Employee Benefit Plans

The Company sponsored a noncontributory, defined benefit pension plan covering substantially all full-time employees of Middleburg Bank and Middleburg Trust Company. The defined benefit pension plan was terminated in February of 2011, and all plan assets were distributed to participants as of December 31, 2011. When the plan was active, the Company funded pension costs in accordance with the funding provisions of the Employee Retirement Income Security Act. Benefit accruals and eligibility were frozen as of September 30, 2009. Information about the plan follows:



(Dollars in thousands)	2011
Change in Benefit Obligation
Benefit obligation, beginning of year	$	5,994
Interest cost	168
Actuarial loss	—
Benefits paid	(7,572		)
Increase in obligation due to settlement	1,410
Benefit obligation, end of year	—
Change in Plan Assets
Fair value of plan assets, beginning of year	5,343
Actual return on plan assets	(39		)
Employer contributions	2,268
Benefits paid	(7,572		)
Fair value of plan assets, ending	—
Funded Status, recognized as accrued benefit cost included in other liabilities	$	—



	2011
Components of Net Periodic Benefit Cost
Interest cost	$	168
Expected return on plan assets	(53		)
Recognized net gain due to curtailment	620
Recognized net actuarial loss	1,117
Net periodic benefit cost	1,852
Other Change in Plan Assets and Benefit Obligations Recognized in Accumulated Other Comprehensive Income
Net gain	(234		)
Deferred income tax expense (benefit)	80
Total recognized in other comprehensive income	(154		)
Total recognized in net periodic benefit costs and other comprehensive loss	$	1,698

401(k) Plan

The Company has a 401(k) plan whereby a majority of employees participate in the plan. Employees may contribute up to 100% of their compensation subject to certain limits based on federal tax laws. The Company makes matching contributions equal to 50% of the first 6% of an employee’s compensation contributed to the plan. Matching contributions vest to the employee equally over a five year period. For the years ended December 31, 2013, 2012, and 2011, expense attributable to the plan amounted to $355,000, $308,000 and $250,000, respectively.

Money Purchase Pension Plan (MPPP)

The Middleburg Financial Corporation Defined Benefit Pension Plan was replaced by a Money Purchase Pension Plan effective on January 1, 2010. Employees who have attained age 21 and completed one year of service are eligible to participate in the plan as of the first day of the month following the completion of such eligibility provisions. Employees earn a year of service if they complete one thousand hours of service in a plan year. Service with Middleburg Financial Corporation and its subsidiaries prior to the effective date of the Plan counts toward a participant's initial eligibility to participate in the plan.

Each year, a participant receives an allocation of an employer contribution equal to 6.5% of total compensation (up to the statutory maximum) plus an additional contribution of 2.75% of compensation in excess of the Social Security taxable wage base (up to the statutory maximum). To receive an allocation, the participant must complete one thousand hours of service in the plan year and be employed on the last day of the plan year. The requirement to be employed on the last day of the plan year does not apply if a participant dies, retires, or becomes disabled during the plan year.

Participants become vested in their employer contributions according to a schedule which allows for graduated vesting and full vesting after five years of service. Service with Middleburg Financial Corporation and its subsidiaries prior to the effective date of the Plan count toward a participant's vested percentage.

Assets are held in a pooled investment account managed by Middleburg Trust Company, a wholly owned subsidiary of the Company. Distributions may be made upon termination of employment, death or disability.

The plan is administered by the Benefits Committee of the Company. The plan may be amended from time to time by the Board or its delegate and may be terminated by the Board at any time for any reason.

For the years ended December 31, 2013 , 2012, and 2011 expense attributable to the plan was $1.0 million, $940,000, and $826,000, respectively.

Deferred Compensation Plans

The Company has adopted several deferred compensation plans; including a defined benefit SERP, an elective deferral plan for the Chairman, and a defined contribution SERP for certain Executive Officers. The two plans for the Chairman made installment payouts in 2013, 2012 and 2011. The defined contribution SERP for Executive Officers includes a vesting schedule, and is currently credited at a rate using the 10-year treasury plus 1.5%. The deferred compensation expense for 2013, 2012, and 2011, was $210,000, $204,000, and $133,000, respectively. The plans are unfunded; however, life insurance has been acquired on the life of the employees in amounts sufficient to help meet the costs of the obligations.