Exhibit 10.5

EXECUTIVE EMPLOYMENT AGREEMENT OF ANITA L. SHULL

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as the
date of the last signature affixed hereto between MILLENNIUM BANK, N.A., a
national banking association (the “Bank”), and Anita L. Shull (“Executive”).

1. EMPLOYMENT DUTIES AND RESPONSIBILITIES

1.1 Position and Title. The Bank hereby agrees to employ the Executive in the
position described on Addendum A attached hereto and the Executive hereby
accepts such position and agrees to serve the Bank in such capacity during the
employment period set forth in Section 2 below, subject to earlier termination
as provided hereunder (the “Employment Period”). The Executive shall perform
such job duties and responsibilities as determined in discussion with the CEO of
the Bank and in accordance with the Bank’s Bylaws. The Bank shall retain the
right to modify the Executive’s job title and responsibilities pursuant to the
legitimate business needs of the Bank, provided that any such modification in
title or responsibilities is consistent with the Executive’s expertise and
training.

1.2 Reporting Relationship. The Executive shall report to the person serving in
the position described on Addendum A attached hereto (the “Executive’s
Manager”), although the Bank shall retain the right to modify such reporting
relationship pursuant to the legitimate business needs of the Bank. The
Executive shall be subject to, and shall act in accordance with, all reasonable
legal instructions and directions of the Executive’s Manager which are
commensurate with duties and responsibilities of similar level executives of
institutions comparable to the Bank, as well as any other duties as may from
time to time be reasonably assigned by the Bank that are commensurate with
Executive’s position.

1.3 Bank Policies and Procedures. The Executive agrees to abide by all
applicable policies and procedures of the Bank.

1.4 Full Attention. During the Employment Period, excluding any periods of
vacation and sick leave to which Executive is entitled, Executive shall devote
Executive’s full business time, energy and attention to the performance of
Executive’s duties and responsibilities hereunder. During the Employment Period,
the Executive shall at all times operate in accordance with the Bank’s Ethics
Policy and may not, without the prior written consent of the Board, operate,
participate in the management, operations or control of, or act as an employee,
officer, consultant, agent or representative of, any other entity or business
that is not related to the Bank, provided that it shall not be a violation of
the foregoing for the Executive: (i) to act or serve as a director on the boards
of directors of any type of non-profit civil, cultural, philanthropic or
professional organization; (ii) to manage Executive’s own personal passive
investments; or (c) to serve, with the written consent of the Executive’s
Manager, on the board of directors of for-profit entities, so long as such
activities do not violate the Bank’s policy on external directorship or
materially interfere with the performance of Executive’s duties and
responsibilities to the Bank as provided hereunder.

2. TERM OF EMPLOYMENT.

2.1 Effective Date. The Effective Date of this Agreement shall be as set forth
on Appendix A.

2.2. Initial Term. The Bank agrees to employ the Executive and the Executive
hereby agrees to serve the Bank in accordance with the terms and conditions set
forth herein, for an initial term of three (3) years commencing on the Effective
Date of this Agreement (“Initial Term”), unless such Agreement is earlier
terminated as expressly provided herein.

 

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2.3. Renewal Term. The Term shall be extended for an additional one (1) year
term at the conclusion of the Initial Term, and then again after each successive
term thereafter (such one year terms hereinafter “Renewal Term”), unless either
party terminates this Agreement at the end of the Initial Term or any Renewal
Term, by giving the other party written notice of intent not to renew, delivered
at least ninety (90) days prior to the end of the Initial Term or any Renewal
Term. In the event such notice of intent not to renew is properly delivered,
this Agreement shall expire at the end of the initial term or successive term
then in progress, expect with respect to any obligations which explicitly by
their terms survive the termination of this Agreement.

3. COMPENSATION

3.1 Base Salary. The Bank shall pay to Executive, and Executive shall accept
from the Bank, a monthly base salary in the amount set forth on Addendum A
attached hereto, payable on the Bank’s standard pay schedule, provided that the
Executive has provided service to the Bank during the specified pay period.
Executive’s base salary may not be decreased at any time during this Agreement
without the express written consent of the Executive. The base salary may be
increased at the sole discretion of the Bank, but nothing herein shall be deemed
to require any such increase.

3.2 Incentive Compensation/Bonus. Executive may be eligible to receive a bonus
based upon satisfactory achievement of personal performance objectives and
business performance objectives as set forth in the Millennium Bank Executive
Incentive Compensation Plan and Appendix A hereto.

3.3 Stock Options. Executive will be eligible for stock options and/or
restricted stock as may be awarded by the Board, with the advice and consent of
the CEO, in its sole discretion

3.4. Expenses. Executive shall be entitled to reimbursement of pre-approved
business expenses that are incurred in the furtherance of Bank business and are
consistent with the Bank’s policies for such expense reimbursement.

3.5 Benefits. Executive shall receive such health, dental, personal disability,
Flexible Spending Account, life insurance and paid time-off benefits as are
provided to similarly situated Executives of the Bank.

4. TERMINATION OF EMPLOYMENT

Executive’s employment with the Bank may be terminated, prior to the expiration
of any term of this Employment Agreement, in accordance with any of the
following provisions:

4.1 Termination By Executive Upon Mutual Agreement. Executive may not terminate
Executive’s employment during the course of this Agreement unless such
termination is mutually agreed upon by the Executive and the Bank. Should
Executive cease providing services to the Bank prior to the end of the Term
without the consent of the Bank, the Bank shall have no obligation to pay the
Executive any additional compensation beyond the Executive’s last day of active
service, but for the remainder of the Term, the Executive shall not be employed
or engaged or provide services to any other bank or financial institution that
is located within 25 miles of the Bank’s offices in Reston, Virginia, or within
25 miles of any of the Bank’s branches then in existence.

4.2 Termination By The Bank Without Cause. The Bank may terminate Executive’s
employment without cause at any time during the term of this Agreement by giving
the Executive three (3) months’ notice of such termination, during which period
Executive will continue to receive normal

 

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compensation and benefits to which Executive would normally be entitled under
the terms of this Agreement. During the notice period, Executive must fulfill
all of Executive’s duties and responsibilities and use Executive’s best efforts
to train and support Executive’s replacement, if any. Notwithstanding the
foregoing, the Bank, at its option, may instruct Executive during such period
not to undertake any active duties on behalf of the Bank.

If Executive is terminated under this section, within thirty (30) days following
the conclusion of the notice period and receipt of the signed separation
agreement described below, the Bank shall provide Executive: (a) a lump sum
payment consisting of an amount equal to the Executive’s Base Salary for the
number of days left in the Term of the Agreement or for nine (9) months,
whichever is greater; (b) a lump sum payment consisting of Executive’s bonus
target for the year in which the termination without cause occurs; and
(c) payment by the Bank of Executive’s COBRA coverage for the remainder of the
Term of the Agreement or 18 months, whichever is less, provided Executive is
covered under the Bank’s health plan and timely elects continued coverage under
COBRA.

Executive expressly agrees and acknowledges that all payments and benefits
referenced herein which may be paid to Executive as a result of a Termination
Without Cause are conditioned upon and subject to the Executive executing a
valid separation agreement and general release, which includes a release of all
claims the Executive may have against the Bank, and all of its respective
subsidiaries, affiliates, directors, officers, employees, shareholders and
agents (other than rights of indemnification, rights to directors and officers
insurance, and any rights to accrued benefits under the employee benefit plans),
a cooperation clause, a non-disparagement clause, and an affirmation of
post-employment restrictions previously agreed to by Executive.

4.3 Termination By The Bank For Cause. The Bank may, at any time and without
notice (except as required below), terminate the Executive for “cause”.
Termination by the Bank of the Executive for “cause” shall include but not be
limited to termination based on any of the following grounds: (a) fraud,
misappropriation, embezzlement or acts of similar dishonesty; (b) conviction of
a crime (other than a minor traffic offense); (c) illegal use of drugs or
excessive use of alcohol in the workplace; (d) intentional and willful
misconduct that may subject the Bank to criminal or civil liability; or
(e) breach of the Executive’s duty of loyalty to the Bank or diversion or
usurpation of corporate opportunities properly belonging to the Bank;
(f) willful disregard of material Bank policies and procedures; and
(g) insubordination or continued failure to satisfactorily perform the duties of
Executive’s position. Executive shall not be terminated for cause under
subsection (f) or (g) unless the Bank first has provided Executive with written
notice that the Bank considers the Executive to be in violation of his
obligations under those subsections and Executive fails, within 30 days of such
notice, to cure the conduct that has given rise to the notice.

In the event of a termination by the Bank for cause, Executive shall be entitled
to receive only that base salary earned on or before the Executive’s last day of
active service and other post-employment benefits required by law or under Bank
policy. Executive shall not be entitled to receive any portion of Executive’s
target bonus for the period in which the termination occurs but shall receive
any accrued bonus for any performance period completed prior to the date of
termination.

4.4 Termination By Death Or Disability. The Executive’s employment and rights to
compensation under this Employment Agreement shall terminate if the Executive is
unable to perform the duties of Executive’s position due to death or disability,
and the Executive’s heirs, beneficiaries, successors, or assigns shall be
entitled only to receive any compensation fully earned prior to the date of the
Executive’s death or incapacitation due to disability and shall not be entitled
to any other compensation or benefits, except: (a) to the extent specifically
provided in this Employment Agreement; (b) to the extent required by law; or
(c) to the extent that such benefit plans or policies under which Executive is
covered provide a benefit to the Executive’s heirs, beneficiaries, successors,
or assigns. For

 

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purposes of this Agreement, “disability” shall be defined as the Executive’s
inability to perform the essential functions of Executive’s position, with or
without reasonable accommodations, as a result of the Executive’s physical or
mental impairment or illness, for a period in excess of four months in any
twelve-month period.

5. CONFIDENTIALITY AND NONDISCLOSURE

5.1 Non-Disclosure of Confidential Information. Executive recognizes that
Executive’s position with Bank is one of the highest trust and confidence and
that Executive will have access to and contact with the trade secrets and
confidential and proprietary business information of Bank. Executive agrees that
Executive shall not, while employed by Bank or thereafter, directly or
indirectly, use for his own benefit or for the benefit of another, or disclose
to another any trade secret or Confidential Information (as defined below) of
the Bank, except such use or disclosure is in the discharge of executive’s
duties and obligations on behalf of the Bank.

5.2 Definition of “Confidential Information”. For purposes of this Agreement,
“Confidential Information” shall include proprietary or sensitive information,
materials, knowledge, data or other information of the Bank not generally known
or available to the public relating to (a) the services, products, customer
lists, business plans, marketing plans, pricing strategies, or similar
confidential information of the Bank or (b) the business of any Bank customer,
including without limitation, knowledge of the customer’s current financial
status, loans, or financial needs.

5.3 Return of Materials and Equipment. Executive further agrees that all
memoranda, notes, records, drawings, or other documents made or compiled by
Executive or made available to Executive while employed by Bank concerning any
Bank activity shall be the property of Bank and shall be delivered to Bank upon
termination of Executive’s employment or at any other time upon request.
Executive also agrees to return any and all equipment belonging to the Bank on
or before Executive’s last day of employment with Bank.

5.4 No Prior Restrictions. The Executive hereby represents and warrants to the
Bank that the execution, delivery, and performance of this Agreement does not
violate any provision of any agreement or restrictive covenant which the
Executive has with any former employer (a “Former Employer”). The Executive
further acknowledges that to the extent the Executive has an obligation to the
Former Employer not to disclose certain confidential information, Executive
intends to honor such obligation and the Bank hereby agrees not to knowingly
request the Executive to disclose such confidential information.

6. POST-EMPLOYMENT RESTRICTIONS

6.1 Non-Interference With Customers. Executive further agrees that, during the
Employment Period and for a period of twelve months thereafter, Executive shall
not undertake to interfere with the Bank’s relationship with any Bank customer.
This means, among other things, that Executive shall refrain: (i) from making
disparaging comments about the Bank or its management or employees to any
customer; (ii) from attempting to persuade any customer to cease doing business
with the Bank; or (iii) from soliciting any customer for the purpose of
providing services competitive with the services provided by the Bank; or
(iv) from assisting any person or entity in doing any of the foregoing.

6.2 Non-Solicitation and Non-Hiring of Employees. Executive agrees that, for the
term of Executive’s employment and for a period of one (1) year following the
termination of Executive’s employment for any reason, the Executive shall not,
directly or indirectly, on Executive’s own behalf or

 

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the behalf of another person or entity: (i) induce or attempt to induce any
person employed by the Bank to leave their employment with the Bank; (ii) hire
or employ, or attempt to hire or employ, any person employed by the Bank; or
(iii) assist any other person or entity in the hiring of any person employed by
the Bank. These restrictions shall apply only where the services or products
provided by the hiring entity are competitive with the services or products
provided by the Bank.

6.3 Reasonableness. Executive understands and acknowledges that the restrictions
contained herein are reasonable in that they do not prohibit Executive from
seeking employment with another financial institution or entity (except as set
forth in Section 4.1 above), but merely restrict Executive’s ability, during the
Employment Period and for a period of 12 months thereafter, to interfere with or
hinder the Bank’s relationships with its employees and customers.

6.4 Remedies. In the event that Executive breaches any of the covenants
contained herein, the Bank shall be entitled to its remedies at law and in
equity, including but not limited to compensatory and punitive damages, and
payment of Executive of attorney’s fees and expenses of litigation incurred by
the Bank in bringing an action to enforce the terms of this Agreement. The
parties also recognize that any breach of the covenants contained herein may
result in irreparable damage and injury to Bank which will not be adequately
compensable in monetary damages, and that in addition to any remedy that Bank
may have at law, the Bank may obtain such preliminary or permanent injunction or
decree as may be necessary to protect Bank against, or on account of, any breach
of the provisions contained herein.

7. CHANGE IN CONTROL

In the event Executive’s employment is terminated within six (6) months prior or
twelve (12) months following a Change in Control, the provisions of this section
shall apply.

7.1 Change in Control Defined: A “Change in Control” is deemed to have taken
place if any of the following events occurs: (a) The shareholders of Millennium
Bankshares approve a transaction for the merger, consolidation, or other
combination of Millennium Bankshares with another corporation or business entity
where the Company is not the Surviving Entity, as defined below; (b) The
shareholders of Millennium Bankshares approve the sale of all or substantially
all the assets of Millennium Bankshares where the Company is not the Surviving
Entity, as defined below; or (c) A Person which does not presently hold at least
10% of the shares of the Company becomes, directly or indirectly, the beneficial
owner of securities representing 50% or more of the voting power or the
Company’s then outstanding securities. “Person” is defined as any individual,
entity or group (within the meaning of Section 13(d)(3) of the Securities and
Exchange Act of 1934).

7.2 “Surviving Entity” Defined. Millennium Bankshares shall not be considered
the “Surviving Entity” of a transaction described in subparagraphs (a) and
(b) if the individuals who constitute the Board of Directors on the date one day
prior to the closing date of the transaction cease to constitute a majority of
the board of directors of the Surviving Entity at any time within the three
months following the transaction. The surviving entity, if not Millennium
Bankshares, shall hereinafter be known as the “Successor Employer”.

7.3 Payout Events. The Executive shall be entitled to the full and complete
rights afforded by this section if, during the period that begins six (6) months
prior to the Closing Date of a Change in Control event and that ends twelve
(12) months following the Closing Date of a Change in Control event, the
Executive: (a) is involuntarily terminated by the Bank or the Successor
Employer, unless such termination is for Cause, as such term is defined in this
Employment Agreement; or (b) resigns from employment with the Bank or the
Successor Employer following a reduction in the Executive’s base salary or bonus
opportunity; or (c) is required by the Bank or the Successor Employer to
relocate the Executive’s place of employment to a location more than 25 miles
from the Executive’s current place of employment. “Closing Date” shall mean the
date on which such transaction or stock purchase is signed and finalized.

 

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7.4 Benefits Under This Section. If any of the Payout Events described above
occurs, Executive shall be entitled to receive, in addition to any other
post-employment benefits to which Executive may be entitled under Bank policy,
the following compensation and benefits, provided the Executive has executed the
separation agreement and general release described in Section 4.2 above: (a) a
lump sum severance payment in the amount of base salary and target bonus for the
greater of (i) the remainder of the applicable Term under this Employment
Agreement or (ii) twenty-four (24) months; and (b) payment by the Bank of
Executive’s COBRA coverage for the remainder of the Term of the Agreement or 18
months, whichever is less, provided Executive is covered under the Bank’s health
plan and timely elects continued coverage under COBRA. The compensation to be
paid under this section shall offset any compensation owed the Executive for the
same period under this Agreement and is not intended to provide double
compensation to the Executive for any period of time. To the extent permitted
under the terms of the Bank’s stock option plan and/or stock option agreements
with Executive, Executive also shall fully vest in any options or restricted
stock in the event of a change in control.

7.5 Excess Payments. If either the Bank or the Executive receives notice from an
independent tax counsel or certified public accounting firm acting on behalf of
the Bank (the “Tax Advisor”), that the payment by the Bank to the Executive
under this Agreement or otherwise would be considered to be an “excess parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor statute then in effect (the “Code”), the
aggregate payments by the Bank pursuant to this Agreement shall be reduced to
the highest amount that may be paid to the Executive by the Bank under this
Agreement without having any portion of any amount payable to the Executive by
the Bank or a related entity under this Agreement or otherwise treated as such
an “excess parachute payment”, and, if permitted by applicable law and without
adverse tax consequence, such reduction shall be made to the last payment due
hereunder. Any payments made by the Bank to the Executive under this Agreement
which are later confirmed by the Tax Advisor to be “excess parachute payments”
shall be considered by all parties to have been a loan by the Bank to the
Executive, which loan shall be repaid by the Executive upon demand together with
interest calculated at the lowest interest rate authorized for such loans under
the Code without a requirement that further interest be imputed.

8. GENERAL PROVISIONS.

8.1 Notices. All notices and other communications required or permitted by this
Agreement to be delivered by the Bank or Executive to the other party shall be
delivered in writing, either personally or by registered, certified or express
mail, return receipt requested, postage prepaid, respectively, to the
headquarters of the Bank, or to the address of record of the Executive on file
at the Bank.

8.2 Amendments: Entire Agreement. This Agreement may not be amended or modified
except by a writing executed by all of the parties hereto. This Agreement,
including any addendums hereto, constitutes the entire agreement between
Executive and the Bank relating in any way to the employment of Executive by the
Bank, and supersedes all prior discussions, understandings and agreements
between them with respect thereto.

8.3 Successors and Assigns. This Agreement is personal to Executive and shall
not be assignable by Executive. The Bank will assign its rights hereunder to
(a) any corporation resulting from any merger, consolidation or other
reorganization to which the Bank is a party or (b) any corporation, partnership,
association or other person to which the Bank may transfer all or substantially
all of the assets and business of the Bank existing at such time or (c) the
parent of Bank. All of the terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns.

 

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8.4 Severability: Provisions Subject to Applicable Law. All provisions of this
Agreement shall be applicable only to the extent that they do not violate any
applicable law, and are intended to be limited to the extent necessary so that
they will not render this Agreement invalid, illegal or unenforceable under any
applicable law. If any provision of this Agreement or any application thereof
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of other provisions of this Agreement or of any other
application of such provision shall in no way be affected thereby.

8.5 Waiver of Rights. No waiver by the Bank or Executive of a right or remedy
hereunder shall be deemed to be a waiver of any other right or remedy or of any
subsequent right or remedy of the same kind.

8.6 Definitions, Headings, and Number. A term defined in any part of this
Employment Agreement shall have the defined meaning wherever such term is used
herein. The headings contained in this Agreement are for reference purposes only
and shall not affect in any manner the meaning or interpretation of this
Employment Agreement.

8.7 Governing Law. This Agreement and the parties’ performance hereunder shall
be governed by and interpreted under the laws of the Commonwealth Of Virginia.
Executive agrees to submit to the jurisdiction of the courts of the Commonwealth
Of Virginia, and that venue for any action arising out of this Agreement or the
parties’ performance hereunder shall be in the Circuit Court for the County of
Fairfax, Virginia.

8.8. Attorneys’ Fees. In the event of a dispute arising out of the
interpretation or enforcement of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys’ fees and costs.

8.9 Construction and Interpretation. This Agreement has been discussed and
negotiated by, all parties hereto and their counsel and shall be given a fair
and reasonable interpretation in accordance with the terms hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.

IN WITNESS WHEREOF, Millennium Bankshares, N.A. and Executive have executed and
delivered this Agreement as of the date written below.

 

EXECUTIVE         MILLENNIUM BANK, N.A.           A National Banking Association
 

/s/ Anita L. Shull

   

May 27, 2004

    By:  

/s/ Carroll C. Markley

   

May 27, 2004

Anita L. Shull     Date       Carroll C. Markley     Date         Title:  

Chairman & Chief Executive Officer

   

 

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ADDENDUM A TO

EMPLOYMENT AGREEMENT OF ANITA L. SHULL

This Addendum A (“Addendum”) to the Employment Agreement of Anita L. Shull
(“Agreement”) is made of the date of the last signature hereto and supersedes
and replaces any prior Addendum A to the Agreement.

 

A. Executive’s title for purposes of Section 1.1 of the Agreement shall be
President.

 

B. Executive’s Manager for purposes of Section 1.2 of the Agreement shall be the
Chief Executive Officer.

 

C. The Effective Date of the Agreement is May 27, 2004.

 

D. The Effective Date of this Addendum is May 27, 2004.

 

E. Effective January 1, 2004, Executive’s Base Salary for purposes of
Section 3.1 of the Agreement shall be $12,500 monthly, which is $150,000
annualized.

 

F. Pursuant to Section 3.2 of the Agreement, Executive shall be eligible to
participate in the Millennium Bank Executive Incentive Compensation Plan (the
“Incentive Comp Plan”). Executive’s target bonus eligibility under the Incentive
Comp Plan shall be 25% of Executive’s Base Salary (the “Target Bonus”) subject
to the terms of the Plan, which shall be provided to Executive at a later date.

 

G. The reference to “twenty-four (24) months” in Section 7.4(a)(ii) of the
Agreement shall be changed to “forty-eight (48) months”.

 

H. Pursuant to Section 3.4 of the Agreement, Bank agrees that it shall further
be responsible for the payment of any country club membership dues, as well as
any related entertainment expenses as a result of entertaining clients, incurred
by Executive during the term of this Agreement

 

EXECUTIVE         MILLENNIUM BANK, N.A.           A National Banking Association
 

/s/ Anita L. Shull

   

May 27, 2004

    By:  

/s/ Carroll C. Markley

   

May 27, 2004

Anita L. Shull     Date       Carroll C. Markley     Date         Title:  

Chairman & Chief Executive Officer

   

 

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Goals for 2004

 

FYE 2003

 

FYE 2004

$313mm

  Budget account assets for FYE 2004 at $364 mm

$965mm

  Budget account assets profits at 2.3 mm

87.6

  Efficiency ratio (YTD) 73.99

3

  Maintaining a 2 CAMEL rating with OCC

 

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