Document:

Exhibit 10.3

George Mason Mortgage, LLC

 

Executive Deferred Income Plan

 

 

Effective January 1, 2005

Amended and Restated Effective October 21,
2008

 

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

TABLE OF CONTENTS

 

	
  ARTICLE I                                   INTRODUCTION

  	
  1

  
	
   

  	
   

  
	
  1.1

  	
  Name

  	
  1

  
	
  1.2

  	
  Purpose

  	
  1

  
	
  1.3

  	
  Interpretation

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II                               DEFINITIONS

  	
  2

  
	
   

  	
   

  
	
  2.1

  	
  Generally

  	
  2

  
	
  2.2

  	
  Account

  	
  2

  
	
  2.3

  	
  Balance

  	
  2

  
	
  2.4

  	
  Board of Directors

  	
  3

  
	
  2.5

  	
  Change of Control

  	
  3

  
	
  2.6

  	
  Code

  	
  3

  
	
  2.7

  	
  Committee

  	
  3

  
	
  2.8

  	
  Company

  	
  3

  
	
  2.9

  	
  Compensation

  	
  3

  
	
  2.10

  	
  Contributions

  	
  3

  
	
  2.11

  	
  Custodian

  	
  4

  
	
  2.12

  	
  Deemed Earnings

  	
  4

  
	
  2.13

  	
  Deemed Crediting Options

  	
  4

  
	
  2.14

  	
  Deferral Election Form

  	
  4

  
	
  2.15

  	
  Designated Beneficiary

  	
  4

  
	
  2.16

  	
  Disability

  	
  5

  
	
  2.17

  	
  Eligible Employee

  	
  5

  
	
  2.18

  	
  Employee

  	
  5

  
	
  2.19

  	
  ERISA

  	
  5

  
	
  2.20

  	
  Key Employee

  	
  5

  
	
  2.21

  	
  Leave of Absence

  	
  5

  
	
  2.22

  	
  Matching Contribution

  	
  6

  
	
  2.23

  	
  Matching Contribution Account

  	
  6

  
	
  2.24

  	
  Participant

  	
  6

  
	
  2.25

  	
  Participant Deferral

  	
  6

  
	
  2.26

  	
  Participant Deferral Account

  	
  6

  
	
  2.27

  	
  Performance Based Compensation

  	
  6

  
	
  2.28

  	
  Plan Year

  	
  7

  
	
  2.29

  	
  Retirement

  	
  7

  
	
  2.30

  	
  Separation from Service

  	
  7

  
	
  2.31

  	
  Unforeseeable Emergency

  	
  7

  
	
  2.32

  	
  Valuation Date

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE III                           ELIGIBILITY & PARTICIPATION

  	
  7

  
	
   

  	
   

  
	
  3.1

  	
  Eligibility Requirements

  	
  7

  

 

i

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

	
  3.2

  	
  Participation

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV                          ELECTIONS, DEFERRALS & MATCHING
  CONTRIBUITONS

  	
  8

  
	
   

  	
   

  
	
  4.1

  	
  Participant Election to Defer Compensation

  	
  8

  
	
  4.2

  	
  Irrevocability, New Participants

  	
  9

  
	
  4.3

  	
  Matching Contributions

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE V                              ACCOUNTS & ACCOUNT CREDITING

  	
  9

  
	
   

  	
   

  
	
  5.1

  	
  Establishment of a Participant’s Account

  	
  9

  
	
  5.2

  	
  Deemed Crediting Options

  	
  10

  
	
  5.3

  	
  Allocation of Account Among Deemed
  Crediting Options

  	
  11

  
	
  5.4

  	
  Valuation and Risk of Decrease in Value

  	
  11

  
	
  5.5

  	
  Limited Function of Committee

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI                          VESTING

  	
  12

  
	
   

  	
   

  
	
  6.1

  	
  Vesting of Participant Deferrals

  	
  12

  
	
  6.2

  	
  Vesting of Matching Contributions

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII                      DISTRIBUTIONS

  	
  12

  
	
   

  	
   

  
	
  7.1

  	
  Distributions Generally

  	
  12

  
	
  7.2

  	
  Distributions

  	
  12

  
	
  7.3

  	
  Timing and Method of Payment Not Specified
  in Section 7.2

  	
  14

  
	
  7.4

  	
  Distributions Resulting from Unforeseeable
  Emergency

  	
  16

  
	
  7.5

  	
  Distributions of Small Accounts

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII                  ADMINISTRATION & CLAIMS PROCEDURES

  	
  17

  
	
   

  	
   

  
	
  8.1

  	
  Duties of the Committee

  	
  17

  
	
  8.2

  	
  Organization of the Committee

  	
  17

  
	
  8.3

  	
  Limitation of Liability

  	
  18

  
	
  8.4

  	
  Committee Reliance on Records and Reports

  	
  18

  
	
  8.5

  	
  Costs of the Plan

  	
  18

  
	
  8.6

  	
  Claims Procedure

  	
  19

  
	
  8.7

  	
  Litigation

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX                          AMENDMENT, TERMINATION & REORGANIZATION

  	
  20

  
	
   

  	
   

  
	
  9.1

  	
  Amendment

  	
  20

  
	
  9.2

  	
  Amendment Required By Law

  	
  20

  
	
  9.3

  	
  Termination

  	
  20

  
	
  9.4

  	
  Consolidation/Merger

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE X                              GENERAL PROVISIONS

  	
  20

  
	
   

  	
   

  
	
  10.1

  	
  Applicable Law

  	
  20

  
	
  10.2

  	
  Benefits Not Transferable or Assignable

  	
  21

  
	
  10.3

  	
  Not an Employment Contract

  	
  22

  
	
  10.4

  	
  Notices

  	
  22

  
	
  10.5

  	
  Severability

  	
  22

  

 

ii

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

	
  10.6

  	
  Participant is General Creditor with No
  Rights to Assets

  	
  23

  
	
  10.7

  	
  No Trust Relationship Created

  	
  24

  
	
  10.8

  	
  Limitations on Liability of the Company

  	
  24

  
	
  10.9

  	
  Plan Establishes Agreement Between Employer
  and Participant Only

  	
  24

  
	
  10.10

  	
  Independence of Benefits

  	
  24

  
	
  10.11

  	
  Unclaimed Property

  	
  24

  
	
  10.12

  	
  Required Tax Withholding and Reporting

  	
  25

  

 

iii

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

ARTICLE I

INTRODUCTION

 

1.1                               Name

 

The name of this Plan is the George Mason Mortgage, LLC Executive
Deferred Income Plan (the Plan).  The
Plan was adopted effective January 1, 2005.  The Plan was amended and restated effective April 21,
2006, and further amended and restated as set forth herein effective October 21,
2008.

 

1.2                               Purpose

 

The purpose of the Plan is to offer Participants the opportunity to
defer voluntarily current Compensation for retirement income and other
significant future financial needs for themselves, their families and other
dependents, and to provide the Company, if appropriate, a vehicle to address
limitations on its contributions under any tax-qualified defined contribution
plan.  This Plan is intended to be a
nonqualified “top-hat” plan; that is, an unfunded plan of deferred compensation
maintained for a select group of management or highly compensated employees
pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, and an
unfunded plan of deferred compensation under the Code.

 

1.3                               Interpretation

 

A.                                   Throughout the Plan,
certain words and phrases have meanings, which are specifically defined for
purposes of the Plan.  These words and
phrases can be identified in that the first letter of the word or words in the
phrase is capitalized.  The definitions
of these words and phrases are set forth in Article II and elsewhere in
the Plan document.  Wherever appropriate,
pronouns of any gender shall be deemed synonymous, as shall singular and plural
pronouns.  Headings of Articles and Sections
are for convenience or reference only, and are not to be considered in the
construction or interpretation of the Plan. 
The Plan shall be interpreted and administered to give effect to its
purpose in Section 1.2 and to qualify as a nonqualified, unfunded plan of
deferred compensation.

 

B.                                     Any
benefit, payment or other right provided by the Plan shall be provided or made
in a manner, and at such time, in such form and subject to such election
procedures (if any), as complies with the applicable requirements of Code
section 409A to avoid a plan failure described in Code section 409A(a)(1),
including without limitation, deferring payment until the occurrence of a
specified payment event described in Code section 409A(a)(2).  Notwithstanding any other provision hereof or
document pertaining hereto, the Plan shall be construed, interpreted and
administered to meet the applicable requirements of Code section 409A and
Treasury Regulations thereunder to avoid a plan failure described in Code
section 409A(a)(1).

 

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

                                                C.                                     It
is specifically intended that all elections, consents and modifications thereto
under the Plan will comply with the requirements of Code section 409A
(including any transition or grandfather rules thereunder).  The Company is authorized to adopt rules or
regulations deemed necessary or appropriate in connection therewith to
anticipate and/or comply the requirements of Code section 409A (including any
transition or grandfather rules thereunder) and to declare any election,
consent or modification thereto void if non-compliant with Code section 409A.

 

D.                                    Pursuant to Section 3.02
of Internal Revenue Notice 2006-79 and Section 3.01(B)(1).02 of Internal
Revenue Notice 2007-86 (collectively, the “Transition Relief”), the Company
shall permit Participants to modify their existing deferral elections under the
Plan to reflect new deferral elections regarding the time and form of payment
of benefits under the Plan to the extent permitted by, and in accordance with,
the Transition Relief and Section 7.4 G of the Plan.

 

ARTICLE II

DEFINITIONS

 

2.1                               Generally

 

Certain words and phrases are defined when first used in later
paragraphs of this Plan.  Unless the
context clearly indicates otherwise, the following words and phrases when used
in this Plan shall have the following respective meanings:

 

2.2                               Account

 

“Account” shall mean the interest of a Participant in the Plan as
represented by the hypothetical bookkeeping entries kept by the Company for
each Participant.  Each Participant’s
interest may be divided into one or more separate accounts or sub-accounts,
including the Participant Deferral Account and the Matching Contribution
Account, which reflect not only the Contributions into the Plan, but also gains
and losses, and income and expenses allocated thereto, as well as distributions
or any other withdrawals.  The value of
these accounts or sub-accounts shall be determined as of the applicable
Valuation Date.  The existence of an
account or bookkeeping entries for a Participant (or his Designated
Beneficiary) does not create, suggest or imply that a Participant, Designated
Beneficiary, or other person claiming through them under this Plan, has a
beneficial interest in any asset of the Company.

 

2.3                               Balance

 

“Balance” shall mean the total of Contributions and Deemed Earnings
credited to a Participant’s Account under Article V, as adjusted for
distributions or other withdrawals in accordance with the terms of this Plan
and the standard bookkeeping rules established by the Company.

 

2

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

2.4                               Board
of Directors

 

“Board of Directors” or “Board” shall mean the Board of Directors of
the Company.

 

2.5                               Change
of Control

 

“Change of Control” shall mean (i) the date that any one person,
or more than one person, acting as a group, acquires ownership of stock of the
Company that, together with stock held by such person or group constitutes more
than 50% of the total fair market value or total voting power of the stock of
the Company; or (ii) the date that any one person, or more than one
person, acting as a group, acquires assets from the Company that have a total gross
fair market value equal to or more than 50% of the total gross fair market
value of all the assets of the Company immediately before such
acquisition.  This definition shall be
interpreted in a manner that is consistent with Treasury Regulation section
1.409A-3(i)(5).

 

2.6                               Code

 

“Code” shall mean the Internal Revenue Code of 1986 and Treasury
Regulations thereunder, as amended from time to time.

 

2.7                               Committee

 

“Committee” shall mean the Compensation Committee of the Company’s
Board of Directors, or such other committee to whom the Board or Compensation
Committee delegates the duty of determining Participant eligibility or other
administrative duties under the Plan.

 

2.8                               Company

 

“Company” shall mean Cardinal Financial Corporation, its designated
subsidiaries, and any corporate successors and assigns, unless otherwise
provided herein.

 

2.9                               Compensation

 

“Compensation” shall mean the base or regular cash salary payable to an
Employee by the Company, as well as incentives or bonuses payable to an
Employee by the Company, and commissions payable to an Employee by the Company,
including any such amounts which are not includible in the Participant’s gross
income under Sections 125, 40 1(k), 402(h) or 403(b) of the Internal
Revenue Code of 1986, as amended.

 

2.10                        Contributions

 

“Contributions” shall mean the total of Participant Deferrals and
Matching Contributions pursuant to Article IV, which represent each
Participant’s credits to his Account.

 

3

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

2.11                        Custodian

 

“Custodian” shall mean the Committee’s choice of financial institution
or designated person or persons that have charge or custody of the assets and
records of the plan and responsibility for the overall recordkeeping for the
plan participants.

 

2.12                        Deemed
Earnings

 

“Deemed Earnings” shall mean the gains and losses (realized and
unrealized), and income and expenses credited or debited to Contributions based
upon the Deemed Crediting Options in a Participant’s Account as of any
Valuation Date.

 

2.13                        Deemed
Crediting Options

 

“Deemed Crediting Options” shall mean the hypothetical options made
available to Plan Participants by the Company for the purposes of determining
the proper crediting of gains and losses, and income and expenses to each
Participant’s Account, subject to procedures and requirements established by
the Committee.  A Participant may
reallocate his Account among such Deemed Crediting Options periodically at such
frequency and upon such terms as the Committee may determine from time to time.

 

2.14                        Deferral
Election Form

 

“Deferral Election Form” or “Annual Deferral Election Form” shall mean
that written agreement of a Participant. 
The Deferral Election Form shall be in such form or forms as may be
prescribed by the Committee, filed annually with the Company, according to
procedures and at such times as established by the Committee.  Among other information the Committee may
require of the Participant for proper administration of the Plan, such
agreement shall establish the Participant’s election to defer Compensation for
a Plan Year under the Plan; the amount of the deferral into the Plan for the
Plan Year; the Participant’s elections as to distribution of his Account; the
allocation of his Accounts among the Deemed Crediting Options provided under
the Plan; and the Designated Beneficiary. 
“Deferral Election Form” shall also include a form on which special
elections are made pursuant to the Transition Relief under Code Section 409A
during 2008.

 

2.15                        Designated
Beneficiary

 

“Designated Beneficiary” or “Beneficiary” shall mean the person,
persons or trust specifically named to be a direct or contingent recipient of
all or a portion of a Participant’s benefits under the Plan in the event of the
Participant’s death prior to the distribution of his full Account Balance.  Such designation of a recipient or recipients
may be made and amended, at the Participant’s discretion, on the Deferral Election
Form and according to procedures established by the Committee.  No beneficiary designation or change of
Beneficiary shall become effective until received and acknowledged by the
Committee.  In the event a Participant
does not have a beneficiary properly designated, the beneficiary under this
Plan shall be the Participant’s estate.

 

4

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

2.16                        Disability

 

“Disability” shall mean that a Participant (i) is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve months, or (ii) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve months, receiving income replacement benefits
for a period of not less than three months under an accident and health plan
covering employees of the Participant’s Company.

 

2.17                        Eligible
Employee

 

“Eligible Employee” shall mean a person who (for any Plan Year or
portion thereof) is: (1) an Employee of the Company; (2) a member of
a select group of management or a highly compensated employee of the Company;
and (3) selected by the Committee to participate in the Plan.

 

2.18                        Employee

 

“Employee” shall mean a full time common law employee of the Company.

 

2.19                        ERISA

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.

 

2.20                        Key
Employee

 

“Key Employee” shall mean a Participant who, as of December 31 of
a given year, meets the requirements of Code section 416(i)(1)(A)(i), (ii), or (iii) applied
in accordance with the regulations thereunder and disregarding Code section
416(i)(5).  A Participant who meets the
criteria set forth in the preceding sentence will be considered a Key Employee
for purposes of the Plan for the 12-month period commencing on the next
following April 1.  In general, a
Participant will meet these criteria if he or she is (i) one of the
top-fifty most highly compensated officers with annual compensation in excess
of $130,000 (as adjusted from time to time by Treasury regulations); (ii) a
five percent owner of the Company; or (iii) a one percent owner of the
Company with annual compensation in excess of $150,000 (as adjusted from time
to time by Treasury Regulations).

 

2.21                        Leave
of Absence

 

“Leave of Absence” shall mean a period of time, not to exceed twelve
(12) consecutive calendar months during which time a Participant shall not be
an active Employee of the Company, but shall be treated for purposes of this Plan
as in continuous service with the Company. 
A Leave of

 

5

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

Absence may be either paid or unpaid, but must be agreed to in writing
by both the Company and the Participant. 
A Leave of Absence that continues beyond the twelve (12) consecutive
months shall be treated as a Separation from Service as of the first business
day of the thirteenth month for purposes of the Plan.  Notwithstanding the foregoing, for a Leave of
Absence that exceeds six (6) months, if the Participant is not guaranteed
a right to reemployment by statute or contract, the Leave of Absence shall be
treated as a Separation from Service on the first date immediately following
the six (6)-month period.

 

2.22                        Matching
Contribution

 

“Matching Contribution” shall mean an amount credited to a Participant’s
Account in accordance with Section 4.4.

 

2.23                        Matching
Contribution Account

 

“Matching Contribution Account” shall mean that portion of a
Participant’s Account established to record Matching Contributions on behalf of
a Participant.  Matching Contributions
shall be deemed to be invested in the Company stock, and a Participant shall
not be permitted to elect a different Deemed Crediting Option for such Matching
Contributions.

 

2.24                        Participant

 

“Participant” shall mean an Eligible Employee who participates in the
Plan under Article III; a former Eligible Employee who has participated in
the Plan and continues to be entitled to a benefit (in the form of an
undistributed Account Balance) under the Plan, and any former Eligible Employee
who has participated in the Plan under Article III and has not yet
exceeded any Leave of Absence.

 

2.25                        Participant
Deferral

 

“Participant Deferral” shall mean voluntary Participant deferral
amounts, which could have been received currently but for the election to defer
and are credited to his Account for later distribution, subject to the terms of
the Plan.

 

2.26                        Participant
Deferral Account

 

“Participant Deferral Account” shall mean that portion of a Participant’s
Account established to record Participant Deferrals on behalf of a Participant.

 

2.27                        Performance
Based Compensation

 

“Performance-based compensation” shall mean compensation that (i) is
variable and contingent on the satisfaction of written, pre-established
organizational or individual performance criteria, where the outcome of such
criteria is substantially uncertain at the time the criteria are established; (ii) is
based on services performed over a period of at least twelve months; and (iii)

 

6

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

otherwise constitutes performance-based compensation within the meaning
of Treasury Regulations under Code Section 409A.

 

2.28                        Plan
Year

 

“Plan Year” shall mean the twelve (12) consecutive month period
constituting a calendar year, beginning on January 1 and ending on December 31.  However, in any partial year of the Plan that
does not begin on January 1, “Plan Year” shall also mean the remaining
partial year ending on December 31.

 

2.29                        Retirement

 

“Retirement” shall mean a Participant’s actual Separation from Service
from the Company after having attained age sixty-two (62).

 

2.30                        Separation
from Service

 

“Separation from Service” shall mean a Participant’s separation from
service as an Employee with the Company within the meaning of Treasury
Regulations under Code Section 409A, other than for Death, Disability, or
Leave of Absence.  A transfer of
employment within and among the Company and any member of a controlled group,
as provided in Code Section 409A (d)(6), shall not be deemed a Separation
from Service.

 

2.31                        Unforeseeable
Emergency

 

“Unforeseeable emergency” shall mean a severe financial hardship to the
Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of
the Code) of the participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.

 

2.32                        Valuation
Date

 

“Valuation Date” shall mean each business day, or such other date(s) as
established and amended from time to time by guidelines and procedures of the
Committee in its sole and exclusive discretion.

 

ARTICLE III

ELIGIBILITY & PARTICIPATION

 

3.1                               Eligibility
Requirements

 

Only an Eligible Employee selected by the Committee may become a
Participant in this Plan.  Moreover, a
Participant shall not be permitted to make new Participant Deferrals to the
Plan, if he ceases to be an Eligible Employee because he is no longer a member
a select group of management or highly compensated employees, or
otherwise.  The Committee shall notify an

 

7

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

Eligible Employee of his eligibility for a Plan Year in such form as it
may determine most appropriate.  Current
Participants remain eligible until notified otherwise.

 

3.2                               Participation

 

An Eligible Employee shall become a Participant in the Plan by the
completion and timely filing with and subsequent acceptance by the Committee of
the Deferral Election Form, in such form and according to the terms and
conditions established by the Committee. 
A Participant (or any Designated Beneficiary who becomes entitled to a
benefit under the Plan) remains a Participant as to his Account until his
Account Balance is fully distributed under the terms of the Plan.

 

ARTICLE IV

ELECTIONS, DEFERRALS & MATCHING
CONTRIBUTIONS

 

4.1                               Participant
Election to Defer Compensation

 

A.                                  Prior
to December 31 or an earlier date set by the Committee, a Participant may
elect to defer Compensation for services to be performed in the next following
Plan Year by the execution and timely filing, and the Committee’s acceptance
of, a Deferral Election Form in such form and according to such procedures
as the Committee may prescribe from time to time.  Each such Deferral Election Form shall
be effective for the Plan Year to which the Deferral Election Form pertains.

 

B.                                    Each
Participant may elect annually to have his Compensation earned during the Plan
Year reduced by a whole percentage that is not less than five percent (5%)
($2,000 minimum), and up to one hundred percent (100%), by timely filing, and
the acceptance by the Committee of, his Deferral Election Form detailing
such deferral.  The amount of this
Participant Deferral shall be deferred into the Plan and credited to the
Participant’s Account as provided in Article V.

 

C.                                    An
election to defer Performance-Based Compensation may be made at such time and
in such manner as the Committee may specify, but in any event not later than
six months before the end of the period of service for which it is earned.

 

D.                                   On
each such Deferral Election Form, a Participant shall indicate the amount of
his or her Participant Deferral; designate and allocate such Participant
Deferral in or among the elective distribution Account option(s); and, allocate
such Accounts among the various Deemed Crediting Options; provided, however,
that Matching Contributions and earnings thereon must remain in the Company
stock Deemed Crediting Option.  Each
Deferral Election Form shall also permit a Participant to elect to receive
a distribution of the portion of his or her Account attributable to Participant
Deferrals elected on that Deferral Election Form in the event of a Change
of Control.  The Deferral Election Form may
also request other information, such as a Participant’s Designated Beneficiary,
as may be required or useful for the administration of the Plan.

 

8

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

4.2                               Irrevocability,
New Participants

 

Any Election Form delivered by a Participant shall be irrevocable
with respect to any Compensation or Performance Based Compensation covered by
the elections set forth therein after the last date for making an effective
election for such Compensation or Performance Based Compensation in accordance
with Code section 409A, or after any earlier date prescribed by the
Committee.  The Committee, however, may
reduce or eliminate Participant Deferrals upon granting a Participant’s request
for a distribution based upon an Unforeseeable Emergency.

 

The initial Deferral Election Form of a new Participant shall be
filed with the Company on a date established by the Committee, but in any event
not later than 30 days following the date the Participant becomes eligible to
participate in the Plan and shall be effective only with respect to
compensation for services to be performed subsequent to the initial election
through the end of that calendar year. 
Such first Deferral Election Form shall be applicable to a
Participant’s Compensation beginning with the first payroll in the month after
such Form is filed and accepted by the Company.

 

4.3                               Matching
Contributions

 

The Company may, but shall not be required to, provide a deemed match,
in such amounts as it may determine from time to time, for Participant
Deferrals.  Such Matching Contributions,
if any, shall be credited to the Matching Contribution Account of the
Participant’s Account and shall be subject to the vesting requirements set
forth in Section 6.2.  Such Matching
Contributions shall not exceed the greater of 50% of the Participant’s deferral
or $50,000 per Participant per year. Such Matching Contributions shall be
credited on the Valuation Date(s) determined by the Company in its sole
discretion.

 

ARTICLE V

ACCOUNTS & ACCOUNT CREDITING

 

5.1                               Establishment
of a Participant’s Account

 

A.                                   Bookkeeping
Account.  The Committee shall cause a
deemed bookkeeping Account and appropriate sub-accounts, based upon the primary
elective distribution option(s) to be established and maintained in the
name of each Participant, according to his annual Deferral Election Form for
the Plan Year.  This Account shall
reflect the amount of Participant Deferrals, Matching Contributions and Deemed
Earnings credited on behalf of each Participant under this Plan. The existence
of an account or bookkeeping entries for a Participant (or his Designated
Beneficiary) does not create, suggest or imply that a Participant, Designated
Beneficiary, or other person claiming through them under this Plan, has a
beneficial interest in any asset of the Company.

 

9

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

B.                                   Bookkeeping
Activity.  Participant Deferrals
shall be credited to a Participant’s Account on the business day they would
otherwise have been made available as cash to the Participant.  Matching Contributions shall be credited to a
Participant’s Account on the Valuation Date(s) the Company designates, in
its sole discretion.  Deemed Earnings
shall be credited or debited to each Participant’s Account, as well as any
distributions and any other withdrawals under this Plan, as of each Valuation
Date.  Accounts shall continue to be
credited and debited with earnings and losses on each Valuation Date through
the first to occur of (i) the last day of the payroll period in which
Participant Separates from Service or (ii) such earlier date as
established by the Committee with respect to amounts subject to a distribution
on a Change of Control.  Notwithstanding
the foregoing, the portion of an Account allocated to the Company Stock Deemed
Crediting Option shall continue to be credited and debited with earnings and
losses on each Valuation Date until such portion is fully distributed under the
terms of the Plan.

 

5.2                               Deemed
Crediting Options

 

A.                                   General.  The Committee shall establish a portfolio of
two or more Deemed Crediting Options, among which a Participant may allocate
amounts credited to his Account, which are subject to Participant direction
under this Plan.  The Committee reserves
the right, in its sole and exclusive discretion, to substitute, eliminate and
otherwise change this portfolio of Deemed Crediting Options, as well as the
right to establish rules and procedures for the selection and offering of
these Deemed Crediting Options.

 

B.                                   Company
Stock Deemed Crediting.  One of the
Deemed Crediting Options shall be Company Stock.  Amounts credited to this option shall be
deemed to be invested in shares of common stock of the Company.  A Participant’s Account will be credited with
deemed distributions if and when dividends are declared and paid with respect
to Company common stock, and such deemed dividends will be deemed to have been
reinvested in Company common stock as of the first business day following the
deemed payment.  Fair market value of
Company common stock means, as of any day, the average of the closing prices of
sales of shares of common stock on all national securities exchanges on which
the common stock may be listed.  If there
have been no sales on such day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day shall be used.  If such common stock is not listed on any
national exchange, then the average of the representative bid and asked prices
quoted in the National Association of Securities Dealers, Inc.  Automated Quotation System for such date or
the next preceding date that the common stock was traded on such market shall
be used.

 

10

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

5.3                               Allocation
of Account Among Deemed Crediting Options

 

A.                                  Each
Participant shall elect the manner in which his Account is divided among the
Deemed Crediting Options by giving allocation written instructions in a
Deferral Election Form supplied by and filed with the Committee, or by
such other procedure, including electronic communications, as the Committee may
prescribe.  A Participant’s election
shall specify the percentage of his Account (in any whole percentage) to be
deemed to be invested in any Deemed Crediting Option; provided, however, that a
Participant Matching Contribution Account must be fully allocated to the
Company Stock Deemed Crediting Option. 
Such election shall remain in effect until a new election is made.

 

B.                                    Amounts
credited to a Participant’s Account shall be deemed to be invested in
accordance with the most recent effective Deemed Crediting Option election.  As of the effective date of any new Deemed
Crediting Option election, all or a portion of the Participant’s Account shall
be reallocated among the designated Deemed Crediting Options and according to
the percentages specified in the new instructions, until and unless subsequent
instructions shall be filed and become effective.  If the Custodian receives a Deemed Crediting
Option election, which is unclear, incomplete or improper, the Deemed Crediting
Option election then in effect shall remain in effect until the subsequent
instruction is clarified, completed or otherwise made acceptable to the
Custodian.  The effective date of a
Deemed Crediting Option election shall be the date such election is implemented
by the Custodian.  Such election shall be
implemented the day a clear and complete election is received and accepted by
the Custodian.

 

5.4                               Valuation
and Risk of Decrease in Value

 

The Participant’s Account will be valued on the applicable Valuation
Date at fair market value.  On such date,
Deemed Earnings will be allocated to each Participant’s Account.  Each Participant and Designated Beneficiary
assumes the risk in connection with any decrease in the fair market value of
his Account.

 

5.5                               Limited
Function of Committee

 

By deferring compensation pursuant to the Plan, each Participant hereby
agrees that the Company and Committee are in no way responsible for or
guarantor of the investment results of the Participant’s Account.  The Committee shall have no duty to review,
or to advise the Participant on, the investment of the Participant’s Account;
and in fact, shall not review or advise the Participant thereon.  Furthermore, the Committee shall have no
power to direct the investment of the Participant’s Account other than promptly
to carry out the Participant’s deemed investment instructions when properly
completed and transmitted to the Committee and accepted according to its rules and
procedures.

 

11

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

ARTICLE VI

VESTING

 

6.1                               Vesting
of Participant Deferrals

 

A Participant shall be fully vested at all times in Participant
Deferrals, as well as Deemed Earnings upon Participant Deferrals, credited to
his Participant Deferral Account.

 

6.2                               Vesting
of Matching Contributions

 

A Participant shall vest in Matching
Contributions, as well as Deemed Earnings upon Matching Contributions which are
credited to his Matching Contribution Account, on the fourth anniversary of the
date of the Matching Contribution.

 

Notwithstanding the above, a Participant shall become fully vested in
his Matching Contribution Account upon Death, Disability, Change of Control or
Retirement.  Upon other Separation from
Service, a Participant shall be entitled to the vested portion of his Matching
Contribution Account, and any non-vested portion shall be forfeited.

 

ARTICLE VII

DISTRIBUTIONS

 

7.1                               Distributions
Generally

 

A Participant’s Account shall be distributed only in accordance with
the provisions of this Article VII. 
Distributions from the Plan shall be made in cash; provided, however,
that to the extent that all or a portion of a Participant’s Account is deemed
to be invested in common stock of Cardinal Financial Corporation (“Common Stock”),
such amounts shall be paid in shares of Common Stock in an amount equal to the
number of whole shares of Common Stock credited to the Participant’s Account as
of the date of distribution.  Any
fractional share shall be paid in cash.

 

7.2                               Distributions

 

A Participant shall become entitled to receive a distribution from his
Account at such time or times and by such method of payment as elected and
specified in the Participant’s applicable annual Deferral Election Form, and/or
as may be mandated by the provisions of this Article VII based upon the
following distribution options:

 

A.                                   Retirement
Distribution.  If a Participant
elects in his annual Deferral Election Form, he can receive upon his Retirement
from the Company a distribution of the portion of the Participant’s Account
attributable to contributions deferred on such Deferral Election Form (i.e., Participant Deferrals and any related Matching
Contributions and Deemed Earnings), which shall be distributed according to the
method of payment elected in his applicable Deferral Election Form.  The election

 

12

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

is made on an annual basis, applies only to the Participant’s current
Plan Year contributions, is irrevocable and is payable according to the method
of payment elected in the Participant’s applicable annual Deferral Election
Form.  If the Participant dies while
receiving Retirement installment payments, his Designated Beneficiary shall
continue to receive the remaining installments. 
If subsequently, the Designated Beneficiary dies, any remaining
installments will be paid to the Designated Beneficiary’s estate.

 

B.                                   Distribution
on a Specific Date.  If a Participant
elects in his annual Deferral Election Form, he can receive, as soon as three (3) years
after the end of the deferral Plan Year, a distribution of the portion of the
Participant’s Account attributable to contributions deferred on such Deferral
Election Form (i.e.,
Participant Deferrals and any related Matching Contributions and Deemed
Earnings), which shall be distributed according to the method of payment
elected in his applicable Deferral Election Form.  The election is made on an annual basis,
applies only to the Participant’s current Plan Year contributions, is
irrevocable and is payable according to the method of payment elected in the
Participant’s applicable annual Deferral Election Form.  If the Participant dies while receiving In-Service
installment payments, his Designated Beneficiary shall continue to receive the
remaining installments.  If subsequently,
the Designated Beneficiary dies; any remaining installments will be paid to the
Designated Beneficiary’s estate.

 

C.                                   Change
of Control Distribution.  If a
Participant shall so elect in his annual Deferral Election Form, the portion of
a Participant’s Account attributable to contributions deferred on such Deferral
Election Form (i.e.,
Participant Deferrals and any related Matching Contributions and Deemed
Earnings) shall be distributed to him as set forth in Section 7.3 C upon
the occurrence of a Change of Control.

 

D.                                   Distribution
Upon Participant’s Death.  If a
Participant dies while employed by the Company, the portion of such Participant’s
Account attributable to contributions deferred on a Deferral Election Form (i.e., Participant Deferrals and any related Matching
Contributions and Deemed Earnings) shall be valued as of the Valuation Date
next following his date of death and shall be distributed in lump sum or
installments, as designated in such Deferral Election Form, to his Designated
Beneficiary within (or commencing within) sixty (60) days of the date of death;
provided, however, that this sentence shall not apply if distribution of such
portion of the Participant’s Account has commenced prior to the Participant’s
death.

 

13

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

E.                                     Distribution
Upon Participant’s Disability.  If a
Participant is determined by the Committee to be Disabled, the portion of such
Participant’s Account attributable to contributions deferred on a Deferral
Election Form (i.e.,
Participant Deferrals and any related Matching Contributions and Deemed
Earnings) shall be valued as of the Valuation Date next following such
Disability determination and shall be distributed in lump sum or installments,
as designated in his Deferral Election Form, within (or commencing within, as
applicable) sixty (60) days of such Disability determination; provided,
however, that this sentence shall not apply if distribution of such portion of
the Participant’s Account has commenced prior to such determination.

 

F.                                     Other
Circumstances.  If a Participant
incurs a Separation from Service due to a cause other than identified above,
his vested Account shall be valued as of the Valuation Date next following such
Separation from Service and shall be distributed in lump sum to him within
sixty (60) days after such Separation from Service, regardless of any elections
the Participant has made with respect to distribution of his Account.  If a Participant experiences a Separation
from Service or Retirement and distribution of all or a portion of his Account
is not governed by an applicable Deferral Election Form, his Account or such
portion shall be distributed to him in a lump sum within sixty (60) days after
such Separation from Service or Retirement. 
Notwithstanding the foregoing, the Account of a Key Employee distributed
under this Section 7.2.E shall be distributed on the first business day
following the six-month anniversary of his or her Separation from Service or
Retirement.

 

7.3                               Timing
and Method of Payment Not Specified in Section 7.2

 

A.                                   Retirement
Distribution.  At the election of a
Participant in the applicable Deferral Election Form, a Participant may receive
a Retirement distribution in a lump sum or in payments of up to ten (10) annual
installments (10 years) with the first installment to begin within ten (10) days
of the first business day on or after January 1 in the calendar year
following the Participant’s date of Retirement and each subsequent installment
to be paid thereafter within ten (10) days of the first business day on or
after January 1 of each calendar year until the Account has been fully
distributed; provided, however, the lump sum payment or initial installment
payable to a Participant who is a Key Employee shall be paid on the earlier of
the commencement date described above in this Section or the first
business day following the six-month anniversary of his Retirement.

 

B.                                   Distribution
on a Specific Date.  At the election
of a Participant in the applicable Deferral Election Form, a specific
distribution date may be selected for payment, which date may be as soon as
three (3) years after the end of the deferral Plan Year.  Distribution will be either in the form of a
lump-sum, occurring no later than thirty (30) days following the distribution
date elected on the Deferral Election Form, or in up to ten (10) annual
installment payments beginning with

 

14

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

the first business day on or after the distribution commencement date
selected by the Participant in his annual Deferral Election Form and
continuing to be paid thereafter within ten (10) days of the anniversary
of the distribution date of each calendar year until the applicable portion of
the Participant’s Account has been fully distributed.  A Participant’s Account shall be valued as of
such distribution (or distribution commencement) date elected on the Deferral
Election Form.

 

C.                                   Change
of Control.  If so elected by the
Participant in the applicable Deferral Election Form, a distribution of the
portion of a Participant’s Account attributable to deferral elections made on a
Deferral Election Form (i.e.,
Participant Deferrals and any related Matching Contributions and Deemed
Earnings) shall be made to him, according to the method of payment elected in
his applicable Deferral Election Form, in the event of a Change of
Control.  Such distribution shall
override any other Participant election(s) (e.g.,
Retirement, Specified Date) applicable to that portion of Participant’s Account
if distribution has not yet commenced on the date of the Change of
Control.  If such an overriding election
is made, amounts will be distributed, or begin to be distributed, within 60
days of the date of the Change of Control. 
Notwithstanding the foregoing provision, no distribution shall be made
to any Participant until the earliest date and upon such conditions as may be
set forth under Treasury Regulations issued pursuant to Code Section 409A.  A Participant’s Account shall be valued as of
such effective date of the Change of Control. 
If no such election was made by the Participant in his Annual Deferral
Election Form, his distribution election(s) will not be overridden.

 

D.                                   Installment
Payments.  In any distribution in
which a Participant has elected or will receive distribution in periodic
installments, the amount of each periodic installment shall be determined by
applying a formula to the Account in which the numerator is the number one and
the denominator is the number of remaining installments to be paid.  For example, if a Participant elects ten (10) annual
installments for a Retirement distribution, the first payment will be 1/10 of
the Account, the second will be 1/9, the third will be 1/8; the fourth will be
1/7 and so on until the Account is entirely distributed.

 

E.                                     Failure
to Designate a Method of Payment.  In
any situation in which the Committee is unable to determine the method of
payment because of incomplete, unclear, or uncertain instructions in a
Participant’s Deferral Election Form, the Participant will be deemed to have
elected a lump sum distribution.

 

F.                                     Subsequent
Elections.  A Participant who has
made an Specific Date distribution or a Retirement distribution election may
make one or more subsequent elections to postpone the distribution date or to
change the form of payment to another form permitted by the Plan and in
accordance with Code Section 409A. 
Such Subsequent Election shall be made in writing in such form as is
acceptable to the Committee or by such other procedure, including electronic
communications, as

 

15

 

George Mason Mortgage, LLC

Executive Deferred Income Plan

Amended and Restated Effective October 21,
2008

 

the Committee may prescribe and (i) is made at least twelve months
prior to the original distribution date (in the case of a Specific Date
distribution election); (ii) provides for an effective date at least
twelve months following the Subsequent Election; and (iii) postpones the
commencement of payment for a period of not less than five years from the
previous distribution date.

 

G.                                   2008
Transition Elections.  Pursuant to
the Transition Relief, a Participant may make a special distribution election in
2008 that shall override any prior election. 
Such special election shall not be effective to the extent it would (i) cause
an amount not otherwise payable in 2008 to become payable in 2008 or (ii) defer
an amount scheduled to be paid in 2008 into a future year.  Such special election shall be made in
accordance with the terms and distribution choices set forth under Sections 7.2
and 7.3, and such election may apply to all or a portion of the Participant’s
Account attributable to amounts deferred for 2008 or earlier years (“pre-2009
Account”).  Such special election shall
occur in accordance with procedures established by the Committee and shall be
irrevocable when submitted to the Committee.

 

7.4                               Distributions
Resulting from Unforeseeable Emergency

 

A Participant may request that all or a portion of his Account be
distributed at any time prior to separation from service from the Company by
submitting a written request to the Committee, in such form or by such other
procedure, including electronic communications, as the Committee may prescribe,
provided that the Participant has incurred an Unforeseeable Emergency, and the
distribution is necessary to alleviate such Unforeseeable Emergency.

 

Such distribution shall be limited to an amount that does not exceed
the amount necessary to satisfy such emergency, plus amounts necessary to pay
taxes reasonably anticipated as a result of the distribution, after taking into
account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of
the Participant’s assets (to the extent the liquidation of such assets would
not itself cause severe financial hardship). 
Such distribution shall be made as soon as administratively practicable,
but no later than sixty (60) days following the Committee’s determination of an
Unforeseeable Emergency.  Valuation date
shall be the same day as the day of receipt of the written request by the
Custodian in such form or by such other procedure, including electronic
communications, as the Committee may prescribe. 
The Balance not distributed from the Participant’s Account shall remain
in the Plan.

 

7.5                               Distributions
of Small Accounts

 

If at any time the value of the Participant’s Account is less than the
applicable dollar amount under Code section 402(g)(1)(B) (or such other
greater or lesser amount as may be permitted under Code section 409A and
Treasury Regulations thereunder), the Committee, in its sole and exclusive
discretion, may make a distribution in lump sum of the value of the entire
Account.  If the value of a Participant’s
Account is zero upon the Valuation Date of any distribution, the

 

16

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

Participant shall be deemed to have received a distribution of such
Account and his participation in the Plan terminates. A distribution under this
Section 7.6 shall be carried out in accordance with Code section 409A and
Treasury Regulations thereunder, including the requirement that the
distribution results in termination and liquidation of a Participant’s interest
in all plans required to be aggregated for purposes of Code section 409A; and
the requirement that the Committee evidence the exercise of its discretion in
writing no later than the date of the payment.

 

ARTICLE
VIII

ADMINISTRATION &
CLAIMS PROCEDURE

 

8.1                               Duties
of the Committee

 

The Committee shall be responsible for the general operation and
administration of the Plan, and shall have such powers as are necessary to
discharge its duties under the Plan, including, without limitation, the
following:

 

A.            With the advice of the
general counsel of the Company, to construe and interpret the Plan, to decide
all questions of eligibility, to determine the amount, manner and time of
payment of any benefits hereunder, in each case in its discretion, to prescribe
rules and procedures to be followed by Participants and their
beneficiaries under the Plan, and to otherwise carry out the purposes of the
Plan; and

 

B.            To appoint or employ
individuals to assist in the administration of the Plan and any other agents
deemed advisable.

 

C.            All decisions of the Committee
shall be binding and conclusive upon all Participants, beneficiaries and other
persons.

 

8.2                               Organization
of the Committee

 

The Committee shall act by a majority of its members at the time in
office. Committee action may be taken either by a vote at a meeting or by
written consent without a meeting. The Committee may authorize any one or more
of its members to execute any document or documents on behalf of the Committee.
The Committee shall notify the Company, in writing, of such authorization and the
name or names of its member or members so designated in such cases. The Company
thereafter shall accept and rely on any documents executed by said member of
the Committee or members as representing action by the Committee until the
Committee shall file with the Company a written revocation of such designation.
With the permission of the Company, the Committee may employ and appropriately
compensate accountants, legal counsel, benefit specialists, actuaries, plan
administrators and record keepers and any other persons as it deems necessary
or desirable in connection with the administration and maintenance of the Plan.
Such professionals and advisors shall not be considered members of the
Committee for any purpose.

 

17

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

8.3                               Limitation
of Liability

 

A.                                   No
member of the Board of Directors, no officer or Employee of the Company, nor
the Company shall be liable to any Employee, Participant, Designated
Beneficiary or any other person for any action taken or act of omission in
connection with the administration or operation of this Plan unless
attributable to his own fraud or willful misconduct. Nor shall the Company be
liable to any Employee, Participant, Designated Beneficiary or any other person
for any such action taken or act of omission unless attributable to fraud,
gross negligence or willful misconduct on the part of a director, officer or
Employee of the Company. Moreover, each Participant, Designated Beneficiary,
and any other person claiming a right to payment under the Plan shall only be
entitled to look to the Company for payment, and shall not have the right,
claim or demand against the Committee (or any member thereof), any director,
officer or Employee of the Company.

 

B.                                     To
the fullest extent permitted by the law and subject to the Company’s
Certificate of Incorporation and By-laws, the Company shall indemnify the
Committee, each of its members, and the Company’s officers and Directors (and
any Employee involved in carrying out the functions of the Company under the
Plan) for part or all expenses, costs, or liabilities arising out of the
performance of duties required by the terms of the Plan, except for those
expenses, costs, or liabilities arising out of a member’s fraud, willful
misconduct or gross negligence.

 

8.4                               Committee
Reliance on Records and Reports

 

The Committee shall be entitled to rely upon certificates, reports, and
opinions provided by an accountant, tax or pension advisor, actuary or legal
counsel employed by the Company or Committee. The Committee shall keep a record
of all its proceedings and acts, and shall keep all such books of account,
records, and other data as may be necessary for the proper administration of
the Plan. The regularly kept records of the Committee and the Company shall be
conclusive evidence of the service of a Participant, Compensation, age, marital
status, status as an Employee, and all other matters contained therein and
relevant to this Plan. The Committee, in any of its dealings with Participants
hereunder, may conclusively rely on any Deferral Election Form, written
statement, representation, or documents made or provided by such Participants.

 

8.5                               Costs
of the Plan

 

All the costs and expenses for maintaining the administration and
operation of the Plan shall be borne by the Company unless the Company shall
give notice (that Plan Participants bear this expense, in whole or in part) to:
(a) Eligible Participants at the time they become a Participant by
completion and filing of a Deferral Election Form; or (b) to existing
Participants during annual re enrollment. Such notice shall detail the
administrative expense to be assessed a Plan Participant, how that expense will
be assessed and allocated to the Participant Accounts, and any other 

 

18

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

important information concerning the imposition of this administrative
expense. This administration charge, if any, shall operate as a reduction to
the bookkeeping Account of a Participant or his designated Beneficiary, and in
the absence of specification otherwise shall reduce the Account, and be charged
annually during the month of January.

 

8.6                               Claims
Procedure

 

A.                                    Claim.
Benefits shall be paid in accordance with the terms of this Plan, as
interpreted and determined by the Committee in its sole discretion. A Participant,
Designated Beneficiary or any person who believes that he is being denied a
benefit to which he is entitled under the Plan (hereinafter referred to as a “Claimant”)
may file a written request, in such form or by such other procedure, including
electronic communications, as the Committee may prescribe, for such benefit
with the Committee, setting forth his claim.

 

The Committee
shall be responsible for deciding whether such claim is within the scope
provided by the Plan (a “Covered Claim”) and for providing full and fair review
of the decision with respect to such claim. In addition, the Company shall
provide a full and fair review to the extent required by ERISA. No Claimant
shall be entitled to a benefit hereunder unless the Committee determines in its
sole discretion that he or she is entitled to it.

 

Each Claimant
or other interested person shall file with the Committee such pertinent
information as the Committee may specify, and in such manner and form as the
Committee may specify and provide, and such person shall not have any rights or
be entitled to any benefits or further benefits hereunder, as the case may be,
unless such information is filed by the Claimant or on behalf of the Claimant. Each
Claimant shall supply at such times and in such manner as may be required,
written proof that the benefit is covered under the Plan. If it is determined
that a Claimant has not incurred a Covered Claim or if the Claimant shall fail
to furnish such proof as is requested, no benefits or no further benefits hereunder,
as the case may be, shall be payable to such Claimant.

 

B.                                    Claim
Decision. For all purposes under the Plan, the Committee’s decision with
respect to a claim if no review is requested and the decision with respect to a
claim if review is requested shall be final, binding and conclusive on all
interested parties as to matters relating to the Plan.

 

8.7                               Litigation

 

It shall only be necessary to join the Company as a party in any action
or judicial proceeding affecting the Plan. No Participant or Designated
Beneficiary or any other person claiming under the Plan shall be entitled to
service of process or notice of such action or proceeding, except as may be
expressly required by law. Any final judgment in such action or proceeding
shall be binding on all Participants, Designated Beneficiaries or persons
claiming under the Plan.

 

19

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

ARTICLE IX

AMENDMENT,
TERMINATION & REORGANIZATION

 

9.1                               Amendment

 

The Company reserves the right to amend the Plan, by resolution of the
Company, to the extent permitted under the Code and ERISA. However, no
amendment to the Plan shall be effective to the extent that it has the effect
of decreasing a Participant’s (or Designated Beneficiary’s) accrued benefit
prior to the date of the amendment. The Company may act through its Board of
Directors, or the Board of Directors may delegate its authority to amend the
Plan to the Committee.

 

9.2                               Amendment
Required By Law

 

Notwithstanding Section 9.1, the Plan may be amended at any time,
if in the opinion of the Company, such amendment is necessary to ensure the
Plan is treated as a nonqualified plan of deferred compensation under the Code
and ERISA, or to bring it into conformance with the Code or Treasury or SEC
regulations or requirements for such plans. This includes the right to amend
this Plan, so that any Trust, if applicable, created in conjunction with this
Plan, will be treated as a grantor Trust under Sections 671 through 679 of the
Code, and to otherwise conform the Plan provisions and such Trust, if
applicable, to the requirements of any applicable law.

 

9.3                               Termination

 

The Company intends to continue the Plan indefinitely. However, the
Company by action of its Board of Directors reserves the right to terminate the
Plan at any time. However, no such termination shall deprive any participant or
Designated Beneficiary of a right accrued tinder the Plan prior to the date of
termination. Any such termination shall be carried out in accordance with Code Section 409A
and Treasury Regulations thereunder.

 

9.4                               Consolidation/Merger

 

The Company shall not enter into any consolidation or merger without
the guarantee and assurance of the successor or surviving company or companies
to the obligations contained under the Plan. Should such consolidation or
merger occur, the term “Company” as defined and used in this Plan shall refer
to the successor or surviving company.

 

ARTICLE X

GENERAL PROVISIONS

 

10.1                        Applicable
Law

 

Except insofar as the law has been superseded by Federal law, Virginia
law shall govern the construction, validity and administration of this Plan as
created by this Plan. The parties to this 

 

20

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

Plan intend that this Plan shall be a nonqualified unfunded plan of
deferred compensation without plan assets and any ambiguities in its
construction shall be resolved in favor of an interpretation which will effect
this intention.

 

10.2                        Benefits
Not Transferable or Assignable

 

A.                                   Benefits
under the Plan shall not be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge such
benefits shall be void, nor shall any such benefits be in any way liable for or
subject to the debts, contracts, liabilities, engagements or torts of any
person entitled to them. However, a Participant may name a recipient for any
benefits payable or which would become payable to a Participant upon his death.
This Section shall also apply to the creation, assignment or recognition of
a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, including a qualified domestic relations order under Section 414
of the Code. In addition, the following actions shall not be treated or
construed as an assignment or alienation: (a) Plan Contribution or
distribution tax withholding; (b) recovery of distribution overpayments to
a Participant or Designated Beneficiary; (c) direct deposit of a
distribution to a Participant’s or Designated Beneficiary’s banking institution
account; or (d) transfer of Participant rights from one Plan to another
Plan, if applicable.

 

B.                                     The
Company may bring an action for a declaratory judgment if a Participant’s,
Designated Beneficiary’s or any Beneficiary’s benefits hereunder are attached
by an order from any court. The Company may seek such declaratory judgment in
any court of competent jurisdiction to:

 

(1)                                  determine
the proper recipient or recipients of the benefits to be paid under the Plan;

 

(2)                                  protect
the operation and consequences of the Plan for the Company and all
Participants; and

 

(3)                                  request
any other equitable relief the Company in its sole and exclusive judgment may
feel appropriate.

 

Benefits which may become payable during the
pendency of such an action shall, at the sole discretion of the Company, either
be:

 

(1)           paid into the court as they become payable
or

 

(2)                                  held
in the Participant’s or Designated Beneficiary’s Account subject to the court’s
final distribution order.

 

21

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

10.3                        Not an
Employment Contract

 

The Plan is not and shall not be deemed to constitute a contract
between the Company and any Employee, or to be a consideration for, or an
inducement to, or a condition of, the employment of any Employee. Nothing
contained in the Plan shall give or be deemed to give an Employee the right to
remain in the employment of the Company or to interfere with the right to be
retained in the employ of the Company, any legal or equitable right against the
Company, or to interfere with the right of the Company to discharge any
Employee at any time. It is expressly understood by the parties hereto that
this Plan relates to the payment of deferred compensation for the Employee’s
services, generally payable after separation from employment with the Company,
and is not intended to be an employment contract.

 

10.4                        Notices

 

A.                                   Any
notices required or permitted hereunder shall be in writing and shall be deemed
to be sufficiently given at the time when delivered personally or when mailed
by certified or registered first class mail, postage prepaid, addressed to
either party hereto as follows:

 

If to the Company or the Committee:

 

Cardinal Financial Corporation

8270 Greensboro Drive

Suite 500

McLean, Virginia  22102

 

If to the Participant:

 

At his last known address, as indicated by
the records of the Company.

 

or to such changed address as such parties
may have fixed by notice. However, any notice of change of address shall be
effective only upon receipt.

 

B.                                     Any
communication, benefit payment, statement of notice addressed to a Participant
or Designated Beneficiary at the last post office address as shown on the
Company’s records shall be binding on the Participant or Designated Beneficiary
for all purposes of the Plan. The Company shall not be obligated to search for
any Participant or Designated Beneficiary beyond sending a registered letter to
such last known address.

 

10.5                        Severability

 

If any provision or provisions of the Plan shall for any reason be
invalid or unenforceable, the remaining provisions of the Plan shall be carried
into effect, unless the effect thereof would be to materially alter or defeat
the purposes of the Plan. All terms of the Plan and all discretion 

 

22

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

granted hereunder shall be uniformly and consistently applied to all
the Employees, Participants and Designated Beneficiaries.

 

10.6                        Participant
is General Creditor with No Rights to Assets

 

A.                                   The
payments to the Participant or his Designated Beneficiary or any other
beneficiary hereunder shall be made from assets which shall continue, for all
purposes, to be a part of the general, unrestricted assets of the Company, no
person shall have any interest in any such assets by virtue of the provisions
of this Plan. The Company’s obligation hereunder shall be an unfunded and
unsecured promise to pay money in the future. To the extent that any person
acquires a right to receive payments from the Company under the provisions
hereof, such right shall be no greater than the right of any unsecured general
creditor of the Company; no such person shall have nor require any legal or
equitable right, or claim in or to any property or assets of the Company. The
Company shall not be obligated under any circumstances to fund obligations
under this Plan.

 

B.                                     The
Company at its sole discretion and exclusive option, may acquire and/or
set-aside assets or funds, in a trust or otherwise, to support its financial
obligations under this Plan. No such trust established for this purpose shall
be established in or transferred to a location that would cause it to be deemed
to be an “offshore trust” for purposes of Code Section 409A (b)(1). No
such acquisition or set-aside shall impair or derogate from the Company’s
direct obligation to a Participant or Designated Beneficiary under this Plan. However,
no Participant or Designated Beneficiary shall be entitled to receive duplicate
payments of any Accounts provided under the Plan because of the existence of
such assets or funds.

 

C.                                     In
the event that, in its discretion, the Company purchases an asset(s) or
insurance policy or policies insuring the life of the Participant to allow the
Company to recover the cost of providing benefits, in whole or in part
hereunder, neither the Participant, Designated Beneficiary nor any other
beneficiary shall have any rights whatsoever therein in such assets or in the
proceeds therefrom. The Company shall be the sole owner and beneficiary of any
such assets or insurance policy and shall possess and may exercise all
incidents of ownership therein. No such asset or policy, policies or other
property shall be held in any trust for the Participant or any other person nor
as collateral security for any obligation of the Company hereunder. Nor shall
any Participant’s participation in the acquisition of such assets or policy or
policies be a representation to the Participant, Designated Beneficiary or any
other beneficiary of any beneficial interest or ownership in such assets,
policy or policies. A Participant may be required to submit to medical
examinations, supply such information and to execute such documents as may be
required by an insurance carrier or carriers (to whom the Company may apply
from time to time) as a precondition to participate in the Plan.

 

23

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

10.7                        No
Trust Relationship Created

 

Nothing contained in this Plan shall be deemed to create a trust of any
kind or create any fiduciary relationship between the Company and the
Participant, Designated Beneficiary, other beneficiaries of the Participant, or
any other person claiming through the Participant. Funds allocated hereunder
shall continue for all purposes to be part of the general assets and funds of
the Company and no person other than the Company shall, by virtue of the
provisions of this Plan, have any beneficial interest in such assets and funds.
The creation of a grantor Trust (so called “Rabbi Trust”) under the Code (owned
by and for the benefit of the Company) to hold such assets or funds for the
administrative convenience of the Company shall not give nor be a
representation to a Participant, Designated Beneficiary, or any other person,
of a property or beneficial ownership interest in such Trust assets or funds
even though the incidental advantages or benefits of the Trust to Plan
Participants may be communicated to them.

 

10.8                        Limitations
on Liability of the Company

 

Neither the establishment of the Plan nor any modification hereof nor
the creation of any Account under the Plan nor the payment of any benefits
under the Plan shall be construed as giving to any Participant or any other
person any legal or equitable right against the Company or any Director,
officer or Employee thereof except as provided by law or by any Plan provision.

 

10.9                        Plan
Establishes Agreement Between Company and Participant Only

 

The Participant, Designated Beneficiary, estate or any other person
claiming through the Participant, shall only have recourse against the Company
for enforcement of this Plan. This Plan shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and the Participant,
successors, heirs, executors, administrators and beneficiaries.

 

10.10                 Independence
of Benefits

 

The benefits payable under this Plan are for services already rendered
and shall be independent of, and in addition to, any other benefits or
compensation, whether by salary, bonus, fees or otherwise, payable to the
Participant under any compensation and/or benefit arrangements or plans,
incentive cash compensations and stock plans and other retirement or welfare
benefit plans, that now exist or may hereafter exist from time to time.

 

10.11      Unclaimed Property

 

Except as may be required by law, the Committee may take any of the
following actions if it gives notice to a Participant or Designated Beneficiary
of an entitlement to benefits under the Plan, and the Participant or Designated
Beneficiary fails to claim such benefit or fails to provide their location to
the Company within three (3) calendar years of such notice:

 

24

 

George Mason
Mortgage, LLC

Executive
Deferred Income Plan

Amended and
Restated Effective October 21, 2008

 

(1)                                  Direct
distribution of such benefits, in such proportions as the Committee may
determine, to one or more or all, of a Participant’s next of kin, if their
location is known to the Committee;

 

(2)                                  Deem
this benefit to be a forfeiture and paid to the Company if the location of a
Participant’s next of kin is not known. However, the Committee shall pay the
benefit, unadjusted for gains or losses from the date of such forfeiture, to a
Participant or Designated Beneficiary who subsequently makes proper claim to
the benefit.

 

The Company shall not be liable to any person for payment pursuant to
applicable state unclaimed property laws.

 

10.12                 Required Tax
Withholding and Reporting

 

The Company shall withhold and report Federal, state and local income
and payroll tax amounts on all Contributions to and distributions and
withdrawals from a Participant’s Account as may be required by law from time to
time.

 

IN WITNESS WHEREOF, the Plan has been
executed on behalf of the Company on this
         day of
                              ,
2008.

 

	
  CARDINAL FINANCIAL CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

25Exhibit
10.1

 

AGREEMENT
RE: CHANGE IN CONTROL

 

This
AGREEMENT RE: CHANGE IN CONTROL (this “Agreement”) is dated as of November 7,
2008 and is entered into by and between John Tamerius (“Executive”) and Quidel
Corporation, a Delaware corporation (the “Company”).

 

Background

 

The
Company believes that because of its position in the industry, financial
resources and historical operating results there is a possibility that the
Company may become the subject of a Change in Control (as defined below),
either now or at some time in the future.

 

The
Company believes that it is in the best interest of the Company and its
stockholders to foster Executive’s objectivity in making decisions with respect
to any pending or threatened Change in Control of the Company and to assure
that the Company will have the continued dedication and availability of
Executive, notwithstanding the possibility, threat or occurrence of a Change in
Control. The Company believes that these goals can best be accomplished by
alleviating certain of the risks and uncertainties with regard to Executive’s
financial and professional security that would be created by a pending or
threatened Change in Control and that inevitably would distract Executive and
could impair his ability to objectively perform his duties for and on behalf of
the Company. Accordingly, the Company believes that it is appropriate and in
the best interest of the Company and its stockholders to provide to Executive
compensation arrangements upon a Change in Control that lessen Executive’s
financial risks and uncertainties and that are reasonably competitive with
those of other corporations.

 

With
these and other considerations in mind, the Compensation Committee of the
Company has authorized the Company to enter into this Agreement with the
Executive to provide the protections set forth herein for Executive’s financial
security following a Change in Control.

 

NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration the receipt of which is hereby acknowledged, it is hereby agreed
as follows:

 

Agreement

 

1.           Term of Agreement.  This
Agreement shall be effective as of  November 10,
2008 and, subject to the provisions of Section 4, shall extend to (and
thereupon automatically terminate) one (1) day after Executive’s
termination of employment with the Company for any reason. No termination of
this Agreement shall limit, alter or otherwise affect Executive’s rights
hereunder with respect to a Change in Control which has occurred prior to such
termination, including without limitation Executive’s right to receive the
various benefits hereunder.

 

2.           Purpose of Agreement. 
The purpose of this Agreement is to provide that, in the event of a “Change in
Control,” Executive may become entitled to receive certain additional benefits,
as described herein, in the event of his termination under specified
circumstances.

 

3.           Change in Control.  As
used in this Agreement, the phrase “Change in Control” shall mean:

 

(i) 
Except as provided by subparagraph (iii) hereof, the acquisition (other
than from the Company) by any person, entity or “group”, within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (excluding, 

 

 

for
this purpose, the Company or its subsidiaries, or any executive benefit plan of
the Company or its subsidiaries which acquires beneficial ownership of voting
securities of the Company), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of forty percent (40%) or more of either
the then outstanding shares of common stock or the combined voting power of the
Company’s then outstanding voting securities entitled to vote generally in the
election of directors; or

 

(ii) 
Individuals who, as of the date hereof, constitute the Board of Directors of
the Company (as of the date hereof the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board of Directors of the Company,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, is or
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; or

 

(iii) 
Approval by the stockholders of the Company of a reorganization, merger or
consolidation with any other person, entity or corporation, other than

 

(1)  a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of another entity) more than fifty percent
(50%) of the combined voting power of the voting securities of the Company or
such other entity outstanding immediately after such merger or consolidation,
or

 

(2)  a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no person acquires forty percent (40%) or more of the combined voting power of
the Company’s then outstanding voting securities; or

 

(iv) 
Approval by the stockholders of the Company of a plan of complete liquidation
of the Company or an agreement for the sale or other disposition by the Company
of all or substantially all of the Company’s assets.

 

4.           Effect of a Change in Control. 
In the event of a Change in Control, Sections 6 through 13 of this Agreement
shall become applicable to Executive. These Sections shall continue to remain
applicable until the third anniversary of the date upon which the Change in
Control occurs.  On such third anniversary date, and provided that the
employment of Executive has not been terminated on account of a Qualifying
Termination (as defined in Section 5 below), this Agreement shall
terminate and be of no further force or effect.

 

5.           Qualifying Termination. 
If following, or within thirty (30) days prior to, a Change in Control Executive’s
employment with the Company and its affiliated companies is terminated, such
termination shall be conclusively considered a “Qualifying Termination” unless:

 

(a)        Executive
voluntarily terminates his employment with the Company and its affiliated
companies.  Executive, however, shall not be considered to have
voluntarily terminated his employment with the Company and its affiliated
companies if, 

 

2

 

following, or within thirty (30) days prior to, the Change in Control,
Executive’s base salary is reduced or adversely modified in any material
respect, or Executive’s authority or duties are materially changed, and
subsequent to such reduction, modification or change Executive elects to
terminate his employment with the Company and its affiliated companies within
sixty (60) days following such reduction, modification or change after having
given the Company at least thirty (30) days notice of the same and a reasonable
opportunity to cure during such 30-day notice period.  For such purposes,
Executive’s authority or duties shall conclusively be considered to have been “materially
changed” if, without Executive’s express and voluntary written consent, there
is any substantial diminution or adverse modification in Executive’s title,
status, overall position, responsibilities, reporting relationship, general
working environment (including without limitation secretarial and staff
support, offices, and frequency and mode of travel), or if, without Executive’s
express and voluntary written consent, Executive’s job location is transferred
to a site more than twenty-five (25) miles away from his place of employment
thirty (30) days prior to the Change in Control.  In this regard as well,
Executive’s authority and duties shall conclusively be considered to have been “materially
changed” if, without Executive’s express and voluntary written consent,
Executive no longer holds the same title or no longer has the same authority
and responsibilities or no longer has the same reporting responsibilities, in
each case with respect and as to a publicly held parent company which is not
controlled by another entity or person.

 

(b)        The
termination is on account of Executive’s death or Disability. For such
purposes, “Disability” shall mean a physical or mental incapacity as a result
of which Executive becomes unable to continue the performance of his
responsibilities for the Company and its affiliated companies and which, at
least three (3) months after its commencement, is determined to be total
and permanent by a physician agreed to by the Company and Executive, or in the
event of Executive’s inability to designate a physician, Executive’s legal
representative. In the absence of agreement between the Company and Executive,
each party shall nominate a qualified physician and the two physicians so
nominated shall select a third physician who shall make the determination as to
Disability.

 

(c)        Executive
is involuntarily terminated for “Cause.” For this purpose, “Cause” shall be
limited to only three types of events:

 

(1)       the
willful and deliberate refusal of Executive to comply with a lawful, written
instruction of the Board of Directors, which refusal is not remedied by
Executive within a reasonable period of time after his receipt of written
notice from the Company identifying the refusal, so long as the instruction is
consistent with the scope and responsibilities of Executive’s position prior to
the Change in Control;

 

(2)       an
act or acts of personal dishonesty by Executive which were intended to result
in substantial personal enrichment of Executive at the expense of the Company;
or

 

(3)       Executive’s
conviction of any felony involving an act of moral turpitude.

 

6.           Severance Payment.  If
Executive’s employment is terminated as a result of a 

 

3

 

Qualifying
Termination, the Company shall pay Executive within thirty (30) days after the
Qualifying Termination a cash lump sum equal to two (2) times the
Executive’s Compensation (the “Severance Payment”).

 

(a)        For
purposes of this Agreement, Executive’s “Compensation” shall equal the sum of (i) Executive’s
highest annual salary rate with the Company within the three year period ending
on the date of Executive’s Qualifying Termination, plus (ii) a “Bonus
Increment.” The Bonus Increment shall equal the annualized average of all
bonuses and incentive compensation payments paid to Executive during the two (2) year
period immediately before the date of Executive’s Qualifying Termination under
all of the Company’s bonus and incentive compensation plans or arrangement.

 

(b)        [Intentionally
Deleted.]

 

(c)        The
Severance Payment hereunder is in lieu of any severance payment that Executive
might otherwise be entitled to from the Company in the event of a Change in
Control under the Company’s applicable severance pay policies, if any, or under
any other oral or written agreement; provided, however, that Executive shall
continue to be entitled to receive the severance pay benefits under the Company’s
applicable policies, if any, or under another written agreement if and to the
extent Executive’s termination is not a Qualifying Termination after, or within
thirty (30) days prior to, a Change in Control.

 

(d)        Notwithstanding
any provision of this Agreement to the contrary, if, at the time of Executive’s
termination of employment with the Company, Executive is a “specified employee”
as defined in Section 409A of the Code, and one or more of the payments or
benefits received or to be received by Executive pursuant to this Agreement (or
any portion thereof) would become subject to the additional tax under Section 409A(a)(1)(B) of
the Code or any other taxes or penalties imposed under Section 409A of the
Code (the “Section 409A Taxes”) if provided at the time otherwise required
under this Agreement, no such payment or benefit will be provided under this
Agreement until the earlier of (a) the date which is six (6) months
after Executive’s “separation from service” or (b) the date of Executive’s
death, or such shorter period that, as determined by the Company, is sufficient
to avoid the imposition of Section 409A Taxes.  The provisions of
this Section 6(d) shall only apply to the minimum extent required to
avoid Executive’s incurrence of any Section 409A Taxes.  In addition,
if any provision of this Agreement would cause Executive to incur any penalty
tax or interest under Section 409A of the Code or any regulations or
Treasury guidance promulgated thereunder, the Company may reform such provision
to maintain to the maximum extent practicable the original intent of the
applicable provision without violating the provisions of Section 409A of
the Code.

 

7.           Additional Benefits.

 

(a)        In
the event of a Qualifying Termination, any and all unvested stock options of
Executive shall immediately become fully vested and exercisable and any and all
restrictions on Executive’s restricted stock shall immediately and
automatically lapse (except as otherwise expressly agreed to, in writing, by
both parties, including whether prior to or after the execution of this
Agreement).

 

(b)        In
the event of a Qualifying Termination, Executive shall be entitled to 

 

4

 

continue
to participate in the following executive benefit programs which had been made
available to Executive (including his family) before the Qualifying
Termination: group medical insurance, group dental insurance, and group vision
insurance. These programs shall be continued at no cost to Executive, except to
the extent that tax rules require the inclusion of the value of such
benefits in Executive’s income. The programs shall be continued in the same way
and at the same level as immediately prior to the Qualifying Termination. 
The programs shall continue for Executive’s benefit for two (2) years
after the date of the Qualifying Termination; provided, however, that Executive’s
participation in each of such programs shall be earlier terminated or reduced,
as applicable, if and to the extent Executive receives benefits as a result of
concurrent coverage through another program.

 

(c)        In
the event of a Qualifying Termination, Executive shall be entitled to receive
from the Company, upon such Termination, the sum of $25,000 to help defray
legal fees, tax and accounting fees, executive outplacement services, and other
costs associated with transitional matters.

 

8.           Limitation on Payments. 
Notwithstanding anything to the contrary herein, in the event that the sum
aggregate present value of (i) the Severance Payment payable under Section 6
hereof, (ii) any and all additional amount or benefits which may be paid
or conferred to or on behalf of Executive in accordance with Section 7
hereof, and (iii) any and all other amounts or benefits paid or conferred
to or on behalf of Executive would constitute a “parachute payment” (“parachute
payment” as used in this Agreement shall be defined in accordance with Section 280G(b)(2),
or any successor thereto, of the Internal Revenue Code of 1986, as amended),
the payments under this Agreement shall be reduced (by the minimum possible
amounts) until no amount payable to Executive under this Agreement constitutes
a parachute payment; provided, however, that no such reduction under this Section 8
shall be made if the net after-tax payment (after taking into account, Federal,
state, local or other income and excise taxes) to which Executive would
otherwise be entitled without such reduction would be greater than the net
after-tax payment (after taking into account Federal, state, local or other
income and excise taxes) to Executive resulting from the receipt of such
payments with such reduction. If, as a result of subsequent events or
conditions (including a subsequent payment or absence of a subsequent payment
under this Agreement), it is determined that payments hereunder have been
reduced by more than the minimum amount required under this Section 8,
then an additional payment shall be promptly made to Executive in an amount
equal to the excess reduction. All determinations required to be made under
this Section 8, including whether a payment would result in a parachute
payment and the assumptions to be utilized in arriving at such determination,
shall be made and approved within fifteen (15) days after the Qualifying
Termination by both (1) accountants selected by the Company and (2) Executive’s
designated financial advisor.

 

9.           Nonsolicitation Covenant. In
consideration of the payments to be made to Executive hereunder, Executive
hereby covenants, for a period of two (2) years following the Qualifying
Termination, that he will not, directly or indirectly (whether as an officer,
director, employee, individual proprietor, control shareholder, consultant,
partner or otherwise) (i) solicit, recruit or hire-away any employee of
the Company or successor of the Company or (ii) solicit, influence or
attempt to influence any person or entity to terminate such person’s or entity’s
contractual and/or business relationship with the Company or successor of the
Company. With regard to this Section 9, Executive acknowledges that the
provisions herein are reasonable in both scope and duration and necessary to
protect the business of the Company or its successor.

 

10.         Rights and Obligations Prior to a
Change in Control. Prior to the date which is 

 

5

 

thirty
(30) days before a Change in Control, the rights and obligations of Executive
with respect to his employment by the Company shall be determined in accordance
with the policies and procedures adopted from time to time by the Company and
the provisions of any written employment contract in effect between the Company
and Executive from time to time. This Agreement deals only with certain rights
and obligations of Executive subsequent, or within thirty (30) days prior to, a
Change in Control, and the existence of this Agreement shall not be treated as
raising any inference with respect to what rights and obligations exist prior
to the date which is thirty (30) days before a Change in Control. Unless
otherwise expressly set forth in a separate written employment agreement
between Executive and the Company, the employment of Executive is expressly
at-will, and Executive or the Company may terminate Executive’s employment with
the Company at any time and for any reason, with or without cause, provided
that if such termination occurs within thirty (30) days prior to or three (3) years
after a Change in Control and constitutes a Qualifying Termination (as defined
in Section 5 above) the provisions of this Agreement shall govern the
payment of the Severance Payment and certain other benefits as provided herein.

 

11.         Non-Exclusivity of Rights.
Subject to Section 6(c) hereof, nothing in this Agreement shall
prevent or limit Executive’s continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive may have under any
stock option or other agreements with the Company or any of its affiliated
companies. Except as otherwise provided in Section 6(c) hereof,
amounts which are vested benefits or which Executive is otherwise entitled to
receive under any plan or program of the Company or any of its affiliated
companies at or subsequent to the date of any Qualified Termination shall be
payable in accordance with such plan or program.

 

12.         Full Settlement.  The
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counter-claim, recoupment, defense or other claim, right, or action
which the Company may have against Executive or others. In no event shall
Executive be obligated to seek other employment or to take any other action by
way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which Executive may reasonably
incur as a result of Executive’s successful collection efforts to receive
amounts payable hereunder, or as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by Executive about
the amount of any payment pursuant to this Section).

 

13.         Successors.

 

(a)        This
Agreement is personal to Executive, and without the prior written consent of
the Company shall not be assignable by Executive other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by Executive’s legal representatives.

 

(b)        The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company.

 

14.         Governing Law.  This
Agreement is made and entered into in the State of 

 

6

 

California,
and the internal laws of California shall govern its validity and
interpretation in the performance by the parties hereto of their respective
duties and obligations hereunder.

 

15.         Modifications.  This
Agreement may be amended or modified only by an instrument in writing executed
by all of the parties hereto.

 

16.         Dispute Resolution.

 

(a)        Any
controversy or dispute between the parties involving the construction,
interpretation, application or performance of the terms, covenants, or conditions
of this Agreement or in any way arising under this Agreement (a “Covered
Dispute”) shall, on demand by either of the parties by written notice served on
the other party in the manner prescribed in Section 17 hereof, be
referenced pursuant to the procedures described in California Code of Civil
Procedure (“CCP”) Sections 638, et  seq., as they may be amended
from time to time (the “Reference Procedures”), to a retired Judge from the
Superior Court for the County of San Diego or the County of Orange for a decision.

 

(b)        The
Reference Procedures shall be commenced by either party by the filing in the
Superior Court of the State of California for the County of San Diego or the
County of Orange of a petition pursuant to CCP Section 638(a) (a “Petition”).
Said Petition shall designate as a referee a Judge from the list of retired San
Diego County and Orange County Superior Court Judges who have made themselves
available for trial or settlement of civil litigation under said Reference
Procedures. If the parties hereto are unable to agree on the designation of a
particular retired San Diego County or Orange County Superior Court Judge or
the designated Judge is unavailable or unable to serve in such capacity,
request shall be made in said Petition that the Presiding or Assistant
Presiding Judge of the San Diego County Superior Court or the Orange County
Superior Court, as relevant, appoint as referee a retired San Diego County or
Orange County Superior Court Judge from the aforementioned list.

 

(c)        Except
as hereafter agreed by the parties, the referee shall apply the internal law of
California in deciding the issues submitted hereunder. Unless formal pleadings
are waived by agreement among the parties and the referee, the moving party
shall file and serve its complaint within 15 days from the date a referee is
designated as provided herein, and the other party shall have 15 days
thereafter in which to plead to said complaint. Each of the parties reserves
its respective rights to allege and assert in such pleadings all claims, causes
of action, contentions and defenses which it may have arising out of or
relating to the general subject matter of the Covered Dispute that is being
determined pursuant to the Reference Procedures. Reasonable notice of any
motions before the referee shall be given, and all matters shall be set at the
convenience of the referee. Discovery shall be conducted as the parties agree
or as allowed by the referee. Unless waived by each of the parties, a reporter
shall be present at all proceedings before the referee.

 

(d)        It
is the parties’ intention by this Section 16 that all issues of fact and
law and all matters of a legal and equitable nature related to any Covered
Dispute will be submitted for determination by a referee designated as provided
herein. Accordingly, the parties hereby stipulate that a referee designated as
provided herein shall have all powers of a Judge of the Superior Court
including, without limitation, the power to grant equitable and interlocutory
and permanent injunctive relief.

 

7

 

(e)        Each
of the parties specifically (i) consents to the exercise of jurisdiction
over his person by a referee designated as provided herein with respect to any
and all Covered Disputes; and (ii) consents to the personal jurisdiction
of the California courts with respect to any appeal or review of the decision
of any such referee.

 

(f)         Each
of the parties acknowledges that the decision by a referee designated as
provided herein shall be a basis for a judgment as provided in CCP Section 644
and shall be subject to exception and review as provided in CCP Section 645.

 

17.         Notices.  Any notice or
communications required or permitted to be given to the parties hereto shall be
delivered personally or be sent by United States registered or certified mail,
postage prepaid and return receipt requested, and addressed or delivered as
follows, or at such other addresses the party addressed may have substituted by
notice pursuant to this Section:

 

	
  Quidel
  Corporation

  	
   

  	
  John
  Tamerius, Ph.D.

  
	
  10165
  McKellar Court

  	
   

  	
  727
  Ashbury

  
	
  San
  Diego, CA 92121

  	
   

  	
  San
  Francisco, CA 94117

  
	
  Attn:
  President

  	
   

  	
   

  

 

18.         Captions.  The captions of
this Agreement are inserted for convenience and do not constitute a part
hereof.

 

19.         Severability.  In case any
one or more of the provisions contained in this Agreement shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein and there
shall be deemed substituted for such invalid, illegal or unenforceable
provision such other provision as will most nearly accomplish the intent of the
parties to the extent permitted by the applicable law. In case this Agreement,
or any one or more the provisions hereof, shall be held to be invalid, illegal
or unenforceable within any governmental jurisdiction or subdivision thereof,
this Agreement or any such provision thereof shall not as a consequence thereof
be deemed to be invalid, illegal or unenforceable in any other governmental
jurisdiction or subdivision thereof.

 

20.         Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which shall together constitute one in the same
Agreement.

 

[Remainder of page left blank intentionally, signatures on
following page]

 

8

 

IN
WITNESS HEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above in San Diego,
California.

 

	
   

  	
  Quidel
  Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Caren Mason

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  John
  Tamerius, Ph.D.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Tamerius

  

 

9

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