Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”), is made and entered into as of the 1st
day of November, 2010, by and between CARDINAL FINANCIAL CORPORATION (the
“Company”), a Virginia corporation, and Bernard H. Clineburg (“Clineburg”).

 

W I T N E S S E T H:

 

WHEREAS, Cardinal Financial Corporation is a bank holding company; and

 

WHEREAS, Clineburg and the Company are parties to an Employment Agreement dated
as of February 12, 2002 and subsequently amended, and now wish to replace that
agreement with this Agreement.

 

WHEREAS, the Company and Clineburg are entering into this Agreement to recognize
Clineburg’s extraordinary past services to the Company, to induce Clineburg to
remain an executive of the Company, and to provide access to Clineburg’s
services during a future management transition period.

 

NOW, THEREFORE, in consideration of the promises and obligations of the Company
and Clineburg under this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

 

ARTICLE 1

SCOPE OF EMPLOYMENT

 

1.1.                              Title and Scope of Employment.  Clineburg is
and shall continue to be employed as Chief Executive Officer of the Company. 
Clineburg is also the Chairman of the Company’s Board of Directors and the
Company agrees to support Clineburg’s continuation in that position and
Clineburg agrees to accept appointment to that position for the term of this
Agreement.

 

1.2.                              Duties and Responsibilities.  As Chief
Executive Officer of the Company, Clineburg will be responsible for the
supervision of all operations and the development of recommendations to the
board of directors of the Company (“Company Board”) of plans and policies for
the Company.  During the term of his employment, Clineburg is required to devote
substantially all of his business time, attention and efforts, with undivided
loyalty, to the business of the Company and its affiliates and shall use his
best efforts to promote their interests.

 

1.3.                              Effective Date and Term.  The commencement
date of this Agreement shall be as of the date of this Agreement.  The current
term of Clineburg’s employment hereunder shall be until July 21, 2014. 
Effective July 22, 2014, the term of Clineburg’s employment hereunder shall be
one additional year and shall be automatically extended

 

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from day to day so that on any day the remaining term shall be one year. 
Effective July 22, 2014, either party may provide notice of termination of the
Agreement to be effective 12 months after the date of the notice, except as
provided in Section 5.6(b).

 

1.4.                              Other Affairs.  Clineburg may engage in
charitable and community affairs and manage his personal investments, and,
subject to the approval of the Company Board, Clineburg may also serve as a
member of the board of directors of other organizations; provided that such
activities are not inconsistent with the purposes of the Company and do not
unreasonably interfere with the performance of his duties or responsibilities as
set forth in this Agreement.

 

ARTICLE 2

COMPENSATION AND BENEFITS

 

2.1.                              Salary.  The Company agrees to pay Clineburg,
for services rendered hereunder, salary at the annual rate of five hundred
thousand dollars ($500,000.00).  Such salary shall be payable in equal periodic
installments, not less frequently than monthly, less any sums which may be
required to be deducted or withheld under the provisions of law.  Clineburg’s
salary may not be adjusted downward at any time during the term of the Agreement
without his express consent.  Clineburg’s salary may be adjusted upward annually
at the discretion of the Company Board, based upon its assessment of Clineburg’s
performance and the Company’s financial circumstances.

 

In addition to his salary, Clineburg will be eligible to receive bonuses at the
discretion of the Company Board, in cash or in stock, or both, and Director’s
fees and any retainers for service on the Company Board.  It is the Company’s
intention that bonuses will be based on attainment of performance objectives
established in the discretion of the Company Board, or may be subjective,
depending upon the financial circumstances of the Company.

 

2.2.                              General Expenses.  Clineburg is expected from
time to time to incur reasonable and necessary expenses for promoting the
business of the Company, including expenses for travel, entertainment, and other
activities associated with Clineburg’s duties.  Reasonable and necessary
expenses incurred by Clineburg in connection with the performance of his duties
hereunder will be reimbursed in the amount of such expenses.

 

2.3.                              Benefits.  Except as otherwise provided in
this Agreement, Clineburg will be entitled to participate in any and all
employee benefit plans, medical insurance plans, retirement plans, bonus
incentive plans, and other fringe benefit programs or benefit plans from time to
time in effect for senior executive and managerial employees of the Company. 
Such participation shall be subject to the terms of the applicable plan
documents and generally applied policies of the Company.  This includes
eligibility to participate in the Company’s qualified retirement plans as
permitted by the terms of such plans.  Specific benefits that Clineburg is
eligible to receive include:

 

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(i)                                     Medical Insurance.  So long as the
Company provides health and dental insurance, Clineburg (and his eligible family
members) shall have the opportunity to participate in the same manner and on the
same terms as other officers and employees of the Company.

 

(ii)                                  Long-term disability.  The Company shall
pay Clineburg’s full premiums for long-term disability insurance coverage,
providing a disability benefit of up to 67% of Clineburg’s salary.

 

(iii)                               Annual physical examination.  The Company
agrees to provide, at no cost to Clineburg, one annual physical examination
through a doctor of Clineburg’s choice.

 

(iv)                              Life insurance.  The Company shall pay
Clineburg’s premiums, for his purchase of a term life insurance policy providing
a death benefit of $500,000 to the beneficiary of Clineburg’s choice, through a
carrier selected by the Company.

 

(v)                                 Automobile.  The Company shall provide
Clineburg with an automobile and expenses consistent with existing Company
policies at the commencement date of this Agreement.

 

(vi)                              Vacation.  Clineburg shall be entitled to
receive five weeks of vacation leave each calendar year.  Clineburg shall be
entitled to cumulate and carry over any unused vacation days from year to year. 
Clineburg shall be entitled to the same personal and sick leave as the Company
Board may from time to time designate for all full-time employees of the
Company.

 

(vii)                           Club Dues.  The Company shall pay dues for clubs
for Clineburg consistent with existing Company policies at the commencement date
of this Agreement.

 

(viii)                        Supplemental Executive Retirement Plan.  As of the
Effective Date, Clineburg shall become 100% vested in all present and future
benefits under his Supplemental Executive Retirement Plan.

 

(ix)                                Executive Deferral Plan.  As of the
Effective Date, Clineburg shall become 100% vested in all current matching
contributions and shall be immediately fully vested in all future matching
contributions made by the Company to the Cardinal Financial Corporation
Executive Deferred Income Plan or any successor plan.

 

ARTICLE 3

FUTURE TRANSITION PROVISIONS

 

3.1                                 Transition Services and Compensation.  The
Company acknowledges that Clineburg may voluntarily resign as Chief Executive
Officer of the Company during the term of this Agreement.  Upon his resignation
as Chief Executive Officer (CEO), Clineburg agrees to continue to provide
services to the Company as an employee for a period (the “Transition Period”) of
at least one year.  At the end of the initial year of the

 

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Transition Period, the Transition Period shall be automatically extended from
day to day so that on any day the remaining term of the Transition Period shall
be one year.  During the Transition Period, either party may provide notice of
termination of the Transition Period to be effective 12 months after the date of
the notice, except as provided in Section 5.6(b).  The transition services will
include Clineburg’s cooperation with the Company in the transition of management
of the Company following Clineburg’s resignation as CEO and such other special
projects and activities as may be reasonably requested by the Company Board or
the Chief Executive Officer and reasonably agreed to by Clineburg.  In addition,
if elected as a member of the Company Board and as Chairman of the Company
Board, Clineburg also agrees to serve as executive Chairman of the Company Board
during the Transition Period.  Upon expiration of the Transition Period,
Clineburg shall cease to perform services for the Company as an employee, but
may continue (if duly elected or appointed) to serve as a member of the Company
Board.

 

In exchange for Clineburg providing the services during the Transition Period
and in lieu of any payments under Article 2, the Company agrees to take the
following actions during the Transition Period:

 

(i)                                     During the first 12 months of the
Transition Period, the Company will pay Clineburg an annual salary at least
equal to fifty percent (50%) of his annual salary as in effect at the time of
his resignation as CEO.  For the first annual extension of the Transition Period
(if any), the Company will pay Clineburg an annual salary equal to at least
forty-five percent (45%) of his salary as in effect at the time of his
resignation as CEO.  For any additional extensions of the Transition Period, the
Company will pay Clineburg an annual salary equal to at least thirty-five
percent (35%) of his annual salary as in effect at the time of his resignation
as CEO.  These payments will cease at the end of the Transition Period.  During
the Transition Period, Clineburg will be eligible for incentive compensation at
the discretion of the Company Board.  During the Transition Period, Clineburg
will receive director’s fees, any retainers for service on the Company Board,
and equity compensation grants equivalent to the grants made to nonemployee
members of the Company Board.

 

(ii)                                  During the Transition Period, Clineburg
will receive the benefits as provided in Section 2.3(i) – (vi) and an
appropriate office and secretarial support.

 

(iii)                               Until 12 months after Clineburg ceases to be
the Chairman of the Company Board, the Company will provide Clineburg with an
appropriate office and secretarial support.   After the end of the Transition
Period, if he continues to serve on the Company Board, Clineburg will be
eligible to receive the compensation and equity compensation grants payable as a
member of the Company Board.

 

3.2                                 Equity Grants in Transition Period.  All
stock-based grants, including stock options and excluding any interests in the
Cardinal Financial Corporation Executive Deferred Income Plan or any successor
plan, held by Clineburg as of the date of his resignation as CEO will become
fully vested as of the date of his resignation.

 

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ARTICLE 4

EQUITY COMPENSATION

 

4.1.                              Equity Grants.  The Company Board may grant
shares of the Company’s stock, options to purchase shares of the Company’s
stock, or other equity grants to Clineburg while he is Chief Executive Officer
as it deems appropriate.  The Company Board may further condition such grants on
attainment of performance objectives established in the discretion of the
Company Board.

 

ARTICLE 5

TERMINATION

 

5.1.                              Termination by the Company.

 

General.  The Company shall have the right to terminate this Agreement, with or
without Cause, by at least a two-thirds vote of the Company’s Board, at any time
during the term of this Agreement or during the Transition Period by giving
written notice to Clineburg.  The termination shall become effective on the date
specified in the notice, which termination date shall not be a date prior to the
date thirty (30) days following the date of the notice of termination itself,
except there shall be no thirty (30) day notice if the Company terminates
Clineburg for Cause.

 

(i)                                     Cause Defined.  For purposes of this
Article 5, while Clineburg is Chief Executive Officer, “Cause” shall mean
Clineburg’s conviction of a felony which has had or will have a direct material
adverse effect upon the business affairs, reputation, properties, operations or
results of operations or financial condition of the Company.  During the
Transition Period, “Cause” shall mean the foregoing plus any material breach by
Clineburg of this Agreement which (if reasonably capable of remedy) is not
remedied by Clineburg within thirty (30) days from the date the Company provides
written notice to Clineburg of such breach.

 

5.2.                              Termination by Operation of Law.

 

(i)                                     If a notice served pursuant to the
Federal Deposit Insurance Act or the Virginia Banking Act suspends or
temporarily prohibits Clineburg from participating in the conduct of the
Company’s affairs, the Company’s prospective obligations under this Agreement
shall be suspended as of the date of service of such notice unless stayed by
appropriate proceedings.  If the charges in the notice are dismissed, the
Company may in its discretion (i) pay Clineburg 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.  The vested
rights of the parties shall not be affected.

 

(ii)                                  If an order issued under the Federal
Deposit Insurance Act or the Virginia Banking Act removes or permanently
prohibits Clineburg from participating in the conduct of the Company’s affairs,
all obligations of the Company under this Agreement

 

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shall terminate as of the effective date of the order, but vested rights of the
parties shall not be affected.

 

(iii)                               If a final order of a court of competent
jurisdiction removes or permanently prohibits Clineburg from participating in
the conduct of the Company’s affairs, all obligations of the Company under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the parties shall not be affected.

 

5.3.                              Termination by Death or Disability.

 

(a)                                  General.  In the event of Clineburg’s death
during the term of this Agreement or during the Transition Period, all
obligations of the parties hereunder shall terminate immediately, except as set
forth in 5.5(a).

 

(b)                                 Disability.  If Clineburg is unable to
perform his duties hereunder, with or without any reasonable accommodation (if
such accommodation is legally required), due to mental, physical or other
disability (as defined in the Company’s then-current disability policy or
policies for Clineburg) for a period of ninety (90) consecutive days in any
180-day period, as determined in good faith by the Company Board, this Agreement
may be terminated by the Company, at its option, by written notice to Clineburg,
effective on the termination date specified in such notice, provided that such
termination date shall not be a date prior to the date of the notice of
termination itself.  In the event of termination because of disability,
Mr. Clineburg shall be entitled to collect all compensation earned prior to
termination and have all reasonable expenses reimbursed paid within 30 days of
the date of termination, and shall be entitled to any disability or other
benefits as his policy or policies shall permit.

 

5.4.                              Termination by Clineburg.  Clineburg may
terminate this Agreement at any time, with or without Good Reason, by giving
written notice to the Company.  Any such termination shall become effective on
the date specified in such notice, provided that the Company may elect to have
such termination become effective on a date after, but not more than thirty (30)
days after, the date of the notice.

 

(i)                                 Good Reason Defined.  For purposes of this
Article 5, Good Reason means (A) Clineburg is not elected to the Company Board
or is not elected as Chairman of the Company Board in an election in which he is
standing for election, or (B) any action or inaction that constitutes a material
breach by the Company of this Agreement, provided that Clineburg must provide
notice to the Company of the existence of the action or inaction that
constitutes a material breach within 90 days of the initial existence of the
condition, and the Company shall have a period of 30 days during which it may
remedy the breach.  If the Company appropriately remedies the breach within the
30-day period, the action or inaction shall not constitute Good Reason.

 

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5.5.                              Effect of Expiration or Termination.

 

(a)                                  General.  In the event (i) this Agreement
expires due to notice under Section 1.3 or upon expiration of the Transition
Period, or (ii) Clineburg is terminated for Cause or dies, then both parties’
obligations hereunder shall immediately cease (including any right to
compensation and benefits under Articles 2 and 3), except that:  (i) Clineburg
or his estate or personal representative shall be entitled to receive the
current Salary owed him through the effective date of such expiration or
termination; and (ii) the Company will pay, or reimburse, Clineburg’s reasonable
and necessary business expenses incurred prior to the date this Agreement
expires or terminates.

 

(b)                                 Treatment of Performance Bonus. 
Notwithstanding the above, Clineburg shall receive any performance bonus he has
earned for the period at issue.

 

(c)                                  Severance Payment.  In the event the
Agreement is terminated without Cause by the Company for a reason other than
Clineburg’s death, disability, or Change in Control or by Clineburg for Good
Reason, in either case while Clineburg is Chief Executive Officer, the Company
shall pay to Clineburg within 30 days of the date of termination, a lump sum
payment equal to the amount of one year’s annual salary, plus the highest bonus
paid in any of the five calendar years prior to the year in which he was
terminated.  In the event the Agreement is terminated without Cause by the
Company for a reason other than Clineburg’s death, disability or by Clineburg
for Good Reason during the Transition Period, the Company shall pay to Clineburg
within 30 days of the date of termination, a lump sum payment equal to the
amount of salary Clineburg would otherwise have received in accordance with
Section 3 for the remainder of the twelve-month Transition Period in which the
termination occurs.  Notwithstanding the foregoing, to the extent required
because Clineburg is a “specified employee” for purposes of section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), on the date of his
termination, such lump sum payment shall be made on the first day of the month
following the six-month anniversary of Clineburg’s date of termination. 
Interest shall accrue on the payment from his date of termination through the
date of payment at the Prime Rate of Interest in effect on the date of
termination and as reported in the Wall Street Journal.  The six-month delay
described in this section shall only apply to the extent an exemption from Code
section 409A for certain amounts payable solely on an involuntary separation
from service is not available.

 

5.6.                              (a)                                  Change in
Control.  In the event (i) a Change in Control occurs while Clineburg is Chief
Executive Officer of the Company, and (ii) a Terminating Event occurs after such
Change in Control, all obligations of the Company under this Agreement shall
terminate as of the effective date of Clineburg’s termination, except that the
Company shall pay to Clineburg an aggregate amount equal to 2.99 times
Clineburg’s average compensation (including without limitation annual salary,
bonuses, stock options, directors’ fees and retainers) over the most recent five
calendar year period of Clineburg’s employment with the Company prior to the
termination (“the Severance Payment”).  The Severance Payment shall be paid to
Clineburg in a lump sum on the date that is six months after the effective date
of Clineburg’s termination of employment, to

 

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the extent required because Clineburg is a “specified employee” for purposes of
Code section 409A on the date of his termination.  Interest shall accrue on the
payment from his date of termination through the date of payment at the Prime
Rate of Interest in effect on the date of termination and as reported in the
Wall Street Journal.  The Severance Payment under this provision is the
exclusive benefit available to Clineburg as the result of termination without
Cause by the Company for a reason other than Clineburg’s death or disability
following a Change in Control that occurs while he is Chief Executive Officer,
and is in lieu of, and not in addition to, any payment or compensation payable
under any other provision of this Agreement.  For purposes of this Section 5.6,
any reference to the Company includes any successor to the Company.

 

(b)                                 For purposes of this Agreement, a Change in
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 40% or
more of the combined voting power of the then outstanding Corporation securities
that may be cast for the election of the Company’s directors other than a result
of an issuance of securities initiated by the Company, or open market purchases
approved by the Company Board, as long as the majority of the Company Board
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 Company before such events cease to constitute a
majority of the Company Board, or any successor’s board, within two years of the
last of such transactions.  For purposes of this Agreement, a Change in Control
occurs on the date on which an event described in (i) or (ii) occurs.  If a
Change in Control occurs on account of a series of transactions or events, the
Change in Control occurs on the date of the last of such transactions or
events.  Following a Change in Control, Clineburg may terminate this Agreement,
with or without Good Reason, at any time by notice to the Company, which notice
may be effective immediately.  A “Terminating Event” is defined as the earlier
of the date, occurring within one (1) year following the Change in Control, that
the Agreement is terminated without Cause by the Company or is terminated by
Clineburg by notice to the Company.

 

(c)                                  Excise Tax, etc. Indemnity.

 

(i)                                     Any amount paid or payable to or for the
benefit of Clineburg under this Agreement, or any payments or benefits which
Clineburg receives or has the right to receive from the Company or any payments
or benefits under any plan or agreement maintained by the Company may constitute
“parachute payments” under Code section 280G.  In that event, the Company must
indemnify Clineburg and hold him harmless against all claims, losses, damages,
penalties, expenses and excise taxes under Code section 4999.  To effect this
indemnification, the Company must pay Clineburg an additional amount that is
sufficient to pay any excise tax imposed by Code section 4999 (whether payable
under this Agreement or any other plan, agreement or arrangement), on the
payments and benefits to which Clineburg is entitled without the additional
amount,

 

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plus the excise, employment and income taxes on the additional amount.  Such
additional amount shall be paid to Clineburg in the first calendar year
following the effective date of Clineburg’s termination of employment; provided,
however, that no such additional amount shall be paid to Clineburg during such
year prior to the date that is six months after the date of Clineburg’s
termination of employment; and provided further that if calculation of such
additional amount or a portion of such additional amount is not administratively
practicable due to events beyond Clineburg’s control, such additional amount (or
such portion, as the case may be) shall be made during the first calendar year
in which the payment is administratively practicable.

 

(ii)                                  In the event a dispute develops between
the Company and Clineburg as to the manner of calculating the amount of the
Severance Payment or the additional amount under Section 5.6(c)(i) payable to
Clineburg, the Severance Payment or additional amount shall be calculated by the
Company’s independent certified public accountants and, if desired, by
Clineburg’s choice of accountant, selected by outside legal counsel, whose joint
determination shall be binding on the parties hereto.  In the event the Company
and Clineburg are still unable to agree, the parties’ representatives
(financial) shall designate a third party, whose expense shall be borne equally
by the parties, and whose determination shall be final and binding.

 

(iii)                               In the event of any review, challenge or
proceeding, by or involving any state or federal government authority or agency
respecting the payments under this Article 5, the Company shall be solely
responsible for all attorney’s fees, costs, penalties, fines, taxes and interest
assessed in connection with any proceeding, regardless of the ultimate finding
or conclusion of the agency.

 

5.7.                              Cooperation.  Following any termination,
Clineburg shall fully cooperate with the Company in all matters related to the
handing over and transitioning of his pending work to other employees of the
Company as may be designated by the Company Board.

 

5.8.                              Stock Options.  In the event of termination,
for any reason except by the Company for Cause, all Clineburg’s equity-based
compensation, including stock options, shall immediately vest.  Clineburg shall
be entitled, for a 90-day period after the date of termination, to exercise the
incentive stock options granted to him to purchase shares of the Company’s
common stock.  With respect to all non-qualified options, Mr. Clineburg shall
have the maximum time allowed under the Plan in which to exercise such options.

 

Notwithstanding the foregoing, this Section 5.8 shall be deemed without any
force or effect if and to the extent the Company should determine that its
application would result in an impermissible “extension” of some or all of
Clineburg’s stock options within the meaning of Code section 409A and applicable
Treasury Regulations thereunder.

 

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ARTICLE 6

CONFIDENTIALITY, NON-DISCLOSURE AND COVENANT NOT TO COMPETE

 

6.1.                              Confidentiality/Nondisclosure.  Clineburg
covenants and agrees that any and all confidential information concerning the
customers, businesses and services of the Company of which he has knowledge or
access as a result of his association with the Company in any capacity, shall
not, without the proper written consent of the Company, be directly or
indirectly used, disseminated, disclosed or published by Clineburg to third
parties other than in connection with the usual conduct of the business of the
Company.  The term “confidential information” shall expressly include, but shall
not be limited to, information concerning the Company’s trade secrets, business
operations, business records, customer lists or other customer information,
financial information, business plans and opportunities (such as lending
relationships, financial product developments or possible acquisitions or
dispositions of businesses or facilities) that have been discussed or considered
by the management of the Company.  “Confidential information” does not include
any information that has become lawfully part of the public domain.

 

6.2.                              Covenant Not to Compete.  During the term of
this Agreement and throughout any further period that he is an officer or
employee of the Company, and for a period of one year from and after the date
that Clineburg is no longer employed by the Company, or for a period of one year
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 Clineburg, whichever is
later, Clineburg covenants and agrees that he will not, directly or indirectly,
either as a principal or employee: (i) engage in a Competitive Business anywhere
within a ten (10) mile radius of any office operated by the Company on the date
Clineburg’s employment terminates; or (ii) solicit, or assist any other person
or business entity in soliciting, any depositors or other customers of the
Company to make deposits in or to become customers of any other financial
institution conducting a Competitive Business; or (iii) induce any individuals
to terminate their employment with the Company or its affiliates.  As used in
this Agreement, the term “Competitive Business” means all banking and financial
products and services that are substantially similar to those offered by the
Company on the date that the Clineburg’s employment terminates.  Merchant
banking is explicitly excluded from the definition of “Competitive Business.”

 

6.3.                              Injunctive, Relief, Damages. Etc.  Clineburg
agrees that given the nature of the positions held by Clineburg with the
Company, that each and every one of the covenants and restrictions set forth in
this Article 6 are reasonable in scope, length of time and geographic area and
are necessary for the protection of the significant investment of the Company in
developing, maintaining and expanding its business.  Accordingly, the parties
hereto agree that in the event of any breach by Clineburg of any of the
provisions of Article 6 that monetary damages alone will not adequately
compensate the Company for its losses and, therefore, that it may seek any and
all legal or equitable relief available to it, specifically including, but not
limited to, injunctive relief.

 

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ARTICLE 7

MISCELLANEOUS

 

7.1.                              Severability.  The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the validity or enforceability of any other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provisions were omitted.

 

7.2.                              Assignment.  Except as provided below, neither
the rights nor obligations under this Agreement may be assigned by either party,
in whole or in part, by operation of law or otherwise, except that it shall be
binding upon and inure to the benefit of any successor of the Company and its
subsidiaries and affiliates, whether by merger, reorganization or otherwise, or
any purchaser of all or substantially all of the assets of the Company.

 

7.3.                              Notices.  Any notice expressly provided for
under this Agreement shall be in writing, shall be given either manually or by
mail and shall be deemed sufficiently given when actually received by the party
to be notified or when mailed, if mailed by certified or registered mail,
postage prepaid, addressed to such party at their addresses as set forth below. 
All notices shall be sent to the Company at its primary office location and to
Clineburg at his address on the Company’s records.  Either party may, by notice
to the other party, given in the manner provided for herein, change their
address for receiving such notices.

 

7.4.                              Governing Law.  This Agreement shall be
executed, construed and performed in accordance with the laws of the
Commonwealth of Virginia without reference to conflict of laws principles.  The
parties agree that the venue for any dispute hereunder will be the Circuit Court
of Fairfax, Virginia and the parties hereby agree to the exclusive jurisdiction
thereof.

 

7.5.                              Entire Agreement.

 

(i)                                     This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all other agreements, either oral or in writing, including
the Employment Agreement dated February 12, 2002 as amended, among the parties
hereto with respect to the subject matter hereof.

 

(ii)                                  This Agreement may be executed in one or
more counterparts, each of which shall be considered an original copy of this
Agreement, but all of which together shall evidence only one agreement.

 

7.7.                              Amendment and Waiver.  This Agreement may not
be amended except by an instrument in writing signed by or on behalf of each of
the parties hereto.  No waiver of any provision of this Agreement shall be valid
unless in writing and signed by the person or party to be charged.

 

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7.8.                              Headings.  The section headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.

 

7.9                                 Code Section 409A Compliance.  This
Agreement is intended by the parties to comply with Code section
409A(a)(2) through (4) and all applicable Treasury Regulations and other
generally applicable guidance thereunder.  The Company reserves the right to
unilaterally amend the Agreement at any time if it determines in its discretion
that such amendment would be necessary to prevent Clineburg from recognizing
additional income tax in connection with any payment under the Agreement under
Code section 409A(a)(1)(B).

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

COMPANY:

 

CARDINAL FINANCIAL CORPORATION

 

 

 

 

 

 

By:

/s/ George P. Shafran

 

 

George P. Shafran, Chairman, Compensation Committee

 

 

 

BERNARD H. CLINEBURG:

 

 

 

 

By:

/s/ Bernard H. Clineburg

 

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