Summary of FIRST NATIONAL CORP /VA/

Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On November 7, 2012, the Board of Directors (the "Board") of First National Corporation (the "Company") adopted an Executive Incentive Plan (the "Plan") to reward certain executive officers for achieving performance goals. The Plan is a multiple-year Plan and shall remain in effect until the Board deems otherwise. Participation is limited to those employees selected by the Chief Executive Officer and approved by the Compensation Committee of the Board each Plan year. Dennis A. Dysart, M. Shane Bell and Marshall Beverley were selected to participate in the Plan along with certain other executive officers, effective January 1, 2012.

Under the Plan, the Board is responsible for establishing and approving annual performance objectives for the Company and Plan participants, based upon such criteria as may be recommended by the Chief Executive Officer, and the award formula by which all incentive awards under the Plan are calculated. Plan participants are entitled to a distribution under this Plan if, upon the approval of the Board, the Plan award is earned as a result of the attainment of Plan performance objectives and the participant is employed on the payment date. Awards shall be paid on or after January 1 of the year following the performance period, and no later than March 15 of the year following the performance period.

In the event of a participant's termination of employment for any reason, including due to death, permanent disability or retirement, any unpaid awards (including any earned but unpaid awards) shall be forfeited by such participant. The Company has the right to recover compensation that the Company determines, in its sole discretion, was unjustly paid to an employee under the Plan. The Board reserves the right to amend or terminate the Plan at any time.

The Plan is attached as Exhibit 10.1 to this report and incorporated herein by reference.