National Bankshares, Inc. (NASDAQ:NKSH) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

ITEM 5.02.ENTRY INTO A MATERIAL DEFINITIVE
AGREEMENT

On June 22, 2016, National Bankshares, Inc. entered in an
amendment of an existing salary continuation agreement with Lara
E. Ramsey, Senior Vice President/Administration and Corporate
Secretary of the Company.The named officer is part of a select
group of Company or subsidiary executives who receive similar
benefits under a salary continuation plan that is funded by an
investment in Company or subsidiary owned life insurance policies
on the lives of the executives.The officers and their
beneficiaries are unsecured creditors of the Company and
subsidiaries with respect to the benefits under the salary
continuation plans.

Each of the salary continuation agreements provides an annual
benefit for the officer at normal retirement age (age 65), that
is payable for the greater of 15 years or the executives
lifetime.If the officer dies before receiving annual benefit for
15 years, the benefit is paid to the officers beneficiary for the
remainder of that period.A reduced benefit is payable upon the
officers early termination, disability or upon a change in
control of the executives employer.Early termination, disability
and change in control are each defined in the salary continuation
agreements.A death benefit that is equal in amount to the
retirement benefit is paid to the executives beneficiary for 15
years in the event of the executives death while an active
employee.No benefit is payable if the officer is terminated for
cause, as that term is defined in the agreement.

The amended salary continuation agreement with Ms. Ramsey
provides that she will receive annual payments of $42,000.00
beginning at normal retirement in 2033.At the time Ms. Ramsey
entered into the original agreement and the First and Second
Amendments, Ms. Ramsey was not a reportable officer of the
Company.

A copy of the salary continuation agreement and any amendments
thereto with Ms. Ramsey are attached as Exhibit 10(xviii).

ITEM 9.01.FINANCIAL STATEMENTS AND EXHIBITS

The following exhibits are filed with this Current Report to Item
5.02:

10.1Salary Continuation Agreement and the First, Second and Third
Amendment between National Bankshares, Inc. and Lara E. Ramsey.

About National Bankshares, Inc. (NASDAQ:NKSH)

National Bankshares, Inc. (NBI) is a financial holding company. The Company conducts its operations through its community bank subsidiary, the National Bank of Blacksburg (NBB or the Bank). NBB offers a range of retail and commercial banking services to individuals, businesses, non-profits and local governments. NBB, which does business as National Bank, focuses lending on small and mid-sized businesses and individuals. NBB’s loan types include commercial and agricultural, commercial real estate, construction for commercial and residential properties, residential real estate, home equity and various consumer loan products. The Company’s investment portfolio includes corporate bonds. NBI’s primary source of funds is deposits. Deposit products offered by the Bank include interest-bearing and non-interest bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit and individual retirement accounts.

National Bankshares, Inc. (NASDAQ:NKSH) Recent Trading Information

National Bankshares, Inc. (NASDAQ:NKSH) closed its last trading session down -0.25 at 39.25 with 2,584 shares trading hands.