Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

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

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

ARTICLE 1

SCOPE OF EMPLOYMENT

 

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

 

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

 

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

 

 

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

 

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

 

ARTICLE 2

COMPENSATION AND BENEFITS

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 3

FUTURE TRANSITION PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

ARTICLE 4

EQUITY COMPENSATION

 

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

 

ARTICLE 5

TERMINATION

 

5.1.                              Termination by the Company.

 

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

 

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

 

5.2.                              Termination by Operation of
Law.

 

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

 

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

 

5

 

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

 

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

 

5.3.                              Termination by Death or
Disability.

 

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

 

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

 

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

 

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

 

6

 

5.5.                              Effect of Expiration or
Termination.

 

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

 

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

 

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

 

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

 

7

 

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

 

(b)                                 For purposes of this
Agreement, a Change in Control occurs if, after the date of this Agreement, (i) any
person, including a “group” as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, becomes the owner or beneficial owner of
Corporation securities having 40% or more of the combined voting power of the
then outstanding Corporation securities that may be cast for the election of
the Company’s directors other than a result of an issuance of securities
initiated by the Company, or open market purchases approved by the Company
Board, as long as the majority of the Company Board approving the purchases is
a majority at the time the purchases are made; or (ii) as the direct or
indirect result of, or in connection with, a tender or exchange offer, a merger
or other business combination, a sale of assets, a contested election of
directors, or any combination of these events, the persons who were directors
of the Company before such events cease to constitute a majority of the Company
Board, or any successor’s board, within two years of the last of such
transactions.  For purposes of this
Agreement, a Change in Control occurs on the date on which an event described
in (i) or (ii) occurs.  If a
Change in Control occurs on account of a series of transactions or events, the
Change in Control occurs on the date of the last of such transactions or
events.  Following a Change in Control,
Clineburg may terminate this Agreement, with or without Good Reason, at any
time by notice to the Company, which notice may be effective immediately.  A “Terminating Event” is defined as the
earlier of the date, occurring within one (1) year following the Change in
Control, that the Agreement is terminated without Cause by the Company or is
terminated by Clineburg by notice to the Company.

 

(c)                                  Excise Tax, etc.
Indemnity.

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

ARTICLE 6

CONFIDENTIALITY, NON-DISCLOSURE AND COVENANT
NOT TO COMPETE

 

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

 

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

 

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

 

10

 

ARTICLE 7

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

7.5.                              Entire Agreement.

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
  CARDINAL FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George P. Shafran

  
	
   

  	
   

  	
  George P. Shafran, Chairman, Compensation Committee 

  
	
   

  	
   

  
	
   

  	
  BERNARD H. CLINEBURG:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bernard H. Clineburg

  

 

12Exhibit 10.1

 

 

October 28, 2010

 

Re:  Extension of Maturity Date

 

John
A. Featherman, III, Chairman, President & CEO

First
Chester County Corporation

9
North High Street

West
Chester, Pennsylvania 19380

 

Dear
John:

 

Graystone
Tower Bank hereby extends the maturity date of the Promissory Note dated November 20,
2009, as modified by that certain Loan and Note Modification Agreement dated December 28,
2009, made by First Chester County Corporation in the principal amount of
$26,000,000 to December 31, 2010.

 

Except
as to the aforesaid extension of the maturity date, all other terms and
conditions of the Promissory Note and the other Loan Documents (as such term is
defined in that certain Loan Agreement dated as of November 20, 2009, as
amended from time to time) shall remain unchanged and in full force and effect.

 

This
letter shall be deemed to constitute an amendment to the Promissory Note and
the other Loan Documents.

 

 

	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRAYSTONE
  TOWER BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Samuel

  
	
   

  	
   

  	
   

  	
  Andrew S. Samuel,

  
	
   

  	
   

  	
   

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED
  AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FIRST
  CHESTER COUNTY CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  John A. Featherman, III

  	
   

  	
   

  
	
   

  	
  John A. Featherman, III,

  	
   

  	
   

  
	
   

  	
  Chairman, President & Chief Executive Officer

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