**Exhibit 10.2**

Cardinal FinancialCorporation

Supplemental ExecutiveRetirement Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**CARDINAL FINANCIAL CORPORATION**

 

**SUPPLEMENTAL EXECUTIVE RETIREMENTPLAN**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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**TABLE OFCONTENTS**

(continued)
|         |                                 | **Page** |
|--------------|--------------------------------------|----------|
|         |                                 |     |
| ARTICLE I    | DEFINITIONS                          | 2        |
| 1.01         | Affiliate                            | 2        |
| 1.02         | Beneficiary                          | 2        |
| 1.03         | Board                                | 2        |
| 1.04         | Cause                                | 2        |
| 1.05         | Code                                 | 2        |
| 1.06         | Committee                            | 2        |
| 1.07         | Corporation                          | 3        |
| 1.08         | Effective Date                       | 3        |
| 1.09         | ERISA                                | 3        |
| 1.10         | Participant                          | 3        |
| 1.11         | Plan                                 | 3        |
| 1.12         | Retirement                           | 3        |
| 1.13         | Retirement Benefit                   | 3        |
| 1.14         | Separation From Service              | 3        |
| 1.15         | Year of Service                      | 3        |
| ARTICLE II   | ELIGIBILITY & PARTICIPATION      | 4        |
| ARTICLE III  | BENEFITS                             | 4        |
| 3.01         | Retirement Benefit                   | 4        |
| 3.02         | Pre- Retirement Separation           | 4        |
| 3.03         | Death                                | 5        |
| 3.04         | Termination For Cause                | 5        |
| 3.05         | No Duplication of Benefits           | 5        |
| ARTICLE IV   | PLAN UNFUNDED                        | 6        |
| ARTICLE V    | NO GUARANTEE OF EMPLOYMENT           | 6        |
| ARTICLE VI   | OTHER BENEFITS AND AGREEMENTS        | 6        |
| ARTICLE VII  | RESTRICTIONS ON TRANSFER OF BENEFITS | 7        |
| ARTICLE VIII | ADMINISTRATION OF THE PLAN           | 7        |
| 8.01         | The Committee                        | 7        |

 

 

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| 8.02       | Indemnification of the Committee | 7 |
|------------|----------------------------------|---|
| 8.03       | Powers of the Committee          | 7 |
| 8.04       | Information                      | 8 |
| ARTICLE IX | CLAIMS PROCEDURE                 | 8 |
| ARTICLE X  | MISCELLANEOUS                    | 8 |
| 10.01      | Binding Nature                   | 8 |
| 10.02      | Governing Law                    | 8 |
| 10.03      | Construction                     | 8 |
| 10.04      | Fiduciary Discretion             | 8 |
| ARTICLE XI | ADOPTION                         | 9 |

 

 

 

 

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Cardinal FinancialCorporation

Supplemental ExecutiveRetirement Plan

 

 

**INTRODUCTION**

                The Board ofDirectors of Cardinal Financial Corporation (the “Board”) adopted theSupplemental Executive Retirement Plan for the purpose of supplementing theretirement benefits payable under the Corporation’s tax-qualified plans forcertain key employees of the Corporation.

 

The Plan is intended to be unfunded and maintainedprimarily for the purpose of providing deferred compensation for a “selectgroup of management or highly compensated employees” (as such phrase is used inthe Employee Retirement Income Security Act of 1974).  The Plan must be administered and construedin a manner that is consistent with that intent.

 

The Plan is intended to satisfy the requirements ofSection 409A of the Internal Revenue Code of 1986, as amended (the “Code”) andapplicable Treasury Regulations issued thereunder.  Each provision and term of the Plan should beinterpreted accordingly, but if any provision or term would be prohibited by orinconsistent with Code Section 409A, then such provision or term should bedeemed to be reformed to comply with Code Section 409A.

 

 

 

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**ARTICLE IDEFINITIONS**

The following phrases or terms have the indicatedmeanings:

 

**1.01        Affiliate**

Affiliate means each trade or business (whether or not incorporated)which together with the Corporation is treated as a controlled group ofcorporations.

**1.02        Beneficiary**  

                Beneficiary means the person,persons, entity, entities or the estate of the Participant entitled to receivebenefits under the Plan in accordance with a properly completed beneficiarydesignation form.  If the Participantfails to complete a beneficiary designation form, or the form is incomplete,Beneficiary means the Participant’s estate. The Participant may amend or change his Beneficiary designation inaccordance with procedures established by the Committee.

**1.03        Board**

                Board means the Board ofDirectors of Cardinal Financial Corporation.

**1.04        Cause**

Cause shall mean:

a)             Willfulmalfeasance by the Employee in connection with the performance of his dutiesfor the Corporation that could, in good faith judgment of the Corporation, (A)subject the Corporation to criminal penalties or (B) result in the incarcerationof any officer, director or employee of the Corporation

b)             The Participant’sconviction of felony or other crime which, in the good faith judgment of theCorporation, could have a material adverse effect on the business of theCorporation.

c)              Themisappropriation by the Participant of Corporate funds for personal use, or

d)             The continuedfailure or refusal by the Participant to perform his duties after reasonableprior notice from the Corporation to the Participant.

**1.05        Code**

                Code means the Internal RevenueCode of 1986, as amended.

**1.06        Committee**

                Committee means the CompensationCommittee of the Board.

 

 

 

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**1.07        Corporation**

                Corporation means CardinalFinancial Corporation.

**1.08        Effective Date**

                The Effective Date of this Planis June 5, 2007.

**1.09        ERISA**

                ERISA means the EmployeeRetirement Income Security Act of 1974, as amended.

**1.10        Participant**

                Participant means Kendal E.Carson, the Corporation’s President.

**1.11        Plan**

                Plan means the CardinalFinancial Corporation Supplemental Executive Retirement Plan.

**1.12        Retirement**

Retirement means theParticipant’s Separation from Service from the Corporation and its Affiliatesat age 65.

**1.13        Retirement Benefit**

Retirement Benefit means themonthly benefit payable to the Participant upon his Retirement in accordancewith Section 3.01 below.

**1.14        Separation FromService**

Separation From Service (andvariations thereof) means any termination of the Participant’s employment orexpiration of a services contract between the Participant and the Corporationor its Affiliates that constitutes a “separation from service” within themeaning of Code Section 409A and applicable Treasury Regulationsthereunder.  The Participant shall not bedeemed to have Separated from Service during an authorized leave of absence (i)that does not extend beyond six months or (ii) following which the Participanthas a contractual or statutory right to resume employment.

**1.15        Year of Service**

Year of Service means a twelve-consecutive month period of employmentwith the Corporation or an Affiliate commencing on March 6, 2006, and eachanniversary thereof.  No partial Years ofService shall be credited under the Plan. Any service with the Company or its Affiliates prior to March 6, 2006 isnot taken into account for purposes of the Plan.

 

 

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**ARTICLE IIELIGIBILITY & PARTICIPATION**

                The Participant was designated by the Committee tocommence participation in the Plan as of June 5, 2007.  The Participant shall continue to participatein the Plan until no longer entitled to any further benefits under the terms ofthe Plan.

** **

**ARTICLE III BENEFITS**

**3.01        Retirement Benefit**

                Upon Retirement at age 65, theParticipant shall be entitled to a monthly retirement benefit equal to $10,000per month payable for 120 months (the “Retirement Benefit”).  Payment of the Retirement Benefit shall bemade to the Participant (or to the Participant’s Beneficiary, in the case ofhis post-Retirement death) commencing on the date which is six months after thedate of the Participant’s Retirement at age 65 (or the date of hispost-Retirement death, if earlier).

**3.02        Pre-RetirementSeparation Benefit**

If the Participant has aSeparation from Service before reaching Retirement at age 65, then theParticipant (or the Participant’s Beneficiary, in the case of hispost-separation death) shall be entitled to a percentage of the RetirementBenefit described in Section 3.01 based on his Years of Service after March 6,2006, determined in accordance with the following schedule, commencing on thedate which is six months after the date of the Participant’s Retirement at age65  (or on the date of hispost-separation death, if earlier).

| **Post-03/06/06 Years of Service** | ** ** | **Percentage of Retirement  Benefit** |
|------------------------------------|------------|---------------------------------------|
|                               |       |                                  |
| 1  but less than 2                 |       | 10.00%                                |
| 2  but less than 3                 |       | 20.00%                                |
| 3  but less than 4                 |       | 30.00%                                |
| 4  but less than 5                 |       | 40.00%                                |
| 5  but less than 6                 |       | 50.00%                                |
| 6  but less than 7                 |       | 60.00%                                |
| 7  but less than 8                 |       | 70.00%                                |
| 8  but less than 9                 |       | 80.00%                                |
| 9  but less than 10                |       | 90.00%                                |
| 10  or more                        |       | 100%                                  |

 

 

 

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**3.03        Death**

(a)           Ifthe Participant Separates from Service with the Corporation and its Affiliatesas a result of his death, then his Beneficiary shall receive the unreduced RetirementBenefit described in Section 3.01 commencing on the first day of the firstmonth following the month in which the Participant has died.

(b)           Ifthe Participant dies after payment of his Retirement Benefit has commenced,then the Participant’s Beneficiary shall be entitled to any payments remainingin the 120-month period.  Such benefitsshall be paid over the remaining months in the 120-month period.

**3.04        Termination ForCause**

Notwithstanding anything inthis Article III to the contrary, if the Participant’s employment with theCorporation and its Affiliates is terminated for Cause, he shall immediatelycease to be a Participant under the Plan and shall forfeit all rights andbenefits (vested or unvested) under the Plan.

**3.05        No Duplication ofBenefits**

Notwithstanding anything inthis Article III to the contrary, a Participant shall be entitled to commencepayment of the benefits described herein on no more than one of the eventsdescribed in Sections 3.01 through 3.04 above. Commencement of benefit payments under any one of Sections 3.01 through3.04 precludes commencement of benefit payments under any other section of thePlan.

 

 

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**ARTICLE IV PLAN UNFUNDED**

                The Corporation and any Affiliate participating inthe Plan have only a contractual obligation to pay the benefits described inArticle III.  All benefits are to besatisfied solely out of the general corporate assets of the Corporation or theappropriate Affiliate which shall remain subject to the claims of itscreditors.  No assets of the Corporationor a participating Affiliate will be segregated or committed to thesatisfaction of its obligations to the Participant or any Beneficiary underthis Plan.  If the Corporation, in itssole discretion, elects to purchase life insurance on the life of theParticipant in connection with the Plan, the Participant must submit to aphysical examination, if required by the insurer, and otherwise cooperate inthe issuance of such policy or his rights under the Plan will be forfeited

** **

**ARTICLEV NO GUARANTEE OF EMPLOYMENT**

The Plan does not in any way limit the right of the Corporation or anAffiliate at any time and for any reason to terminate the Participant’semployment.  In no event shall the Plan,by its terms or by implication, constitute an employment contract of any naturewhatsoever between the Corporation or an Affiliate and the Participant.

** **

**ARTICLEVI OTHER BENEFITS AND AGREEMENTS**

                The benefitsprovided for a Participant and his Beneficiary under the Plan are in additionto any other benefits available to such Participant under any other plan orprogram of the Corporation for its employees, and, except as may otherwise beexpressly provided for, the Plan shall supplement and shall not supersede,modify or amend any other plan or program of the Corporation in which aParticipant is participating.

 

 

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**ARTICLE VIIRESTRICTIONS ON TRANSFER OF BENEFITS**

                No right or benefit under the Plan shall be subjectto anticipation, alienation, sale, assignment, pledge, encumbrance or charge,and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for orsubject to the debts, contracts, liabilities, or torts of the person entitledto such benefit.  If the Participant orany Beneficiary under the Plan should become bankrupt or attempt to anticipate,alienate, sell, assign, pledge, encumber or charge any right to a benefithereunder, then such right or benefit, in the discretion of the Committee,shall cease and terminate, and, in such event, the committee may hold or applythe same or any part thereof for the benefit of the Participant or suchBeneficiary, his or her spouse, children, or other dependents, or any of them,in such manner and in such portion as the Committee may deem proper.

 

**ARTICLE VIII ADMINISTRATION OF THE PLAN**

**8.01        The Committee **

                The Plan shall be administeredby the Committee.  Subject to theprovisions of the Plan, the Committee may adopt such rules and regulations asmay be necessary to carry out the purposes hereof.  The Committee’s interpretation andconstruction of any provision of the Plan shall be final and conclusive.  The Committee in its sole discretion maydelegate ministerial duties with respect to the administration of the Plan toemployees of the Corporation or to third parties.

**8.02        Indemnification ofthe Committee**

                The Corporation shall indemnifyand save harmless each member of the Committee against any and all expenses andliabilities arising out of membership on the Committee related to anyshareholder or similar action involving the Plan, excepting only expenses andliabilities arising out of a member’s own willful misconduct.  Expenses against which a member of theCommittee shall be indemnified hereunder shall include without limitation, theamount of any settlement or judgment, costs, counsel fees, and related chargesreasonably incurred in connection with a claim asserted, or a proceedingbrought or settlement thereof.  Theforegoing right of indemnification shall be in addition to any other rights towhich any such member may be entitled.

**8.03        Powers of theCommittee**

                In addition to the powershereinabove specified, the Committee shall have the power to compute andcertify the amount and kind of benefits from time to time payable toParticipants and their Beneficiaries under the Plan, to authorize alldisbursements for such purposes, and to determine whether a Participant isentitled to a benefit under Article III.

 

 

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**8.04        Information**

                To enable the Committee toperform its functions, the Corporation shall supply full and timely informationto the Committee on all matters relating to the compensation of allParticipants, their retirement, death or other cause for termination ofemployment, and such other pertinent facts as the Committee may require.

** **

**ARTICLEIX CLAIMS PROCEDURE**

All claims for benefitsshall be in writing in a form satisfactory to the Committee.  If the Committee wholly or partially deniesParticipant’s or Beneficiaries claim for benefits, the Board shall reviewParticipant’s or Beneficiary’s claim in accordance with applicable proceduresdescribed in the Employee Retirement Income Security Act of 1974.

** **

**ARTICLEX MISCELLANEOUS**

**10.01      Binding Nature**

                The Plan shall be binding uponthe Corporation, any participating Affiliates and its successors and assigns;and upon a Participant, his or her Beneficiary, and either of their assigns,heirs, executors and administrators.

**10.02      Governing Law**

                To the extent not preempted byfederal law, the Plan shall be governed and construed under the laws of theCommonwealth of Virginia (including its choice of law rules, except to theextent those rules would require the application of the law of a state otherthan Virginia) as in effect at the time of their adoption and execution,respectively.

**10.03      Construction**

                Masculine pronouns wherever usedshall include feminine pronouns and the use of the singular shall include theplural.

**10.04      Fiduciary Discretion**

                In discharging the dutiesassigned to it under the Plan, the Committee shall have the discretion tointerpret the Plan; adopt, amend and rescind rules and regulations pertainingto its duties under the Plan; and to make all other determinations necessary oradvisable for the discharge of its duties under the Plan.  The Committee’s discretionary authority shallbe absolute and exclusive if exercised in a uniform and nondiscriminatory mannerwith respect to similarly

 

 

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situatedindividuals.  The express grant in thePlan of any specific power to the Committee with respect to any duty assignedto it under the Plan must not be construed as limiting any power of authorityof the Committee to discharge its duties. The Committee’s decision is final and conclusive unless it isestablished that the Committee’s decision constituted an abuse of itsdiscretion.  Benefits under the Plan willbe paid only if the Committee decides that the applicant is entitled thereto.

 

**ARTICLE XI ADOPTION**

                The Corporationhas adopted this Plan pursuant action taken by the Board.

 

                As evidence of itsadoption of the Plan, Cardinal Financial Corporation has caused this documentto be signed by its Chairman and CEO, this 7th day of November, 2007

 

 
| ** ** | **CARDINAL FINANCIAL CORPORATION** |
|------------|------------------------------------|
|       |                               |   |
|       | By:                                | /s/ Bernard H. Clineburg |
|       |                               | Bernard H. Clineburg, Chairman and CEO |

 

 

 

I, Kendal Carson, President of Cardinal FinancialCorporation, by my signature below indicate my agreement with and assent to theterms of the Cardinal Financial Corporation Supplemental Executive RetirementPlan.

 

 
| /s/ Kendal E. Carson |   | 11/7/2007 |
|----------------------|--------|-----------|
| Kendal E. Carson     |   | Date      |
| President            |   |      |

 

 

 

 

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