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Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“AGREEMENT”), is made as of May 7, 2010, and is
effective May 1, 2010, by and between Middleburg Financial Corporation
(“Corporation”) and Raj Mehra (“Executive”).

WHEREAS, it is the desire of the Corporation to have the benefit of Executive's
continued loyalty, service and counsel; and

WHEREAS, the Executive wishes to remain an employee of the Corporation; and

WHEREAS, the Corporation desires to protect its confidential information and
guard against unfair competition; and

WHEREAS, Executive possesses certain valuable knowledge, professional skills and
expertise which will contribute to the continued success of the business of the
Corporation and its affiliates; and

WHEREAS, the Corporation and Executive desire to set forth, in writing, the
terms and conditions of their agreements and understandings;

NOW, THEREFORE, in consideration of the mutual promises herein contained, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending legally to be bound, agree as
follows:

Section 1.                      Employment.

(a)           The Corporation and Executive agree that Executive shall be
employed to perform such services for the Corporation as may be assigned to
Executive by the Corporation from time to time upon the terms and conditions
herein provided. Executive’s services shall be rendered in an executive capacity
and shall be of a type for which Executive is suited by background and training.

(b)           References in this Agreement to services rendered for the
Corporation and compensation and benefits payable or provided by the Corporation
shall include services rendered for, and compensation and benefits payable or
provided by, any Affiliate.  References in this Agreement to the “Corporation”
also shall mean and refer to each Affiliate for which Executive performs
services.  References in this Agreement to “Affiliate” shall mean any business
entity that, directly or indirectly, through one or more intermediaries, is
controlled by the Corporation.

(c)           The Executive shall devote his full time and attention to the
discharge of the duties undertaken by him hereunder.  Executive shall comply
with all policies, standards and regulations of the Corporation now or hereafter
promulgated, and shall perform his duties under this Agreement to the best of
his abilities and in accordance with general business standards of conduct.

 
 

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         (d)           Executive acknowledges that he is entering into this
Agreement of his own free will and that he has had the benefit of the advice of,
and is relying solely upon the advice of, independent counsel of his own choice.

Section 2.                      Term.

The term of this Agreement shall be deemed to have commenced on May 1, 2010 (the
“Effective Date”), and, subject to Section 7(a), shall continue until April 30,
2012, unless sooner terminated in accordance with the provisions of Section
7.  Beginning on April 30, 2012, and each April 30th thereafter, the term of
this Agreement and all its terms and provisions shall be automatically extended
for one additional year, unless 30 days prior written notice of non-renewal is
provided by the Corporation or Executive or unless employment under this
Agreement is otherwise terminated in accordance with the provisions of Section
7.

Section 3.                      Compensation.

(a)           As compensation for the services to be rendered by the Executive
under this Agreement, the Executive shall receive a base annual salary at the
rate of One Hundred Ninety Thousand Dollars ($190,000.00) per year.  The
Executive may receive base salary increases and incentive, bonus compensation or
other compensation in the amounts determined by the Board of Directors of the
Corporation.

(b)           The Corporation shall withhold state and federal income taxes,
social security taxes and such other payroll deductions as may from time to time
be required by law.  The Corporation shall also withhold and remit to the proper
party any amounts agreed to in writing by the Corporation and the Executive for
participation in any corporate sponsored benefit plans for which a contribution
is required.

(c)           Except as otherwise expressly set forth herein, no compensation
shall be paid pursuant to this Agreement subsequent to any termination of
Executive’s employment with the Corporation; provided, however, that Executive’s
right to exercise stock options following a termination of employment shall be
governed by the terms of the Corporation’s stock option plans and any stock
option agreements between the Corporation and the Executive.  No stock options
shall be granted to Executive after his employment terminates.

Section 4.                      Additional Benefits.

In addition to the usual and customary fringe benefits which are provided to the
other executive officers of the Corporation, Executive shall be entitled to
participate in the Corporation’s employee benefit plans and programs for which
he is or will become eligible according to the terms of said plans or programs.
It is understood that the Board of Directors may, in its sole discretion,
establish, modify or terminate such plans or benefits. Fringe benefits available
to Executive under this section include, but are not limited to, participation
in the Corporation’s group health insurance, disability and life insurance
plans, and participation in its qualified and non-qualified retirement plans.

 
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Section 5.                      Expense Account.

The Corporation shall reimburse Executive for reasonable and customary business
expenses incurred during the term of this Agreement in the conduct of the
Corporation’s business.  Such expenses will include business meals, out-of-town
lodging and travel expenses of Executive and, when she accompanies him on
Company business, Executive’s spouse.  In no event will there be reimbursement
for items which are not reimbursable under written Corporation
policy.  Executive agrees to timely submit records and receipts of reimbursable
items and agrees that the Corporation can adopt reasonable rules and policies
regarding such reimbursement.  The Corporation agrees to make prompt payment to
the Executive following receipt and verification of such reports.

Section 6.                      Paid Time Off.

Executive shall be entitled to six (6) weeks of paid time off ("PTO") leave each
year, which shall be taken at such time or times as may be approved by the
Corporation and during which Executive’s compensation hereunder shall continue
to be paid.

Section 7.                      Termination and Survival of Obligations.

(a)           Notwithstanding the termination of this Agreement or the
termination of Executive’s employment for any reason, the parties shall be
required to carry out any provisions of this Agreement which contemplate
performance by them subsequent to such termination.  In addition, no termination
of this Agreement shall affect any liability or other obligation of either party
which shall have accrued prior to such termination, including, but not limited
to, any liability, loss or damage on account of breach.  No termination of
employment shall terminate the obligation of the Corporation to make payments of
any vested benefits provided hereunder or the obligations of Executive under
Sections 8, 9 and 10 of this Agreement.  The existence of any claim or cause of
action of the Executive against the Corporation, whether predicated on this
Agreement or not, shall not constitute a defense to the enforcement by the
Corporation of the restrictions, covenants and agreements contained in this
Agreement.

(b)           Executive’s employment hereunder may be terminated by Executive
upon thirty (30) days written notice to the Corporation or at any time by mutual
agreement in writing.  It shall not constitute a breach of this Agreement for
the Corporation to suspend Executive’s duties and to place Executive on a paid
leave during the thirty (30) day notice period.

(c)           This Agreement shall terminate upon death of Executive; provided,
however, that in such event the Corporation shall pay to the estate of Executive
the compensation, including salary and accrued but unused PTO, which otherwise
would be payable to Executive through the end of the  month in which his death
occurs.  Such amounts shall be paid at the end of the payroll period that
follows the payroll period in which his employment terminates due to
death.  Additionally, there shall be paid to the Executive’s estate (y) any
bonus or other short term incentive compensation earned, but not yet paid, for
any year prior to the year in which his death occurs and (z) any bonus or other
short term incentive compensation for the year in which his death occurs that he
would have received if he had lived, multiplied by a fraction, the numerator of
which is the

 
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number of days in the year that precede the date on which his death occurs and
the denominator of which is three hundred sixty-five.

Any bonus or other short term incentive compensation payable under this Section
7(c) shall be paid (i) on the date of payment to other employees eligible for
bonuses or other short term incentive compensation under the same plan or plans,
or, (ii) if no date or time frame for payment is specified in those plans, by
March 15 of the calendar year following the calendar year in which the
compensation is earned.

(d)(1)           The Corporation may terminate Executive’s employment other than
for “Cause”, as defined in Section 7(e), at any time upon written notice to
Executive, which termination shall be effective immediately.  Executive may
resign thirty (30) days after notice to the Corporation for “Good Reason”, as
hereafter defined.  In the event the Executive’s employment terminates pursuant
to this Section 7(d)(1), Executive shall receive, at the end of the payroll
period that follows the payroll period in which his employment terminates, his
salary earned through the date of termination and accrued but unused PTO.  In
the event the Executive’s employment terminates pursuant to this Section
7(d)(1), Executive shall also receive the following items on the later of the
applicable date set forth below or the 60th day following his termination of
employment, provided that Executive signs a release and waiver of claims
reasonably satisfactory to the Corporation that becomes irrevocable within 60
days of his termination of employment, and provided further that any portion of
the premium due to be paid by the Corporation during such 60-day period under
item (iv) below shall be paid by the Corporation on the due date whether or not
the release and waiver has been signed:

 
(i)
An amount equal to 200% of his current rate of annual salary in effect
immediately preceding such termination; and
 

 
(ii)
Any bonus or other short term incentive compensation earned, but not yet paid,
for any year prior to the year in which his employment terminates; and
 

 
(iii)
 
 
 
(iv)
Any bonus or other short term incentive compensation for the year in which his
employment terminates that he would have received if his employment had not
terminated, multiplied by a fraction, the numerator of which is the number of
days in the year that precede the date on which he is notified of the
termination of his employment and the denominator of which is three hundred
sixty-five; and
 
If Executive timely elects COBRA coverage, his current benefits under group
health and dental plans will continue.  In such case, for the longer of one year
or the remainder of the term of this Agreement: (a) Executive will receive such
benefits at the rates paid by active participants, and (b) the Corporation will
continue to pay its portion of such health and dental premiums.  In no event
shall such benefits continue beyond the period permitted by COBRA, and periods
of coverage under this Agreement shall offset Executive’s period of coverage
under COBRA.
 

 
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Twenty-nine percent (29%) of any amount due under Section 7(d)(1)(i) shall be
paid on the first day of the seventh month following the date his employment
terminates and the balance shall be paid in equal monthly installments on the
first day of the seventeen (17) succeeding months.

Any amount due under Section 7(d)(1)(ii) or (iii) shall be paid on (i) the date
of payment to other employees eligible for bonuses or other short term incentive
compensation under the same plan or plans or, (ii) if no date or time frame for
payment is specified in those plans, by March 15 of the calendar year following
the calendar year in which the compensation is earned.  Notwithstanding the
foregoing, if Executive is a “specified employee” under Section 409A of the
Internal Revenue Code and Treasury Regulations (“Section 409A”) on the date of
his termination, payment will be deferred under the preceding sentence to the
first day of the seventh month following the date Executive’s employment
terminates, to the extent required by Section 409A.

(d)(2)           Notwithstanding anything in this Agreement to the contrary, if
Executive breaches Section 8 or 9 of this Agreement, Executive will not
thereafter be entitled to receive any further compensation or benefits pursuant
to this Section 7(d)(1).

(d)(3)           The Corporation shall not be required to make payment of, or
provide any benefit under, Section 7(d)(1) to the extent such payment is
prohibited by the terms of the regulations presently found at 12 C.F.R. part 359
or to the extent that any other governmental approval of the payment required by
law is not received.

(d)(4)           For purposes of this Agreement, Good Reason shall mean:

 
(i)
The assignment of duties to the Executive by the Corporation which result in the
Executive having significantly less authority or responsibility than he has on
the date hereof without his express written consent;

 
(ii)
Requiring the Executive to maintain his principal office outside of Loudoun
County, Virginia, unless the Corporation moves its principal executive offices
to the place to which the Executive is required to move:

 
(iii)
A reduction by the Corporation of the Executive's base salary, as the same may
have been increased from time to time:

 
(iv)
The failure of the Corporation to provide the Executive with substantially the
same fringe benefits that are provided to other executive officers of the
Corporation;

 
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(v)
The Corporation’s failure to comply with any material term of this Agreement; or

 
(vi)
The failure of the Corporation to obtain the assumption of and agreement to
perform this Agreement by any successor as contemplated in Section 11 hereof.

(e)           The Corporation shall have the right to terminate Executive’s
employment under this Agreement at any time for Cause, which termination shall
be effective immediately.  Termination for “Cause” shall mean material failure
of the Executive to perform his duties under this Agreement, unlawful business
conduct, theft, commission of a felony, a material violation of the
Corporation’s work rules or policies; or a material breach of this
Agreement.  The term “Cause” also shall include the failure of Executive for any
reason within three (3) days after receipt by Executive of written notice from
the Chief Executive Officer and President of the Corporation to correct, cease,
or otherwise alter any action or omission that could materially or adversely
affect the Corporation's profits or operations.  In the event Executive’s
employment under this Agreement is terminated for Cause, Executive shall
thereafter have no right to receive compensation or other benefits under this
Agreement.

(f)           The Corporation may terminate Executive’s employment under this
Agreement, after having established that the Executive is unable to perform his
obligations under this Agreement because of the Executive's disability by giving
to Executive written notice of its intention to terminate his employment due to
inability to regularly perform his duties.  Executive's employment with the
Corporation can be terminated effective on the 90th day after receipt of such
notice if, within 90 days after such receipt, Executive shall fail to return to
the full performance of the essential functions of his position on a regular
basis with or without reasonable accommodations (and if Executive's disability
has been established pursuant to the definition of “disability” set forth
below).  For purposes of this Agreement, “disability” means either (i)
disability which after the expiration of more than 13 consecutive weeks after
its commencement is determined to be total and permanent by a physician selected
and paid for by the Corporation or its insurers, and acceptable to Executive or
his legal representative, which consent shall not be unreasonably withheld; or
(ii) disability as defined in the policy of disability insurance maintained by
the Corporation or its Affiliates for the benefit of Executive, whichever shall
be more favorable to Executive.  Notwithstanding any other provision of this
Agreement, the Corporation shall comply with all requirements of the Americans
with Disabilities Act, 42 U.S.C. § 12101 et. seq.

(g)           If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Corporation's affairs by a notice served
pursuant to the Federal Deposit Insurance Act, the Corporation’s obligations
under this Employment Agreement shall be suspended as of the date of service
unless stayed by appropriate proceedings.  If the charges in the notice are
dismissed, the Corporation may in its discretion (i) pay Executive all or part
of  the compensation withheld while its contract obligations were suspended, and
(ii) reinstate (in whole or in part) any of its obligations which were
suspended.

(h)(1)           If Executive’s employment is terminated without Cause within
one year after a Change of Control shall have occurred or if he resigns for Good
Reason within one year after a

 
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Change of Control shall have occurred, then the Corporation shall pay to
Executive as compensation for services rendered to the Corporation a cash amount
(subject to any applicable payroll or other taxes required to be withheld) equal
to 200% of his highest annual rate of cash compensation earned after 2009.  If
Executive is a “specified employee” under Section 409A on the date of his
termination of employment, payment shall be made six months and one day after
the date his employment terminates to the extent required by Section
409A.  Otherwise, payment shall be made on or no more than thirty (30) days
before the date his employment terminates.  Payment under this Section 7(h)(1))
shall be in lieu of any amount that it is or might be due under Section 7(d).

   (2)            For purposes of this Agreement, a Change of Control occurs if,
after the date of this Agreement; (i) any person, including a “group” as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the owner or
beneficial owner of Corporation securities having 50 percent or more of the
combined voting power of the then outstanding Corporation securities that may be
cast for the election of the Corporation’s directors other than a result of an
issuance of securities initiated by the Corporation, or open market purchases
approved by the Board of Directors, as long as the majority of the Board of
Directors approving the purchases is a majority at the time the purchases are
made; or (ii) as the direct or indirect result of, or in connection with, a
tender or exchange offer, a merger or other business combination, a sale of
assets, a contested election of directors, or any combination of these events,
the persons who were directors of the Corporation before such events cease to
constitute a majority of the Corporation’s Board, or any successor’s board,
within two years of the last of such transactions.  For purposes of this
Agreement, a Change of Control occurs on the date on which an event described in
(i) or (ii) occurs.  If a Change of Control occurs on account of a series of
transactions or events, the Change of Control occurs on the date of the last of
such transactions or events.

     (3)              It is the intention of the parties that no payment be made
or benefit provided to Executive pursuant to this Agreement that would
constitute an “excess parachute payment” within the meaning of Section 280G of
the Code and any regulations thereunder, thereby resulting in a loss of an
income tax deduction by the Corporation or the imposition of an excise tax on
Executive under Section 4999 of the Code.  If the independent accountants
serving as auditors for the Corporation on the date of a Change of  Control (or
any other accounting firm designated by the Corporation) determine that some or
all of  the payments or benefits scheduled under this Agreement, as well as any
other payments or benefits on a Change of  Control, would be nondeductible by
the Company under Section 280G of  the Code, then the payments scheduled under
this Agreement will be reduced to one dollar less than the maximum amount which
may be paid without causing any such payment or benefit to be
nondeductible.  The determination made as to the reduction of benefits or
payments required hereunder by the independent accountants shall be binding on
the parties.  Executive shall have the right to designate within a reasonable
period, which payments or benefits will be reduced provided, however, that if no
direction is received from Executive, the Corporation shall implement the
reductions in its discretion; provided, however, that no reduction shall be
permitted that results in a deferral prohibited by Section 409A.

Section 8.                      Confidentiality/Nondisclosure.

Executive covenants and agrees that any and all information maintained as
confidential by the Corporation and not generally known to the public concerning
the customers, businesses and

 
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services of the Corporation of which he has knowledge or access as a result of
his association with the Corporation in any capacity, shall be deemed
confidential in nature and shall not, without the proper written consent of the
Corporation, be directly or indirectly used, disseminated, disclosed or
published by Executive to third parties other than in connection with the usual
conduct of the business of the Corporation.  Such information shall expressly
include, but shall not be limited to, information concerning the Corporation’s
trade secrets, business operations, business records, customer lists or other
customer information.  Upon termination of employment, the Executive shall
deliver to the Corporation all property in his possession which belongs to the
Corporation including all originals and copies of documents, forms, records or
other information, in whatever form it may exist, concerning the Corporation or
its business, customers, products or services.  This Section 8 shall not be
applicable to any information which, through no misconduct or negligence of
Executive, has been disclosed to the public by anyone other than Executive.

Section 9.                      Covenant Not to Compete and Related Covenants.

(a)           During the term of this Agreement and throughout any further
period that he is an employee of the Corporation, and for the longer of:

 (x) twelve (12) months from and after the date that Executive is (for any
reason) no longer employed by the Corporation; or

 (y) for a period of  twelve (12) months from the date of entry by a court
of  competent jurisdiction of a final judgment enforcing this covenant in the
event of a breach by Executive.

Executive covenants and agrees that he will not serve as the President, Chief
Financial Officer or other executive officer of any bank or bank holding company
within twenty-five (25) miles of headquarters of the Corporation or within five
(5) miles of any bank branch operated by the Corporation.

(b)           During the term of this Agreement and throughout any further
period that he is an employee of the Corporation, and for the longer of:

 (x) twenty-four (24) months from and after the date that Executive is (for any
reason) no longer employed by the Corporation; or

(y) for a period of twenty-four (24) months from the date of entry by a court of
competent jurisdiction of a final judgment enforcing this covenant in the event
of a breach by Executive.

the Executive will not, directly or indirectly, on behalf of the Executive or
any other person or entity, solicit or induce, or attempt to solicit or induce,
any person currently employed by the Corporation to terminate his or her
relationship with the Corporation.

(c)           During the term of this Agreement and throughout any further
period that he is an employee of the Corporation, and for the longer of:

 
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(x) twenty-four (24) months from and after the date that Executive is (for any
reason) no longer employed by the Corporation; or

(y) for a period of twenty-four (24) months from the date of entry by a court of
competent jurisdiction of a final judgment enforcing this covenant in the event
of  a breach by Executive.

the Executive will not, except to the extent necessary to carry out his duties
as an employee of the Corporation, directly or indirectly provide Competitive
Services (as defined below) to any Customer (as defined below), and shall not,
directly or indirectly, on behalf of the Executive or any other person or
entity, solicit or divert away or attempt to solicit or divert away any Customer
of the Corporation for the purpose of selling or providing Competitive Services,
provided the Corporation is then still engaged in the sale or provision
of  Competitive Services.

(d)           It is agreed that notwithstanding the above to the contrary,
Executive may engage in business ventures as long as they are not competitive
with the Corporation.  Anything to the contrary notwithstanding, Executive may
own, as a passive investor, securities of any public competitor corporation, so
long as his direct holdings in any one such corporation shall not in the
aggregate constitute more than one percent (1%) of the voting stock of such
corporation.  The parties intend that the covenants and restrictions in this
Section 9 be enforceable against Executive regardless of the reason that his
employment by the Corporation may terminate and that such covenants and
restrictions shall be enforceable against Executive even if this Agreement
expires after a notice of nonrenewal is given by Executive or the Corporation
under Section 2.  The existence of any claim or cause of action by the Executive
against the Corporation, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Corporation of the
restrictive covenants set forth in Sections 8 and 9 of this Agreement.

(e)           For purposes of this Agreement, the term “Customer” means any
individual or entity to whom or to which the Corporation provided Competitive
Services within two years of the date on which the Executive’s employment
terminates.

(f)           For purposes of this Agreement, "Competitive Services" means
providing financial products and services of the types that, as of the date of
Executive’s termination of employment, are provided to Customers of the
Corporation, whether such services are provided directly by the Corporation or
by others under a contractual arrangement with the Corporation.
 
 
(g)           The Executive agrees that the covenants in this Section 9 are
reasonably necessary to protect the legitimate interests of the Corporation, are
reasonable with respect to the time and territory and do not interfere with the
interests of the public.  The Executive further agrees that the descriptions of
the covenants contained in this Section 9 are sufficiently accurate and definite
to inform the Executive of the scope of the covenants.  Finally, the Executive
agrees that the consideration set forth in this Agreement is full, fair and
adequate to support the Executive’s obligations hereunder and the Corporation’s
rights hereunder.  The Executive acknowledges that in the event the Executive’s
employment with the Corporation is terminated for any reason, the Executive will
be able to earn a livelihood without violating such covenants.

 
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(h)           The parties have attempted to limit the Executive’s right to
compete only to the extent necessary to protect the Corporation from unfair
competition.  The parties recognize, however, that reasonable people may differ
in making such a determination.  Accordingly, the parties intend that the
covenants contained in this Section 9 to be completely severable and
independent, and any invalidity or unenforceability of any one or more such
covenants will not render invalid or unenforceable any one or more of the other
covenants.  The parties further agree that, if the scope or enforceability of a
covenant contained in this Section 9 is in any way disputed at any time, and if
permitted by applicable law, a court or other trier of fact may modify and
reform such provision to substitute such other terms as are reasonable to
protect the Corporation’s legitimate business interests.

Section 10.                      Injunctive Relief, Damages, Etc.

The Executive agrees that, given the nature of the positions held by Executive
with the Corporation, each and every one of the covenants and restrictions set
forth in Sections 8 and 9 above are reasonable in scope, length of time and
geographic area and are necessary for the protection of the significant
investment of the Corporation in developing, maintaining and expanding its
business.  Accordingly, the parties hereto agree that in the event of any breach
by Executive of any of the provisions of Section 9 that monetary damages alone
will not adequately compensate the Corporation for its losses and, therefore,
that it shall be entitled to any and all legal or equitable relief available to
it, specifically including, but not limited to, injunctive relief, and the
Executive shall be liable for all damages, including actual and consequential
damages, costs and expenses, and legal costs and actual attorneys fees incurred
by the Corporation as a result of taking action to enforce, or recover for any
breach of Section 9.  The covenants contained in Section 9 shall be construed
and interpreted in any judicial proceeding to permit their enforcement to the
maximum extent permitted by law.

Section 11.                      Successors.

The Corporation will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business, stock or assets of the Corporation, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in its entirety.  Failure of the Corporation to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to the compensation
described in Section 7(d).  As used in this Agreement, "Corporation” shall mean
Middleburg Financial Corporation, and any successor to its respective business,
stock or assets as aforesaid, which executes and delivers the agreement provided
for in this Section 11 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.

Section 12.                      Invalid Provisions.

The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.  Any provision in this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be valid and enforceable to the fullest extent permitted by law
without

 
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invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

Section 13.                      Notices.

Any and all notices, designations, consents, offers, acceptance or other
communications provided for herein shall be given in writing and shall be deemed
properly delivered if delivered in person or by registered or certified mail,
return receipt requested, addressed in the case of the Corporation to its Chief
Executive Officer and President or in the case of Executive to his last known
address.

Section 14.                      Arbitration.

With the exception of Sections 8 and 9 and the enforcement of said Sections (as
set forth in Section 10), all other claims under this Agreement will be resolved
by binding arbitration.

The parties agree that with the exception of controversies or claims arising out
of Sections 8, 9 and 10, all controversies or claims arising out of or relating
to this Agreement or Executive’s employment with the Corporation shall be
submitted to final and binding arbitration.  The parties further agree that the
arbitration will be conducted under the Federal Arbitration Act (“FAA”) and the
procedural rules of the American Arbitration Association (“AAA”), specifically
AAA’s National Rules for the Resolution of Employment Disputes.  Any arbitration
proceeding and/or other procedural matter related to an arbitration proceeding,
shall be conducted in Richmond, Virginia, at a location to be determined by the
parties.  The parties agree that such arbitration will be conducted before an
experienced arbitrator chosen by the Corporation and the Executive.  In the
event that the parties are unable to choose an arbitrator, the parties agree
that one will be designated by the AAA in accordance with their rules and
procedures.  The parties further agree that the arbitrator shall apportion the
fees and costs of the arbitration pursuant to the rules of the AAA and
applicable law.

Section 15.                      Governing Law.

Except where preempted by federal law, the Employment Agreement shall be subject
to and construed in accordance with the laws of the Commonwealth of Virginia.

Section 16.                      Captions.

The captions used in this Employment Agreement are intended for descriptive and
reference purposes only and are not intended to affect the meaning of any
Section hereunder.

Section 17.                      Section 409A.

This Agreement is intended to comply with Section 409A to the extent Section
409A is applicable.  This Agreement shall be interpreted and administered
accordingly.

 
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IN WITNESS WHEREOF, the parties have executed this Agreement on the 7th day of
May, 2010.

MIDDLEBURG FINANCIAL CORPORATION

By:  /s/Gary R.
Shook                                                                                                                                    
       Gary R. Shook
       President

By:  /s/Raj Mehra                                                            
                                                                           
        Raj Mehra
 

 
12 

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