Southern National Bancorp of Virginia Inc (Form: S-1/A, Received: 10/29/2009 13:41:43)

Date of Grant:

William H. Lagos

Chief Financial Officer

As filed with the Securities and Exchange Commission on October 29, 2009

Registration No. 333-162467

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

(Exact name of registrant as specified in its charter)

Virginia

6022

20-1417448

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

6830 Old Dominion Drive

McLean, Virginia 22101

(703) 893-7400

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Georgia S. Derrico

Chairman and Chief Executive Officer

Southern National Bancorp of Virginia, Inc.

6830 Old Dominion Drive

McLean, Virginia 22101

(703) 893-7400

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies To:

William T. Luedke IV

Charlotte M. Rasche

Bracewell & Giuliani LLP

711 Louisiana Street, Suite 2300

Houston, Texas 77002-2770

(713) 223-2300

(713) 221-1212 (Fax)

Mark C. Kanaly

Alston & Bird LLP

One Atlantic Center

1201 W. Peachtree Street

Atlanta, Georgia 30309-3424

(404) 881-7000

(404) 253-8390 (Fax)

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer x (Do not check if smaller reporting company)		Smaller reporting company ¨

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Amendment No. 2 to the Registration Statement on Form S-1 (Registration No. 333-162467) of Southern National Bancorp of Virginia, Inc. is being filed solely to amend Item 16 of Part II thereof and to transmit certain exhibits thereto. This Amendment No. 2 does not modify any provision of the Prospectus constituting Part I or the other Items of Part II of the Registration Statement. Accordingly, the Prospectus has not been included in this Amendment No. 2.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than underwriting commissions, to be paid in connection with the sale of shares of our common stock being registered, all of which will be paid by us. All of the amounts shown are estimates, except the SEC Registration fee, and the FINRA filing fee.


Securities and Exchange Commission registration fee	$	1,605
FINRA filing fee	$	3,375
Accounting fees and expenses	$	65,000
Legal fees and expenses	$	200,000
Printing and engraving expenses	$	50,000
Miscellaneous expenses	$	25,000

Total	$	344,980

ITEM 14. Indemnification of Directors and Officers.

Article 10 of Chapter 9 of Title 13.1 of the Virginia Stock Corporation Act (the “VSCA”) permits a Virginia corporation to indemnify any director or officer for reasonable expenses incurred in any legal proceeding in advance of final disposition of the proceeding, if the director or officer furnishes the corporation a written statement of his or her good faith belief that he or she has met the standard of conduct prescribed by the VSCA and furnishes the corporation a written undertaking to repay any funds advanced if it is ultimately determined that he or she did not meet the relevant standard of conduct. In addition, a corporation is permitted to indemnify a director or officer against liability incurred in a proceeding if a determination has been made by the disinterested members of the board of directors, special legal counsel or shareholders that the director or officer conducted himself or herself in good faith and otherwise met the required standard of conduct. In a proceeding by or in the right of the corporation, no indemnification shall be made in respect of any matter as to which a director or officer is adjudged to be liable to the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director or officer has met the relevant standard of conduct. In any other proceeding, no indemnification shall be made if the director or officer is adjudged liable to the corporation on the basis that he or she improperly received a personal benefit. Corporations are given the power to make any other or further indemnity, including advancement of expenses, to any director or officer that may be authorized by the articles of incorporation or any bylaw made by the shareholders, or any resolution adopted, before or after the event, by the shareholders, except an indemnity against willful misconduct or a knowing violation of the criminal law. Unless limited by its articles of incorporation, indemnification against the reasonable expenses incurred by a director or officer is mandatory when he or she entirely prevails in the defense of any proceeding to which he or she is a party because he or she is or was a director or officer.

Our Articles of Incorporation, as amended, and Amended and Restated Bylaws, as amended, contain provisions indemnifying our directors and officers to the full extent permitted by the VSCA. In addition, our Articles of Incorporation, as amended, eliminate the personal liability of our directors, officers and shareholders for monetary damages to the full extent permitted by the VSCA.

The Federal Deposit Insurance Act (the “FDI Act”) provides that the Federal Deposit Insurance Corporation (“FDIC”) may prohibit or limit, by regulation or order, payments by any insured depository institution or its holding company for the benefit of directors and officers of the insured depository institution, or others who are or were “institution-affiliated parties,” as defined under the FDI Act, in order to pay or reimburse such person for any liability or legal expense sustained with regard to any administrative or civil enforcement action which results in a final order against the person. FDIC regulations prohibit, subject to certain exceptions, insured depository institutions, their subsidiaries and affiliated holding companies from indemnifying officers, directors

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or employees from any civil money penalty or judgment resulting from an administrative or civil enforcement action commenced by any federal banking agency, or for that portion of the costs sustained with regard to such an action that results in a final order or settlement that is adverse to the director, officer or employee.

ITEM 15. Recent Sales of Unregistered Securities.

As part of the consideration for our acquisition of the Leesburg branch location from Founders Corporation of Leesburg, Virginia on February 11, 2008, we granted warrants to the organizers of Founders Corporation to acquire 61,000 shares of our common stock at an exercise price of $12.73 per share. No underwriter or other securities dealer was involved in the transaction. The transaction was exempt from registration under Rule 506 of the Securities Act and such securities are “covered securities” within the meaning of Section 18(b)(4)(D) of the Securities Act.

ITEM 16. Exhibits and Financial Statement Schedules.

The following exhibits are filed as part of this registration statement.


Exhibit		Description
1.1*		Form of Underwriting Agreement

3.1		Articles of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

3.2		Certificate of Amendment to the Articles of Incorporation dated January 31, 2005 (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

3.3		Certificate of Amendment to the Articles of Incorporation dated April 13, 2006 (incorporated herein by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

3.4		Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006)

3.5		Amendment No. 1 to Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 14, 2009)

4.1		Specimen Stock Certificate of Company (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

4.2		Form of Warrant Agreement (incorporated herein by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

4.3		Form of Amendment to Warrant Agreement (incorporated herein by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

5.1*		Opinion of Bracewell & Giuliani LLP regarding the legality of the securities being registered

10.1†		Southern National Bancorp of Virginia, Inc. 2004 Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

10.2†		Form of Change in Control Agreement with Georgia S. Derrico and R. Roderick Porter (incorporated herein by reference to Exhibit 10.2 to Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

10.3†		Form of Southern National Bancorp of Virginia, Inc. Incentive Stock Option Agreement

10.4†		Supplemental Executive Retirement Plan for Georgia Derrico

10.5†		Supplemental Executive Retirement Plan for Rod Porter

21.1		Subsidiaries of the Company (incorporated herein by reference to Exhibit 21.0 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008)

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Exhibit		Description
23.1*		Consent of BDO Seidman, LLP

23.2*		Consent of Crowe Horwath LLP

23.3*		Consent of Bracewell & Giuliani LLP (included as part of its opinion filed as Exhibit 5.1 and incorporated herein by reference)

24.1*		Power of Attorney (included with signature pages to the Registration Statement)

*	Previously filed.

†	Management contract or compensatory plan or arrangement

ITEM 17. Undertakings.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions referenced in Item 14, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of our company in the successful defense of any action, suit or proceeding) is asserted by that director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether this indemnification by us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment no. 2 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of McLean, Commonwealth of Virginia, on October 29, 2009.


SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
(Registrant)

By:		/ S / G EORGIA S. D ERRICO
		Georgia S. Derrico
		Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment no. 2 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.


Signature	Title	Date

/ S / G EORGIA S. D ERRICO Georgia S. Derrico	Chairman of the Board and Chief Executive Officer	October 29, 2009

/ S / W ILLIAM H. L AGOS William H. Lagos	Sr. Vice President and Chief Financial Officer	October 29, 2009

/ S / R. R ODERICK P ORTER * R. Roderick Porter	President and Director	October 29, 2009

/ S / N EIL J. C ALL * Neil J. Call	Director	October 29, 2009

/ S / C HARLES A. K ABBASH * Charles A. Kabbash	Director	October 29, 2009

/ S / F REDERICK L. B OLLERER * Frederick L. Bollerer	Director	October 29, 2009

/ S / R OBIN R. S HIELD * Robin R. Shield	Director	October 29, 2009

/ S / J OHN J. F ORCH * John J. Forch	Director	October 29, 2009


*By:		G EORGIA S. D ERRICO
pursuant to a Power of Attorney executed by the directors listed above, which Power of Attorney has previously been filed with the Securities and Exchange Commission.

		/ S / G EORGIA S. D ERRICO
		Georgia S. Derrico
		Attorney-in-Fact

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Exhibit Index


Exhibit		Description

1.1	*	Form of Underwriting Agreement

3.1		Articles of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

3.2		Certificate of Amendment to the Articles of Incorporation dated January 31, 2005 (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

3.3		Certificate of Amendment to the Articles of Incorporation dated April 13, 2006 (incorporated herein by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

3.4		Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006)

3.5		Amendment No. 1 to Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 14, 2009)

4.1		Specimen Stock Certificate of Company (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

4.2		Form of Warrant Agreement (incorporated herein by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

4.3		Form of Amendment to Warrant Agreement (incorporated herein by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

5.1	*	Opinion of Bracewell & Giuliani LLP regarding the legality of the securities being registered

10.1†		Southern National Bancorp of Virginia, Inc. 2004 Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

10.2†		Form of Change in Control Agreement with Georgia S. Derrico and R. Roderick Porter (incorporated herein by reference to Exhibit 10.2 to Company’s Registration Statement on Form S-1 (Registration No. 333-136285))

10.3†		Form of Southern National Bancorp of Virginia, Inc. Incentive Stock Option Agreement

10.4†		Supplemental Executive Retirement Plan for Georgia Derrico

10.5†		Supplemental Executive Retirement Plan for Rod Porter

21.1		Subsidiaries of the Company (incorporated herein by reference to Exhibit 21.0 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008)

23.1	*	Consent of BDO Seidman, LLP

23.2	*	Consent of Crowe Horwath LLP

23.3	*	Consent of Bracewell & Giuliani LLP (included as part of its opinion filed as Exhibit 5.1 and incorporated herein by reference)

24.1	*	Power of Attorney (included with signature pages to the Registration Statement)

*	Previously filed.

†	Management contract or compensatory plan or arrangement

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Exhibit 10.3

Option Number:

FORM OF

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

INCENTIVE STOCK OPTION AGREEMENT

2004 STOCK OPTION PLAN

AN INCENTIVE STOCK OPTION (“Option”) to purchase a total of shares of the common stock, par value $0.01 per share (“Common Stock”), of Southern National Bancorp of Virginia Inc., McLean, Virginia (the “Corporation”), is hereby granted (the “Optionee”) pursuant to the 2004 Stock Option Plan (“Plan”) of the Corporation. The Option granted hereby is subject to all the terms and conditions of the Plan and this Agreement. The Plan is incorporated by reference herein. Defined terms, unless otherwise defined herein, shall have the same meaning as set forth in the Plan. The term “Corporation” shall include the Corporation and any subsidiary corporation (as defined in Section 424(f) of the Internal Revenue Code of 1986, as amended).

1. Option Price . The option price shall be for each share of Common Stock eligible to the exercised hereunder, which price is 100% of the Fair Market Value, as defined in Section 6(a) of the Plan, of the Common Stock on the date of grant of this Option.

2. Exercise of Option . This Option shall be exercisable pursuant to the provisions of Section 9 of the Plan, as follows:

(a) Schedule of Right of Exercise .


Years of Continuous Employment After Date of Grant of Option		Percentage of Total Shares of Common Stock Subject to Option Which May be Exercised
after 1 year		20%
after 2 years		40%
after 3 years		60%
after 4 years		80%
after 5 years		100%

The right to exercise the Option pursuant to the above schedule is cumulative.

Notwithstanding the foregoing, the Option shall become immediately vested and exercisable in full on the date the Optionee terminates his employment with the Corporation because of his death or disability (as defined in Section 11 of the Plan). Such accelerated vesting may result in all or a portion of this Option no longer qualifying as an Incentive Stock Option (as defined in Section 2(c) of the Plan). Accelerated vesting shall not occur in the event of a change in control of the Corporation.

(b) Method of Exercise . This Option shall be exercisable by written notice to the Secretary of the Corporation on the Incentive Stock Option Exercise Form provided herewith which shall:

(i) state the election to exercise the Option, the number of shares with respect to which it is being exercised, the person in whose name the stock certificate or certificates for such shares of Common Stock is to be registered, his address and Social Security number (or if more than one, the names, addresses and Social Security numbers of such persons);

(ii) be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any person or person other than the Optionee, be accompanied by proof, satisfactory to counsel for the Corporation, of the right of such person or persons to exercise the Option;

(iii) be in writing and delivered in person or by certified mail to the Secretary of the Corporation at its executive office located at 550 Broadview Avenue, Warrenton, Virginia 20186, Attention: R. Devon Porter, Secretary; and

(iv) be accompanied by payment for, or irrevocable instructions to a broker to sell, the shares of Common Stock with respect to which the Option is being exercised (payment for the Option in this manner will result in the loss of the tax-advantaged nature of the Option).

Payment in full of the purchase price for shares of Common Stock purchased pursuant to the exercise of the Option shall be made to the Corporation upon exercise of the Option. Payment for shares may be made by the Optionee (i) in cash or by check, or (ii) by delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to sell the shares and then to properly deliver to the Corporation the amount of sale proceeds to pay the exercise price, all in accordance with applicable laws and regulations, plus any required amount to meet any tax withholding requirements of federal and/or state law, or (iii) any combination of the foregoing.

(c) Restrictions on Exercise . This Option may not be exercised if the issuance of the shares of Common Stock upon such exercise would constitute a violation of any applicable federal or state securities law or regulation or any other law or valid regulation. As a condition to the exercise of this Option, the Corporation may require the person exercising this Option to make any representation or warranty to the Corporation as may be required by any applicable law or regulation, and may require the Optionee to comply with the matters set forth in Sections 9(d) and 14 of the Plan.

3. Non-transferability of Option . This Option may not be transferred or assigned in any manner otherwise than by will or the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by him. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

4. Term of Option . This Option may not be exercised later than the earlier to occur of (i) ten years from the date of grant of this Option, or if an Incentive Stock Option is granted to a ten percent shareholder, five years from the date of grant, or (ii) three (3) months after the date on which the Optionee ceases to be employed by the Corporation and may be exercised during such term only

in accordance with the Plan and the terms of this Agreement. If the Optionee terminates his employment with the Corporation as a result of disability (as defined in Section 11 of the Plan) without having fully exercised his Option, all unvested and forfeitable Options shall immediately become vested and the Optionee shall have the right, during the twelve (12) month period following his termination due to disability, to exercise such Options in accordance with the terms hereof and the Plan at the time of termination for disability. If the Optionee dies while in the employ of the Corporation or terminates employment with the Corporation as a result of disability and dies without having fully exercised his vested Option, the executors, administrators, legatees or distributees of his estate shall have the right, during the twelve (12) month period following his death, to exercise such Option. If the Optionee terminates his employment with the Corporation following a change in control of the Corporation without having fully exercised his Option, the Optionee shall have the right to exercise such Option to the extent vested at the time of such termination during the remainder of the original ten (10) year term of the Option from the date of grant. Exercise of the Option more than three (3) months (or one (1) year in certain cases) after termination of employment will result in the loss of the tax-advantaged nature of the Option.

5. Effect of Change in Control . If a tender offer or exchange offer for shares of Common Stock (other than such an offer by the institution) is commenced, or if the shareholders of the Institution shall approve an agreement providing either for a transaction in which the Institution will cease to be an independent publicly owned institution or for sale or other disposition of all or substantially all the assets of the Institution, this option shall (to the extent it is not then exercisable) become exercisable in full upon the happening of such event and shall remain so exercisable for a period of sixty days following such date after which this option shall revert to being exercisable in accordance with the other provisions of this Option; provided, that the provisions of this Section 5 shall not be deemed to cause this Option to be exercisable to the extent it has previously been exercised or otherwise terminated.

6. Notice of Disposition; Withholding; Escrow . Optionee shall immediately notify the Corporation in writing of any sale, transfer, assignment or other disposition (or action constituting a disqualifying disposition within the meaning of Section 421 of the Internal Revenue Code of 1986, as amended) of any shares of Common Stock acquired through exercise of this Option, within two (2) years after the date of the grant of the Option or within one (1) year after the acquisition of such shares, setting forth the date and manner of disposition, the number of shares disposed of and the price at which such shares were disposed of. The Corporation shall be entitled to withhold from any compensation or other payments then or thereafter due to the Optionee such amounts as may be necessary to satisfy any withholding requirements of federal or state law or regulation and, further, to collect from the Optionee any additional amounts which may be required for such purpose. The Committee or the Board may, in their discretion, require shares of Common Stock acquired by an Optionee upon exercise of this Option to be held in an escrow arrangement for the purpose of enabling compliance with the provisions of Section 8(g) of the Plan.

7. Administration . The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding in the absence of action by the Board.

8. Terms and Conditions . The terms and conditions included in the Plan are incorporated herein by reference, and to the extent that any conflict may exist between the terms and conditions included in the Plan and the terms of this Agreement, the terms and conditions included in the Plan shall control.

9. Not an Employment Contract . The Option will not confer on the Optionee any right with respect to continuance of employment or other service with the Corporation, nor will it interfere in any way with any right the Company would otherwise have to terminate or modify the terms of the Optionee’s employment or other service at anytime.

10. Notices . Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by overnight courier or by postage paid first class mail. Notices sent by mail shall be deemed received three (3) business days after mailing but in no event later than the date of actual receipt. Notices shall be directed, if to the Optionee, at the Optionee’s address indicated by the Corporation’s records, or if to the Corporation, at the Corporation’s executive office set forth in Section 2(b)(iii) hereof.

11. No Rights As Shareholder . The Optionee shall not have any rights of a shareholder with respect to the shares subject to the Option until a stock certificate has been duly issued following exercise of the Option as provided herein.

12. Exercise or Forfeiture . Notwithstanding any provision of the Plan or this Option Agreement to the contrary, the Option will expire, to the extent not exercised, within forty-five (45) days following the receipt of notice from the primary federal regulator (“Regulator”) of Sonabank, National Association (“Bank”) that (i) the Bank has not maintained its minimum capital requirements (as determined by the Regulator); and (ii) the Regulator is requiring exercise or forfeiture of the Option. Upon receipt of such notice from the Regulator, the Corporation shall promptly notify each Optionee that he must exercise the Options granted to him prior to the end of the 45-day period or such earlier period as may be specified by the Regulator or forfeit such Option(s). In case of forfeiture, no Optionee shall have cause of action, of any kind or nature, against the Corporation, the Bank or any of their respective officers or directors with respect to the forfeiture. In addition, the Corporation shall not be liable to any Optionee due to the failure or inability of the Corporation to provide adequate notice to the Optionee.

13. Amendment . This Agreement may be amended by written agreement of the Optionee and the Corporation, without the consent of any other person.

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.


By
		R. Devon Porter, Secretary
(Seal)


OPTIONEE

By:
Name:

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

INCENTIVE STOCK OPTION EXERCISE FORM

, 20

Date


Attn:		R. Devon Porter, Secretary
		Southern National Bancorp of Virginia, Inc.
		550 Broadview Avenue
		Warrenton, Virginia 20186

Dear Mr. Porter:

The undersigned elects to exercise his Incentive Stock Option to purchase shares, par value $0.01 per share, of Common Stock of Southern National Bancorp of Virginia, Inc. (the “Option Shares”).

Delivered herewith in satisfaction of the required purchase price is ( select applicable choice(s) ):


		(a)		cash or a check payable to Southern National Bancorp of Virginia, Inc. in the amount of $ ; or

		(b)		irrevocable instructions to a broker to sell the Option Shares and then to properly deliver to the Corporation the amount of sale proceeds to pay the exercise price and any applicable tax withholding (which manner of payment I acknowledge will result in a disqualifying disposition of my Option and the loss of the tax-advantaged nature of the Option to the extent exercised).

The name or names to be on the stock certificates and the address and Social Security number or addresses and Social Security numbers of such person or persons is as follows:


Name:



Address:




City	State	Zip Code



Social Security Number:


		Very truly yours,


		(Signature of Person or Persons exercising the Option)


		(Print Name)


		(Print Address)

Date received by the Corporation:

Exhibit 10.4

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

THIS AGREEMENT , made and entered into this 1st day of August, 2007, by and between Sonabank N.A., a banking corporation organized and existing under the laws of the State of Virginia, hereinafter referred to as the “Plan Sponsor”, and Georgia Derrico, hereinafter referred to as the Participant.

WITNESSETH

WHEREAS, it is the consensus of the Board that the Participant’s services to the Plan Sponsor in the past have been of exceptional merit and have constituted an invaluable contribution to the general welfare of the Plan Sponsor bringing it to its present status of operating efficiency, and its present position in its field of activity; and,

WHEREAS, the experience of the Participant, her knowledge of the affairs of the Plan Sponsor, her reputation and contacts in the industry are so valuable that assurance of his continued services is essential for the future growth and profits of the Plan Sponsor and it is in the best interests of the Plan Sponsor to arrange terms of continued employment for the Participant so as to reasonably assure his remaining in the Plan Sponsor’s employment during her lifetime or until the age of retirement; and,

WHEREAS , it is the desire of the Plan Sponsor that her services be retained as herein provided; and,

WHEREAS , the Participant is willing to continue in the employ of the Plan Sponsor provided the Plan Sponsor agrees to pay to her or her beneficiaries certain benefits in accordance with the terms and conditions hereinafter set forth; and,

WHEREAS , the Plan Sponsor intends that the Plan shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation plan for tax purposes and for purposes of Title I of ERISA. This Plan is not intended to qualify for favorable tax treatment pursuant to IRC Section 401(a) of the Code or any successor section or statute. This Plan is intended to comply with IRC Section 409A as created under The American Jobs Creation Act of 2004 (the “Jobs Act of 2004”). It is both anticipated and expected that the terms and provisions of this Plan may need to be amended in the future to assure continued compliance. The Plan Sponsor and the Participant acknowledge that fact and agree to take any and all steps necessary to operate the plan in “good faith” based on their current understanding of the regulations;

NOW THEREFORE , in consideration of services performed in the past and to be performed in the future as well as of the mutual promises and covenants herein contained, it is agreed as follows:

ARTICLE 1

DEFINITIONS

DEFINITION OF TERMS. Certain words and phrases are defined when first used in later Articles of this Plan. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply. For the purpose of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1 “Accrued Benefit” shall mean, as of any date, the benefit accrued and recorded on the books of the Plan Sponsor on behalf of the Participant, as shown on the attached

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Schedule A. If the Participant becomes entitled to payment from the Plan during a Plan Year, the amount of the benefit that would have accrued for that Plan Year shall be pro-rated based on the number of full months the Participant was employed during that Plan Year, and shall be added to the benefit that has accrued during all prior Plan Years to determine the Participant’s Accrued Benefit. With respect to the first, short Plan Year (i.e., August 1, 2007 through December 31, 2007), the benefit that shall accrue and be recorded on the books of the Plan Sponsor for the Plan Year, as shown on the attached Schedule A, shall be pro-rated based on the number of full months during which the Plan is in effect during that Plan Year.

1.2 “Aggregated Plans” shall mean this Plan and any other like-type plan or arrangement (nonaccount balance plan) of the Plan Sponsor in which the Participant participates and to which the Plan or Applicable Guidance requires the aggregation of all such nonqualified Deferred Compensation Plans in applying Code § 409A and associated regulations.

1.3 “Applicable Guidance” shall mean, as the context requires, Code § 409A, Final Treasury Regulations §1.409A, or other written Treasury or IRS guidance regarding or affecting Code § 409A. Applicable Guidance also includes, through December 31, 2007, Notice 2005-1, Notice 2006-79 and Notice 2006-100.

1.4 “Beneficiary” shall mean the person or persons, natural or otherwise, designated in writing by a Participant before his or her death to receive Plan benefits in the event of the Participant’s death.

1.5 “Benefit Eligibility Date” shall be August 1 ^st 2017.

1.6 “Board” shall mean the board of director’s of the Plan Sponsor, unless specifically noted otherwise.

1.7 “Cause” shall mean any of the following acts or circumstances: (i) willful destruction by the Participant of property of the Plan Sponsor having a material value to the Plan Sponsor; (ii) fraud, embezzlement, theft, or comparable dishonest activity committed by the Participant (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor); (iii) the Participant’s conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any misdemeanor involving fraud, dishonesty, or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor); (iv) the Participant’s breach, neglect, refusal, or failure to materially discharge the Participant’s duties (other than due to physical or mental illness) commensurate with the Participant’s title and function or the Participant’s failure to comply with the lawful directions of a senior managing officer of the Plan Sponsor in any such case that is not cured within fifteen (15) days after the Participant has received written notice thereof from such senior managing officer; or (v) any willful misconduct by the Participant which may cause substantial economic or reputation injury to the Plan Sponsor, including, but not limited to, sexual harassment.

1.8 “Change in Control” shall mean the occurrence of a Change in Control event, within the meaning of Treasury Regulations §1.409A-3(i)(5) and described in any of subparagraph (a), (b), or (c), (collectively referred to as “Change in Control Events”), or any combination of the Change in Control Events. To constitute a Change in Control Event with respect to the Participant or Beneficiary, the Change in Control Event must relate to: (i) the corporation for whom the Participant is performing services at the time of the Change in Control Event; (ii) the corporation that is liable for the payment of the Deferred Compensation (or all corporations liable for the payment if more than one corporation is liable); or (iii) a corporation that is a majority shareholder of a corporation identified in clause (i) or (ii), or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in clause (i) or (ii).

(a) Change in Ownership. A Change in Ownership occurs if a person, or a group of persons acting together, acquires more than fifty percent (50%) of the stock of the corporation, measured by voting power or value. Incremental increases in ownership by a person or group that already owns fifty percent (50%) of the corporation do not result in a Change of Ownership, as defined in Treasury Regulations §1.409A-3(i)(5)(v).

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(b) Change in Effective Control. A Change in Effective Control occurs if, over a twelve (12) month period: (i) a person or group acquires stock representing thirty percent (30%) of the voting power of the corporation; or (ii) a majority of the members of the board of directors of the ultimate parent corporation is replaced by directors not endorsed by the persons who were members of the board before the new directors’ appointment, as defined in Treasury Regulations §1.409A-3(i)(5)(vi).

(c) Change in Ownership of a Substantial Portion of Corporate Assets. A Change in Control based on the sale of assets occurs if a person or group acquires Forty percent (40%) or more of the gross fair market value of the assets of a corporation over a twelve (12) month period. No change in control results pursuant to this Article (c) if the assets are transferred to certain entities controlled directly or indirectly by the shareholders of the transferring corporation, as defined in Treasury Regulations §1.409A-3(i)(5)(vii).

1.9 “Claimant” shall mean a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

1.10 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.11 “Disability” shall mean a condition of the Participant whereby he or she either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Plan Sponsor. The Administrator will determine whether the Participant has incurred a Disability based on its own good faith determination and may require the Participant to submit to reasonable physical and mental examinations for this purpose. The Participant will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration, Railroad Retirement Board, or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the requirements of Treasury Regulation §1.409A-3(i)(4) and authoritative guidance.

1.12 “Effective Date” shall mean August 1st 2007.

1.13 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.14 “Participant” shall mean Georgia Derrico.

1.15 “Plan” shall mean this Supplemental Executive Retirement Plan Agreement, all Election Forms, the Trust, (if any), and any other written documents relevant to the Plan. For purposes of applying Code § 409A requirements, this Plan is a non-account balance plan under Treasury Regulation §1.409-1(c)(2)(i)(A.

1.16 “Plan Administrator” shall be the Plan Sponsor or its designee. A Participant in the Plan should not serve as a singular Plan Administrator. If a Participant is part of a group of persons designated as a committee or Plan Administrator, then the Participant may not participate in any activity or decision relating solely to his or her individual benefits under this Plan. Matters solely affecting the applicable Participant will be resolved by the remaining committee members.

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1.17 “Plan Sponsor” shall mean Sonabank N.A..

1.18 “Plan Year” shall mean, for the first Plan Year, the period beginning on the Effective Date of the Plan and ending December 31 of such calendar year, and thereafter, a twelve (12) month period beginning January 1 of each calendar year and continuing through December 31 of such calendar year.

1.19 “Section 409A” shall mean Section 409A of the Code and the Treasury Regulations and other Applicable Guidance issued under that Section.

1.20 “Separation from Service” shall mean the occurrence of a Participant’s death, retirement, or “other termination of employment” (as defined in Treasury Regulations §1.409A-1(h)(1)) with the Plan Sponsor (as defined in Treasury Regulations §1.409A-1(h)(3)).

(a) Effect of Leave. A Participant does not incur a Separation from Service if the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Participant with the right to reemployment with the Plan Sponsor. If a Participant’s leave exceeds six (6) months but the Participant is not entitled to reemployment under a statute or contract, the Participant incurs a Separation from Service on the next day following the expiration of such six (6) month period.

(b) Termination of Employment. A Participant will have incurred a Separation from Service where the Plan Sponsor and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an Employee or as an Independent Contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an Employee or an Independent Contractor) over the immediately preceding 36-month period (or the full period of services to the employer if the Employee has been providing services to the Plan Sponsor less than 36 months). A Participant is presumed to have Separated from Service where the level of bona fide services performed decreases to a level equal to or less than twenty percent (20%) of the services performed by the Participant during the immediately preceding 36-month period.

1.21 “Taxable Year” shall mean the twelve (12) consecutive month period ending each December 31.

1.22 “Treasury Regulations” shall mean regulations promulgated by the Internal Revenue Service for the U.S. Department of the Treasury, as they may be amended from time to time.

1.23 “Trust” shall mean one or more trusts that may be established in accordance with the terms of this Plan.

ARTICLE 2

Selection, Enrollment, Eligibility

2.1 Selection by Plan Sponsor . Participation in the Plan shall be limited to a select group of management or highly compensated employees of the Plan Sponsor, as determined by the Plan Sponsor in its sole and absolute discretion. The Participant is the only participant in the Plan.

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2.2 Re-Employment. If a Participant who incurs a Separation from Service is subsequently re-employed, he or she may, at the sole and absolute discretion of the Plan Administrator, become a Participant in accordance with the provisions of the Plan.

2.3 Enrollment Requirements. As a condition of participation, the Participant shall complete, execute, and return to the Plan Administrator all form(s) required by the Plan Administrator and within the time specified by the Plan Administrator. In addition, the Plan Administrator shall establish such other enrollment requirements as it determines necessary or advisable.

2.4 Eligibility; Commencement of Participation. Provided that the Participant has met all enrollment requirements set forth in the Plan and required by the Plan Administrator, the Participant shall commence participation in the Plan on the date this Plan is executed by the Plan Sponsor.

2.5 Termination of Participation. If the Plan Administrator determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Section 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Plan Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.

ARTICLE 3

BENEFITS

3.1 Normal Retirement Benefit. If the Participant remains in the service of the Plan Sponsor until reaching the Benefit Eligibility Date, the Participant shall be entitled to an annual benefit in the amount of One Hundred Thirty-Seven Thousand and Three Hundred Fifty-Seven dollars ($137,357.00). The benefit will be paid in ten (10) annual installments and shall commence on the first day of the seventh month following the Participant’s Separation from Service subject to the conditions and limitations hereinafter set forth.

3.2 Death Prior to Commencement of Benefit Payments. In the event the Participant should die while actively employed by the Plan Sponsor at any time after the date of this Agreement but prior to the Benefit Elgibility Date, the Plan Sponsor will pay the Accrued Benefit, calculated as of the date of death, as a lump sum to such individual or individuals as the Participant may have designated in writing, filed with and been approved by the Plan Sponsor. The payment shall be due on the first day of the third month following the month of the decease of the Participant.

3.3 Death Subsequent to Commencement of Benefit Payments. In the event the Participant dies while receiving payments, but prior to receiving all such payments due and owing hereunder, the unpaid balance of the payments shall continue to be paid to the Participant’s Beneficiary for the balance of the ten (10) annual installments.

3.4 Disability Benefit. In the event the Participant should become Disabiled while actively employed by the Plan Sponsor at any time after the date of this Agreement but prior to the Benefit Elgibility Date, the Participant shall be entitled to receive the Accrued Benefit, calculated as of the date of determination of Disability. Such benefit shall be paid in the form of a lump sum the date the Participant attains age 65, or, if later, the first day of the month following the date of determination of Disability.

3.5 Separation from Service Benefit. If the Participant incurs a Seperation from Service prior to the Benefit Eligibility Date for reasons other than termination for Cause, Death, Disability or following a Change in Control, then the Participant shall be entitled to a benefit equal to the Accrued Benefit, calculated as of the date of Separation from Service. Such benefit shall commence on the first day of the seventh month following the date of Seperation from Service and shall be paid in ten (10) equal annual installments.

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3.6 Change in Control Benefit. If the Participant incurs a Seperation from Service following a Change in Control, then the Participant shall be entitled to receive the Normal Retirement Benefit, as described in Section 3.1, calculated as of the date of said event. Such benefit shall commence on the first day of the seventh month following the date of Seperation from Service and shall be paid in ten (10) equal annual installments.

3.7 Termination for Cause Prior To Benefit Eligibility Date. If the Plan Sponsor terminates the Participant’s employment for “Cause”, then the Participant shall not be entitled to any benefits under the terms of this Agreement.

3.8. Participant Elections. Subject to Section 3.9, the Participant may change the form and/or timing of payment described in the preceding Sections by submitting a form to the Plan Sponsor at least twelve (12) months prior to the date on which the distribution is to be made (or commence) and delays the distribution (or commencement of distributions) date at least five (5) full calendar years from the previously scheduled distribution date. Any election under this paragraph shall not take effect until at least 12 months after the date on which the election is made. Any such change in election may not result in an acceleration of any payment, except as otherwise provided in this Article.

Notwithstanding the preceding, to the extent permitted under Section 409A and by the Plan Sponsor, the Participant may elect the timing and manner of distributions during 2007 and 2008 (except that a Participant cannot in a year change payment elections with respect to payments that the Participant would otherwise receive in that same year, or make an election that causes payments scheduled for subsequent years to be made in the year the election is made), and such election shall not be treated as a change in the form and timing of payment or an acceleration of payment under Section 409A.

3.9 Prohibition on Acceleration of Payments. Notwithstanding anything in this Plan to the contrary, neither the Plan Sponsor nor a Participant may accelerate the time or schedule of any payment or amount scheduled to be paid under this Plan, except as otherwise permitted by Treasury Regulations §1.409A-3(j)(4). The Plan Sponsor shall deny any change made to an election if the Plan Sponsor determines that the change violates the requirements of authoritative guidance. However, the Plan Sponsor, in its discretion, may accelerate distributions under the Plan to the extent permitted under Code section 409A (e.g., Treas. Reg. 1.409A-3(j)(4)).

3.10 Delay in Payment by Plan Sponsor.

(a) A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Plan Sponsor treats all payments to similarly situated Participants on a reasonably consistent basis.

(i) Payments subject to Section 162(m). A payment may be delayed to the extent that the Plan Sponsor reasonably anticipates that if the payment were made as scheduled, the Plan Sponsor’s deduction with respect to such payment would not be permitted due to the application of Code §162(m). If a payment is delayed, such payment must be made either:

(1) during the Participant’s first taxable year in which the Plan Sponsor reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred by application of Code §162(m) or,

(2) during the period beginning with the date of the Participant’s Separation from Service and ending on the later of the last day of the Taxable Year of the Plan Sponsor in which the Participant separates from service or the

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15 ^th day of the third month following the Participant’s Separation from Service. Where any scheduled payment to a specific Participant in the Plan Sponsor’s Taxable Year is delayed in accordance with this Article, the delay in payment will be treated as a subsequent deferral election unless all scheduled payments to the Participant that could be delayed in accordance with this Article are also delayed. Where the payment is delayed to a date on or after the Participant’s Separation from Service, the payment will be considered a payment upon a Separation from Service for purposes of the rules under Treasury Regulations §1.409A-3(i)(2) (payments to specified employees upon a separation from service) and the 6 month delay rule will apply.

(ii) Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Plan Sponsor reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Plan Sponsor reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Internal Revenue Code is not treated as a violation of applicable law.

(iii) Other events and conditions. The Plan Sponsor may delay a payment upon such other events and conditions as the Commissioner of the IRS may prescribe.

(iv) Not withstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Plan Sponsor to continue as a going concern.

(b) Treatment of Payment as Made on Designated Payment Date. Each payment under this Plan is deemed made on the required payment date even if the payment is made after such date, provided the payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) in case the Plan Sponsor cannot calculate the payment amount on account of administrative impracticality which is beyond the Participant’s control (or the control of the Participant’s estate), in the first calendar year in which payment is practicable; (iv) in case the Plan Sponsor does not have sufficient funds to make the payment without jeopardizing the Plan Sponsor’s solvency, in the first calendar year in which the Plan Sponsor’s funds are sufficient to make the payment.

3.11 Unsecured General Creditor Status of Participant:

(a) Payment to the Participant or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Plan Sponsor and no person shall have any interest in any such asset by virtue of any provision of this Plan. The Plan Sponsor’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. To the extent that any person acquires a right to receive payments from the Plan Sponsor under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of the Plan Sponsor and no such person shall have or acquire any legal or equitable right, interest, or claim in or to any property or assets of the Plan Sponsor.

(b) In the event that the Plan Sponsor purchases an insurance policy or policies insuring the life of a Participant or employee, to allow the Plan Sponsor to recover or meet the cost of providing benefits, in whole or in part, hereunder, no Participant or Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom. The Plan Sponsor or the Trustee of the Trust (if any) shall be the

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primary owner and beneficiary of any such insurance policy or property and shall possess and may exercise all incidents of ownership therein. No insurance policy with regard to any director, “highly compensated employee”, or “highly compensated individual” as defined in IRS Section 101(j) shall be acquired before satisfying the Section 101(j) “Notice and Consent” requirements.

(c) In the event that the Plan Sponsor purchases an insurance policy or policies on the life of a Participant as provided for above, then all of such policies shall be subject to the claims of the creditors of the Plan Sponsor.

(d) If the Plan Sponsor chooses to obtain insurance on the life of a Participant in connection with its obligations under this Plan, the Participant hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Plan Sponsor or the insurance company designated by the Plan Sponsor.

3.12 Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Plan Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Plan Sponsor and the Plan Administrator from further liability on account thereof.

3.13 Excise Tax Limitation. In the event that any payment or benefit (within the meaning of Code §280G(b)(2) of the Code) to the Participant or for the Participant’s benefit paid or payable or distributed or distributable (including, but not limited to, the acceleration of the time for the vesting or payment of such benefit or payment) pursuant to the terms of this Plan or otherwise in connection with, or arising out of, the Participant’s employment with the Plan Sponsor or any of its Affiliates or a Change in Control within the meaning of Code §280G of the Code (a “Payment” or “Payments”), would be subject to the excise tax imposed by Code §4999 of the Code (the “Excise Tax”), then the Payments shall be increased in an amount necessary to provide for the payment of the excise tax imposed by Code § 4999 (the “Section 4999 Limit”). Any payment made to the Participant under this Section 3.13 shall be made no later than the end of the calendar year following the calendar year in which the Participant remits the related taxes.

ARTICLE 4

Vesting and Taxes

4.1 Vesting. The Participant shall be vested in the Accrued Benefit at all times.

4.2 Acceleration of Vesting. If the Participant is entitled to a benefit following a Change in Control, then the Participant shall be One Hundred (100%) percent vested in the Normal Retirement Benefit (as described in Section 3.1).

4.3 FICA, Withholding and Other Taxes:

(a) When a Participant becomes vested in a portion of the Normal Retirement Benefit, the Plan Sponsor shall withhold from the Participant’s Base Salary in a manner determined in the sole discretion of the Plan Sponsor, the Participant’s share of FICA and other employment taxes on such vested Normal Retirement Benefit.

(b) Distributions. The Plan Sponsor, or trustee of the Trust, shall withhold from any payments made to a Participant or Beneficiary under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Plan Sponsor in a manner elected by the Participant or Beneficiary (or in the absence of such an election, in a manner determined in the sole and absolute discretion of the Plan Sponsor or the trustee of the Trust), provided that such manner complies with applicable tax withholding requirements.

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ARTICLE 5

BENEFICIARY DESIGNATION

5.1 Designation of Beneficiaries.

(a) The Participant may designate any person or persons (who may be named contingently or successively) to receive any benefits payable under the Plan upon the Participant’s death, and the designation may be changed from time to time by the Participant by filing a new designation. Each designation will revoke all prior designations by the Participant and shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Participant’s lifetime.

(b) In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Participant, the Plan Sponsor shall pay the benefit payment to the Participant’s spouse, if then living, and if the spouse is not then living to the Participant’s then living descendants, if any, per stirpes, and if there are no living descendants, to the Participant’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Plan Sponsor may rely conclusively upon information supplied by the Participant’s personal representative, executor, or administrator.

(c) If a question arises as to the existence or identity of anyone entitled to receive a death benefit payment under the Plan, or if a dispute arises with respect to any death benefit payment under the Plan, the Plan Sponsor may distribute the payment to the Participant’s estate without liability for any tax or other consequences, or may take any other action which the Plan Sponsor deems to be appropriate.

5.2 Information to be Furnished by Participants and Beneficiaries; Inability to Locate Participants or Beneficiaries. Any communication, statement, or notice addressed to the Participant or to a Beneficiary at his or her last post office address as shown on the Plan Sponsor’s records shall be binding on the Participant or Beneficiary for all purposes of this Plan. The Plan Sponsor shall not be obligated to search for any Participant or Beneficiary beyond the sending of a registered letter to the last known address.

ARTICLE 6

ADMINISTRATION

6.1 Administrator Duties. The Administrator shall be responsible for the management, operation, and administration of the Plan. The Administrator shall act at meetings by affirmative vote of a majority of its members. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a unanimous written consent to the action is signed by all members and such written consent is filed with the minutes of the proceedings of the Administrator, provided, however that no member may vote or act upon any matter which relates solely to the Participant. The Chair, or any other member or members of the Administrator designated by the Chair, may execute any certificate or other written direction on behalf of the Administrator. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Participant or the Plan Sponsor. No provision of this Plan shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

6.2 Administrator Authority. The Administrator shall enforce this Plan in accordance with its terms, shall be charged with the general administration of this Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

(a) To construe and interpret the terms and provisions of this Plan;

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(b) To compute and certify the amount and kind of benefits payable to the Participant and their Beneficiaries; to determine the time and manner in which such benefits are paid; and to determine the amount of any withholding taxes to be deducted;

(c) To maintain all records that may be necessary for the administration of this Plan;

(d) To provide for the disclosure of all information and the filing or provision of all reports and statements to the Participant, Beneficiaries, and governmental agencies as shall be required by law;

(e) To make and publish such rules for the regulation of this Plan and procedures for the administration of this Plan as are not inconsistent with the terms hereof;

(f) To administer this Plan’s claims procedures;

(g) To approve election forms and procedures for use under this Plan; and

(h) To appoint a plan record keeper or any other agent, and to delegate to them such powers and duties in connection with the administration of this Plan as the Administrator may from time to time prescribe.

6.3 Binding Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of this Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Plan.

6.4 Compensation, Expenses, and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator is authorized at the expense of the Plan Sponsor to employ such legal counsel and/or Plan record keeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Plan shall be paid by the Plan Sponsor.

6.5 Plan Sponsor Information. To enable the Administrator to perform its functions, the Plan Sponsor shall supply full and timely information to the Administrator, on all matters relating to the compensation of the Participant, the date and circumstances of the Disability, death, or Separation from Service of the Participant, and such other pertinent information as the Administrator may reasonably require.

6.6 Periodic Statements. Under procedures established by the Administrator, Participant shall be provided a statement of the Accrued Benefit on an annual basis.

ARTICLE 7

CLAIMS PROCEDURE

7.1 Claims Procedures . This Section 7.1 is based on final regulations issued by the Department of Labor and published in the Federal Register on November 21, 2000 and codified at section 2560.503 1 of the Department of Labor Regulations. If any provision of this Section 8.4 conflicts with the requirements of those regulations, the requirements of those regulations will prevail.

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(a) Initial Claim . A Participant or Beneficiary who believes he or she is entitled to any Benefit (a “Claimant”) under this Plan may file a claim with the Administrator. The Administrator will review the claim itself or appoint another individual or entity to review the claim.

(i) Benefit Claims that do not Require a Determination of Disability . In the claim is for a benefit other than a disability benefit, the Claimant will be notified within ninety (90) days after the claim is filed whether the claim is allowed or denied, unless the Claimant receives written notice from the Administrator or appointee of the Administrator before the end of the ninety (90) day period stating that special circumstances require an extension of the time for decision, such extension not to extend beyond the day which is one hundred eighty (180) days after the day the claim is filed.

(ii) Disability Benefit Claims . In the case of a benefits claim that requires a determination by the Plan Administrator of a Participant’s disability status, the Plan Administrator will notify the Claimant of the Plan’s adverse benefit determination within a reasonable period of time, but not later than forty-five (45) days after receipt of the claim. If, due to matters beyond the control of the Plan, the Plan Administrator needs additional time to process a claim, the Claimant will be notified, within forty-five (45) days after the Plan Administrator receives the claim, of those circumstances and of when the Plan Administrator expects to make its decision but not beyond seventy-five (75) days. If, prior to the end of the extension period, due to matters beyond the control of the Plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to one hundred five (105) days, provided that the Plan Administrator notifies the Claimant of the circumstances requiring the extension and the date as of which the Plan expects to render a decision. The extension notice will specifically explain the standards on which entitlement to a disability benefit is based, the unresolved issues that prevent a decision on the claim and the additional information needed from the Claimant to resolve those issues, and the Claimant will be afforded at least forty-five (45) days within which to provide the specified information.

(iii) Manner and Content of Denial of Initial Claims . If the Plan Administrator denies a claim, it must provide to the Claimant, in writing or by electronic communication:

(A) The specific reasons for the denial;

(B) A reference to the Plan provision or insurance contract provision upon which the denial is based;

(C) A description of any additional information or material that the Claimant must provide in order to perfect the claim;

(D) An explanation of why such additional material or information is necessary;

(E) Notice that the Claimant has a right to request a review of the claim denial and information on the steps to be taken if the Claimant wishes to request a review of the claim denial; and

(F) A statement of the participant’s right to bring a civil action under ERISA section 502(a) following a denial on review of the initial denial.

In addition, in the case of a denial of disability benefits on the basis of the Plan Administrator’s independent determination of the Participant’s disability status, the Plan Administrator will provide a copy of any rule, guideline, protocol, or other similar criterion relied upon in making the adverse determination (or a statement that the same will be provided upon request by the Claimant and without charge).

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(b) Review Procedures .

(i) Benefit Claims that do not Require a Determination of Disability . Except for claims requiring an independent determination of a Participant’s disability status, a request for review of a denied claim must be made in writing to the Plan Administrator within sixty (60) days after receiving notice of denial. The decision upon review will be made within sixty (60) days after the Plan Administrator’s receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than one hundred twenty (120) days after receipt of a request for review. A notice of such an extension must be provided to the Claimant within the initial sixty (60) day period and must explain the special circumstances and provide an expected date of decision.

The reviewer will afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Plan Administrator. The reviewer will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the initial benefit determination.

(ii) Disability Benefit Claims . In addition to having the right to review documents and submit comments as described in (i) above, a Claimant whose claim for disability benefits requires an independent determination by the Plan Administrator of the Participant’s disability status has at least one hundred eighty (180) days following receipt of a notification of an adverse benefit determination within which to request a review of the initial determination. In such cases, the review will meet the following requirements:

(A) The Plan will provide a review that does not afford deference to the initial adverse benefit determination and that is conducted by an appropriate named fiduciary of the Plan who did not make the initial determination that is the subject of the appeal, nor is a subordinate of the individual who made the determination.

(B) The appropriate named fiduciary of the Plan will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment before making a decision on review of any adverse initial determination based in whole or in part on a medical judgment. The professional engaged for purposes of a consultation in the preceding sentence will not be an individual who was consulted in connection with the initial determination that is the subject of the appeal or the subordinate of any such individual.

(C) The Plan will identify to the Claimant the medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the review, without regard to whether the advice was relied upon in making the benefit review determination.

(D) The decision on review will be made within forty-five (45) days after the Plan Administrator’s receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than ninety (90) days after receipt of a request for review. A notice of such an extension must be provided to the Claimant within the initial forty-five (45) day period and must explain the special circumstances and provide an expected date of decision.

(iii) Manner and Content of Notice of Decision on Review . Upon completion of its review of an adverse initial claim determination, the Plan Administrator will give the Claimant, in writing or by electronic notification, a notice containing:

(A) its decision;

(B) the specific reasons for the decision;

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(D) a statement that the Claimant is entitled to receive, upon request and without charge, reasonable access to, and copies of, all documents, records and other information in the Plan’s files which is relevant to the Claimant’s claim for benefits;

(E) a statement describing the Claimant’s right to bring an action for judicial review under ERISA section 502(a); and

(F) if an internal rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination on review, a statement that a copy of the rule, guideline, protocol or other similar criterion will be provided without charge to the Claimant upon request.

(c) Calculation of Time Periods . For purposes of the time periods specified in this Section, the period of time during which a benefit determination is required to be made begins at the time a claim is filed in accordance with the Plan procedures without regard to whether all the information necessary to make a decision accompanies the claim. If a period of time is extended due to a Claimant's failure to submit all information necessary, the period for making the determination shall be tolled from the date the notification is sent to the Claimant until the date the Claimant responds.

(d) Failure of Plan to Follow Procedures . If the Plan fails to follow the claims procedures required by this Section 7.1, a Claimant shall be deemed to have exhausted the administrative remedies available under the Plan and shall be entitled to pursue any available remedy under ERISA section 502(a) on the basis that the Plan has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim.

(e) Failure of Claimant to Follow Procedures . A Claimant's compliance with the foregoing provisions of this Section 7.1 is a mandatory prerequisite to the Claimant's right to commence any legal action with respect to any claim for benefits under the Plan.

7.2 Arbitration of Claims. All claims or controversies arising out of or in connection with this Plan shall, subject to the initial review provided for in the foregoing provisions of this Article and any legal remedies to which the Participant is entitled under ERISA, be resolved through arbitration. Except as otherwise mutually agreed to by the parties, any arbitration shall be administered under and by the Judicial Arbitration & Mediation Services, Inc. (“JAMS”), in accordance with the JAMS procedures then in effect. The arbitration shall be held in the JAMS office nearest to where the Claimant is or was last employed by the Plan Sponsor or at a mutually agreeable location. The prevailing party in the arbitration shall have the right to recover its reasonable attorney’s fees, disbursements, and costs of the arbitration (including enforcement of the arbitration decision), subject to any contrary determination by the arbitrator.

ARTICLE 8

AMENDMENT AND TERMINATION

8.1 Amendment . The Plan Sponsor reserves the right to amend this Agreement Plan at any time to comply with Section 409A and other Applicable Guidance or for any other purpose, provided that such amendment will not cause the Plan to violate the provisions of Section 409A. Except to the extent necessary to bring this Plan into compliance with Section 409A, no amendment or modification shall be effective to decrease the value or vested percentage of a Participant’s Accrued Benefit in existence at the time an amendment or modification is made to the Plan.

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8.2 Plan Termination. The Plan Sponsor reserves the right to terminate this Plan in accordance with one of the following, subject to the restrictions imposed by Section 409A and authoritative guidance:

(a) Corporate Dissolution or Bankruptcy. This Plan may be terminated within twelve (12) months of a corporate dissolution taxed under Code § 331, or with the approval of a Plan Sponsor bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), and distributions may then be made to the Participant provided that the amounts payable under this Plan are included in the Participants’ gross income in the latest of:

(i) The calendar year in which the Plan 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.

(b) Change in Control. This Plan may be terminated within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Plan will then be treated as terminated only if all substantially similar arrangements sponsored by the Plan Sponsor are terminated so that all participants in all similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date of termination of the arrangements.

(c) Discretionary Termination. The Plan Sponsor may also terminate this Plan and make distributions provided that:

(i) All plans sponsored by the Plan Sponsor that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated;

(ii) No payments, other than payments that would be payable under the terms of this plan if the termination had not occurred, are made within twelve (12) months of this plan termination;

(iii) All payments are made within twenty-four (24) months of this plan termination; and

(iv) Neither the Plan Sponsor nor any of its affiliates adopts a new plan that would be aggregated with any terminated plan if the same Participant participated in both arrangements at any time within three (3) years following the date of termination of this Plan.

(v) The termination does not occur proximate to a downturn in the financial health of the Plan Sponsor.

ARTICLE 9

THE TRUST

9.1 Establishment of Trust. The Plan Sponsor may establish a grantor trust (the “Trust”), of which the Plan Sponsor is the grantor, within the meaning of subpart E, part I, subchapter J, subtitle A of the Code, to pay benefits under this Plan. If the Plan Sponsor establishes a Trust, all benefits payable under this Plan to a Participant shall be paid directly by the Plan Sponsor from the Trust. To the extent such benefits are not paid from the Trust, the benefits shall be paid from the general assets of the Plan Sponsor. The Trust, (if any), shall be a grantor trust which conforms to the terms of the model trust as described in IRS Revenue

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Procedure 92-64, I.R.B. 1992-33, as same may be amended or modified from time to time. If the Plan Sponsor establishes a Trust, the assets of the Trust will be subject to the claims of the Plan Sponsor’s creditors in the event of its insolvency. Except as may otherwise be provided under the Trust, the Plan Sponsor shall not be obligated to set aside, earmark, or escrow any funds or other assets to satisfy its obligations under this Plan, and the Participant and/or his or her designated Beneficiaries shall not have any property interest in any specific assets of the Plan Sponsor other than the unsecured right to receive payments from the Plan Sponsor, as provided in this Plan.

9.2 Interrelationship of the Plan and the Trust. The provisions of this Plan shall govern the rights of a Participant to receive distributions pursuant to this Plan. The provisions of the Trust (if established) shall govern the rights of the Participant and the creditors of the Plan Sponsor to the assets transferred to the Trust. The Plan Sponsor and each Participant shall at all times remain liable to carry out its obligations under this Plan. The Plan Sponsor’s obligations under this Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust.

9.3 Contribution to the Trust. Amounts may be contributed by the Plan Sponsor to the Trust at the sole discretion of the Plan Sponsor.

ARTICLE 10

MISCELLANEOUS

10.1 Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. To the extent any provision of this Plan is determined by the Plan Administrator (acting in good faith), the Internal Revenue Service, the United States Department of the Treasury, or a court of competent jurisdiction to fail to comply with Section 409A of the Code or authoritative guidance with respect to any Participant or Participants, such provision shall have no force or effect with respect to such Participant or Participants.

10.2 Nonassignability. Neither any Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate, alienate, or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part hereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment (except to the extent the Plan Sponsor may be required to garnish amounts from payments due under this Plan pursuant to applicable law), or sequestration for the payment of any debts, judgments, alimony, or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency, or be transferable to a spouse as a result of a property settlement or otherwise. If any Participant, Beneficiary, or successor in interest is adjudicated bankrupt or purports to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber transfer, hypothecate, alienate, or convey in advance of actual receipt, the amount, if any, payable hereunder, or any part thereof, the Plan Administrator, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary, or successor in interest in such manner as the Plan Administrator shall direct.

10.3 Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Plan Sponsor and the Participant. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Plan Sponsor as an employee or otherwise or to interfere with the right of the Plan Sponsor to discipline or discharge the Participant at any time.

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10.4 Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of Virginia without regard to its conflicts of laws principles.

10.5 Notice. Any notice, consent or demand required or permitted to be given under the provisions of this Plan shall be in writing and shall be signed by the party giving or making the same. If such notice, consent, or demand is mailed, it shall be sent by United States certified mail, postage prepaid, addressed to the addressee’s last known address as shown on the records of the Plan Sponsor. The date of such mailing shall be deemed the date of notice consent or demand. Any person may change the address to which notice is to be sent by giving notice of the change of address in the manner aforesaid.

10.6 Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under this Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Plan Sponsor. This Plan shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

10.7 Compliance. A Participant shall have no right to receive payment with respect to the Participant’s Accrued Benefit until all legal and contractual obligations of the Plan Sponsor relating to establishment of the Plan and the making of such payments shall have been complied with in full.

10.8 Compliance with Section 409A and Authoritative Guidance. Notwithstanding anything in this Plan to the contrary, all provisions of this Plan, including but not limited to the definitions of terms, elections to defer, and distributions, shall be made in accordance with and shall comply with Section 409A and any authoritative guidance. The Plan Sponsor will amend the terms of this Plan retroactively, if necessary, to the extent required to comply with Section 409A and any authoritative guidance. No election made by a Participant hereunder, and no change made by a Participant to a previous election, shall be accepted by the Plan Sponsor if the Plan Sponsor determines that acceptance of such election or change could violate any of the requirements of Section 409A or the authoritative guidance. This Plan and any accompanying forms shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A and the authoritative guidance, including, without limitation, any such Treasury Regulations or other guidance that may be issued after the date hereof.

IN WITNESS WHEREOF , the Plan Sponsor and Participant have signed this Plan document as of August 1, 2007.


		WITNESS:		FOR THE PLAN SPONSOR:

		/s/ R. Roderick Porter		/s/ William H. Lagos
		(signature)		(signature)

		R. Roderick Porter		William H. Lagos, Sr. V.P.
		(print name)		(print name)

		DATE:		PARTICIPANT:

		August 1, 2007		/s/ Georgia S. Derrico
				(signature)

				Georgia S. Derrico
				(print name)

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Exhibit 10.5

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

THIS AGREEMENT, made and entered into this 1st day of August, 2007, by and between Sonabank N.A., a banking corporation organized and existing under the laws of the State of Virginia, hereinafter referred to as the “Plan Sponsor”, and Rod Porter, hereinafter referred to as the Participant.

WITNESSETH

WHEREAS, the experience of the Participant, his knowledge of the affairs of the Plan Sponsor, his reputation and contacts in the industry are so valuable that assurance of his continued services is essential for the future growth and profits of the Plan Sponsor and it is in the best interests of the Plan Sponsor to arrange terms of continued employment for the Participant so as to reasonably assure his remaining in the Plan Sponsor’s employment during his lifetime or until the age of retirement; and,

WHEREAS, it is the desire of the Plan Sponsor that his services be retained as herein provided; and,

WHEREAS, the Participant is willing to continue in the employ of the Plan Sponsor provided the Plan Sponsor agrees to pay to him or his beneficiaries certain benefits in accordance with the terms and conditions hereinafter set forth; and,

WHEREAS, the Plan Sponsor intends that the Plan shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation plan for tax purposes and for purposes of Title I of ERISA. This Plan is not intended to qualify for favorable tax treatment pursuant to IRC Section 401(a) of the Code or any successor section or statute. This Plan is intended to comply with IRC Section 409A as created under The American Jobs Creation Act of 2004 (the “Jobs Act of 2004”). It is both anticipated and expected that the terms and provisions of this Plan may need to be amended in the future to assure continued compliance. The Plan Sponsor and the Participant acknowledge that fact and agree to take any and all steps necessary to operate the plan in “good faith” based on their current understanding of the regulations;

NOW THEREFORE, in consideration of services performed in the past and to be performed in the future as well as of the mutual promises and covenants herein contained, it is agreed as follows:

ARTICLE 1

DEFINITIONS

1.1 “Accrued Benefit” shall mean, as of any date, the benefit accrued and recorded on the books of the Plan Sponsor on behalf of the Participant, as shown on the attached

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1.5 “Benefit Eligibility Date” shall be August 1 ^st 2017.

1.6 “Board” shall mean the board of director’s of the Plan Sponsor, unless specifically noted otherwise.

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1.9 “Claimant” shall mean a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

1.10 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.12 “Effective Date” shall mean August 1st 2007.

1.13 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.14 “Participant” shall mean Rod Porter.

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1.17 “Plan Sponsor” shall mean Sonabank N.A..

1.19 “Section 409A” shall mean Section 409A of the Code and the Treasury Regulations and other Applicable Guidance issued under that Section.

1.21 “Taxable Year” shall mean the twelve (12) consecutive month period ending each December 31.

1.22 “Treasury Regulations” shall mean regulations promulgated by the Internal Revenue Service for the U.S. Department of the Treasury, as they may be amended from time to time.

1.23 “Trust” shall mean one or more trusts that may be established in accordance with the terms of this Plan.

ARTICLE 2

Selection, Enrollment, Eligibility

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ARTICLE 3

BENEFITS

3.1 Normal Retirement Benefit. If the Participant remains in the service of the Plan Sponsor until reaching the Benefit Eligibility Date, the Participant shall be entitled to an annual benefit in the amount of One Hundred Six Thousand and Three Hundred Thirty-Three dollars ($106,330.00). The benefit will be paid in ten (10) annual installments and shall commence on the first day of the seventh month following the Participant’s Separation from Service subject to the conditions and limitations hereinafter set forth.

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3.10 Delay in Payment by Plan Sponsor.

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(iii) Other events and conditions. The Plan Sponsor may delay a payment upon such other events and conditions as the Commissioner of the IRS may prescribe.

(iv) Not withstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Plan Sponsor to continue as a going concern.

3.11 Unsecured General Creditor Status of Participant:

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ARTICLE 4

Vesting and Taxes

4.1 Vesting. The Participant shall be vested in the Accrued Benefit at all times.

4.3 FICA, Withholding and Other Taxes:

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ARTICLE 5

BENEFICIARY DESIGNATION

5.1 Designation of Beneficiaries.

ARTICLE 6

ADMINISTRATION

(a) To construe and interpret the terms and provisions of this Plan;

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(c) To maintain all records that may be necessary for the administration of this Plan;

(e) To make and publish such rules for the regulation of this Plan and procedures for the administration of this Plan as are not inconsistent with the terms hereof;

(f) To administer this Plan’s claims procedures;

(g) To approve election forms and procedures for use under this Plan; and

6.6 Periodic Statements. Under procedures established by the Administrator, Participant shall be provided a statement of the Accrued Benefit on an annual basis.

ARTICLE 7

CLAIMS PROCEDURE

7.1 Claims Procedures. This Section 7.1 is based on final regulations issued by the Department of Labor and published in the Federal Register on November 21, 2000 and codified at section 2560.503 1 of the Department of Labor Regulations. If any provision of this Section 8.4 conflicts with the requirements of those regulations, the requirements of those regulations will prevail.

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(iii) Manner and Content of Denial of Initial Claims . If the Plan Administrator denies a claim, it must provide to the Claimant, in writing or by electronic communication:

(A) The specific reasons for the denial;

(B) A reference to the Plan provision or insurance contract provision upon which the denial is based;

(C) A description of any additional information or material that the Claimant must provide in order to perfect the claim;

(D) An explanation of why such additional material or information is necessary;

(E) Notice that the Claimant has a right to request a review of the claim denial and information on the steps to be taken if the Claimant wishes to request a review of the claim denial; and

(F) A statement of the participant’s right to bring a civil action under ERISA section 502(a) following a denial on review of the initial denial.

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(b) Review Procedures .

(A) its decision;

(B) the specific reasons for the decision;

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(E) a statement describing the Claimant’s right to bring an action for judicial review under ERISA section 502(a); and

(c) Calculation of Time Periods . For purposes of the time periods specified in this Section, the period of time during which a benefit determination is required to be made begins at the time a claim is filed in accordance with the Plan procedures without regard to whether all the information necessary to make a decision accompanies the claim. If a period of time is extended due to a Claimant’s failure to submit all information necessary, the period for making the determination shall be tolled from the date the notification is sent to the Claimant until the date the Claimant responds.

(e) Failure of Claimant to Follow Procedures . A Claimant’s compliance with the foregoing provisions of this Section 7.1 is a mandatory prerequisite to the Claimant’s right to commence any legal action with respect to any claim for benefits under the Plan.

ARTICLE 8

AMENDMENT AND TERMINATION

8.1 Amendment. The Plan Sponsor reserves the right to amend this Agreement Plan at any time to comply with Section 409A and other Applicable Guidance or for any other purpose, provided that such amendment will not cause the Plan to violate the provisions of Section 409A. Except to the extent necessary to bring this Plan into compliance with Section 409A, no amendment or modification shall be effective to decrease the value or vested percentage of a Participant’s Accrued Benefit in existence at the time an amendment or modification is made to the Plan.