DEF 14A of National Bankshares Inc, Mar 28, 2024

DEF 14A of National Bankshares Inc

Filed Mar 28, 2024 · FY20230001437749-24-009701

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Company’s articles of incorporation provide that the Board of Directors will be divided into three classes (1, 2 and 3), with each class as nearly equal in number as possible and the term of office of each class ending in successive years. The articles of incorporation also provide that the number of directors shall be set by the bylaws but shall not be less than nine or more than 26. The bylaws currently set the number of directors at 12. The current term of office of the Class 1 directors expires at this 2024 Annual Meeting of Shareholders. The terms of Class 2 and Class 3 directors will expire at the 2025 and 2026 Annual Meetings of Shareholders, respectively. In the future, the Board may consider adjustment of the size of each class of directors. All directors of the Company also serve as directors of the Bank. The current Class 1 directors are Lawrence J. Ball, Michael E. Dye, Mary G. Miller and Glenn P. Reynolds. One new director, Lara E. Ramsey, was appointed to the Board of Directors in January 2024 and is being nominated as a Class 1 director for the first time. The Board of Directors has nominated the four current Class 1 directors and Ms. Ramsey to each serve a three year term to expire at the Annual Meeting of Shareholders in 2027. The Board of Directors, upon recommendation of the Nominating Committee, also has nominated Lutheria H. Smith to serve as a Class 3 director for a two year term expiring at the Annual Meeting of Shareholders in 2026. Ms. Smith is not currently a director of the Company and has indicated that, if elected, her service on the Board of Directors will not begin until she is no longer employed or affiliated with another financial institution. Ms. Smith is currently employed at American National Bank & Trust Company, which is expected to be acquired by Atlantic Union Bank on April 1, 2024. Upon such acquisition, it is anticipated that Ms. Smith will no longer be employed or affiliated with another financial institution. The bylaws of the Company will be amended to set the number of directors at 13 effective upon Ms. Smith’s election. Each nominee has consented to be named in this proxy statement and has agreed to serve if elected. At this time, the Board knows of no reason why any nominee might be unable to serve. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF ALL SIX OF THE NOMINEES SET FORTH BELOW. Class 1 Board Nominees (Nominated to serve until the 2027 Annual Meeting): Lawrence J. Ball (Age 69): Mr. Ball has served on the Board of Directors since 2006. He is retired President of Moog Components Group, a part of Moog, Inc., which is an international corporation. Prior to being named President, Mr. Ball was the Vice President and General Manager of Moog Components Group. Moog Components Group is headquartered in Blacksburg, Virginia and designs and manufactures products in motion control, electronics and fiber optics. Mr. Ball has extensive experience in management, financial reporting and acquisition strategies. Mr. Ball’s experience as a senior manager and corporate officer with a large corporation is considered valuable in adding to the Board of Directors’ understanding of larger business operations. Mr. Ball also has extensive local connections having served on various local boards including the Montgomery County Chamber of Commerce, the Montgomery Lewis Gale Hospital, the Blacksburg Partnership and the Blacksburg Country Club. Michael E. Dye (Age 69): Mr. Dye has served on the Board of Directors since 2017. He became a member of the Board of Directors of the Bank in 2006 with the merger of the Bank and the Bank of Tazewell County. Prior to the merger, he had served on the Bank of Tazewell County Board of Directors since 2005. Mr. Dye is a Pharmacist and owner of New Graham Pharmacy (since 1979), Cornerstone Gifts and New Graham Knives, all located in Bluefield, Virginia. He possesses an extensive knowledge of the business activity and community life in the Company’s important Bluefield market area. Mr. Dye is past president of the Bluefield, Virginia Downtown Development Corporation and is a member of the Bluefield, Virginia Business and Professional Association and the Bluefield Chamber of Commerce. He serves as a Clinical Instructor for Virginia Commonwealth University/Medical College of Virginia School of Pharmacy, Marshall University School of Pharmacy and Campbell University School of Pharmacy. Mary G. Miller (Age 73): Dr. Miller has served on the Board of Directors since 2003. For 35 years, she has owned and operated Interactive Design & Development, Inc. (“IDD”), a custom software development company. Additionally, Dr. Miller has served as Director of the Regional Acceleration and Mentoring Program (“RAMP”), which provides programs for technology businesses in the Roanoke-Blacksburg-Lynchburg, Virginia region. In her role at RAMP, she built a mentor network in the region, conducted business development clinics and directed a residential program for promising technology companies. Dr. Miller brings in-depth knowledge of the region’s developing technology sector and technology issues to her service on the Board. Lara E. Ramsey (Age 55): Ms. Ramsey was elected to serve on the Board of Directors in January 2024. She was appointed Executive Vice President and Chief Operating Officer of the Company in May 2023. She has served in various senior officer positions with the Company and the Bank since 1996 including Senior Vice President of Administration, where she led the Bank’s Investment, Human Resources, Marketing, and Training areas. Ms. Ramsey currently serves as the Company’s Corporate Secretary. Ms. Ramsey is a graduate of Radford University with a bachelor's degree in both Psychology and Economics and a master's degree in Industrial and Organizational Psychology. She is also a graduate of the Virginia Bankers Association’s School of Bank Management, the American Bankers Association’s Stonier Graduate School of Banking, The New River Valley Leadership program, and is a certified Senior Professional in Human Resources. Ms. Ramsey currently serves on the Radford University Alumni Board and Athletic Foundation Board. She is a past board member of United Way of the New River Valley and Montgomery County Chamber of Commerce. Glenn P. Reynolds (Age 71): Mr. Reynolds has served on the Board of Directors since 2006. He is the founder and President of Reynolds Architects Incorporated, a regional architecture firm located in Blacksburg, Virginia. Mr. Reynolds’ familiarity with the area’s construction and development projects and his experience with regional construction firms are useful to the Board. In addition, Mr. Reynolds has business management experience and a network of contacts in the area business and academic communities. Mr. Reynolds has served on local, regional and state boards of the America Institute of Architects (“AIA”) and national AIA committees. He has served as President of the Virginia Tech Athletic Association (Hokie Club). Mr. Reynolds’ has also served on boards for the HopeTree Family Services (Virginia Baptist Children’s Home), Virginia Tech Alumni Association, Virginia Tech Foundation, Montgomery County Planning Commission (Chairman), Montgomery County Chamber of Commerce and Blacksburg Country Club. Class 3 Board Nominee (Nominated to serve until the 2026 Annual Meeting):

  2. ELECTION OF DIRECTORS

    Lutheria H. Smith (Age 57): Ms. Smith has been nominated to serve on the Board of Directors. She is currently employed at American National Bank & Trust Company (“American National”), as the bank’s Executive Vice President & Chief Human Resource Officer. Prior to joining American National in November 2020, Ms. Smith was the Vice President & Director of Human Resources and a Board Member of Draper Aden Associates, a consulting engineering firm, for five years. She is a certified Senior Professional in Human Resources and brings significant board level interface and exposure of corporate governance protocols to the Board. She has served as conference speaker, university guest lecturer and adjunct instructor on topics related to people strategy, programs and practices. Ms. Smith is the Treasurer & Investments Committee Chair for Western Virginia Community Foundation Board of Governors. She is also the Immediate Past Chair of Roanoke City Public Schools Board of Trustees. Class 2 Directors (Serving until the 2025 Annual Meeting): F. Brad Denardo (Age 71): Mr. Denardo has served on the Board of Directors since 2017. He joined the Bank as a Vice President in 1983 and was promoted to Executive Vice President of Loans in 1989. In 2002, he was named Executive Vice President and Chief Operating Officer of the Bank and was also elected to the Bank Board of Directors. He was named President and Chief Executive Officer of the Bank in May 2014 and named Chairman, President and Chief Executive Officer of the Bank in September 2017. He was Treasurer of National Bankshares Financial Services, Inc. (“NBFS”) from 2001 until 2017. He currently serves as Chairman, President and Chief Executive Officer of NBFS and has served as a director since 2001. He served as Executive Vice President of the Company from 2008 until August 31, 2017. Mr. Denardo was named President and Chief Executive Officer of the Company on September 1, 2017 and named Chairman, President and Chief Executive Officer of the Company on May 15, 2019. In addition to Mr. Denardo’s considerable banking experience, his community and professional involvement bring a valuable perspective to the Board. Mr. Denardo is a director of the Montgomery-Blacksburg-Christiansburg Development Corporation, the Community Foundation of the New River Valley, the Blacksburg Partnership, Bankers Insurance, LLC and LewisGale Hospital Montgomery. John E. Dooley (Age 69): Dr. Dooley has served on the Board of Directors since 2012. Before retiring as Chief Executive Officer and Secretary-Treasurer of the Virginia Tech Foundation, Inc. in 2021, he oversaw the management of Virginia Tech’s private assets in excess of $2.5 billion in support of university programs and initiatives. Prior to becoming Chief Executive Officer of the Virginia Tech Foundation in July 2012, Dr. Dooley served in various administrative leadership roles over 30 years with Virginia Tech, including Vice President for Outreach and International Affairs. He serves on the boards of several community and state organizations, including the Go Virginia Region 2 Council, and currently chairs the Roanoke-Blacksburg Business Council. He brings extensive financial knowledge and management capabilities to the Board as well as a significant network of contacts in the regional business and academic communities. Norman V. Fitzwater, III (Age 73): Mr. Fitzwater has served on the Board of Directors since 2017. He retired in 2019 as President and owner of Fitzwater, Inc. d/b/a A Cleaner World Dry Cleaners, a business serving Blacksburg and Virginia Tech for over 29 years. Prior to opening A Cleaner World in Blacksburg in 1992, he was Vice President of Shenandoah Furniture, a custom furniture upholstery company based in Martinsville, Virginia, and, prior to that, a Vice President of Perfection Furniture, a custom furniture upholstery company based in Claremont and Hickory, North Carolina. Mr. Fitzwater joined the Bank Board of Directors in 2013 and contributes extensive small business experience to the Board. He has been President of the Blacksburg Hokie Club since 1995, and responsible for leading that organization’s raising over $900,000 that has been used for Virginia Tech athletic scholarships and athletic facilities improvements. He is a member of the Blacksburg Partnership, an organization helping to bring business opportunities to the Blacksburg area. In 2020, Mr. Fitzwater received the Lifetime Hall of Fame Achievement Award from the Montgomery County Chamber of Commerce. Class 3 Directors (Serving until the 2026 Annual Meeting): Charles E. Green, III (Age 73): Mr. Green has served on the Board of Directors since 2011 and currently serves as Vice Chairman and Lead Independent Director. Mr. Green has served as a member of the Board of Directors of the Bank since 2006. He has over 35 years of experience as a community bank director, having served on the Board of Directors of Bank of Tazewell County from 1986 until it merged with the Bank in 2006. Mr. Green retired in 2022 after a 48 year career as a financial advisor with Equitable Advisors, LLC, a financial advisory firm headquartered in Bluefield, Virginia. Mr. Green also previously served as Vice Chairman of the Board of Carilion Tazewell Community Hospital. He has extensive experience in small business management, as well as insurance and investment matters, all of which benefit the Board and the Company. He was formerly the mayor of Tazewell, Virginia, and currently resides in Bristol, Virginia. Mr. Green possesses in-depth knowledge of the western portion of the Company’s market area and community. Mildred R. Johnson (Age 69): Ms. Johnson has served on the Board of Directors since 2017. She joined the Board of Directors of the Bank in 2012 and is currently on its Trust Committee and is Chairperson of its Audit and Compliance Committee. Ms. Johnson’s role as former Associate Vice Provost for Enrollment Management and Director of Admissions at Virginia Tech and Dean of Admissions at Radford University enables her to bring senior executive leadership to the Board. She is a recognized leader in higher education with a career spanning over 45 years. She provided leadership to these large, complex organizations in areas such as operations, marketing and communication, budget and finance, and extensive strategic planning. Ms. Johnson also has served in leadership positions and on academic boards both nationally — as a former elected Trustee with The College Board — and in Virginia, as a past President of the Virginia Association of Collegiate Registrars and Admissions Officers, as a member of the committees for the Potomac and Chesapeake Association for College Admissions Counseling and as a member of the LewisGale Hospital Montgomery Board of Trustees where she served for more than 10 years. William A. Peery (Age 72): Mr. Peery has served on the Board of Directors since 2005. He is President of Cargo Oil Company, Inc. and COC Transport, Inc., which operate convenience stores and sell and transport petroleum products. The firms are headquartered in Tazewell, Virginia, where Mr. Peery resides. Mr. Perry brings small business management experience, including experience in financial management, to the Board. The Company considers small businesses to be a key component of its customer market. Mr. Peery is former Chairman of the Board of Trustees of Main St. United Methodist Church, and has served on numerous committees. He has also served on the Tazewell County Real Estate Equalization Board and the Virginia Lottery Retail Advisory Board.

  3. ELECTION OF DIRECTORS

    James C. Thompson (Age 67): Mr. Thompson has served on the Board of Directors since 2017. He joined the Board of Directors of the Bank in 2006 with the merger of the Bank and Bank of Tazewell County. Prior to the merger, Mr. Thompson served on the Bank of Tazewell County Board of Directors. He serves as Director of Strategic Initiatives for Thompson & Litton, Inc., an engineering, architecture and construction business in seven Mid-Atlantic States. Mr. Thompson has served on the Board of Directors of Thompson & Litton, Inc. for 37 years, as Chairman for 15 years, and has been employed by the firm full-time since 1981. He brings extensive experience in executive management, finance and strategic planning to the Board. Mr. Thompson serves as Chairman of the Board of Carilion Tazewell Community Hospital, on the Carilion Clinic Board of Directors in Roanoke, Virginia, and on the Tazewell Community Foundation Board of Directors. All information is provided as of March 13, 2024, and employment information is provided for at least the past five years. No director or nominee is related by blood, marriage or adoption to any other director, nominee or executive officer. No director or nominee currently serves or has served within the past five years, as a director of any company which has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or is subject to the requirements of Section 15(d) of the Exchange Act, or of any company registered as an investment company under the Investment Company Act of 1940. Mr. Denardo and Ms. Ramsey currently serve as directors of the Bank. Mr. Denardo and Ms. Ramsey also serve as directors of NBFS. Except for Mr. Denardo and Ms. Ramsey, no other directors have been employed by a subsidiary affiliate of the Company during the last five years. Each director and nominee above, except for Mr. Denardo and Ms. Ramsey, have been determined to be independent by the Board of Directors using the definition of “independent director” that is used for determining compliance with the applicable listing standards for The Nasdaq Stock Market (“Nasdaq”), the national securities exchange on which the Company’s common stock is listed. (See also “Corporate Governance Matters-Director Independence; Certain Relationships and Related Transactions.”)

  4. Directors Compensation Table

    Directors Compensation Table

  5. Directors Compensation Table

    | | Fees Earned or Paid in Cash | Stock Awards(1) | Total | | Lawrence J. Ball | $42,600 | $14,000 | $56,600 | | F. Brad Denardo | --- | --- | --- | | John E. Dooley | $42,600 | $14,000 | $56,600 | | Michael E. Dye | $41,800 | $14,000 | $55,800 | | Norman V. Fitzwater, III | $41,000 | $14,000 | $55,000 | | Charles E. Green, III | $42,600 | $14,000 | $56,600 | | Mildred R. Johnson | $41,800 | $14,000 | $55,800 | | Mary G. Miller | $55,800 | --- | $55,800 | | William A. Peery | $35,500 | $14,000 | $49,500 | | Glenn P. Reynolds | $42,600 | $14,000 | $56,600 | | James C. Thompson | $35,000 | $14,000 | $49,000 |

  6. Directors Compensation Table

    | (1) The amounts represent the grant date fair value of the awards calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation – Stock Compensation. Assumptions used in the calculation of these amounts are included in Note 20 of the Company’s audited financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2023. |

  7. Nonqualified Salary Continuation Plan

    Nonqualified Salary Continuation Plan In 2006, the Company established a nonqualified salary continuation plan designed to supplement the retirement benefits of those more highly compensated executive officers who, because of legal limitations, are unable to participate fully in the Company’s qualified retirement plans. As part of the nonqualified salary continuation plan, the Company has entered into salary continuation plan agreements, which have been amended from time to time, with a group of selected executive officers. Assuming retirement at normal retirement age (age 65), contributions to the salary continuation plan are sufficient to provide the greater of lifetime or 15 years of annual supplemental retirement income payments equal to 25.0% of final average salary (based on 2008 annual salary, adjusted by a pre-retirement inflation factor of 4%) for Mr. Denardo, 27.3% of final average salary (based on 2021 annual salary, adjusted by a pre-retirement inflation factor of 4%) for Mr. Skeens, 25.0% of final average salary (based on 2021 annual compensation, adjusted by a pre- retirement inflation factor of 4%) for Mr. Mylum, and 22.2% of final average salary (based on 2021 annual salary, adjusted by a pre-retirement inflation factor of 4%) for Ms. Ramsey. Final average salary is equal to the projected average salary for the five years prior to the normal retirement age. In 2016, the Company entered into a separate additional salary continuation plan agreement with Mr. Denardo. Assuming retirement at the normal age (age 70 for this agreement), the 2016 agreement provides an additional $17,512 annual benefit payable for the greater of 15 years or lifetime. Both salary continuation plan agreements with Mr. Denardo are in payout status. The nonqualified salary continuation plan and related agreements are discussed in greater detail under “Compensation of Our Named Executive Officers – Retirement Plans – Nonqualified Retirement Plan.”

  8. Summary Compensation Table

    Summary Compensation Table The following table sets forth information concerning total compensation earned or paid to the individuals who served as the Company’s named executive officers for the fiscal year ended December 31, 2023.

  9. Summary Compensation Table

    | Summary Compensation Table | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | | F. Brad Denardo | 2023 | 564,333 | --- | | Chairman, President & CEO – Company | 2022 | 541,667 | --- | | (Principal Executive Officer) | | | | | Chairman, President & CEO – Bank | | | | | Chairman, President & CEO – NBFS | | | | | Lora M. Jones | 2023 | 161,721 | --- | | Treasurer & CFO – Company | 2022 | 147,600 | --- | | (Principal Financial Officer) | | | | | Paul M. Mylum | 2023 | 254,102 | --- | | Executive Vice President/Chief Lending Officer – | 2022 | 248,187 | --- | | Bank | | | | | Lara E. Ramsey | 2023 | 198,431 | --- | | Executive Vice President/Chief Operating Officer – | 2022 | 168,116 | --- | | Bank | | | | | Corporate Secretary – Company / Bank | | | | | David K. Skeens | 2023 | 216,372 | --- | | Senior Vice President/ Senior Operations, Risk and | 2022 | 208,422 | --- | | Technology Officer – Bank | | | |

  10. Summary Compensation Table

    | Summary Compensation Table (continued) | | | | | | | Name | Year | Non-Equity Incentive Plan Compensation ($)(1) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(2) | All Other Compensation ($)(3) | Total ($) | | F. Brad Denardo | 2023 | --- | 335,464 | 42,332 | 942,129 | | | 2022 | 156,000 | --- | 70,258 | 767,925 | | Lora M. Jones | 2023 | --- | 30,974 | 14,675 | 207,370 | | | 2022 | 26,530 | --- | 16,020 | 190,150 | | Paul M. Mylum | 2023 | --- | 157,281 | 20,302 | 431,685 | | | 2022 | 41,200 | --- | 23,088 | 312,475 | | Lara E. Ramsey | 2023 | --- | 112,527 | 16,497 | 327,455 | | | 2022 | 28,222 | --- | 16,742 | 213,080 | | David K. Skeens | 2023 | --- | 129,029 | 17,896 | 363,297 | | | 2022 | 37,120 | --- | 19,823 | 265,365 |

  11. Summary Compensation Table

    (1) Consists of cash bonus payments earned by the officer pursuant to the Company’s Incentive Plan for the respective year. (2) Consists of changes in the actuarial present fair value in the National Bankshares, Inc. Retirement Income Plan and in the Officers Salary Continuation Plan for each officer. For the year ended December 31, 2023, the actuarial present value of the accumulated benefits under such plans increased by amounts reflected in the column above. For the year ended December 31, 2022, the actuarial present value of the accumulated benefits under such plans decreased by $213,534 for Mr. Denardo, $51,024 for Ms. Jones, $74,798 for Mr. Mylum, $138,300 for Ms. Ramsey and $209,284 for Mr. Skeens, which amounts are not reflected in the column above. For Mr. Denardo $90,000 of in service distribution is included. All changes in values are based on reports from independent advisors, using the assumptions described in the “Retirement Plans—Qualified Retirement Plans—National Bankshares, Inc. Retirement Income Plan” and “Retirement Plans—Nonqualified Retirement Plan—Officers Salary Continuation Plan” sections of this proxy statement. (3) Additional information about “All Other Compensation” for the executive officers is provided in the following table.

  12. Summary Compensation Table

    | Detail of All Other Compensation | | | | | | | | Name | Year | Directors Fees ($)(1) | Matching Contribution Under National Bankshares, Inc. Retirement Accumulation Plan ($) | Contribution Under National Bankshares, Inc. Employee Stock Ownership Plan ($) | Perquisites ($)(2) | Total All Other Compensation ($) | | F. Brad Denardo | 2023 | --- | 16,500 | 9,232 | 16,600 | 42,332 | | | 2022 | 27,500 | 15,250 | 12,945 | 14,563 | 70,258 | | Lora M. Jones | 2023 | --- | 9,410 | 5,265 | --- | 14,675 | | | 2022 | --- | 8,665 | 7,355 | --- | 16,020 | | Paul M. Mylum | 2023 | --- | 13,018 | 7,284 | --- | 20,302 | | | 2022 | --- | 12,488 | 10,600 | --- | 23,088 | | Lara E. Ramsey | 2023 | --- | 10,578 | 5,919 | --- | 16,497 | | | 2022 | --- | 9,055 | 7,687 | --- | 16,742 | | David K. Skeens | 2023 | --- | 11,475 | 6,421 | --- | 17,896 | | | 2022 | --- | 10,722 | 9,101 | --- | 19,823 |

  13. Summary Compensation Table

    See “All Other Compensation” in the Summary Compensation Table above. (1) Director’s fees for Mr. Denardo include fees from the Company and the Bank from January through October 2022. (2) In 2023, perquisites for Mr. Denardo’s totaled $8,613 for personal use of a Company owned automobile and $7,987 for club dues and Virginia Tech football tickets.

  14. Potential Payments Upon Termination Before or After a Change in Control

    Potential Payments Upon Termination Before or After a Change in Control The following table provides information on the potential payments to the named executive officers upon termination of employment before or after a change in control of the Company, assuming the termination or change in control occurred on December 31, 2023.

  15. Potential Payments Upon Termination Before or After a Change in Control

    | Name | Benefit | Before Change in Control Termination Without Cause or Resignation For Good Reason ($) | After Change in Control Termination Without Cause or Resignation For Good Reason ($) | Long-Term Incapacity ($) | Death ($) | | F. Brad Denardo | Post-Termination Compensation | 564,333 | 1,405,039 | --- | --- | | | Welfare & Executive Benefits | | | | | | | Continuation | 35,979 | 71,958 | --- | --- | | | Officers Salary Continuation Plan | --- | --- | --- | --- | | | Total Value: | 600,312 | 1,476,997 | --- | --- | | Lora M. Jones | Post-Termination Compensation | 82,500 | 493,350 | --- | --- | | | Welfare & Executive Benefits | | | | | | | Continuation | 9,301 | 37,204 | --- | --- | | | Officers Salary Continuation Plan | --- | --- | --- | --- | | | Total Value: | 91,801 | 530,554 | --- | --- | | Paul M. Mylum | Post-Termination Compensation | --- | --- | --- | --- | | | Welfare & Executive Benefits | | | | | | | Continuation | --- | --- | --- | --- | | | Officers Salary Continuation Plan | 41,660(1) | 58,078(2) | 41,660(3) | 70,000(4) | | | Total Value: | 41,660 | 58,078 | 41,660 | 70,000 | | Lara E. Ramsey | Post-Termination Compensation | 380,000 | 568,100 | --- | --- | | | Welfare & Executive Benefits | | | | | | | Continuation | 22,904 | 22,904 | --- | --- | | | Officers Salary Continuation Plan | 26,367(1) | 28,930(2) | 26,367(3) | 45,000(4) | | | Total Value: | 429,271 | 619,934 | 26,367 | 45,000 | | David K. Skeens | Post-Termination Compensation | --- | --- | --- | --- | | | Welfare & Executive Benefits | | | | | | | Continuation | --- | --- | --- | --- | | | Officers Salary Continuation Plan | 43,603(1) | 48,497(2) | 43,603(3) | 68,940(4) | | | Total Value: | 43,603 | 48,497 | 43,603 | 68,940 |

  16. Potential Payments Upon Termination Before or After a Change in Control

    | (1) The Officers Salary Continuation Plan early termination benefit is an annual amount commencing at normal retirement age payable to the officer for the longer of life or to the officer’s beneficiary for up to 15 years. |

  17. Potential Payments Upon Termination Before or After a Change in Control

    | (2) The Officers Salary Continuation Plan change in control benefit is an annual amount commencing at termination of employment payable to the officer for the longer of life or to the officer’s beneficiary for up to 15 years. |

  18. Potential Payments Upon Termination Before or After a Change in Control

    | (3) The Officers Salary Continuation Plan disability benefit is an annual amount commencing at normal retirement age payable to the officer for the longer of life or to the officer’s beneficiary for 15 years. |

  19. Potential Payments Upon Termination Before or After a Change in Control

    | (4) The Officers Salary Continuation Plan death benefit is an annual amount commencing at death payable to the officer’s beneficiary for 15 years. |

  20. Potential Payments Upon Termination Before or After a Change in Control

    The table above does not provide information on the present value of accumulated benefits for each officer under the National Bankshares, Inc. Retirement Income Plan. Such benefits are vested and are not affected by termination of employment or a change in control of the Company. See “Pension Benefits Table” for more information.

  21. Nonqualified Retirement Plan

    Nonqualified Retirement Plan Officers Salary Continuation Plan. In 2006, the Bank entered into salary continuation agreements with a select group of bank officers, including Mr. Denardo, Mr. Skeens and Ms. Ramsey. In 2013, the Bank entered into a salary continuation agreement with Mr. Mylum. The Salary Continuation Plan benefits are funded by investments in bank subsidiary owned life insurance policies on the lives of the participating officers. The officers and their beneficiaries are unsecured creditors of the Company and of the Bank with respect to the benefits under the Salary Continuation Plan. Each of the salary continuation agreements provides an annual benefit for the participating officer at normal retirement age (defined as age 65) while in the active service of the Company. The salary continuation agreement benefits approximate 25.0% of final average salary based on 2008 annual salary, adjusted for inflation, for Mr. Denardo; 27.3% of final average salary based on 2021 annual salary, adjusted for inflation, for Mr. Skeens; 25.8% of final average salary based on 2021 annual salary, adjusted for inflation, for Mr. Mylum; and 22.2% of final average salary based on 2021 annual salary, adjusted for inflation, for Ms. Ramsey. The benefit is payable for the greater of 15 years or the officer’s lifetime. If the officer dies before receiving the annual benefit for 15 years, the benefit is paid to his or her beneficiary for the remainder of that period. A reduced benefit is available upon the officer’s early termination if he or she is 50 years of age or older, upon disability or upon a change in control of the Company. “Early termination,” “disability” and “change in control” are defined in the salary continuation agreements. A death benefit that is equal in amount to the annual retirement benefit is paid to the officer’s beneficiary for 15 years in the event of the officer’s death while an active employee. No benefit is payable if the officer is terminated for “cause”, as that term is defined in the agreements. Under his 2006 salary continuation agreement, in 2017, Mr. Denardo became entitled to receive annual payments of $72,488 as a result of his achieving normal retirement age (defined as age 65). In 2016, the Bank entered into a new and additional salary continuation agreement with Mr. Denardo (the “2016 Agreement”). Under the 2016 Agreement, in 2022, Mr. Denardo became entitled to receive annual payments of $17,512 as a result of his achieving normal retirement age (defined as age 70). Mr. Skeens’ agreement provides that he will be paid $68,940 annually at his normal retirement age, which will occur in 2031. Mr. Mylum will be paid $70,000 annually at his normal retirement age, which will occur in 2031. Ms. Ramsey’s agreement provides that she will be paid $45,000 annually at her normal retirement age, which will occur in 2033.

  22. Pension Benefits Table

    Pension Benefits Table The following table provides additional information about the pension benefits from the National Bankshares, Inc. Retirement Income Plan and from the Officers Salary Continuation Plan for Mr. Denardo, Ms. Jones, Mr. Mylum, Ms. Ramsey and Mr. Skeens.

  23. Pension Benefits Table

    | Pension Benefits Table | | | | | | Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefits ($) | Payments During Last Fiscal Year ($) | | F. Brad Denardo | Company Retirement Income | 40 | 2,287,106 | --- | | | Officers Salary Continuation | n/a | 790,876 | --- | | Lora M. Jones | Company Retirement Income | 13 | 110,313 | --- | | | Officers Salary Continuation | n/a | --- | --- | | Paul M. Mylum | Company Retirement Income | 17 | 571,636 | --- | | | Officers Salary Continuation | n/a | 305,837 | --- | | Lara E. Ramsey | Company Retirement Income | 27 | 496,755 | --- | | | Officers Salary Continuation | n/a | 195,618 | --- | | David K. Skeens | Company Retirement Income | 33 | 685,760 | --- | | | Officers Salary Continuation | n/a | 314,299 | --- |

  24. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  25. Pay versus Performance Table

    Pay versus Performance Table As required by SEC rules, the following table provides information on total compensation and compensation “actually paid” to our principal executive officer (“PEO”) and to our other named executive officers (“NEOs”) for the fiscal years ended December 31, 2023 and December 31, 2022, and (i) the cumulative shareholder return on our common stock and (ii) our net income over the same time period. This information is presented based on methodology that has been prescribed by the SEC.

  26. Pay versus Performance Table

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(3)(4) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(5) | Net Income | | 2023 | $852,129 | $852,129 | $332,452 | $350,383 | $96 | $15,691,000 | | 2022 | $767,925(6) | $794,412 | $245,268 | $262,755 | $117 | $25,932,000 |

  27. Pay versus Performance Table

    | (1) During 2023 and 2022, F. Brad Denardo was our PEO. |

  28. Pay versus Performance Table

    | (2) The following table sets forth the adjustments made during each year represented in the table above to arrive at compensation “actually paid” to our PEO during each of the years in question: |

  29. Pay versus Performance Table

    | Adjustments to determine compensation “actually paid” for PEO | 2023 | 2022 | | Deduction for amounts reported for aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the Summary Compensation Table | --- | --- | | Increase for service cost, calculated as the actuarial present value of each benefit under all such plans attributable to services rendered during year | --- | $26,487 | | Increase for prior service cost, calculated as the entire cost of benefits granted (or credit for benefits reduced) in a plan amendment (or initiation) during the year that are attributed by the benefit formula to services rendered in periods prior to the amendment | --- | --- | | Total Adjustments | --- | $26,487 |

  30. Pay versus Performance Table

    | (3) During 2023 and 2022, our other NEOs consisted of Lora M. Jones, Paul M. Mylum, Lara E. Ramsey and David K. Skeens. |

  31. Pay versus Performance Table

    | (4) The following table sets forth the adjustments made during each year represented in the table above to arrive at average compensation “actually paid” to our other NEOs during each of the years in question: |

  32. Pay versus Performance Table

    | Adjustments to determine compensation “actually paid” for non-PEO NEOs | 2023 | 2022 | | Deduction for amounts reported for aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the Summary Compensation Table | --- | --- | | Increase for service cost, calculated as the actuarial present value of each benefit under all such plans attributable to services rendered during year | $17,932 | $17,487 | | Increase for prior service cost, calculated as the entire cost of benefits granted (or credit for benefits reduced) in a plan amendment (or initiation) during the year that are attributed by the benefit formula to services rendered in periods prior to the amendment | --- | --- | | Total Adjustments | $17,932 | $17,487 |

  33. Pay versus Performance Table

    | (5) Total shareholder return is calculated assuming a fixed investment of $100 in the Company’s common stock based on the closing price on December 31, 2021, the last trading day prior to January 1, 2022, assuming reinvestment of dividends, through and including the end of each fiscal year. The amount for 2022 represents the one year total shareholder return and the amount for 2023 represents the two year total shareholder return. |

  34. Pay versus Performance Table

    | (6) The amount of $767,925 was incorrectly reported as $813,972 in the Company’s 2023 proxy statement. |