher of (1) the Executive's annual base salary on the
               Date of Termination or (2) the Executive's annual base salary in
               effect immediately prior to the Change in Control, plus any
               benefits or awards which pursuant to the terms of any Plans which
               could have been earned and payable, but which have not yet been
               paid to the Executive (including amounts which previously had
               been deferred at the Executive's request). For purposes of
               calculating benefits or awards, said amount shall be the average
               amount (s) paid to Employee based upon the prior three (3) years
               under said plans.

          For the purposes of this Agreement, the term "base salary" shall
include any amounts deducted by the Bank with respect to the Executive or for
his account pursuant to Sections 125 and 401(k) of the Code.

     D)   If, within twenty-four (24) months after a Change in Control of the
          Bank has occurred, the Executive's employment with the Bank is
          terminated (i) by the Bank other than for Cause or Disability, or (ii)
          by the executive for Good Reason, then the Bank shall maintain in full
          force and effect, for the continued benefit of the Executive and his
          dependents for a period terminating on the earliest of (a) 30 months
          after the Date of Termination or (b) the commencement date of
          equivalent benefits from a new employer, insured and self-insured
          employee welfare benefit Plans in which the executive was entitled to
          participate immediately prior to the date of Termination, provided
          that the Executive's continued participation is possible under the
          general terms and provisions of such plans (and any applicable funding
          media) and he continues to pay an amount equal to the Executive's
          regular contribution under such plans for such participation. If
          neither 30 months after the Date of Termination the Executive has not
          previously received, nor is then receiving, equivalent benefits from a
          new employer, the Bank shall offer the Executive continuation of
          coverage under COBRA as prescribed under Section 498OB of the Code. At
          the expiration of such continuation coverage (or, if COBRA
          continuation coverage is not applicable to the Plan, then upon the
          expiration of the 30 month period beginning on the Termination date),
          the Bank shall arrange, at its sole cost and expense, to enable the
          Executive to convert him and his dependents' coverage under such plans
          to individual policies and

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          programs upon the same terms as employees of the bank may apply for
          such conversions. In the event that the Executive's participation in
          any such Plan is barred, the Bank, at its sole cost and expense, shall
          arrange to have issued for the benefit of him and his dependents
          individual policies of insurance providing benefits substantially
          similar (on an after-tax basis) to those which the Executive otherwise
          would have been entitled to receive under such Plans pursuant to this
          paragraph (v) or, if such insurance is not available at a reasonable
          cost to the Bank, the Bank shall otherwise provide the Executive and
          his dependents with equivalent benefits (on an after-tax basis). The
          Executive shall not be required to pay any premiums or other charges
          in an amount greater than that which he would have paid in order to
          participate in such Plans.

     E)   Except as specifically provided in paragraph (D) above, the amount of
          any payment provided for in this Section 5 shall not be reduced,
          offset or subject to recovery by the Bank by reason of any
          compensation earned by the Executive as the result of employment by
          another employer after the Date of Termination, or otherwise.

6)   Successors; Binding Agreement.

     A)   The Bank will seek, by written request at least five (5) business days
          prior to the time a Person becomes a Successor, to have such Person,
          by agreement in form and substance satisfactory to the Executive,
          assent to the fulfillment of the Bank's obligations under this
          Agreement. Failure of such Person to furnish such assent by the later
          of (i) three (3) business days prior to the time such Person becomes a
          successor or (ii) two (2) business days after such Person receives a
          written request to so assent shall constitute Good Reason for
          termination by the Executive of his employment if a change in Control
          of the Bank occurs or has occurred.

     B)   This Agreement shall inure to the benefit of and be enforceable by the
          Executive's personal legal representatives, executors, administrators,
          successors, heirs, distributes, devisees and delegates. If the
          Executive should die while any amount would still be payable to him
          hereunder if he had continued to live, all such amounts, unless
          otherwise provided herein, shall be paid in accordance with the terms
          of the Agreement to the Executive's devisee, delegate or other
          designee or, if no such designee exists, to his estate.

     C)   For purposes of this Agreement, the Bank shall include any
          subsidiaries and any corporation or other entity which is the
          surviving or continuing entity in respect of any merger, consolidation
          or form of business combination in which the Bank ceases to exist.

7)   Fees and Expenses; Mitigation.

     A)   The Bank shall reimburse the Executive, on a current basis, for all
          reasonable legal fees and related expenses incurred by him in
          connection with the Agreement following a Change in Control of the
          Bank, including without limitation, (i) all such fees and expenses, if
          any, incurred in contesting or disputing any termination of the
          Executive's employment or (ii) the Executive's seeking to obtain or
          enforce any right or benefit provided by this Agreement, in each case
          regardless of whether or not his claim is

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          upheld by a court of competent jurisdiction; provided by this
          Agreement, provided, however, the Executive shall be required to repay
          any such amounts to the Bank to the extent that a court issues a final
          and non-appealable order setting forth the determination that the
          position taken by him was frivolous or advanced by him in bad faith.

     B)   The Executive shall not be required to mitigate the amount of any
          payment the Bank becomes obligated to make to him in connection with
          this Agreement, by seeking other employment or otherwise.

8)   Taxes. Subject to the provisions of Section 5(e), all payments to be made
     to the Executive under this Agreement will be subject to required
     withholding of federal, state and local income and employment taxes.

9)   Survival. The respective obligations of, and benefits afforded to, the Bank
     and the Executive provided in Sections 5, 6(B), 7, 8, 12, and 14 of this
     Agreement shall survive Termination of this Agreement.

10)  Notice. For the purposes of this Agreement, notices and all other
     communications provided for in the Agreement shall be in writing and shall
     be deemed to have been duly given when delivered or mailed by United States
     registered mail, return receipt requested, postage prepaid and addressed,
     in the case of the Bank, to the address set forth on the first page of this
     Agreement or, in the case of the undersigned employee, to the address set
     forth below his signature, provided that all notices to the Bank shall be
     directed to the attention of the Chairman of the Board of the Bank, with a
     copy to the Secretary of the Bank, or to such other address as either party
     may have furnished to the other in writing in accordance herewith, except
     that notice of change of address shall be effective only upon receipt.

11)  Miscellaneous. No provision of this Agreement may be modified, waived or
     discharged unless such modification, waiver or discharge is agreed to in a
     writing signed by the Executive and the Chairman of the Board of the Bank.
     No waiver by either party hereto at any time of any breach by the other
     party hereto of, or of compliance with, any condition or provision of this
     Agreement to be performed by such other party shall be deemed a waiver of
     similar or dissimilar provisions or conditions at the same or at any prior
     or subsequent time. No agreements or representations, oral or otherwise,
     express or implied, with respect to the subject matter hereof have been
     made by either party which are not expressly set forth in this agreement.

12)  Governing Law and Venue. The validity, interpretation, construction and
     performance of this Agreement shall be governed by the laws of the State of
     West Virginia. Venue for any proceeding related to the performance or
     interpretation of this Agreement, or in any way arising out of this
     Agreement, shall be either the state or federal courts for Pendleton
     County, West Virginia.

13)  Validity. The invalidity or unenforceability of any provision of this
     Agreement shall not affect the validity or enforceability of any other
     provision of this Agreement, which shall remain in full force and effect.

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14)  Executive's Commitment. The Executive agrees that subsequent to his period
     of employment with the Bank, the Executive will not at any time communicate
     or disclose to any unauthorized person, without the written consent of the
     Bank, any proprietary processes of the Bank or other confidential
     information concerning its business, affairs, products, suppliers or
     customers which, if disclosed, would have a material adverse effect upon
     the business or operations of the Bank, taken as a whole; it being
     understood, however, that the obligations under this Section 14 shall not
     apply to the extent that the aforesaid matters (i) are disclosed in
     circumstances where the Executive is legally required to do so or (ii)
     become generally known to, and available for use by, the public otherwise
     than by the Executive's wrongful act or omission.

15)  Joinder. Allegheny Bancshares, Inc. joins into this agreement as evidence
     and consent and agrees to employ employee as it's Executive Vice President
     and CEO without additional pay and on the terms and conditions herein and
     Employment Agreement of even date.

16)  Enforceability. This agreement shall serve to replace any previous
     Executive Severance Agreements, if any, between Bank and Executive and
     shall continue in force, pursuant to the terms and conditions contained
     herein, until changed, modified, or replaced.

17)  Definitions.

     A)   Cause. Termination by the Bank of the Executive's employment for
          "Cause" shall mean termination upon (i) the failure of Employee to
          observe or perform (other than by reason of illness, injury or
          incapacity) any of the material terms or provisions of this Agreement;
          (ii) the failure of Employee to comply fully with the lawful
          directives of the Board of Directors of the Bank (the "Board"); (iii)
          willful misconduct; (iv) material neglect of the business of the Bank;
          (v) conviction of a felony or other crime involving moral turpitude;
          (vi) misappropriation of funds; or (vii) habitual insobriety or drug
          addiction. In the case of a termination for "cause," the notice of
          termination shall specify the basis for the Bank's determination of
          "cause." Any act or failure to act based upon authority given pursuant
          to a resolution duly adopted by the Board or based upon the advice of
          counsel for the Bank shall be conclusively presumed to be done, or
          omitted to be done, by the Executive's attention to matters not
          directly related to the business of the Bank shall not provide a basis
          for termination for Cause. Notwithstanding the foregoing, the
          Executive shall not be deemed to have been terminated for Cause unless
          and until there shall have been delivered to him a copy of a
          resolution duly adopted by the affirmative vote of a majority of the
          Board at a meeting of the Board called and held for such purpose
          (after reasonable notice to the Executive and an opportunity for him,
          together with his counsel, to be heard before the Board), finding that
          in the good faith opinion of the Board the Executive was guilty of the
          conduct set forth above and specifying the particulars thereof in
          detail.

     B)   Change in Control. A "change in Control" shall mean:

               i)   The acquisition by any individual, entity or group (within
                    the meaning of Section 13 (d) (3) or 14 (d) (2) of the
                    Securities and Exchange Act of 1934, as amended (the
                    "Exchange Act")) (a "Person") of beneficial ownership
                    (within the meaning of rule 13d-3 promulgated under the

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                    Exchange Act) of fifty percent (50%) or more of either the
                    then outstanding shares of common stock of the Bank (the
                    "Outstanding Company Common Stock") or the combined voting
                    power of the then outstanding voting securities of the Bank
                    entitled to vote generally in the election of directors (the
                    "Outstanding Company Voting Securities"); provided, however,
                    that in no event may the following acquisitions constitute a
                    Change in Control: (a) any acquisition by the Bank, (b) any
                    acquisition by any employee benefit plan (or related trust)
                    sponsored or maintained by the Bank or any corporation
                    controlled by the Bank, (c) any acquisition by any
                    corporation pursuant to a reorganization, merger or
                    consolidation, the conditions described in clauses (a), (b)
                    and (c) of paragraph (iii) of this Section are satisfied, or
                    (d) any sale or other disposition of all or substantially
                    all of the assets of the Bank, if, following such sale or
                    other disposition, the conditions described in (1), (2) and
                    (3) paragraph (iv) of this Section are satisfied; or

               ii)  Individuals who, on September 30, 2003, constitute the Board
                    (the "Incumbent Directors") cease for any reason to
                    constitute at least a majority of the board, provided that
                    any person becoming a director subsequent to September 30,
                    2003, whose election or nomination for election was approved
                    by a vote of at least two-thirds (2/3) of the Incumbent
                    Directors then on the Board (either by specific vote or by
                    approval of the proxy statement of the Employer in which
                    such person is named as a nominee for director, without
                    objection to such nomination) shall be an Incumbent
                    Director; provided, however, that no individual elected or
                    nominated as a director of the employer initially as a
                    result of an actual or threatened election contest with
                    respect to directors or an other actual or threatened
                    solicitation of proxies or consents by or on behalf of any
                    person other than the Board shall be deemed to an Incumbent
                    Director.

               iii) Approval by the shareholders of the Bank of a
                    reorganization, merger or consolidation, unless, in each
                    case following such reorganization, merger, or
                    consolidation, (a) more than fifty percent (50%) of,
                    respectively, the then outstanding shares of common stock of
                    the corporation resulting from such reorganization, merger
                    or consolidation and the combined voting power of the then
                    outstanding voting securities of such corporation entitled
                    to vote generally in the election of directors is then
                    beneficially owned, directly or indirectly, by all or
                    substantially all of the individuals who were the beneficial
                    owners, respectively, of the Outstanding Company Common
                    Stock and reorganization, merger or consolidation in
                    substantially the same proportions as their ownership
                    immediately prior to such reorganization, merger or
                    consolidation, of the Outstanding Company Common Stock and
                    Outstanding Company Voting Securities, as the case may be,
                    (b) no Person (excluding the Bank, any employee benefit plan
                    (or related trust) of the Bank or a corporation resulting
                    from such reorganization, merger or consolidation)
                    beneficially owns,

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                    directly or indirectly, forty-nine percent (49%) or more of,
                    respectively, the then outstanding shares of common stock of
                    the corporation resulting from such reorganization, merger
                    or consolidation or the combined voting power of the then
                    outstanding voting securities of such corporation entitled
                    to vote generally in the election of directors, and (c) at
                    least a majority of the members of the board of directors of
                    the corporation resulting from such reorganization, merger
                    or consolidation were members of the Incumbent Board at the
                    time of the execution of the initial agreement providing for
                    such reorganization, merger or consolidation; or

               iv)  Approval by the shareholders of the Bank of (a) a complete
                    liquidation or dissolution of the Bank or (b) the sale or
                    other disposition of all or substantially all of the assets
                    of the Bank, other than to a corporation with respect to
                    which following such sale or other disposition, (1) more
                    than fifty percent (50%) of, respectively, the then
                    outstanding shares of common stock of such corporation and
                    the combined voting power of the then outstanding voting
                    securities of such corporation entitled to vote generally in
                    the election of directors is then beneficially owned,
                    directly or indirectly, by all or substantially all of the
                    individuals and entities who were the beneficial owners,
                    respectively, of the Outstanding company Common Stock and
                    Outstanding company Voting Securities immediately prior to
                    such sale or other disposition in substantially the same
                    proportion as their ownership, immediately prior to such
                    sale or other disposition, of the Outstanding Company Common
                    Stock and Outstanding Company Voting Securities, as the case
                    may be, (2) no Person (excluding the Bank and any employee
                    benefit plan (or related trust) of the Bank or such
                    corporation) beneficially owns, directly or indirectly,
                    forty-nine percent (49%) or more of, respectively, the then
                    outstanding shares of common stock of such corporation and
                    the combined voting power of the then outstanding voting
                    securities of such corporation entitled to vote generally in
                    the election of directors and (3) at least a majority of the
                    members of the board of directors of such corporation were
                    members of the Incumbent Board at the time of the execution
                    of the initial agreement or action of the Board providing
                    for such sale or other disposition of assets of the Bank.

     C)   Code. "Code" shall mean the Internal Revenue Code of 1986, as amended
          from time to time.

     D)   Date of Termination. "Date of Termination" following a Change in
          Control shall mean (i) if the Executive's employment is to be
          terminated for Disability, thirty (30) days after Notice of
          Termination is given (provided that the Executive shall not have
          returned to the performance of his duties on a full time basis during
          such thirty (30) day period), (ii) if the Executive's employment is to
          be terminated by the Bank for Cause or by him pursuant to Sections 6
          or 15 (f) hereof or for any other good Reason, the date specified in
          the Notice of Termination, (iii) if the Executive's employment is to
          be terminated by the Bank for any reason other than Cause, the date
          specified in the

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          Notice of Termination, which in no event shall be a date earlier than
          ninety (90) days after the date on which a Notice of Termination is
          given, unless an earlier date has been expressly agreed to by the
          Executive in writing either in advance of, or after, receiving such
          Notice of Termination, or (iv) if the Executive's employment is
          terminated on account of his death, the day after his death. In the
          case of termination of the Executive's employment by the Bank for
          Cause, if he has not previously expressly agreed in writing to the
          termination, then within thirty (30) days after receipt by the
          Executive of the Notice of Termination with respect thereto, he may
          notify the Bank that a dispute exists concerning the termination, in
          which event the Date of Termination shall be the date set either by
          mutual written agreement of the parties or by such court having the
          matter before it. During the pendency of any such dispute, the Bank
          will continue to pay the Executive his full compensation in effect
          just prior to the time the Notice of Termination is given and until
          the dispute is resolved. However, if such court issues a final and
          non-appealable order finding that the Bank had Cause to terminate the
          Executive, then he must return all compensation paid to him after the
          Date of Termination specified in the Notice of Termination previously
          received by him.

     E)   Disability. Termination by the Bank of the Executive's employment
          based on "Disability" shall mean termination because of the
          Executive's absence from his duties with the Bank on a full time basis
          for one hundred eighty (180) consecutive days as a result of his
          incapacity due to physical or mental illness, unless within thirty
          (30) days after Notice of Termination (as defined herein) is given to
          the Executive following such absence, he shall have returned to the
          full time performance of his duties.

     F)   Good Reason. Termination by the Executive of his employment for "Good
          Reason" shall mean termination based on:

               i)   a determination by the Executive, in his reasonable
                    judgment, that there has been an adverse change in his
                    status or position(s) as an executive officer of the Bank as
                    in effect immediately prior to the change in Control,
                    including, without limitation, any adverse change in his
                    status or position as a result of a diminution in his duties
                    or responsibilities (other than, if applicable, any such
                    change directly attributable to the fact that the Bank is no
                    longer privately owned) or the assignment to him of any
                    duties or responsibilities which are inconsistent with such
                    status or position(s), or any removal of him from, or any
                    failure to reappoint or reelect him to, such positions (s)
                    (except in connection with the termination of his employment
                    for Cause or Disability or as a result of his death or by
                    him other than for Good Reason);

               ii)  a material reduction by the Bank in the Executive's base
                    salary as in effect immediately prior to the Change in
                    Control;

               iii) the failure by the Bank to continue in effect any Plan (as
                    hereinafter defined) in which the Executive is participating
                    at the time of the Change in Control of the bank (or Plans
                    providing the Executive with at least substantially similar
                    benefits) other than as a result of the normal expiration of
                    any such Plan in accordance with its terms as in

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                    effect at the time of the Change in Control, or the taking
                    of any action, or the failure to act, by the Bank which
                    would adversely affect the Executive's continued
                    participation in any of such Plans on at least as favorable
                    a basis to the Executive as is the case on the date of the
                    Change in Control or which would materially reduce his
                    benefits in the future under such Plans or deprive him of
                    any material benefit enjoyed by him at the time of the
                    Change in Control;

               iv)  the failure by the bank to provide and credit the Executive
                    with the number of paid vacation days to which the Executive
                    is then entitled in accordance with the Bank's normal
                    vacation policy as in effect immediately prior to the Change
                    in Control;

               v)   The Bank's requiring the Executive to be based at any office
                    that is greater than thirty (30) miles from where his office
                    is located immediately prior to the Change in Control except
                    for required travel on the Bank's business to an extent
                    substantially consistent with the business travel
                    obligations which he undertook on behalf of the Bank prior
                    to the Change in Control;

               vi)  the failure by the Bank to obtain from any Successor (as
                    defined herein) the assent to this Agreement contemplated by
                    Section 6 hereof;

               vii) Any refusal by the bank to continue to allow the Executive
                    to attend to matters or engage in activities not directly
                    related to the business of the Bank which, prior to the
                    Change in Control, the Executive was permitted by the Board
                    to attend to or engage in.

     G)   Notice of Termination. "Notice of Termination" shall mean a notice
          which shall indicate the specific termination provision in this
          Agreement relied upon.

     H)   Plan. "Plan" shall mean any compensation plan, or employee benefit
          plan such as a pension, profit sharing, medical, disability, accident,
          life insurance plan or any other plan, program or policy of the bank
          intended to benefit employees.

     I)   Retirement. "Retirement" shall mean a termination of the Executive's
          employment by the Executive on or after he has reached age sixty-five
          (65) and has completed at least five (5) years of service for the Bank
          (including any service for a predecessor of the Bank where such prior
          service is recognized by the Bank for the purpose of awarding other
          benefits).

     J)   Successor. "Successor" shall mean any Person that succeeds to, or has
          the practical ability to control (either immediately or with the
          passage of time), the Bank's business, directly by merger or
          consolidation, or indirectly, by purchase of the outstanding Voting
          Securities or otherwise.

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     K)   Years of Service. "Years of Service" shall be defined as a twelve (12)
          consecutive month period in while the Executive has at least one
          thousand (1,000) hours of service with the Bank.

          IN WITNESS WHEREOF, the Bank and Allegheny has caused this instrument
to be signed in its name and on its behalf; and

          WITNESS the following signatures and seals.

                                        Pendleton County Bank,
                                        a West Virginia Corporation

                                        By
                                           -------------------------------------
                                           President

                                        By
                                           -------------------------------------
                                           Chairman of the Board

                                        Allegheny Bancshares, Inc.

                                        By:
                                            ------------------------------------
                                            President

                                        By:
                                            ------------------------------------
                                            Chairman of the Board

                                        By:
                                            ------------------------------------
                                            Executive  William A. Loving, Jr.,
                                            CLBB

Page 11 of 13

<PAGE>

                                  MODIFICATION

                              EMPLOYMENT AGREEMENT

                          EXECUTIVE SEVERANCE AGREEMENT

          William A. Loving (Employee), and Pendleton Community Bank (Bank) and
Allegheny Bancshares, Inc. hereby agree to modify that certain Employment
Agreement between the parties dated September 30, 2003 ("Employment Agreement")
and that certain Executive Severance Agreement between the parties also dated
September 30, 2003 ("Executive Severance Agreement") as hereinafter set forth.

          1. Section 6 of the Employment Agreement is amended by adding the
following paragraph at the end:

               Notwithstanding the above, if at the time of the Employee's
          termination from employment the Employee is a "specified employee" as
          defined under Section 409A of the Internal Code and regulations
          thereunder, any cash "Termination Compensation" due Employee during
          the first six months following the date of his termination shall be
          accumulated and paid in a lump sum on the first day of the seventh
          month following the termination of his employment. Except for these
          cash payments, all other Termination Compensation shall be made in
          accordance with the provisions of this Agreement.

          2. Paragraph 5(C)(b) of the Executive Severance Agreement 5(C) is
amended by adding the following at its end:

          Notwithstanding the payment date set forth in the preamble to
          Paragraph 5(C), if Executive at the time of his termination is a
          "specified employee" as defined under Section 409A of the Internal
          Revenue Code and regulations thereunder, the cash severance benefit
          shall be deferred and paid as of the first day of the seventh month
          following Executive's termination.

          3. Except as hereinabove amended the Employment Agreement and the
Executive Severance Agreement shall remain in full force and effect.

Page 12 of 13

<PAGE>

          In Witness Whereof, Employee, Bank and Allegheny Bancshares, Inc. has
caused this Modification to be executed as of the 28th day of December, 2006.

                                        PENDLETON COMMUNITY BANK

                                        By:
                                            ------------------------------------
                                        Its:
                                              ----------------------------------

                                        ALLEGHENY BANCSHARES, INC.

                                        By:
                                            ------------------------------------
                                        Its:
                                             -----------------------------------

                                        ----------------------------------------
                                        WILLIAM A. LOVING, JR.

Page 13 of 13exv10w1

 

Exhibit 10.1

MEADOW VALLEY CORPORATION

OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT

     THIS AGREEMENT (“Agreement”) is entered into and effective this                      day of                                   
      ,
2007 (“Effective Date”), by and between Meadow Valley Corporation, a Nevada corporation
(“Corporation”), and                      (the “Indemnified Party”).

     WHEREAS, the Board of Directors of the Corporation has determined that it is in the best
interest of the Corporation and its shareholders to agree to indemnify the Indemnified Party (who
is a director and/or officer of the Corporation) from and against certain liabilities for actions
taken by him during the performance of his tasks for the Corporation.

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:

     1. Indemnification. The Corporation shall indemnify and hold harmless, to the fullest
extent permitted by applicable law as it presently exists or may hereafter be amended, the
Indemnified Party, if the Indemnified Party was or is made or is threatened to be made a party or a
witness or is otherwise involved in any action, suit, arbitration, alternative dispute resolution
mechanism or proceeding, whether civil, criminal, administrative or investigative (any of the
foregoing being referred to as a “Proceeding”), by reason of the fact that the Indemnified Party,
or a person for whom the Indemnified Party is the legal representative, is or was a director or
officer of the Corporation or, while a director or officer of the Corporation, is or was serving at
the request of the Corporation as a director, officer, employee or agent (a director, officer,
employee or agent is referred to as an “Indemnified Position”) of another corporate entity or of a
partnership, joint venture, trust, limited liability company enterprise or any other type of entity
(an “Other Entity”), including service with respect to employee benefit plans, against all claims,
demands, debts, duties, liabilities, judgments, fines and amounts paid in settlement and expenses
(including attorneys’ fees and expenses) actually and reasonably incurred by the Indemnified Party
in connection with the investigation, defense, negotiation and settlement of any such Proceeding
(including an action by or in the right of the Corporation) to which the Indemnified Party is or
becomes a party, or is threatened to be made a party, by reason of the fact that the Indemnified
Party is in an Indemnified Position with the Corporation or of any Other Entity. Nothwithstanding
the foregoing, no change in Nevada law shall have the effect of reducing the benefits available to
the Indemnified Party hereunder based on Nevada law as in effect on the Effective Date. For the
avoidance of doubt, this Agreement shall apply to the entire period of the Indemnified Party’s
service in an Indemnified Position, including, without limitation, the Indemnified Party’s service
as a director of the Company prior to the Effective Date.

     2. Limitations on Indemnity. No indemnity pursuant to this Agreement shall be made by
the Corporation:

 

 

	 	(a)	 	For the amount of such losses for which the Indemnified Party is indemnified
pursuant to any insurance purchased and maintained by the Corporation; or
	 
	 	(b)	 	If the Indemnified Party is liable pursuant to NRS 78.138; or
	 
	 	(c)	 	On account of any suit in which judgment is rendered against the Indemnified
Party for an accounting of profits made (i) for an improper personal profit without
full and fair disclosure to the Corporation of all material conflicts of interest and
not approved thereof by a majority of the disinterested members of the Board of
Directors of the Corporation; or (ii) from the purchase or sale by the Indemnified
Party of securities of the Corporation pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local law; or
	 
	 	(d)	 	If it is established by clear and convincing evidence that the Indemnified
Party did not act in good faith and in a manner in which the Indemnified Party
reasonably believed to be in or not opposed to the best interests of the Corporation
or the Other Entity, as the case may be, and, with respect to any criminal action or
Proceeding, in which the Indemnified Party had no reasonable cause to believe the
Indemnified Party’s conduct was unlawful; or
	 
	 	(e)	 	If a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful; or
	 
	 	(f)	 	In connection with a Proceeding (or part thereof) commenced by the
Indemnified Party if the commencement of the Proceeding (or part thereof) by the
Indemnified Person was not authorized by the Board of Directors of the Corporation.

     The termination of any action, suit or Proceeding by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that
the person is liable pursuant to NRS 78.138 or did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the corporation, or that, with
respect to any criminal action or Proceeding, he had reasonable cause to believe that his conduct
was unlawful.

     3. Court-Ordered Indemnification. Nothwithstanding any other provision of this
Agreement, a court of appropriate jurisdiction, upon application of the Indemnified Party and such
notice as the court shall require, may order indemnification if it determines that the Indemnified
Party is fairly and reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the Indemnified Party (i) has met the standards of conduct set forth
under Nevada law or (ii) has been adjudged liable for receipt of an improper personal benefit under
Nevada law, in which case the court may order such indemnification as the court shall deem proper.

     4. Continuation of Indemnity. All obligations of the Corporation contained in this
Agreement shall continue during the period the Indemnified Party is in an
Indemnified Position and thereafter so long as the Indemnified Party shall be subject to

2

 

any
possible claim or threatened, pending or completed Proceeding, by reason of the fact that the
Indemnified Party was in an Indemnified Position for the Corporation or any Other Entity.

     5. Notification and Defense of Claim. Promptly after receipt by the Indemnified Party
of notice of any claim or any threatened, pending or completed Proceeding, in which the Indemnified
Party has a right to indemnification hereunder, the Indemnified Party will notify the Corporation
of the commencement thereof; provided, however, that the failure to give any such notice shall not
disqualify the Indemnified Party from the right, or otherwise affect in any manner any right of the
Indemnified Party, to indemnification or the advance of expenses under this Agreement unless the
Corporation’s ability to defend in such claim or action or to obtain proceeds under any insurance
policy is materially and adversely prejudiced thereby, and then only to the extent the Corporation
is thereby actually so prejudiced. With respect to any such Proceeding as to which the Indemnified
Party notifies the Corporation of the commencement thereof:

	 	(a)	 	The Corporation will be entitled to participate therein at its own expense;
and
	 
	 	(b)	 	Except as otherwise provided below, to the extent that it may wish, the
Corporation jointly with any other indemnifying party will be entitled to assume the
defense thereof, with counsel satisfactory to the Indemnified Party. After notice
from the Corporation to the Indemnified Party of its election to assume the defense
thereof, the Corporation will not be liable to the Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. The Indemnified Party shall have the
right to employ counsel in such Proceeding, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense thereof
shall be at the expense of the Indemnified Party , unless (i) the employment of
counsel by the Indemnified Party has been authorized by the Corporation, (ii) the
Indemnified Party shall have reasonably concluded that there may be a conflict of
interest between the Corporation and the Indemnified Party in the conduct of the
defense of such action, (iii) the Corporation shall not in fact have employed counsel
to assume the defense of such action, in each of which cases the fees and expenses of
counsel shall be at the expense of the Corporation, or (iv) unless the Indemnified
Party reasonably and in good faith asserts defenses and theories of defense not
asserted by the Corporation. The Corporation shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Corporation or as to which
the Indemnified Party shall have made the conclusion provided for in (ii) or (iv)
above.
	 
	 	(c)	 	The Corporation shall not be liable to indemnify the Indemnified Party under
this Agreement for any amounts paid in settlement of any action or claim effected
without the Corporation’s written consent.The Corporation

3

 

	 	 	 	shall not settle any
action or claim without the Indemnified Party’s written consent, unless the settlement
includes a full release of the Indemnified Party from all liability in respect of such
action or claim. Neither the Corporation or the Indemnified Party will unreasonably
withhold their consent to any proposed settlement.

     6. Payment of Expenses. The Corporation shall pay the expenses (including attorneys’
fees) incurred by the Indemnified Party in defending any Proceeding in advance of its final
disposition, provided, however, that, to the extent required by applicable law, such payment of
expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of
an undertaking by the Indemnified Party to repay all amounts advanced if it should be ultimately
determined that the Indemnified Party is not entitled to be indemnified under this Agreement or
otherwise.

     7. Enforcement.

	 	(a)	 	The Corporation expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on the Corporation hereby in order to
induce the Indemnified Party to serve in an Indemnified Position for the Corporation
or an Other Entity, and acknowledges that the Indemnified Party is relying upon this
Agreement as part of the consideration for so acting.
	 
	 	(b)	 	In the event the Indemnified Party is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such action,
the Corporation shall reimburse the Indemnified Party for all of the Indemnified
Party’s reasonable attorneys’ and other fees and expenses in bringing and pursuing
such action.
	 
	 	(c)	 	If a claim for indemnification or advancement of expenses under this
Agreement is not paid in full within 10 days after a written claim therefor by the
Indemnified Party has been received by the Corporation, the Indemnified Party may file
suit to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the Indemnified Party is
not entitled to the requested indemnification or advancement of expenses under
applicable law.
	 
	 	(d)	 	The Corporation’s obligation, if any, to indemnify or to advance expenses to
the Indemnified Party who was or is serving at its request as in an Indemnified
Position for an Other Entity shall be reduced by any amount such Indemnified Party may
collect as indemnification or advancement of expenses from such Other Entity.

     8. Severability. Each of the provisions of this Agreement is a separate and distinct
provision and independent of the others, so that if any provision hereof shall be held to be
invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof.

4

 

     9. Governing Law; Binding Effect; Amendment and Termination.

	 	(a)	 	This Agreement shall be interpreted and enforced in accordance with the laws
of the State of Nevada.
	 
	 	(b)	 	This Agreement shall be binding upon the Indemnified Party and upon the
Corporation, its successors and assigns, and shall inure to the benefit of the
Indemnified Party, the Indemnified Party’s heirs, personal representatives and assigns
and to the benefit of the Corporation, its successors and assigns. The Corporation
shall require and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all or a substantial part, of the business and/or
assets of the Corporation, by written agreement in form and substance satisfactory to
the Indemnified Party, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Corporation would be required to perform
if no such succession had taken place.
	 
	 	(c)	 	No amendment, modification, termination or change of this Agreement shall be
effective unless it is signed by both parties hereto. Any amendment, modification,
termination or change of this Agreement shall not adversely affect any right or
protection hereunder of any Indemnified Party in respect of any act or omission
occurring prior to the time of such repeal or modification.

     10. Additional Rights. The rights conferred on the Indemnified Party by this
Agreement shall not be exclusive of any other rights that the Indemnified Party may have or
hereafter acquire under any statute, provision of the Corporation’s Articles of Incorporation, its
bylaws, contract, vote of stockholders or disinterested directors or otherwise.

     11. Insurance. The Corporation will use its reasonable best efforts to acquire and
maintain directors and officers liability insurance, on terms and conditions deemed appropriate by
the Board of Directors of the Corporation, with the advice of counsel, covering the Indemnified
Party or any claim made against the Indemnified Party for service as a director or officer of the
Corporation and covering the Corporation for any indemnification or advance of expenses made by the
Corporation to the Indemnified Party for any claims made against the Indemnified Party for service
as a director or officer of the Corporation. Without in any way limiting any other obligation
under this Agreement, the Corporation shall indemnify the Indemnified Party for any payment by the
Indemnified Party arising out of the amount of any deductible or retention and the amount of any
excess of the aggregate of all judgments, penalties, fines, settlements and reasonable expenses
actually and reasonably incurred by the Indemnified Party in
connection with a claim or action over the coverage of any insuance referred to in the previous
sentence.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

5

 

	 	 	 	 	 	 	 
	 	 	MEADOW VALLEY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 	 	Bradley E. Larson, President/CEO	 	 
	 
	 	 	 	 	 	 
	 	 	The Indemnified Party:	 	 
	 
	 	 	 	 	 	 
	 	 	  	 	 
	 

	 	[Name]	 	 

6

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