EXHIBIT 10.11

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT made as of the 16th day of April, 2002, by and between C&F
MORTGAGE CORPORATION (C&F), Virginia Corporation and BRYAN McKERNON (McKernon):

 

W I T N E S S E T H:

 

That for and in consideration of the mutual covenants contained herein, the
parties hereto do agree as follows:

 

1. Scope of Services; Exclusivity. C&F hereby employs McKernon and McKernon
hereby agrees to accept employment and serve as President and Chief Executive
Officer of C&F Mortgage Corporation. McKernon agrees to perform the duties
normally associated with such positions, as well as such other legally
permissible and proper duties and functions as the Board of Directors of C&F
shall from time to time assign to him.

 

During the period of his employment with C&F, McKernon will devote his exclusive
efforts toward the establishment and operation of C&F. He will not engage in any
activities which would conflict with the present or future enterprises of C&F
and will use his best efforts to promote the present and future welfare of C&F
in all his business and social dealings.

 

2. Compensation; Bonus. McKernon shall be paid monthly salary payments, based on
an annual salary of $150,000.00.

 

In addition, C&F will pay to McKernon a bonus equal to a percentage of the
             (calculated according to Generally Accepted Accounting Principles)
(            ) realized by C&F, according to the following schedule:

 

    %

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__________   _____ __________   _____ __________   _____

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The bonus will be computed at the end of each month and will be paid prior to
the end of the next month, except as limited by the next paragraph. The bonus
computation will be based upon 80% of the annualized year-to-date results and
will be adjusted at year-end based upon final results in order that the total
bonus will be equal to the appropriate percentage of year end             .

 

3. Term of Agreement; Termination. The term of this Agreement shall be three
years at all times, unless and until notice is given pursuant to the following
sentence or until terminated as otherwise allowed herein. Either party may give
notice to the other party, at any time and for any reason, that the party giving
notice intends to terminate this Agreement three (3) years from the date that
the notice is received. Three (3) years from the date of such notice, this
Agreement shall be terminated and neither party hereto shall have any further
obligation or liability hereunder. McKernon may terminate this Agreement
immediately upon the happening of an event of “Covered Termination” as defined
in that “Change in Control Agreement” between McKernon and C&F Financial
Corporation attached hereto and labeled “Schedule A” (the “Change in Control
Agreement”). Any termination of this Agreement shall also terminate the Change
in Control Agreement with the exception of a termination of this Agreement by
McKernon as allowed by the preceding sentence.

 

4. Further Termination of Agreement.

 

A. Anything to the contrary in this Agreement notwithstanding, either party may
terminate this Agreement, with no further obligation of any nature to the other
party except as may be set out in this Agreement, upon the happening of either
of the following events: (i) if there shall be              in which C&F
experiences              during any period of             ; or (ii) if C&F
experiences              during any              exceeding the sum of
            .

 

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B. C & F shall have the right, at any time and at its sole option, to buy out
McKernon’s interest in this Agreement, thereafter having no further obligation
to McKernon except as may be set out in this Agreement, based upon the following
chart:

 

_______________    _____    __________ _______________    _____    __________
_______________    _____    __________ _______________    _____    __________

 

For purposes of this paragraph,              shall be defined as             ,
as defined in paragraph 2 of this Agreement) for the 12 months immediately
preceding the buy out.

 

Should this Agreement be terminated under the provisions of this paragraph, C&F
may purchase a “non-competition” commitment from McKernon, on a month-to-month
basis for up to             , based upon the following monthly purchase price:
(i) If McKernon is gainfully employed at the time of a monthly payment, a
monthly amount equal to             ; or (ii) if McKernon is not gainfully
employed at the time of a monthly payment, a monthly amount equal to
            . Under the non-competition commitment, McKernon shall be prohibited
from communicating with, soliciting or hiring any employee of C&F.

 

C. This Agreement shall terminate upon the death or disability of McKernon,
whereupon C&F shall have no obligation to McKernon, his heirs or personal
representatives except as may be set out in this Agreement.

 

D. This Agreement shall terminate upon the failure of either party to fulfill
its obligations undertaken herein. Thereafter, the aggrieved party shall be free
to pursue any remedies it may have at law and in equity against the breaching
party.

 

5. Benefits. C&F shall provide McKernon, during the time of his employment by
C&F, benefits commensurate with benefits furnished to other employees of C&F.
Such benefits are anticipated to include: major medical/hospitalization
insurance; dental insurance; long-term disability insurance; and life insurance
with a death benefit equal to three (3) times McKernon’s base salary.

 

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6. Vacations; Sick Leave. McKernon shall accrue vacation leave at the rate of 20
days per year and shall accrue sick leave at the rate of 12 days per year.

 

7. Confidentiality. All information, whether printed, written or oral, acquired
by McKernon from or in connection with his employment by C&F shall be held in
confidence by McKernon and shall be considered proprietary in nature. All such
information shall be used for business purposes only. Upon termination of his
employment, McKernon shall immediately return all such information to C&F,
keeping no copies.

 

8. Disqualification from Performance of Duties. Should McKernon be disqualified
from the performance of his duties under this Agreement, or otherwise be
rendered unable to perform such duties, by Federal, state or local statutes,
laws, rules, regulations, or ordinances, this Agreement shall at once be
terminated and C&F shall have no obligation to McKernon hereunder except as may
be set out in this Agreement.

 

9. General Provisions.

 

A. This Agreement and Schedule A constitute the entire agreement between the
parties. This Agreement supercedes and replaces all previous agreements between
the parties addressing the subject matter.

 

B. This Agreement shall be binding upon and inure to the benefit of the heirs,
personal representatives, successors and assigns of the parties.

 

C. If any provision or any portion thereof contained in this Agreement is held
to be unconstitutional, invalid or unenforceable, the remainder of this
Agreement or portion thereof shall be deemed severable, and shall not be
affected and shall remain in full force and effect; waiver of any provision of
this Agreement shall be in writing and shall not be deemed to be a waiver of any
default thereafter occurring.

 

D. In the event of a dispute regarding the interpretation, application or
enforcement of this Agreement, the parties agree that the jurisdiction for a
resolution of such dispute shall be the appropriate court of law in King William
County, Virginia.

 

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WITNESS the following signatures and seals as of the day, month and year first
above written.

 

C&F Mortgage Corporation By:  

/s/ Larry G. Dillon

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    Chairman, Board of Directors    

/s/ Bryan McKernon

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    Bryan McKernon

 

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