Document:

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                                                                    EXHIBIT 10.3

                           BOTETOURT BANKSHARES, INC.
                        1998 EMPLOYEE STOCK DISCOUNT PLAN
                                    ARTICLE I
                               Definition of Terms

     The following words and terms as used herein shall have the meaning set
forth below, unless a different meaning is clearly required by the context:

     1.1 "Account": The account maintained to record a Participant's Actual Base
Pay and Bonus payroll deduction contributions to the Plan.

     1.2 "Actual Base Pay": The amount of an Eligible Employee's regular
straight-time cash earnings, overtime and shift premium, as an Eligible Employee
from the Employer, excluding payments and other special payments, commissions
and other marketing incentive payments.

     1.3 "Administrator": The Plan Administrator provided for in ARTICLE X.

     1.4 "Affiliate": Any present or future corporation which would be a "parent
corporation" or a "subsidiary corporation" of the Plan Sponsor as those terms
are defined in Section 424 of the Code.

     1.5 "Annual Base Pay Rate": With respect to an Offering, a Participant's
annual rate of Actual Base Pay as of January 1, but excluding overtime and shift
premium, determined by multiplying his normal weekly rate of such base pay (as
in effect on January 1 of the calendar year for which the Offering is made) by
52 or the hourly rate by 2,080, provided that, in the case of a part-time
employee, such determination shall be made by multiplying such employee's hourly
rate by the number of his regularly scheduled hours of work as in effect on the
January 1 of the calendar year for which the Offering is made.

     1.6 "Beneficiary": The person or persons designated by a Participant or
otherwise entitled pursuant to paragraph 9.2 to receive benefits under the Plan
attributable to such Participant after death of such Participant.

     1.7 "Board": The present and any succeeding Board of Directors of the Plan
Sponsor, unless such term is used with respect to a particular Employer and its
Employees, in which event it shall mean the present and any succeeding Board of
Directors of that Employer.

     1.8 "Bonus": Incentive pay available in cash from the Employer for
performance as an Eligible Employee, exclusive of prizes, awards, stock options,
stock award and the like.

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     1.9 "Common Stock": The common stock, $1.00 par value, of the Plan Sponsor.

     1.10 "Code": The Internal Revenue Code of 1986, as amended.

     1.11 "Eligible Employee": Any person who is employed as a common law
employee by the Employer, who is customarily employed more than 20 hours per
week and who is customarily employed for more than 5 months in a calendar year.

     1.12 "Employee": Any person considered a common law employee of the
Employer or an Affiliate.

     1.13 "Employer": The Plan Sponsor and each other employer heretofore or
hereafter executing or adopting the Plan with the consent of the Administrator
as a participating Employer, collectively unless the context otherwise
indicates, for as long as it remains a participating Employer; and with respect
to any Employee, any one or more of such Employers by which he is at any time
employed. The Administrator shall maintain a list of such Employers who are,
from time to time, participating Employers in the Plan.

     1.14 "Market Value": The fair market value of a Share of Common Stock as
quoted on a reorganized stock quotation system, exchange or bulletin board or,
in the alternative, as determined pursuant to a reasonable method adopted by the
Board in good faith for such purpose.

     1.15 "Offering": An offering of Common Stock pursuant to the Plan.

     1.16 "Offering Commencement Date": January 1 of the calendar year for which
an Offering is made.

     1.17 "Offering Termination Date": December 31 of the calendar year for
which an Offering is made.

     1.18 "Participant": An Eligible Employee who is eligible and who elects to
participate in the Plan for so long as he is considered a Participant as
provided in ARTICLE II.

     1.19 "Plan": The Plan as contained herein or duly amended which shall be
known as the Botetourt Bankshares, Inc. 1998 Employee Stock Discount Plan".

     1.20 "Plan Sponsor": Botetourt Bankshares, Inc., a Virginia corporation.

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                                   ARTICLE II
                          Eligibility and Participation

     2.1 Eligibility and Date of Participation.

     2.1(a) Each Eligible Employee who has completed a 12 month Period of
Service as of the Offering Commencement Date for an Offering and who is an
Eligible Employee on such Offering Commencement Date shall be eligible to
participate in the Offering.

     2.1(b) An Eligible Employee who meets the requirements of subparagraph
2.1(a) with respect to an offering shall become a Participant for that Offering
by filing an authorization for a payroll deduction from his Actual Base Pay with
the Administrator on or before the date set therefor by the Administrator, which
date shall be prior to the first pay day in the Offering period. Payroll
deductions from Actual Base Pay for a Participant shall commence on the
applicable Offering Commencement Date when his authorization for a payroll
deduction from Actual Base Pay becomes effective and shall end on the Offering
Termination Date of the Offering in question to which such authorization is
applicable unless sooner terminated by the Participant as proved in the Plan.

     2.1(c) An individual who becomes a Participant shall be or remain a
Participant for so long as he remains an Eligible Employee who has a payroll
deduction authorization in force and thereafter while he is entitled to future
benefits under the terms of the Plan.

     2.2 Restrictions on Participation. Notwithstanding any provisions of the
Plan to the contrary, no Eligible Employee shall be granted an option to
participate in the Plan:

          (i) if, immediately after the grant, such employee would own stock,
     and/or hold outstanding options to purchase stock, possessing 5% or more of
     the total combined voting power or value of all classes of stock of the
     Plan Sponsor (for purposes of this paragraph, the rules of Section 424(d)
     of the Code shall apply in determining stock ownership); or

          (ii) which permits his rights to purchase stock under all employee
     stock purchase plans of the Plan Sponsor and all Affiliates to accrue at a
     rate which exceeds $25,000 in fair market value of the stock (determined at
     the time such option is granted) for each calendar year in which such
     option is granted) for each calendar year in which such option is
     outstanding (this limitation shall be interpreted to comply with Section
     423(b)(8) of the Code).

     2.3 Leave of Absence.

     2.3(a) For purposes of participation in the Plan, a person on a Leave of
Absence shall be deemed to be an employee for such Leave of Absence and such
employee's employment shall be deemed to have terminated at the end of such
Leave of Absence unless such employment shall have returned to regular
employment with the Employer at the end of such Leave of Absence. Termination by
the Employer of any employee's Leave of Absence, other than termination of such
Leave of Absence on return to employment, shall terminate an employees'
employment for all purposes of the Plan and shall terminate such employee's
participation in the Plan and right to exercise any option granted under the
Plan.

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     2.3(b) If a Participant goes on a Leave of Absence, the Participant shall
have the right to elect (i) to discontinue his participation in the Plan as
provided in paragraph 7.1 or (ii) remain a Participant in the Plan during such
Leave of Absence. If the Participant's Leave of Absence ends by his return to
employment as an Eligible Employee and he has not elected to discontinue his
participation in the Plan, his elected payroll deductions shall recommence.

     2.3(c) A Participant on a Leave of Absence shall, subject to the election
made by the Participant pursuant to subparagraph 2.3(b), continue to be a
Participant and to be considered an Eligible Employee for purposes of the Plan
so long as he is on continuous Leave of Absence.

     2.4 Special Definition and Rules.

     2.4(a) For purposes hereof, the following terms shall have the following
meanings:

          (i) "Leave of Absence": A leave of absence authorized by an Employer.
     For purposes of participation in the Plan, a leave of absence shall in any
     event be considered ended on the 91st day thereof unless the person's right
     to reemployment is guaranteed by law or by contract.

          (ii) "Period of Service": A period of continuous employment as an
     Employee, including Leaves of Absence.

     2.4(b) The Administrator is authorized to treat service with any
organization as service with an Affiliate if substantially all the operating
assets of that organization are acquired by the Plan Sponsor or an Affiliate.

     2.4(c) For purposes hereof, service with any organization which becomes an
Affiliate shall be considered as service with the Affiliate even though such
service occurs before the date the organization becomes an Affiliate.

                                   ARTICLE III
                                     Funding

     3.1 Payroll Deduction.

     3.1(a) At the time a Participant files his authorization for payroll
deduction from his Actual Base Pay for an Offering, he shall elect to have
deductions made from his Actual Base Pay on each payday during the period he is
a Participant and an Eligible Employee with respect to an Offering at a fixed
rate of 5%, inclusive but in whole percentages, of his Actual Base Pay.

     3.1(b) During November of a calendar year for which an Eligible Employee is
a Participant, the Participant may also file an authorization for payroll
deduction from his Bonus payable in December of the year. The maximum amount of
this authorization shall be the lesser of :

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          (i) his Bonus for the calendar year payable in December, or

          (ii) 5% of his Annual Base Pay Rate for the Offering, reduced by his
     Actual Base Pay payroll deductions under the Plan for the calendar year.

     3.1(c) A Participant may discontinue his participation in the Plan by
filing a written notice thereof with the Administrator, but no other change in
an elected payroll deduction can be made by a Participant during an Offering.

     3.1(d) A Participant may not make any separate cash payment to the Plan.

     3.1(e) If the number of shares of Common Stock for which options are
granted to a Participant is limited by reason of the maximum number of shares
which may be issued under paragraph 4.2, the Administrator may reduce the
maximum percentage of Actual Base Pay which may be contributed to the Plan
accordingly.

     3.2 Participant Accounts. All payroll deduction contributions made by or
for a Participant shall be credited to his Account under the Plan. A
Participant's Account is a bookkeeping account maintained by one or more
Employers designated by the Administrator to reflect a Participant's
contributions accumulated under the Plan.

     3.3 Adjustments to Participant Accounts. Each Participant's Account shall
be appropriately credited for contributions and any interest provided under the
Plan and debited for option exercise costs and distributions from the Account to
the Participant or his Beneficiary.

     3.4 Interest on Participant Accounts.

     3.4(a) No interest normally will be paid or allowed on any money paid into
the Plan or credited to the Account of any Participant; provided, however, that
interest shall be paid on any and all money which is distributed to a
Participant or his Beneficiary pursuant to the provisions of subparagraph 4.2(c)
or paragraph 7.1, 7.2 or 7.3.

     3.4(b) Distributions which are credited with interest shall bear simple
interest during the period from the beginning of the month immediately following
the month of withholding or other payment to the end of the month immediately
preceding in which a return is made at the regular passbook savings account
rates in effect at the beginning of each month at the Bank of Botetourt during
the applicable period or, if such rates are not published or otherwise available
for such purpose, at the regular passbook savings account rates in effect at the
beginning of each month during such period at another major commercial bank in
the Commonwealth of Virginia selected by the Administrator.

     3.4(c) Where the amount distributed represents an excess amount in a
Participant's Account after such Account has been applied to the purchase of
Common

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Stock, the Participant's Account balance shall be deemed to have been applied
first toward purchase of Common Stock under the Plan, so that interest shall be
paid on the last withholdings during the period which results in the excess
amount.

     3.5 Plan Costs and Expenses. All costs and benefits under and expenses of
the Plan, including reasonable legal, accounting, and other fees and expenses
incurred in the establishment, amendment, administration and termination of the
Plan, shall be paid by the Employers from their general assets in such manner
and proportions as the Plan sponsor shall determine.

     3.6 Status of Employer Obligations under the Plan.

     3.6(a) The Employers' obligation under the Plan shall be an unfunded
obligation payable solely from the general assets of the Employer and subject to
the claims of the Employer creditors. Each Participant, his Beneficiary and any
other person having or claiming a right to payment hereunder or to any interest
under the Plan shall rely solely on the unsecured promise of the Employer to
make payments or issue Common Stock due hereunder. Each Participant, his
Beneficiary, and any other person having or claiming a right to payments under
the Plan shall have the right to enforce such claim against the Employer in the
same manner as an unsecured creditor of the Employer. Nothing contained in the
Plan shall be deemed to create a trust of any kind. All amounts received or held
by the Employer under the Plan may be used by the Employer for any corporate
purpose and the Employer shall not be obligated to segregate such amounts.

     3.6(b) Nothing contained herein shall be deemed to give any Participant or
Beneficiary any interest in any specific part of the assets of the Employer or
any legal or equitable rights other than his right to receive benefits in
accordance with the provisions of the Plan.

                                   ARTICLE IV
                                    Offerings

     4.1 Offerings. Offering shall be made on a calendar year basis.

     4.2 Shares Available for Offerings.

     4.2(a) The Administrator shall determine the number of shares, if any, of
Common Stock to be issued in connection with any Offering, subject to the limits
provided in the Plan. If the Administrator takes no action regarding the number
of shares available for any Offering, the maximum number shall be considered
available.

     4.2(b) The maximum number of shares of Common Stock which shall be issued
under the Plan and the maximum number of shares issued with respect to any
Offering shall, subject to adjustment upon changes in capitalization of the Plan
Sponsor as provided in paragraph 4.3, be:

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     .    From January 1, 1999 to December 31, 1999: 2,500 shares.

     .    From January 1, 2000 to December 31, 2000: 2,500 shares plus shares
          available for but unissued after prior Offerings, whether offered or
          not.

     .    From January 1, 2001 to December 31, 2001: 2,500 shares plus shares
          available for but unissued after prior Offerings, whether offered or
          not.

     .    From January 1, 2002 to December 31, 2002: 2,500 shares plus shares
          available for but unissued after prior Offerings, whether offered or
          not.

     4.2(c) If the total number of shares for which options are exercised on any
Offering Termination Date exceeds the maximum number of shares for the
applicable Offering, the Administrator shall make a pro rata allocation of the
shares available for delivery and distribution in as nearly a uniform manner as
shall be practicable and as it shall determine to be equitable, and the balance
of each Participant's Account under the Plan shall be returned to him as
promptly as possible.

     4.3 Adjustment upon Changes in capitalization or other Events.

     4.3(a) If, while any option is outstanding, the outstanding shares of
Common Stock have increased, decreased, changed into, or been exchanged for a
different number of kind of shares or securities of the Plan Sponsor through
reorganization, merger, recapitalization, reclassification, stock split, reverse
stock split, stock dividend or similar transaction, appropriate and
proportionate adjustments may be made by the Administrator in the number and/or
kind of shares which are subject to purchase under outstanding options and on
the option exercise price or prices applicable to such outstanding options. In
addition, in any such event, the number and/or kind of shares which may be
offered in the Offerings described in paragraph 4.2 shall also be
proportionately adjusted.

     4.3(b) Upon the dissolution or liquidation of the Plan sponsor, or upon a
reorganization, merger, or consolidation of the Plan Sponsor with one or more
corporations as a result of which the Plan Sponsor is not the surviving
corporation and the Plan is not continued by corporate succession, or upon a
sale of substantially all of the property or stock of the Plan Sponsor to
another corporation, the holder of each option then outstanding under the Plan
will thereafter be entitled to receive at the next Offering Termination Date
upon the exercise of such option for each share as to which such option shall be
exercised, as nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Common Stock was entitled to
receive upon and at the time of such transaction. The Board shall take such
steps in connection with such transactions as it shall deem necessary to assure
that the provisions of this subparagraph shall thereafter be applicable, as
nearly as reasonably may be determined, in relation to the said cash, securities
and/or property as to which such holder of such option might thereafter be
entitled to receive.

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                                    ARTICLE V
                                     Options

     5.1 Number of Option Shares Granted. On the Offering Commencement Date of
each Offering, a Participant with respect to that Offering shall be deemed to
have been granted an option to purchase a maximum number of whole shares of
Common Stock (rounded to the nearest whole share) equal to (i) the Participant's
payroll deduction percentage multiplied by (ii) the Participant's Annual Base
Pay Rate for the Offering and then (iii) divided by 85% of the Market Value of
the Common Stock on the applicable Offering Commencement Date. If the aggregate
shares to be purchased by all Participants for an Offering exceeds the maximum
number permitted in paragraph 4.2, the number of shares shall be reduced pro
rata so that the maximum is not exceeded.

     5.2 Option Price. The option price of Common Stock purchased with a
Participant's Account for an Offering shall be the lesser of :

          (i) 85% of the Market Value of the Common Stock on the Offering
     Commencement date

          (ii) 85% of the Market Value of the Common Stock on the Offering
     Termination Date.

     5.3 Non-Transferability of Option. During Participant's lifetime, options
held by the Participant under the Plan shall not be transferable and shall only
be exercisable by the Participant.

     5.4 Participant's Interest in Optioned Stock. The Participant will have no
interest in Common Stock covered by his option until such option has been
exercised and certificates therefor have been issued.

                                   ARTICLE VI
                               Exercise of Options

     6.1 Automatic Exercise. A Participant's option for the purchase of Common
Stock with his Account attributable to his contributions with respect to any
Offering will be deemed to have been exercised automatically on the Offering
Termination Date applicable to such Offering, and there shall be purchased that
number of full shares of Common Stock which the balance in his Account at that
time will purchase at the applicable option price (but not in excess of the
number of shares for which options have been granted to him pursuant to
paragraph 5.1). Any balance in his Account which is not used to purchase Common
Stock at that time will be returned to him.

     6.2 Fractional Shares. Fractional shares will not be issued under the Plan
for any Offering and any balance in a Participant's Account which would have
been used to purchase fractional shares will be returned to the Participant or,
if the Participant is

<PAGE>

deceased, to his Beneficiary, promptly following the termination of the Offering
in question, without interest.

     6.3 Delivery of Common Stock. As promptly as practicable after the Offering
Termination Date of each Offering, the Plan Sponsor or the Administrator will
deliver to each Participant or his Beneficiary, as appropriate, the Common Stock
purchased upon exercise of his option.

     6.4 Cancellation of Options. Options granted to a Participant which are not
exercised at the Offering Termination Date of an Offering shall thereupon be
cancelled.

                                   ARTICLE VII
             Cessation of Participation and Distribution of Accounts

     7.1 Voluntary Cessation of Participation.

     7.1(a) By written notice to the Administrator, at any time prior to the
Offering Termination Date applicable to any Offering, a Participant may elect to
discontinue his participation in the Offering and withdraw the entire balance of
his Account at such time. In such event, he shall cease to be a Participant with
respect to the Offering upon the filing of the written notice.

     7.1(b) If a Participant elects to discontinue his participation in an
Offering as provided in subparagraph 7.1(a), the entire balance credited to his
Account will then be paid to him promptly after receipt of his notice by the
Administrator, and no further payroll deductions (whether from Actual Base Pay
or Bonus) will be made from his pay for such Offering.

     7.1(c) A Participant's withdrawal from any Offering will not have any
effect upon his eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Plan Sponsor or any
Affiliate.

     7.2 Termination of Employment Generally. Upon termination of the
Participant's employment as an Eligible Employee for any reason (including
death), whether voluntarily or involuntarily, other than for retirement as
provided in paragraph 7.3, or in the event of the Participant's death after
retirement but before the Offering Termination Date for an Offering, the balance
in the Participant's Account will be returned to him or, in the case of his
death, to his Beneficiary.

     7.3 Termination of Employment Due to Retirement. Subject to the provisions
of paragraph 7.2, upon termination of a Participant's employment because of his
retirement under the Plan Sponsor's qualified Retirement Plan, the Participant
shall have the right to elect, by written notice given to the Administrator
prior to the earlier of the Offering Termination Date or the expiration of a
period of 60 days commencing with the date of his retirement, either:

<PAGE>

          (i) withdraw the entire balance in his Account, or

          (ii) to exercise his option for the purchase of Common Stock on the
     Offering Termination Date coinciding with or next following the date of his
     retirement for the purchase of the number of full shares of Common Stock
     which the accumulated balance in his Account at the Offering Termination
     Date will purchase at the applicable option price, and any excess in his
     Account will be returned to him.

     In the event that no such written notice of election shall be duly received
by the Administrator, the Participant shall automatically be deemed to have
elected under alternative (ii) to exercise his option.

                                  ARTICLE VIII
                                 Stock Issuance

     8.1 Issuance of Common Stock Certificates.

     8.1(a) As soon as practicable after the exercise of an option, the
Administrator shall notify the Plan Sponsor and the Plan Sponsor shall deliver
to the Participant or, if the Participant is deceased, his beneficiary,
certificates representing the shares purchased thereunder.

     8.1(b) Stock certificates to be delivered to a Participant under the Plan
will be registered in the name of the Participant, or if the Participant so
directs by written notice to the Administrator prior to the Offering Termination
Date applicable thereto, in the names of the Participant and one such other
person as may be designated by the Participant, as joint tenants with rights of
survivorship or as tenants by the entireties, to the extent permitted by
applicable law.

     8.2 Restrictions on Exercise. The Board may, in its discretion, require as
conditions to the exercise of any option and issuance of any shares that the
shares of Common Stock reserved for issuance upon the exercise of the option
shall have been duly listed, upon official notice of issuance, upon a stock
exchange, and that either:

          (i) a Registration Statement under the Securities Act of 1933, as
     amended, with respect to said shares shall be effective, or

          (ii) the Participant shall have represented at the time of purchase,
     in form and substance satisfactory to the Plan Sponsor, that it is his
     intention to purchase the shares for investment and not for resale or
     distribution.

<PAGE>

                                   ARTICLE IX
                                Death Beneficiary

     9.1 Disposition of Plan Benefits after Death. Upon the death of a
Participant and upon receipt by the Administrator of proof of the Participant's
death and the determination and identity of the Participants' Beneficiary, the
Administrator shall deliver such Common Stock and/or cash to such Beneficiary as
is due under the Plan.

     9.2 Beneficiary Designation.

     9.2(a) Each Participant shall have the right to notify the Administrator in
writing of any designation of a Beneficiary to receive, if alive, benefits under
the Plan in the event of his death. Such designation may be changed from time to
time by notice in writing to the Administrator.

     9.2(b) If a Participant dies without having designated a Beneficiary, or if
the Beneficiary so designated has predeceased the Participant or cannot be
located by the Administrator within one year after the date when the
Administrator commenced making a reasonable effort to locate such Beneficiary,
then his surviving spouse, or if none, then his estate shall be deemed to be his
Beneficiary.

     9.2(c) Any Beneficiary designation may include multiple, contingent or
successive Beneficiaries and may specify the proportionate distribution to each
Beneficiary. If a Beneficiary shall survive the Participant, but shall die
before the entire benefit payable to such Beneficiary has been distributed, then
absent any other provisions by the Participant, the unpaid amount of such
benefit shall be distributed to the estate of the deceased Beneficiary. If
multiple Beneficiaries are designated, absent provisions by the Participant,
those named or the survivors of them shall share equally any benefits payable
under the Plan. Any Beneficiary shall be entitled to disclaim any benefit
otherwise payable to him under the Plan.

                                    ARTICLE X
                              Plan Administration.

     10.1 Appointment of Plan Administrator.

     10.1(a) The Plan Sponsor may appoint two or more persons to serve as the
Plan Administrator (the "Administrator") for the purpose of carrying out the
duties specifically imposed on the Administrator by the Plan and the Code. Upon
the death, resignation or removal of a person serving as, or on a committee
which is, the Administrator, the Plan Sponsor may, but need not, appoint a
successor. The persons shall form an administrative committee for the Plan. The
committeemen serving as Administrator shall serve for indefinite terms at the
pleasure of the Plan sponsor, and may, by thirty (30) days prior written notice
to the Plan sponsor, terminate such appointment.

     10.1(b) Unless otherwise determined by the Plan Sponsor, the Board shall be
the Plan Administrator.

<PAGE>

     10.2 Authority of Administrator. Subject to the express provisions of the
Plan, the Administrator shall have plenary authority in its discretion to
interpret and construe any and all provisions of the Plan, to adopt rules and
regulations for administering the Plan, and to make all other determinations
deemed necessary or advisable for administering the Plan. The Administrator's
determination on the foregoing matters shall be conclusive.

     10.3 Rules Governing the Operation of the Administrator. The Administrator
shall select one of its members as its chairman. The Administrator may appoint a
Secretary and shall make such rules and regulations for the conduct of its
business as it shall deem advisable. The Administrator shall hold its meetings
at such times and places as it shall deem advisable and may hold telephonic
meetings. A majority of its members shall constitute a quorum. All
determinations of the Administrator shall be made by a majority of its members.
The Administrator may correct any defect or omission or reconcile any
inconsistency in the Plan, in the manner and to the extent it shall deem
desirable. Any decision or determination reduced to writing and signed by all of
the members of the Administrator shall be as fully effective as if it has been
made by a majority vote at a meeting duly called and held. No person serving as,
or on a committee constituting, the Administrator who is a Participant shall
take any part as the Administrator in any discretionary action in connection
with his participation as an individual. Such action shall be taken by the
remaining members of the Administrator, if any, or otherwise by the Plan
Sponsor.

                                   ARTICLE XI
                        Amendment and Termination of Plan

     11.1 Amendment and Termination

     11.1(a) The Plan may be amended or terminated in whole or in part at any
time by action of the Board; provided, however, that the Board shall not,
without the approval of the stockholders of the Plan Sponsor, (i) increase the
maximum number of shares which may be issued under any Offering (except pursuant
to paragraph 4.3), (ii) increase the maximum percentage of a Participant's
Annual Base Pay Rate or Actual Base Pay that can be contributed to the Plan,
(iii) reduce the price per share at which Common Stock may be sold, (iv) amend
the requirement as to the class of employees eligible to purchase Common Stock
under the Plan (other than by designating Affiliates which may become
participating Employers), or (v) permit the issuance of Common Stock before
payment therefor in full.

     11.1(b) No termination, modification or amendment of the Plan may, without
the consent of the affected Participant then having an option under the Plan to
purchase Common Stock, adversely affect the rights of such Participant under
such option to use his then Account balance (without further increase or
contribution) to exercise such option in accordance with the Plan.

<PAGE>

     11.2 Termination events with Respect to Employers Other Than the Plan
Sponsor.

     11.2(a) The Plan shall terminate with respect to any Employer other than
the Plan Sponsor, and such Employer shall automatically cease to be a
participating Employer in the Plan and its employees shall cease to be
considered Eligible Employees, upon the happening of any of the following
events:

          (i) Action by its Board or the Board terminating the Plan as to it and
     specifying the date of such termination. Notice of such termination shall
     be delivered to the Administrator and the Plan Sponsor.

          (ii) Its ceasing to be an Affiliate.

     11.2(b) Notwithstanding the foregoing provisions of this Article XII, the
merger or liquidation of any Employer or the consolidation of two (2) or more of
the Employers shall not cause the Plan to terminate with respect to the merging,
liquidating or consolidating Employers, provided that the Plan has been adopted
or is continued and has not terminated with respect to the surviving or
continuing Employer.

                                   ARTICLE XII
                                  Miscellaneous

     12.1 Governing Law. The Plan shall be construed, enforced and administered
in accordance with the laws of the Commonwealth of Virginia, and any federal law
preempting the same.

     12.2 Employment Rights. Participating in the Plan shall not give any
Employee the right to be retained in the Employer's employ nor, upon dismissal
or upon his voluntary termination of employment, to have any right or interest
under the Plan other than as herein provided.

     12.3 Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Participant, including, without limitation, such Participant's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.

     12.4 Conclusiveness of Employer Records. The records of the Employer with
respect to age, service, employment history, compensation, absences, illnesses
and all other relevant matters shall be conclusive for purposes of the
administration of the Plan.

     12.5 Alienation. Except as may be provided in the Plan in the event of a
Participant's death, no Account balance and no option to purchase Common Stock
granted hereunder shall be subject in any manner to alienation, whether by
voluntarily or

<PAGE>

involuntarily, by sale, anticipation, transfer, assignment, pledge, encumbrance,
garnishment, attachment, execution or levy of any kind. Any such attempted
assignment shall be without effect, except that the Administrator may in its
discretion treat such act as an election to cease participation and withdraw
funds in accordance with paragraph 7.1.

     12.6 Notices and Elections. All notices required to be given in writing and
all elections required to be made in writing, under any provision of the Plan
shall be invalid unless made on such forms as may be provided or approved by the
Administrator and, in the case of a notice or election by a Participant or
Beneficiary, unless dated and executed by the Participant or Beneficiary giving
such notice or making such election.

     12.7 Delegation of Authority. Wherever the Plan Sponsor or any Employer is
permitted or required to perform any act, such act may be performed by its Chief
Executive Officer, its President or its Board of Directors or by any person duly
authorized by any of the foregoing.

     12.8 Purpose and Construction. The Plan is intended to provide Eligible
Employees of the Plan Sponsor and other Employers an opportunity to acquire a
proprietary interest in the Plan Sponsor through the purchase of shares of
Common Stock. It is intended that the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Code. The Provisions of the Plan shall
be construed so as to extend and limit participation in a manner consistent with
the requirements of Section 423 of the Code.

                                  ARTICLE XIII
                              Adoption of the Plan

     13.1 Establishment and Effectiveness of the Plan. The Plan shall become
effective as of January 1, 1999, subject to the approval by the holders of the
majority of the Common Stock present and represented at a special or annual
meeting of the shareholders of the Plan Sponsor held on or before May 22, 1999.
If the Plan is not so approved, the Plan shall not become effective and all
funds received by the Employer shall be returned to Participants without
interest.

     13.2 Adoption by Additional Employers. Any corporation which is an
Affiliate and which, with the consent of the Administrator and the approval of
its Board of Directors, desires to adopt the Plan, may do so by executing an
adoption agreement in a form authorized by the Administrator.<PAGE>

                                                                    EXHIBIT 10.4

                           BOTETOURT BANKSHARES, INC.
                                CHANGE OF CONTROL
                                    AGREEMENT

     THIS AGREEMENT, made and entered into this    th day of              , by
                                                ---          -------------
and between BOTETOURT BANKSHARES, INC. (the "Company"), BANK OF BOTETOURT
(the"Bank") and ___________.

                                   WITNESSETH

     WHEREAS, __________ rendered good and valuable services to the Bank as Vice
President promoting the growth of the Bank and profitability for the
shareholders; and

     WHEREAS, __________ has requested and the Bank desires to provide a measure
of security and proper compensation for said services; and

     WHEREAS, the Bank desires to induce __________ to continue his/her
association with the Bank in order to promote future profitability and growth;

     NOW THEREFORE, THAT FOR AND IN CONSIDERATION of the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties covenant and agree as
follows:

     1. In the event that effective control of the Company is obtained by any
person, persons or entity by the purchase of 51% or more of the stock of the
Company at any time while is employed by the Bank, then the Bank shall, within
thirty (30) days of such occurrence, pay to a sum of money equal to one year's
annual salary then in effect.

     2.   This payment shall be made whether or not remains an employee of the
          Bank after the event described herein and shall be in addition to
          other payments to by reason of his/her employment.

     WITNESS the following signatures and seals:

                                                               BANK OF BOTETOURT

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