Note 9.

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 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:

	2011			2010
	(In Thousands)
Change in Benefit Obligation
Benefit obligation, beginning of year	$	5,994		$	5,407
Interest cost	168			320
Actuarial loss	—			299
Benefits paid	(7,572		)	(32		)
Increase in obligation due to settlement	1,410			—
Benefit obligation, end of year	—			5,994
Change in Plan Assets
Fair value of plan assets, beginning of year	5,343			4,897
Actual return on plan assets	(39		)	451
Employer contributions	2,268			27
Benefits paid	(7,572		)	(32		)
Fair value of plan assets, ending	—			5,343
Funded Status, recognized as accrued benefit cost included in other liabilities	$	—		$	651
Amounts Recognized in Accumulated Other Comprehensive Loss
Net loss	—			234
Prior service costs	—			—
Deferred income tax benefit	—			(80		)
Total amount recognized in accumulated other comprehensive loss	—			154

The accumulated benefit obligation for the defined benefit pension plan was $6 million at December 31, 2010.

	2011			2010
	(In Thousands)
Components of Net Periodic Benefit Cost
Interest cost	$	168		$	320
Expected return on plan assets	(53		)	(386		)
Amortization of prior service cost	—			—
Recognized net gain due to curtailment	620			—
Recognized net actuarial loss	1,117			—
Net periodic benefit cost	$	1,852		$	(66	)
Other Change in Plan Assets and Benefit Obligations Recognized in Accumulated Other Comprehensive (Income) Loss
Net (gain) loss	$	(234	)	$	234
Deferred income tax expense (benefit)	80			(80		)
Total recognized in other comprehensive (income) loss	$	(154	)	$	154
Total recognized in net periodic benefit costs and other comprehensive (income) loss	$	1,698		$	88
Adjustment to Retained Earnings Due to Change in Measurement Date

Weighted-Average Assumptions for Benefit Obligations	2011			2010
Discount rate	N/A			5.50		%
Expected return on plan assets	N/A			8.00		%
Rate of compensation increase	N/A			4.00		%
Weighted-Average Assumptions for Net Periodic Benefit Costs	2011			2010
Discount rate	N/A			6.00		%
Expected return on plan assets	N/A			8.00		%
Rate of compensation increase	N/A			4.00		%

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 percent of their compensation subject to certain limits based on federal tax laws. The Company makes matching contributions equal to 50 percent of the first 6 percent 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, 2012, 2011, and 2010, expense attributable to the plan amounted to $308,000, $250,000 and $258,000, respectively.

Money Purchase Pension Plan (MPPP)

The Middleburg Financial Corporation Defined Benefit Pension Plan was replaced by a Money Purchase Pension Plan put into effect 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 1,000 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 1,000 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.

A participant becomes vested in his 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 and 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, 2012 , 2011, and 2,010 expense attributable to the plan amounted to $940,000, $826,000, and $762,000, respectively.

Deferred Compensation Plans

Several deferred compensation plans were adopted; including a defined benefit SERP and 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 2012, 2011 and 2010. The defined contribution SERP on the Executive Officers includes a vesting schedule, and is currently credited at a rate of the 10-year treasury plus 1.5%. The deferred compensation expense for 2012, 2011, and 2010, was $204,000, $133,000, and $150,000, 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.