EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

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

INTRODUCTION

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

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

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

TERMS

1.              Position, Title, Compensation and Benefits.

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

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

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

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

3.              Prohibition on Competition.

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

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

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

d.              Enforcement of Covenants.

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

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

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

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

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

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

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

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

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