Exhibit 10.1


EXECUTIVE EMPLOYMENT AGREEMENT


 


This
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective as of the 6th day
of  March 2006, by and between CARDINAL
FINANCIAL CORPORATION (“Cardinal”) and Kendal E. Carson (“you” and all similar
references) (collectively, the “parties”).


INTRODUCTION


 


WHEREAS,
Cardinal has retained you to provide services in an executive capacity; and


WHEREAS,
the parties desire to memorialize the terms and conditions of your continuing
employment.


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


TERMS


 


1.              Position, Title,
Compensation and Benefits.


 


a.              During your employment, Cardinal agrees to employ you
in as a Senior Executive Officer in the position of President, Cardinal
Financial Corporation and Senior Executive Vice President, Cardinal Bank,
reporting to the Chairman and CEO of Cardinal Financial Corporation and you
agree to accept such employment, devoting substantially all of your business
time, effort and attention to the business of Cardinal, and performing such
duties as are normally associated with your position.


 


b.              Your initial base salary will be at the annualized
rate set forth in your offer letter, less required and authorized withholding
and deductions, payable in installments in accordance with Cardinal’s normal
payroll practices. You will be eligible for an annual merit increase,
performance bonus, and stock option grants on the same basis as other similarly
situated Cardinal Executive Officers and subject to the terms of any applicable
compensation, bonus and stock plans.


 


c.               You will be eligible to participate on the same basis
as similarly situated Executive Officers in the Company’s benefit plans,
including its 401(k) Plan and medical benefit plans in effect from time to time
during your employment.  All matters of
eligibility for coverage or benefits under any benefit plan will be determined
in accordance with the provisions of such plan. 
Cardinal may change, alter, or terminate any benefit plan in its sole
discretion. Your employment will also be subject to Cardinal’s personnel
policies and procedures as they may be interpreted, adopted, revised or deleted
from time to time in the Company’s sole discretion.


 


 


2.              Contract Term. 
The term of this Agreement shall commence on March 6, 2006, and shall
continue from that date for three (3) years unless terminated prior thereto by
either Cardinal or you as provided in Section 4.  If the parties do not wish to renew this
Agreement when it expires at the end of the initial or any renewal term hereof
as hereinafter provided or if either of the parties wishes to renew this Agreement
on different terms than those contained herein, Cardinal or you shall give
written notice of such intent to the other party at least six (6) months prior
to the expiration date. In the absence of such notice, this Agreement shall be
renewed on the same terms and conditions contained herein for successive one
year terms up until March 6, 2011, when, absent express agreement by the
parties, this Agreement shall terminate. The parties expressly agree that
designation of a term and renewal provisions in this Agreement does not in any
way limit the right of the parties to terminate this Agreement at any time as
hereinafter provided. References herein to the term of this Agreement shall
refer both to the initial term and any successive term as the context requires.


 

















 


 


3.              Prohibition on Competition.


 


a.              Covenant not to Perform
Competing Services.  During the term of this
Agreement and during any period during which you remain employed following the
expiration of this Agreement, and for any period during which you receive pay
from Cardinal, you shall not render or perform competing banking and/or
financial services within twenty-five (25) miles from your office or Cardinal’s
corporate headquarters.  This provision
shall not be construed to prevent you from obtaining employment in the banking
and/or financial services industries provided your new endeavor does not
violate the above-stated prohibition.


 


b.              Covenant Not to Solicit
Clients or Prospective Clients.  During the
term of this Agreement and during any period during which you remain employed
following the expiration of this Agreement and for a period of six (6) months
from the date you are terminated for Cause or your Voluntary Termination, you
agree not to contact directly or indirectly, or to assist another to contact,
any Client or Prospective Client of Cardinal with whom you have had any contact
on behalf of Cardinal to offer to perform or to perform or render banking
and/or financial services.  This
provision shall not be construed to prevent you from contacting clients of
Cardinal with whom you have not had any contact during the term of this
Agreement. For the purpose of this Agreement, “Client” means any entity for
which Cardinal has performed banking and/or financial services within the
twelve months from your termination date. 
“Prospective Client” means any entity that is not a Client but with
respect to whom, within six (6) months from your termination date, you
conducted, prepared, submitted (or assisted or supervised such conduct) any
client development work product or marketing efforts on behalf of Cardinal.


 


c.               Restriction on the
Solicitation of Cardinal’s Employees.  During the
term of this Agreement and during any period during which you remain employed
following the expiration of this Agreement, and for a period of six (6) months
from the date you are terminated for Cause or your Voluntary Termination, you
agree not to attempt to induce any Cardinal employee to terminate his or her
employment, or to seek or accept any employment with any other business entity
that performs banking and/or financial services.


 


d.              Enforcement of Covenants.


 


i.               You understand that damages Cardinal will
suffer as a result of your breach of any provision of Section 3 of this
Agreement are impossible to reasonably calculate and may irreparably harm
Cardinal.  Nothing in this Agreement
shall be construed to prevent Cardinal from seeking any form of injunctive
relief to enforce any provision of this Agreement.


 


ii.           In the event that a court finds Section 3
of this Agreement, or any of its restrictions, to be ambiguous, unenforceable,
or invalid, you and Cardinal agree that the court shall read the Agreement as a
whole and interpret the restriction(s) at issue to be enforceable and valid to
the maximum extent allowed by law.


 


iii.  If the Court declines to enforce this
Agreement in the manner provided in subparagraph 3(d)(ii), you and Cardinal
agree that this Agreement will be automatically modified to provide Cardinal
with the maximum protection of its business interests allowed by law and you
agree to be bound by this Agreement as modified.


 


iv.   If any provision of this Section 3 is
declared to be ambiguous, unenforceable or invalid, the remainder of this
Section 3 shall remain in full force and effect, and shall be read as if the
ambiguous, unenforceable or invalid provision was not contained in the
Agreement.


 

















 


 


4.              Termination of Employment
Relationship.  Your employment relationship with Cardinal
may be terminated by either party subject to the notice provision addressed
below.


 


a.              Cardinal may terminate your employment for Cause at
any time effective immediately upon written notice.  In the event that Cardinal terminates your
employment for Cause, you will be entitled to earned and unpaid base salary and
payment for any earned and unused vacation days through the last date of your
employment.


 


For the purpose of this Agreement, “Cause” means any
of the following: (i) you engage in embezzlement, misappropriation of corporate
funds or other material acts of dishonesty; (ii) your commission or conviction
of any felony or entry of a plea of guilty or nolo contendere to any felony;
(iii) your material failure to adhere to Cardinal’s corporate codes, policies
or procedures; (iv) your insubordination or any act of gross misconduct; (v)
your material breach of your obligations to Cardinal pursuant to this
Agreement; or (v) revocation by any applicable regulatory authority of the
necessary approvals for you to serve as an Executive with Cardinal.


 


b.              Cardinal may terminate this Agreement for any reason
with thirty (30) days prior notice, pursuant to Section 10 below, to the other
party.


 


i.                     In the event your employment is
terminated by Cardinal pursuant to this Section 4.b, then provided that you
execute a general release in favor of Cardinal, in a form acceptable to
Cardinal (the “Release”),
and subject to Section 4.b.(ii) (the date that the Release becomes effective
and may no longer be revoked by you is referred to as the “Release
Date”), then: (i) Cardinal shall pay to you an amount equal to
your Base Salary for a period of twelve months (12) months from the Release
Date if the termination occurs during the first three years of the contract or
six (6) months from the Release Date if the termination occurs thereafter (such
applicable period is referred to as the “Severance Period”),
less applicable withholdings and deductions, on Cardinal’s regular payroll
dates; and (ii) if you are participating in Cardinal’s group health insurance
plans on the effective date of termination, and you timely elect and remain
eligible for continued coverage under COBRA, or, if applicable, state insurance
laws, Cardinal shall pay that portion of your COBRA premiums that Cardinal was
paying prior to the effective date of termination for the Severance Period or
for the continuation period for which you are eligible, whichever is shorter.
Cardinal’s COBRA premium payment obligation will end immediately if you obtain
health care insurance from any other source during the Severance Period.


 


ii.                 You shall not receive any of the benefits
pursuant to Section 4.b.(i) unless you execute the Release within the
consideration period specified therein and until the Release becomes effective
and can no longer be revoked by you under its terms.  Your ability to receive benefits pursuant to
Section 4.b(i) is further conditioned upon your: returning all Cardinal
property; complying with your post termination obligations under this Agreement; and complying
with the Release including without limitation any non-disparagement and
confidentiality provisions contained therein.


 


iii.             The benefits provided to you pursuant to
this Section 4.b are in lieu of, and not in addition to, any benefits to which
you may otherwise be entitled under any Cardinal severance plan, policy or
program.


 


c.               You may Voluntarily Terminate your employment with
Cardinal upon thirty (30) days prior written notice directed to Cardinal’s
Chairman and Chief Executive Officer (“CEO”). 
The Chairman and CEO, in his sole capacity may waive this notice
requirement.


 


d.              In the event of your death, your employment will
terminate as of the date of death. If your employment is terminated by reason
of your death, then Cardinal shall pay your accrued salary through the date of
termination and thereafter have no further obligation to pay compensation to
you. The entitlement of any of your beneficiaries to benefits under any
Cardinal benefit plan shall be determined in accordance with applicable law and
the provisions of such plan.


 

















 


 


e.               Subject to applicable state and federal law, Cardinal
shall at all times have the right, upon written notice to you, to terminate
this Agreement based on your Disability (as defined below).  Termination by Cardinal of your employment
based on “Disability” shall mean termination because you are unable due to a
physical or mental condition to perform the essential functions of your
position with or without reasonable accommodation for six (6) months in the
aggregate during any twelve (12) month period or based on the written
certification by two licensed physicians of the likely continuation of such
condition for such period.  This
definition shall be interpreted and applied consistent with the Americans with
Disabilities Act, the Family and Medical Leave Act, and other applicable law.
In the event your employment is terminated based on your Disability, Cardinal
shall pay your accrued salary through the date of termination and thereafter
have no further obligation to pay compensation to you. Your entitlement to
benefits under any Cardinal benefit plan shall be determined in accordance with
applicable law and the provisions of such plan.


 


f.                Regardless of the basis of your termination of
employment, you agree to provide all assistance requested by Cardinal in
transitioning your duties, responsibilities client and other Cardinal
relationships to other Cardinal personnel, both during your employment and
after your termination or resignation.


 


5.              Change in Control. 
Notwithstanding the terms and conditions set forth in Section 4 of this
Agreement, in the event of a Change in Control (as defined below) Cardinal
agrees on behalf of itself and any successor to continue your employment
pursuant to this Agreement for a period of eighteen (18) months following the
Change in Control and to enter into an agreement with you within the eighteen
month period to continue your employment thereafter. In the event Cardinal or
any successor to Cardinal fails to continue your employment for the full
eighteen month period, then, in lieu of the benefits, if any, to which you
would otherwise be entitled under Section 5, provided you execute a general
release in favor of Cardinal, in a form acceptable to Cardinal: (i) within
thirty (30) days of the effective date of the release, Cardinal shall pay you
an amount equal to your base salary for the remainder of the eighteen (18)
months period plus an amount equal to your base salary for a period of eighteen
months, less required and authorized withholdings and deductions, on Cardinal’s
regular payroll dates, and (ii) if you are participating in Cardinal’s group
health insurance plans on the effective date of termination, and you timely
elect and remain eligible for continued coverage under COBRA, or, if
applicable, state insurance laws, Cardinal shall pay that portion of your COBRA
premiums that Cardinal was paying prior to the effective date of termination
for eighteen months or for the continuation period for which you are eligible,
whichever is shorter. Cardinal’s COBRA premium payment obligation will end
immediately if you obtain health care insurance from any other source while you
are receiving COBRA payments. In the event Cardinal continues your employment
for the full eighteen (18) month period but you and Cardinal fail to reach an
agreement for your continued employment thereafter, then, in lieu of the
benefits, if any, to which you would otherwise be entitled under Section 5,
provided you execute a general release in favor of Cardinal, in a form
acceptable to Cardinal, then within thirty (30) days of the effective date of the
release, Cardinal shall make eighteen equal monthly payments to you in an
amount equal to your base salary for eighteen (18) months.  


 


a.              For the purpose of this Agreement, “Change in Control”
means a merger or consolidation in which (i) Cardinal is a constituent party,
or (ii) a Company Subsidiary is a constituent party and Cardinal issues shares
of its capital stock pursuant to such merger or consolidation, except any such
merger or consolidation involving Cardinal or a Company Subsidiary in which the
holders of capital stock of Cardinal immediately prior to such merger or
consolidation continue to hold immediately following such merger or
consolidation more than fifty (50) percent by voting power of the capital stock
of or ownership interest in (A) the surviving or resulting entity or (B) if the
surviving or resulting entity is a wholly owned subsidiary of another entity
immediately following such merger or consolidation, the parent entity of such
surviving or resulting entity.   “Change
in Control” may also mean the sale, in a single transaction or series of
related transactions, (i) by Cardinal of all or substantially all the assets of
Cardinal (except where such sale is to a wholly owned subsidiary of the
Company), or (ii) by the stockholders of Cardinal of more than fifty (50)
percent by voting power of the then-outstanding capital stock of Cardinal.  Finally, a “Change of Control” may constitute
the occurrence of any agreement, happening or device, which has substantially
the same effect on the control of Cardinal as any of the foregoing.


 

















 


 


b.              In the event that the aggregate of all payments or
benefits made or provided to, or that may be made or provided to, you under
this Agreement and under all other plans, programs and arrangements of Cardinal
(the “Aggregate Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G
of the Code, and (ii) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), then such payments and benefits
shall be equal to the Reduced Amount. The “Reduced Amount” shall be the largest portion
of the payments and benefits that would result in no portion of the payments
and benefits being subject to the Excise Tax. 
Cardinal shall determine the procedures and manner of making the
calculation required above, and the method to order the reduction of Payments (i.e.,
whether equity or cash payments get reduced first). You and Cardinal shall
cooperate with each other in connection with any proceeding or claim relating
to the existence or amount of liability for Excise Tax.


 


c.               For the purpose of this Agreement, “Effective Date”
means the close of business on the date on which a “Change of Control” occurs.


6.              Assignment and Survival.  
The rights and obligations of Cardinal under this Agreement shall inure
to the benefit of, and shall be binding upon, the successors and assigns of
Cardinal.  Your rights and obligations
are personal, and may not be assigned or delegated without the Company’s proper
written consent.


 


7.              Severability. 
If any provision of this Agreement is held invalid or unenforceable for
any reason, the invalidity shall not nullify the validity of the remaining
provisions of this Agreement.  If any
provision of this Agreement is determined by a court or arbitration tribunal to
be overly broad in duration, geographical coverage or scope, or unenforceable
for any other reason, such provision will be narrowed so that it will be
enforced as much as permitted by law.


8.              Choice of Law. 
This Agreement shall be governed by the laws of the Commonwealth of
Virginia.  You and Cardinal consent to
the jurisdiction and venue of any state or federal court in the Commonwealth of
Virginia and agree that any permitted lawsuit may be brought to such courts or
other court of competent jurisdiction. 
Each party hereby waives, releases and agrees not to assert, and agrees
to cause its affiliates to waive, release and not assert, any rights such party
or its affiliates may have under any foreign law or regulation that would be
inconsistent with the terms of this Agreement as governed by Virginia law.


9.              Waiver. 
Any party’s waiver of any other party’s breach of any provision of this
Agreement shall not waive any other right or any future breaches of the same or
any other provision.


10.       Notices.  Any notices required hereunder to be in
writing shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by electronic mail, telex or confirmed
facsimile if sent during normal business hours of the recipient, and if not,
then on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.  All communications shall be sent to Cardinal
at its primary office location and to you at your address as listed on Cardinal
payroll, or at such other address as Cardinal or you may designate by ten (10)
days advance written notice to the other.


 


11.       Entire Agreement. 
This Agreement is the entire agreement between you and Cardinal
regarding these matters and supersedes any verbal and written agreements on
such matters.  This Agreement may be
modified only by written agreement signed by you and the CEO or his or her
express designee.  All Section headings
are for convenience only and do not modify or restrict any of this Agreement’s
terms.


 

















 


 


12.       Counterparts.  For convenience
of the parties, this Agreement may be executed in one or more counterparts,
each of which shall be deemed an original for all purposes.


 


 


The parties state that they have read, understood
and agree to be bound by this Agreement and that they have had the opportunity
to seek the advice of legal counsel before signing it and have either sought
such counsel or have voluntarily decided not to do so:


 


 


	
  CARDINAL FINANCIAL CORPORATION

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bernard H. Clineburg

  	
   

  	
  /s/ Kendal E. Carson

  
	
   

  	
  Bernard H. Clineburg

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Chairman and CEO

  	
   

  	
  Kendal E. Carson

  
	
   

  	
  (Title)

  	
   

  	
   

  
						



 


11/7/2007