National Bankshares Inc

This proposal is an advisory, non-binding 'say-on-pay' vote required under Dodd-Frank and SEC rules that asks shareholders to approve, on an overall basis, the compensation of the Company’s named executive officers as described in the proxy statement. Management is presenting the vote to obtain shareholder feedback on the design and outcomes of its executive pay program—composed principally of base salary, an annual incentive plan that pays 50% cash and 50% restricted stock units (RSUs), long-term RSU awards under the 2023 Stock Incentive Plan, and retirement and severance/change-in-control protections in employment agreements. The Compensation Committee uses the advisory vote as an input when setting future compensation and has disclosed that it will consider the outcome although the vote is non-binding. The Company emphasizes pay-for-performance, retention, and long-term share ownership alignment (including clawback provisions and anti-hedging/pledging policies) as governance features intended to mitigate excessive risk and align executives with shareholder interests. Recent context includes the promotion and material base-salary increase for the current CEO in 2025, incentive payouts and RSU grants tied to corporate financial metrics (Budgeted Net Income and ROAA) and individual performance, and change-in-control protections in employment agreements. Because the Company is a smaller reporting company, some disclosures are scaled, but the proxy provides detailed rationale, pay elements, and historical outcomes (including prior shareholder support of say-on-pay). From a governance evaluation perspective, the advisory vote provides shareholders a focused channel to express approval or concern with both pay quantum and structure; a 'For' outcome supports management’s compensation philosophy and retention strategy, while a 'Against' outcome would likely trigger more active shareholder engagement and potential changes by the Compensation Committee. The Board recommends a 'For' vote citing alignment with Company objectives and prior favorable shareholder support; however, shareholders should note the vote will not itself compel changes and must be interpreted in the context of the Company’s compensation details, performance metrics, and recent executive transitions.

This is a catch-all, procedural item reserved to allow the meeting to transact any other valid business properly brought before the Annual Meeting or at any adjournment. The proxy materials explicitly state the Board is not aware of any additional matters to be presented; nonetheless, the proxies granted to management and the named proxies include discretionary authority to vote on such matters according to their judgment if they arise. Practically, this item is rarely substantive at well-managed companies but preserves the ability to address unexpected ministerial or procedural items or to exercise discretion on unforeseen matters, subject to applicable advance notice and bylaw requirements. Shareholders who wish to propose substantive items for future meetings must follow the Company’s advance notice procedures and SEC rules; the proxy statement outlines deadlines for 2027 proposals and the universal proxy notice requirements. From a governance perspective, this item imposes no specific vote threshold beyond quorum and standard majority rules for any particular matter that might arise, and it carries no board recommendation because there is nothing specific to recommend for or against. Investors should treat this item as administrative; any meaningful shareholder-initiated proposals will generally be described in advance in proxy materials, or, if not, will be subject to shareholder scrutiny at the meeting. The presence of this item does not change the required vote rules for the other enumerated proposals and primarily operates to maintain procedural flexibility for the meeting's conduct.