Document:

Exhibit 4.1

 

CA
HEALTHCARE ACQUISITION CORP.

Amendment
TO the 

AMENDED AND RESTATED SPONSOR AGREEMENT

 

This AMENDMENT
TO The AMENDED AND RESTATED SPONSOR Agreement (this “Amendment”) is made as of August 19, 2021, by and among
CA Healthcare Acquisition Corp., a Delaware corporation (“CAH”), CA Healthcare Sponsor LLC (the “Sponsor”)
and each of the undersigned individuals, each of whom is a member of CAH’s board of directors and/or management team (each, an “Insider”
and collectively, the “Insiders”), in connection with that certain Amendment to the Agreement and Plan of Merger (the
 “Merger Agreement”), dated as of the date hereof, by and among LumiraDx Limited, a Cayman Islands exempted company
limited (the “Company”), LumiraDx Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
(“Merger Sub”), and CAH. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Merger Agreement.

 

RECITALS

 

WHEREAS, the Sponsor,
CAH and the Insiders are parties to that certain Amended and Restated Sponsor Agreement dated as of April 6, 2021 (the “Sponsor
Agreement”);

 

WHEREAS, in connection
with the amendment to the Merger Agreement, the Sponsor, CAH and the Insiders wish to amend certain provisions of the Sponsor Agreement;

 

WHEREAS, Section 13 of
the Sponsor Agreement provides that any term of the Sponsor Agreement may be amended by a written instrument referencing the Sponsor Agreement
and signed by (i) CAH, (ii) the Sponsor and (iii) the Insiders (collectively, the “Requisite Holders”) and (iv) the
Company;

 

WHEREAS, the undersigned
parties to this written instrument constitute the Requisite Holders.

 

NOW, THEREFORE, THE PARTIES
HEREBY AGREE AS FOLLOWS:

 

1.     Amendments to the Sponsor
Agreement. Clause (e) of Section 6 of the Sponsor Agreement is hereby deleted in its entirety and replaced with the following:

 

“(e) Sponsor
Equity Cancellation.

 

(i) In the event
that more than fifty percent (50%) of the Class A Common Stock sold in the Public Offering is redeemed, then an equal percentage of the
Founder Shares shall be cancelled prior to giving effect to the CAH Class B Conversion (the “Forfeited Founder Shares”)
and accordingly the Company shall have no obligation under this Sponsor Agreement, the Merger Agreement or any other agreement relating
to the Transactions to issue any Company Common Shares in respect of such Forfeited Founder Shares; provided however that for the period
from the Closing Date and up to 31 December 2021 the Company, in its sole discretion, may elect to issue, on the same terms as provided
for in the Merger Agreement, Company Common Shares in respect of some or all of the Forfeited Founder Shares to the Sponsor. By way of
illustrative example if 60% of the Class A Common Stock sold in the Public Offering is redeemed, then the Sponsor shall only receive 1,150,000
Company Common Shares (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like).

 

     

     

    

 

(ii) In the event
that fifty percent (50%) or less of the Class A Common Stock sold in the Public Offering is redeemed, then the Sponsor shall retain its
entitlement to one hundred percent (100%) of its Founder Shares and its entitlement to Company Common Shares pursuant to the terms of
the Merger Agreement (the “Entitlement”), subject to the following vesting conditions for the Company Common Shares
(the “Vesting Conditions”): (A) sixty percent (60%) of the Entitlement to Company Common Shares shall vest at
Closing, (B) twenty percent (20%) of the Entitlement to Company Common Shares shall vest if, at any time within eighteen (18) months
of the Closing, the last reported closing price of the Company Common Shares
equals or exceeds $12.50 per Company Common Share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30 consecutive trading day period, and (C) twenty percent (20%) of the Entitlement
to Company Common Shares shall vest if, within thirty six (36) months of the Closing, the
last reported closing price of the Company Common Shares equals or exceeds $15.00 per Company Common Share (as adjusted for share splits,
share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 consecutive trading day period.
In the event that a Vesting Condition is not satisfied the relevant Entitlement to Company Common Shares shall lapse.”

 

2.     Continued Validity of Sponsor
Agreement. Except as specifically amended hereby, the Sponsor Agreement shall continue in full force and effect as originally constituted
and is ratified and affirmed by the parties hereto.

 

3.     Successors and Assigns.
Except as otherwise provided herein, the terms and conditions of this Amendment shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.

 

4.     Governing Law. This Amendment
shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents
to be performed entirely within Delaware, without regard to principles of conflicts of law.

 

5.     Counterparts. This Amendment
may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. Counterparts may be delivered by facsimile, electronic mail (including pdf or any electronic signature complying
with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method, and any counterpart so delivered shall
be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

 

[Remainder of page intentionally left blank]

 

    2

     

    

 

IN WITNESS WHEREOF, the parties
have executed this Amendment as of the date first above written.

 

	 	Sincerely,
	 	 
	 	SPONSOR:
	 	 
	 	CA Healthcare Sponsor LLC
	 	 
	 	By: 	/s/ Tim McMahon
	 	Name: Tim McMahon
	 	Title: Managing Member

 

	 	INSIDERS:
	 	 
	 	By:	/s/
    Larry J. Neiterman
	 	Name: Larry J. Neiterman
	 	 	 
	 	By:	/s/ Jeffrey
    H. Barnes
	 	Name: Jeffrey H. Barnes
	 	 	 
	 	By:	/s/ David Lang
	 	Name: David Lang
	 	 	 
	 	By:	/s/ David H.
    Klein
	 	Name: David H. Klein
	 	 	 
	 	By:	/s/ Afsaneh
    Naimollah
	 	Name: Afsaneh Naimollah

 

[Signature Page to Amendment to the Amended and Restated Sponsor
Agreement]

 

     

     

    

 

	Acknowledged and Agreed:	 
	 	 
	CA HEALTHCARE ACQUISITION CORP.	 
	 	 
	By: 	/s/
    Larry J. Neiterman	 
	Name: Larry J. Neiterman	 
	Title: Chief Executive Officer	 

 

[Signature Page to Amendment to the Amended and Restated Sponsor
Agreement]

 

     

     

    

 

	Acknowledged and Agreed:	 
	 	 
	LUMIRADX LIMITED	 
	 	 
	By: 	/s/
    Veronique Ameye	 
	Name: Veronique Ameye	 
	Title: Executive Vice President and General
    Counsel	 

 

[Signature Page to Amendment to the Amended and Restated Sponsor
Agreement]ex_277340.htm

Exhibit 10.1

 THE NATIONAL BANK OF BLACKSBURG

Salary Continuation Agreement

 

THE NATIONAL BANK OF BLACKSBURG

SALARY CONTINUATION AGREEMENT

 

 

THIS SALARY CONTINUATION AGREEMENT (the “Agreement”) is adopted this 8th day of February, 2006, by and between THE NATIONAL BANK OF BLACKSBURG, a nationally-chartered commercial bank located in Blacksburg, Virginia (the “Bank”) and DAVID K. SKEENS (the “Executive”).

 

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development, and future business success of the Bank. This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

 

Article 1

Definitions

 

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

 

	
			1.1

				
			“Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive determined pursuant to Article 4.

			

 

	
			1.2

				
			“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.

			

 

	
			1.3

				
			“Board” means the Board of Directors of the Bank as from time to time constituted.

			

 

	
			1.4

				
			“Change in Control” means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Section 409A of the Code and regulations thereunder.

			

 

	
			1.5

				
			“Code” means the Internal Revenue Code of 1986, as amended.

			

 

	
			1.6

				
			“Disability” means Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

			

 

 

 

 

 

	
			1.7

				
			“Early Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs: (i) following a Change in Control; or (ii) due to death, Disability, or Termination for Cause.

			

 

	
			1.8

				
			“Effective Date” means January 1, 2006.

			

 

	
			1.9

				
			“Normal Retirement Age” means the Executive attaining age sixty-five (65).

			

 

	
			1.10

				
			“Plan Administrator” means the plan administrator described in Article 6.

			

 

	
			1.11

				
			“Plan Year” means each twelve-month period commencing on January 1, 2006 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31.

			

 

	
			1.12

				
			“Schedule A” means the schedule attached to this Agreement and made a part hereof. Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3.

			

 

	
			1.13

				
			“Separation from Service” means the termination of the Executive’s employment with the Bank for reasons other than death or Disability. Whether a Separation from Service takes place is determined based on the facts and circumstances surrounding the termination of the Executive’s employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if:

			

 

	 	
			(a)

				
			the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or

			

 

	 	
			(b)

				
			the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period).

			

 

2

 

 

	
			1.14

				
			“Specified Employee” means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise.

			

 

	
			1.15

				
			“Termination for Cause” means Separation from Service for:

			

 

	 	
			(a)

				
			Gross negligence or gross neglect of duties to the Bank; or

			

	 	
			(b)

				
			Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Bank; or

			

	 	
			(c)

				
			Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Bank.

			

 

Article 2

Distributions During Lifetime

 

	
			2.1

				
			Normal Retirement Benefit. Upon the Executive reaching Normal Retirement Age while in the active service of the Bank, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

			

 

	 	
			2.1.1

				
			Amount of Benefit. The annual benefit under this Section 2.1 is Thirty Thousand Eight Hundred Seven Dollars ($30,807). 

			

 

	 	
			2.1.2

				
			Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age. The annual benefit shall be distributed to the Executive for the greater of fifteen (15) years, or the Executive’s lifetime.

			

 

	
			2.2

				
			Early Termination Benefit. Upon Early Termination, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

			

 

	 	
			2.2.1

				
			Amount of Benefit. The annual benefit under this Section 2.2 is the Early Termination Benefit set forth on Schedule A for the Plan Year immediately preceding the date that Separation from Service occurs; provided, however, if the Executive Separates from Service on December 31st of a Plan Year, then the Bank shall distribute the Early Termination Benefit set forth on Schedule A for the Plan Year in which such Separation from Service occurs.

			

 

	 	
			2.2.2

				
			Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age. The annual benefit shall be distributed to the Executive for the greater of fifteen (15) years, or the Executive’s lifetime.

			

 

3

 

 

	
			2.3

				
			Disability Benefit. If the Executive experiences a Disability prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

			

 

	 	
			2.3.1

				
			Amount of Benefit. The annual benefit under this Section 2.3 is the Disability Benefit set forth on Schedule A for the Plan Year immediately preceding the date that Separation from Service occurs; provided, however, if the Executive Separates from Service on December 31st of a Plan Year, then the Bank shall distribute the Disability Benefit set forth on Schedule A for the Plan Year in which such Separation from Service occurs.

			

 

	 	
			2.3.2

				
			Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age. The annual benefit shall be distributed to the Executive for the greater of fifteen (15) years, or the Executive’s lifetime.

			

 

	
			2.4

				
			Change in Control Benefit. Upon a Change in Control followed by Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article.

			

 

	 	
			2.4.1

				
			Amount of Benefit. The annual benefit under this Section 2.4 is the Change in Control Benefit set forth on Schedule A for the Plan Year immediately preceding the date that Separation from Service occurs; provided, however, if the Executive Separates from Service on December 31st of a Plan Year, then the Bank shall distribute the Change in Control Benefit set forth on Schedule A for the Plan Year in which such Separation from Service occurs.

			

 

	 	
			2.4.2

				
			Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Separation from Service. The annual benefit shall be distributed to the Executive for the greater of fifteen (15) years, or the Executive’s lifetime.

			

 

	 	
			2.4.3

				
			Excess Parachute Payment Gross-up. If any benefit payable under this Agreement would create an excise tax under the excess parachute rules of Section 280G of the Code, the Bank shall pay to the Executive an additional amount (the “Gross-up”) equal to:

			

 

the Executive’s excise penalty tax amount

divided by the sum of

(one minus the sum of the penalty tax rate plus the Executive’s marginal income tax rate)

 

The Gross-up shall be paid in equal annual payments for the greater of fifteen (15) years or the Executive’s lifetime.

 

4

 

 

	
			2.5

				
			Restriction on Timing of Distribution. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution or series of distributions to be made due to a Separation from Service shall commence no earlier that the first day of the seventh month following the Separation from Service.

			

 

	
			2.6

				
			Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the inclusion of any portion of the Account Value into the Executive’s income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the Executive’s vested Account Value, a distribution shall be made as soon as is administratively practicable following the discovery of the plan failure.

			

 

	
			2.7

				
			Change in Form or Timing of Distributions. For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the Agreement to delay the timing or change the form of distributions. Any such amendment:

			

 

	 	
			(a)

				
			may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder;

			

	 	
			(b)

				
			must, for benefits distributable under Section 2.1, be made not less than twelve (12) months prior to the Executive’s Normal Retirement Age.

			

	 	
			(c)

				
			must, for benefits distributable under Sections 2.1, 2.2, and 2.3 delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

			

	 	
			(d)

				
			 must take effect not less than twelve (12) months after the amendment is made.

			

 

Article 3

Distribution at Death

 

	
			3.1

				
			Death During Active Service. If the Executive dies while in the active service of the Bank, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed in lieu of the benefits under Article 2.

			

 

	 	
			3.1.1

				
			Amount of Benefit. The annual benefit under this Section 3.1 is the Death Benefit set forth on Schedule A for the indicated date which is the same date or most recently precedes the date that the Executive’s death occurs.

			

 

	 	
			3.1.2

				
			Distribution of Benefit. The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments for fifteen (15) years commencing the first day of the month following receipt by the Bank of the Executive’s death certificate.

			

 

5

 

 

	
			3.2

				
			Death During Distribution of a Benefit. If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining monthly installments at the same time and in the same amounts that would have been distributed to the Executive had the Executive survived; provided, however, for benefits payable under Section 2.1, if the Executive has received less than one hundred eighty (180) equal consecutive monthly installments, the Beneficiary shall continue to receive the same amounts and at the same time until the sum of the monthly installments to the Beneficiary and Executive equal one hundred eighty (180).

			

 

	
			3.3

				
			Death After Separation from Service But Before Benefit Distributions Commence. If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit distributions shall commence within thirty (30) days following receipt by the Bank of the Executive’s death certificate for a total of on hundred eighty (180) equal consecutive monthly installments.

			

 

Article 4

Beneficiaries

 

	
			4.1

				
			Beneficiary. The Executives shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefit distributions under this Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates.

			

 

	
			4.2

				
			Beneficiary Designation: Change. The Executives 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 Executives 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 prior to the Executive’s death.

			

 

	
			4.3

				
			Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged 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 made to the personal representative of the Executive's estate.

			

 

6

 

 

	
			4.5

				
			Facility of Distribution. If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Executive’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount.

			

 

Article 5

General Limitations

 

	
			5.1

				
			Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated due to a Termination for Cause.

			

 

	
			5.2

				
			Suicide or Misstatement. No benefits shall be distributed if the Executive commits suicide within two years after the Effective Date of this Agreement, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

			

 

	
			5.3

				
			Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

			

 

Article 6

Administration of Agreement

 

	
			6.1

				
			Plan Administrator Duties. This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall appoint. The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administra‐tion of this Agreement and (ii) decide or resolve any and all ques‐tions including interpretations of this Agreement, as may arise in connection with the Agreement to the extent the exercise of such discretion and authority does not conflict with Section 409A of the Code and regulations thereunder.

			

 

	
			6.2

				
			Agents. In the administration of this Agreement, 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 Bank.

			

 

7

 

 

	
			6.3

				
			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 Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement.

			

 

	
			6.4

				
			Indemnity of Plan Administrator. The Bank 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 Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

			

 

	
			6.5

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

			

 

	
			6.6

				
			Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.

			

 

Article 7

Claims And Review Procedures

 

	
			7.1

				
			Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:

			

 

	 	
			7.1.1

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

			

 

	 	
			7.1.2

				
			Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within 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 90 days by notifying the claimant in writing, prior to the end of the initial 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.

			

 

8

 

 

	 	
			7.1.3

				
			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:

			

 

	 	
			(a)

				
			The specific reasons for the denial;

			

	 	
			(b)

				
			A reference to the specific provisions of the Agreement on which the denial is based;

			

	 	
			(c)

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

			

	 	
			(d)

				
			An explanation of the Agreement’s review procedures and the time limits applicable to such procedures; and

			

	 	
			(e)

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

			

 

	
			7.2

				
			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:

			

 

	 	
			7.2.1

				
			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.

			

 

	 	
			7.2.2

				
			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.

			

 

	 	
			7.2.3

				
			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.

			

 

	 	
			7.2.4

				
			Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within 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 60 days by notifying the claimant in writing, prior to the end of the initial 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.

			

 

9

 

 

	 	
			7.2.5

				
			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:

			

 

	 	
			(a)

				
			The specific reasons for the denial;

			

	 	
			(b)

				
			A reference to the specific provisions of the Agreement on which the denial is based;

			

	 	
			(c)

				
			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

			

	 	
			(d)

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

			

 

Article 8

Amendments and Termination

 

	
			8.1

				
			Amendments. This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative or tax law, including without limitation Section 409A of the Code and any and all regulations and guidance promulgated thereunder.

			

 

	
			8.2

				
			Plan Termination Generally. This Agreement may be terminated only by a written agreement signed by the Bank and the Executive. The benefit shall be the Early Termination benefit as set forth on Schedule A as of the date the Agreement is terminated. Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3.

			

 

	
			8.3

				
			Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances:

			

 

	 	
			(a)

				
			Within thirty (30) days before, or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Bank's arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements;

			

	 	
			(b)

				
			Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

			

 

10

 

 

	 	
			(c)

				
			Upon the Bank’s termination of this and all other non-account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Bank does not adopt any new non-account balance plans for a minimum of five (5) years following the date of such termination;

			

 

the Bank may distribute the actuarial equivalent of the present value of the Early Termination benefit, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms.

 

Article 9

Miscellaneous

 

	
			9.1

				
			Binding Effect. This Agreement shall bind the Executive and the Bank, and their beneficiaries, survivors, executors, administrators and transferees.

			

 

	
			9.2

				
			No Guarantee of Employment. This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Bank's right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time.

			

 

	
			9.3

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

			

 

	
			9.4

				
			Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement. Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). Further, the Bank shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder.

			

 

	
			9.5

				
			Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the Commonwealth of Virginia, except to the extent preempted by the laws of the United States of America.

			

 

	
			9.6

				
			Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute 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 on the Executive's life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.

			

 

11

 

 

	
			9.7

				
			Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor bank.

			

 

	
			9.8

				
			Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.

			

 

	
			9.9

				
			Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

			

 

	
			9.10

				
			Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement, the Bank or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative acts do not violate Section 409A of the Code.

			

 

	
			9.11

				
			Headings. Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

			

 

	
			9.12

				
			Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

			

 

	
			9.13

				
			Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

			

 

	
			The National Bank of Blacksburg

			
	
			c/o National Bankshares, Inc.

			
	
			Attn: James G. Rakes

			
	
			P.O. Box 90002

			
	
			Blacksburg, VA 24062-9002

			

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

12

 

 

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive.

 

	
			9.14

				
			Compliance with Section 409A. This Agreement shall at all times be administered and the provisions of this Agreement shall be interpreted consistent with the requirements of Section 409A of the Code and any and all regulations thereunder, including such regulations as may be promulgated after the Effective Date of this Agreement.

			

 

	
			9.15

				
			Rescissions. Any modification to the terms of this Agreement that would inadvertently result in an additional tax liability on the part of the Executive, shall have no effect to the extent the change in the terms of the plan is rescinded by the earlier of a date before the right is exercised (if the change grants a discretionary right) and the last day of the calendar year during which such change occurred.

			

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement.

 

	
			Executive: 

				
			BANK:

			 

			The National Bank of Blacksburg

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			/s/David K. Skeens                                                  

				
			By: 

				
			/s/ James G. Rakes

				
			 

			
	
			David K. Skeens

				
			 

				
			James G. Rakes

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	 	Its: Chairman, President & CEO	 

        

13

 

 

The National Bank of Blacksburg Salary

Continuation Plan - Schedule A

David K. Skeens

 

	
			Birth Date: 10/12/1966

				 	
			Early

				
			 

				
			 

				
			Pre-retirement

			
	
			Efffective Date: 1/1/2006

				 	
			Termination

				Disability	Change of Control	
			Death Benefit

			
	
			Normal Retirement 10/12/2031, Age 65:

				 	
			Annual Benefits 

			Payable in Monthly 

			Installments 

			Commencing at

			Normal Retirement Date

			For Life

				
			Annual Benefits 

			Payable in Monthly 

			Installments 

			Commencing at

			Normal Retirement Date

			For Life

				
			Annual Benefits 

			Payable in Monthly 

			Installments 

			Commencing at

			Termination Date

			For Life

				
			Annual Benefits 

			Payable in Monthly 

			Installments 

			Commencing at

			Death for

			15 Years

			
	
			Period Ending:

				
			Age

				
			(1)

				
			(2)

				
			(3)

				
			(4)

			
	
			12/31/2005

				
			39

				
			$0

				
			$0

				
			$11,221

				
			$30,807

			
	
			12/31/2006

				
			40

				
			$0

				
			$1,186

				
			$11,670

				
			$30,807

			
	
			12/31/2007

				
			41

				
			$0

				
			$2,373

				
			$12,137

				
			$30,807

			
	
			12/31/2008

				
			42

				
			$0

				
			$3,559

				
			$12,622

				
			$30,807

			
	
			12/31/2009

				
			43

				
			$0

				
			$4,745

				
			$13,127

				
			$30,807

			
	
			12/31/2010

				
			44

				
			$0

				
			$5,932

				
			$13,652

				
			$30,807

			
	
			12/31/2011

				
			45

				
			$0

				
			$7,118

				
			$14,198

				
			$30,807

			
	
			12/31/2012

				
			46

				
			$0

				
			$8,304

				
			$14,766

				
			$30,807

			
	
			12/31/2013

				
			47

				
			$0

				
			$9,491

				
			$15,357

				
			$30,807

			
	
			12/31/2014

				
			48

				
			$0

				
			$10,677

				
			$15,971

				
			$30,807

			
	
			12/31/2015

				
			49

				
			$0

				
			$11,864

				
			$16,610

				
			$30,807

			
	
			12/31/2016

				
			50

				
			$13,050

				
			$13,050

				
			$17,275

				
			$30,807

			
	
			12/31/2017

				
			51

				
			$14,236

				
			$14,236

				
			$17,966

				
			$30,807

			
	
			12/31/2018

				
			52

				
			$15,423

				
			$15,423

				
			$18,684

				
			$30,807

			
	
			12/31/2019

				
			53

				
			$16,609

				
			$16,609

				
			$19,432

				
			$30,807

			
	
			12/31/2020

				
			54

				
			$17,795

				
			$17,795

				
			$20,209

				
			$30,807

			
	
			12/31/2021

				
			55

				
			$18,982

				
			$18,982

				
			$21,017

				
			$30,807

			
	
			12/31/2022

				
			56

				
			$20,168

				
			$20,168

				
			$21,858

				
			$30,807

			
	
			12/31/2023

				
			57

				
			$21,354

				
			$21,354

				
			$22,732

				
			$30,807

			
	
			12/31/2024

				
			58

				
			$22,541

				
			$22,541

				
			$23,641

				
			$30,807

			
	
			12/31/2025

				
			59

				
			$23,727

				
			$23,727

				
			$24,587

				
			$30,807

			
	
			12/31/2026

				
			60

				
			$24,913

				
			$24,913

				
			$25,571

				
			$30,807

			
	
			12/31/2027

				
			61

				
			$26,100

				
			$26,100

				
			$26,593

				
			$30,807

			
	
			12/31/2028

				
			62

				
			$27,286

				
			$27,286

				
			$27,657

				
			$30,807

			
	
			12/31/2029

				
			63

				
			$28,472

				
			$28,472

				
			$28,763

				
			$30,807

			
	
			12/31/2030

				
			64

				
			$29,659

				
			$29,659

				
			$29,914

				
			$30,807

			
	
			10/12/2031

				
			65

				
			$30,807

				
			$30,807

				
			$30,807

				
			$30,807

			

 

14

 

 

FIRST AMENDMENT

 

TO THE

 

NATIONAL BANK OF BLACKSBURG

 

SALARY CONTINUATION AGREEMENT DATED FEBRUARY 8, 2006

FOR DAVID K. SKEENS

 

THIS FIRST AMENDMENT  is adopted this 19th day of December, 2007, effective as of January 1, 2006, by and between THE NATIONAL BANK OF BLACKSBURG, a  nationally-chartered commercial  bank  located  in  Blacksburg,  Virginia  (the  "Bank"),  and DAVID K. SKEENS (the "Executive").

 

The Bank and the Executive executed the Salary Continuation Agreement on February 8, 2006 effective as of January 1, 2006 (the "Agreement").

 

The undersigned hereby amend the Agreement for the purpose of bringing the Agreement into compliance  with  Section  409A of  the  Internal Revenue Code.   Therefore, the following changes shall be made:

 

Sections 2.4 and 2.4.3 of the Agreement shall be deleted in its entirety and replaced by the following:

 

	 	
			2.4

				
			Change in Control Benefit.  If a Change in Control occurs, followed within twenty-four (24) months by the Executive's Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article.

			

 

	 	
			2.4.3

				
			Excess Parachute Payment Gross-up.  If any benefit payable under this Agreement would create an excise tax under the excess parachute rules of Section 280G of the Code, the Bank shall pay to the Executive an additional amount (the "Gross-up") equal to:

			

 

the Executive's excise penalty tax amount divided by the sum of (one minus the sum of the penalty tax rate plus the Executive's marginal income tax rate)

 

The Gross-up shall be paid in the same manner and same time as the benefit which creates the gross-up.

 

 

 

 

Section 2.7 of the Agreement shall be deleted in its entirety and replaced by the following:

 

	
			2.7 

				
			Change  in  Form  or  Timing  of  Distributions. 

			

 

	 	
			All  changes  in  the  form  or  timing  of distributions hereunder must comply with the following requirements.  The changes:

			

 

	 	 	
			(a)       may  not accelerate  the time or schedule  of  any distribution,  except as provided in Code Section 409A and the regulations thereunder;

			

 

	 	 	
			(b)       must, for benefits distributable under Sections 2.1, 2.2 and 2.3, be made at least twelve (12) months prior to the first scheduled distribution;

			

 

	 	 	
			(c)       must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

			

 

	 	 	
			(d)       must  take effect  not  less than twelve (12)  months after  the election  is made.

			

 

Section 8.3  of the Agreement shall be deleted in its entirety and replaced by the following:

 

	
			8.3

				
			Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in Section 8.2, if this Agreement terminates in the following circumstances:

			

 

	
			(a) Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Bank's arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of such terminations;

			

 

	
			(b)   Upon the Bank's dissolution or with the approval of a bankruptcy court, provided that the amounts deferred under the Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

			

 

2

 

 

	
			(c)   Upon the Bank's termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements ("Similar Arrangements"), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Bank, (ii) all termination distributions are made No earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate the Agreement;

			

 

	 	
			the Bank may distribute the actuarial equivalent of the present value of the Early Termination benefit, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms.

			

 

IN WITNESS OF THE ABOVE, the Bank and the Executive hereby consent to this First Amendment.

 

	
			Executive:  

				 	
			The National Bank of Blacksburg:

				
			 

			
	
			 

				 	
			 

				
			 

				
			 

			
	
			/s/ David K. Skeens

				 	
			By:

				
			/s/ James G. Rakes

				
			 

			
	
			David K. Skeens

				 	
			 

				
			James G. Rakes

				
			 

			
	
			 

				 	
			 

				
			 

				
			 

			
	 	 	Its: Chairman, President & CEO	 

 

3

 

 

 

 

 

SECOND AMENDMENT 

TO

THE NATIONAL BANK OF BLACKSBURG 

SALARY CONTINUATION AGREEMENT 

DATED FEBRUARY 8, 2006

FOR DAVID K. SKEENS

 

THIS SECOND AMENDMENT is adopted this 17th day of December, 2008, effective as of January 1, 2006, by and between THE NATIONAL BANK OF BLACKSBURG, a nationally-chartered commercial bank located in Blacksburg, Virginia (the "Bank"), and DAVID

K. SKEENS (the "Executive").

 

The Bank and the Executive executed the Salary Continuation Agreement on February 8, 2006 effective as of January 1, 2006 (the "Agreement").

 

The undersigned hereby amend the Agreement for the purpose of bringing the Agreement into compliance with Section 409A of the Internal Revenue Code. Therefore, the following changes shall be made:

 

 

The following sentence is added at the end of Section 1.13 of the Agreement:

 

In determining whether a Separation from Service has occurred, the term "Bank" shall include its affiliates required to be treated as a service recipient along with the Bank for purposes of Section 409A of the Code.

 

\ Sections 2.3 and 2.3.1 of the Agreement shall be deleted in their entirety and replaced by the following:

 

	
			2.3

				
			Disability Benefit. If the Executive experiences a Disability prior to Normal Retirement Age while in the active service of the Bank, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

			

 

	
			2.3.1

				
			Amount of Benefit. The annual benefit under this Section 2.3 is the Disability Benefit set forth on Schedule A for the Plan Year immediately preceding the date that the Executive's cessation of service with the Bank occurs due to Disability; provided, however, if the Executive ceases service with the Bank due to Disability on December 31st of a Plan Year, then the Bank shall distribute the Disability Benefit set forth on Schedule A for the Plan Year in which such Separation from Service occurs.

			

 

Section 2.4.3 of the Agreement shall be deleted in its entirety and replaced by the following:

 

	
			2.4.3

				
			Excess Parachute Payment If any benefit payable under this Agreement would create an excise tax under the excess parachute rules of Section 280G of the Code, the Bank shall comply with any applicable restrictions or limitations applicable to the Executive in the Executive's employment or other agreement, if any, with the Bank or any affiliate of the Bank addressing the same.

			

 

2

 

THE NATIONAL BANK OF BLACKSBURG

Salary Continuation Agreement

 

Section 2.5 of the Agreement shall be deleted in its entirety and replaced by the following:

 

	
			2.5

				
			Restriction on Timing of Distribution. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution or series of distributions to be made due to a Separation from Service shall commence no earlier than the first day of the seventh month following the Separation from Service. No catch-up payment, or interest representing the time value of money, shall be made or due as a result of the six (6) month delay in payment required by this Section 2.5

			

 

Section 8.3 of the Agreement shall be deleted in its entirety and replaced by the following:

 

	
			8.3

				
			Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in Section 8.2, but subject to the applicable requirements of Section 409A of the Code, if this Agreement terminates in the following circumstances:

			

 

	 	(a)	
			Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Bank's arrangements which are substantially similar to the Agreement are terminated with respect to the participants therein who experienced the Change in Control so the Executive and all such participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of such terminations;

			

 

	 	
			(b)

				
			Upon the Bank's dissolution or with the approval of a bankruptcy court, provided that the amounts deferred under the Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

			

 

	 	
			(c)

				
			Upon the Bank's termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section l.409A-l(c) if the Executive participated in such arrangements ("Similar Arrangements"), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate the Agreement;

			

 

 

 

THE NATIONAL BANK OF BLACKSBURG

Salary Continuation Agreement

 

the Bank may distribute the actuarial equivalent of the present value of the Early Termination benefit, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms. Actuarial equivalence shall be determined on the basis of the applicable actuarial factors in the National Bankshares, Inc. Retirement Income Plan unless the Bank decides, in good faith, that other actuarial factors are more appropriate.

 

 

IN WITNESS OF THE ABOVE, the Bank and the Executive hereby consent to this Second Amendment.

 

	
			Executive:  

				 	
			The National Bank of Blacksburg:

				
			 

			
	
			 

				 	
			 

				
			 

				
			 

			
	
			/s/ David K. Skeens

				 	
			By:

				
			/s/ James G. Rakes

				
			 

			
	
			David K. Skeens

				 	
			 

				
			James G. Rakes

				
			 

			
	
			 

				 	
			 

				
			 

				
			 

			
	 	 	Its: Chairman, President & CEO	 

 

3

 

 

THIRD AMENDMENT

TO THE

THE NATIONAL BANK OF BLACKSBURG

SALARY CONTINUATION AGREEMENT

FOR DAVID K. SKEENS

 

THIS THIRD AMENDMENT is adopted this 20th day of January, 2012, by and between The National Bank of Blacksburg, (the “Bank”) and David K. Skeens (the “Executive”).

 

The Bank and the Executive entered into a Salary Continuation Agreement dated February 8, 2006 and two subsequent amendments thereto (collectively, the “Agreement”). The Bank and the Executive now wish to increase the amount of the retirement benefit provided in the Agreement.

 

Now, therefore, the Bank and the Employee amend the Agreement as follows.

 

Section 2.2.1 of the Agreement shall be deleted in its entirety and replaced with the following.

 

2.1.1         Amount of Benefit. The annual benefit under this Section 2.1 is Sixty-Five Thousand Nine Hundred Forty Dollars ($65,940).

 

The Schedule A attached hereto shall replace the Schedule A originally incorporated into the Agreement.

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Third Amendment.

 

	
			Executive:  

				 	
			The National Bank of Blacksburg:

				
			 

			
	
			 

				 	
			 

				
			 

				
			 

			
	
			/s/ David K. Skeens

				 	
			By:

				
			/s/ James G. Rakes

				
			 

			
	
			David K. Skeens

				 	
			 

				
			James G. Rakes

				
			 

			
	
			 

				 	
			 

				
			 

				
			 

			
	 	 	Its: Chairman, President & CEO	 

 

 

 

 

The National Bank of Blacksburg

Salary Continuation Plan - Schedule A (revised as of January 1, 2012)

David K. Skeens

	
			Birth Date: 10/12/1966

				
			Early

				
			 

				
			 

				
			Pre-retirement

			
	
			Plan Effective Date: 1/1/2012

				Termination	Disability	Change of Control	
			Death Benefit

			
	
			Normal Retirement 10/12/2031, Age 65

				
			Annual Benefits

				
			Annual Benefits

				
			Annual Benefits

				
			Annual Benefits

			
	 	
			Payable in Monthly

				
			Payable in Monthly

				
			Payable in Monthly

				
			Payable in Monthly

			
	
			Normal Retirement Benefit: $65,940

				
			Installments for life, with

				
			Installments for life, with

				
			Installments for life, with

				
			Installments for 15 years;

			
	 	
			15 years certain;

				
			15 years certain;

				
			15 years certain;

				 
	 	
			Commencing at

			Normal Retirement Age

				
			Commencing at

			Normal Retirement Age

				
			Commencing at

			Separation of Service

				
			Commencing at

			Death

			
	 	 	 
	
			Separation of Service

				 	 	 
	on or after:	
			Vesting

				
			Dollars

				
			(2)

				
			(3)

				
			(4)

			

 

	
			January 1, 2012

				
			0.00%

				
			$0

				
			$7,079

				
			30,291

				
			65,940

			
	
			December 31, 2012

				
			0.00%

				
			$0

				
			$10,047

				
			31,503

				
			65,940

			
	
			December 31, 2013

				
			0.00%

				
			$0

				
			$13,015

				
			32,763

				
			65,940

			
	
			December 31, 2014

				
			0.00%

				
			$0

				
			$15,983

				
			34,073

				
			65,940

			
	
			December 31, 2015

				
			0.00%

				
			$0

				
			$18,950

				
			35,436

				
			65,940

			
	
			December 31, 2016

				
			100.00%

				
			$21,918

				
			$21,918

				
			36,854

				
			65,940

			
	
			December 31, 2017

				
			100.00%

				
			$24,886

				
			$24,886

				
			38,328

				
			65,940

			
	
			December 31, 2018

				
			100.00%

				
			$27,853

				
			$27,853

				
			39,861

				
			65,940

			
	
			December 31, 2019

				
			100.00%

				
			$30,821

				
			$30,821

				
			41,456

				
			65,940

			
	
			December 31, 2020

				
			100.00%

				
			$33,789

				
			$33,789

				
			43,114

				
			65,940

			
	
			December 31, 2021

				
			100.00%

				
			$36,757

				
			$36,757

				
			44,838

				
			65,940

			
	
			December 31, 2022

				
			100.00%

				
			$39,724

				
			$39,724

				
			46,632

				
			65,940

			
	
			December 31, 2023

				
			100.00%

				
			$42,692

				
			$42,692

				
			48,497

				
			65,940

			
	
			December 31, 2024

				
			100.00%

				
			$45,660

				
			$45,660

				
			50,437

				
			65,940

			
	
			December 31, 2025

				
			100.00%

				
			$48,628

				
			$48,628

				
			52,455

				
			65,940

			
	
			December 31, 2026

				
			100.00%

				
			$51,595

				
			$51,595

				
			54,553

				
			65,940

			
	
			December 31, 2027

				
			100.00%

				
			$54,563

				
			$54,563

				
			56,735

				
			65,940

			
	
			December 31, 2028

				
			100.00%

				
			$57,531

				
			$57,531

				
			59,004

				
			65,940

			
	
			December 31, 2029

				
			100.00%

				
			$60,498

				
			$60,498

				
			61,364

				
			65,940

			
	
			December 31, 2030

				
			100.00%

				
			$63,466

				
			$63,466

				
			63,819

				
			65,940

			
	
			October 12, 2031 (*)

				
			100.00%

				
			$65,940

				
			$65,940

				
			65,940

				
			65,940

			

 

(*) Normal Retirement Age

 

 

 

 

FOURTH AMENDMENT

TO THE

THE NATIONAL BANK OF BLACKSBURG

SALARY CONTINUATION AGREEMENT

FOR DAVID K. SKEENS

 

THIS FOURTH AMENDMENT is adopted this 16th day of August, 2021, by and between The National Bank of Blacksburg (the “Bank”) and David K. Skeens (the “Executive”).

 

The Bank and the Executive entered into a Salary Continuation Agreement dated February 8, 2006 and three subsequent amendments thereto (collectively, the “Agreement”). The Bank and the Executive now wish to increase the amount of the retirement benefit provided in the Agreement and update the Agreement’s amendment and termination provisions.

 

Now, therefore, the Bank and the Executive amend the Agreement as follows.

 

Section 2.2.1 of the Agreement shall be deleted in its entirety and replaced with the following.

 

2.1.1         Amount of Benefit. The annual benefit under this Section 2.1 is Sixty-Eight Thousand Nine Hundred Forty Dollars ($68,940).

 

Article 8 of the Agreement shall be deleted in its entirety and replaced with the following.

 

ARTICLE 8

AMENDMENT AND TERMINATION

 

	
			8.1

				
			Agreement Amendment Generally. Except as provided in Section 8.2, this Agreement may be amended only by a written agreement signed by both the Bank and the Executive.

			

 

	
			8.2

				
			Amendment to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Bank at any time, if found necessary in the opinion of the Bank, (i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, (ii) to conform the Agreement to the requirements of any applicable law or (iii) to comply with the written instructions of the Bank’s auditors or banking regulators.

			

 

	
			8.3

				
			Agreement Termination Generally. Except as provided in Section 8.4, this Agreement may be terminated only by a written agreement signed by the Company and the Executive. Such termination shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or 3.

			

 

 

 

 

	
			8.4

				
			Effect of Complete Termination. Notwithstanding anything to the contrary in Section 6.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Bank may completely terminate and liquidate the Agreement. In the event of a complete termination under subsection 8.4.1 or 8.4.3, the Bank shall pay the Executive the entire amount the Bank has accrued with respect to the benefits hereunder. In the event of a complete termination under subsection 8.4.2, the Employer shall pay the Executive the present value of the Change in Control benefit described in Section 2.4, calculated using the discount rate and mortality age assumptions utilized by the Employer for determining the accrued benefit under Generally Accepted Accounting Principles as of December 31st of the calendar year preceding the earlier of (i) the date of the Change of Control or (ii) the date of the complete termination. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.

			

 

	 	
			8.4.1

				
			Corporate Dissolution or Bankruptcy. The Bank may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

			

 

	 	
			8.4.2

				
			Change in Control. The Bank may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Bank which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Bank takes the irrevocable action to terminate the arrangements.

			

 

	 	
			8.4.3

				
			Discretionary Termination. The Bank may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Bank; (ii) all arrangements sponsored by the Bank and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Bank takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Bank takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Bank nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Bank takes the irrevocable action to terminate this Agreement.

			

 

2

 

 

The Schedule A attached hereto shall replace the Schedule A originally incorporated into the Agreement.

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Fourth Amendment.

 

	EXECUTIVE	
			 

				
			BANK

				
			 

			
	 	
			 

				
			 

				
			 

				
			 

			
	 	
			 

				
			 

				
			 

				
			 

			
	/s/ David K. Skeens      	
			 

				
			By:

				
			/s/ F. Brad Denardo

				
			 

			
	David K. Skeens	
			 

				
			 

				
			F. Brad Denardo

				
			 

			
	 	
			 

				
			 

				
			 

				
			 

			
	 	 	
			Title: Chairman, President &

			Chief Executive Officer

				 

 

                                                      

3

 

 

The National Bank of Blacksburg

Salary Continuation Plan - Schedule A (as amended effective August 1, 2021)

 

David K. Skeens

 

	
			Birth Date: 10/12/1966

			Plan Effective Date: 1/1/2006

				
			Early

			Termination

				
			Disability

				
			Change of Control

				
			Pre-retirement

			Death Benefit

			
	
			Normal Retirement 10/12/2031, Age 65

			 

			Normal Retirement Benefit: $68,940

				
			Annual Benefits

			Payable in Monthly

			Installments for life, with

				
			Annual Benefits

			Payable in Monthly I

			nstallments for life, with

				
			Annual Benefits 

			Payable in Monthly

			Installments for life, with

				
			Annual Benefits 

			Payable in Monthly

			Installments for 15 years;

			
	 	
			15 years certain;

			Commencing at

			Normal Retirement Age

				
			15 years certain;

			Commencing at

			Normal Retirement Age

				
			15 years certain;

			Commencing at

			Separation of Service

				
			Commencing at Death

			
	 	 	 
	
			Separation of Service

				 	 	 
	on or after:	
			Vesting

				
			Dollars

				
			(2)

				
			(3)

				
			(4)

			
	
			August 1, 2021

				
			100.00%

				
			33,789

				
			33,789

				
			43,114

				
			68,940

			
	
			December 31, 2021

				
			100.00%

				
			36,974

				
			36,974

				
			44,838

				
			68,940

			
	
			December 31, 2022

				
			100.00%

				
			40,297

				
			40,297

				
			46,632

				
			68,940

			
	
			December 31, 2023

				
			100.00%

				
			43,603

				
			43,603

				
			48,497

				
			68,940

			
	
			December 31, 2024

				
			100.00%

				
			46,890

				
			46,890

				
			50,437

				
			68,940

			
	
			December 31, 2025

				
			100.00%

				
			50,160

				
			50,160

				
			52,455

				
			68,940

			
	
			December 31, 2026

				
			100.00%

				
			53,413

				
			53,413

				
			54,553

				
			68,940

			
	
			December 31, 2027

				
			100.00%

				
			56,652

				
			56,652

				
			56,735

				
			68,940

			
	
			December 31, 2028

				
			100.00%

				
			59,877

				
			59,877

				
			59,004

				
			68,940

			
	
			December 31, 2029

				
			100.00%

				
			63,086

				
			63,086

				
			61,364

				
			68,940

			
	
			December 31, 2030

				
			100.00%

				
			66,284

				
			66,284

				
			64,855

				
			68,940

			
	
			October 12, 2031 (*)

				
			100.00%

				
			68,940

				
			68,940

				
			68,940

				
			68,940

			

 

(*) Normal Retirement Age

 

IF THERE IS A CONFLICT BETWEEN THIS SCHEDULE A AND THE AGREEMENT, THE TERMS AND PROVISIONS OF THE AGREEMENT SHALL PREVAIL. IF A TRIGGERING EVENT OCCURS, REFER TO THE AGREEMENT TO DETERMINE THE ACTUAL BENEFIT AMOUNT BASED ON THE DATE OF THE EVENT.

 

	David K, Skeens /s/ David K. Skeens                             	The National Bank of Blacksburg, by /s/ F. Brad Denardo                                    
	 	F. Brad Denardo
	 	 
	Date: August 16, 2021	Title: Chairman, President & Chief Executive Officer
	 	Date: August 16, 2021

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