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                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is made as of June 27, 2002, between
Resource Bank ("Resource"), and Lawrence N. Smith ("Employee").

     WHEREAS, Resource wishes to continue to employ Employee to serve as its
Chief Executive Officer, and Employee is willing to accept such employment in
accordance with the terms of this Agreement; and

     WHEREAS, Employee previously has been employed by Resource pursuant to the
terms and conditions of an Employment Agreement dated January 1, 1999 ("Original
Employment Agreement"); and

     WHEREAS, Employee and Resource desire to terminate the Original Employment
Agreement and enter into this Agreement; and

     WHEREAS, Employee recognizes the importance to Resource and to the public
of maintaining the high standards and quality associated with Resource's name
and reputation, and is willing to maintain such high standards and quality;

     NOW, THEREFORE, it is agreed as follows:

1.   TERM OF EMPLOYMENT: Subject to the provisions of this Agreement, Resource
will employ Employee as its Chief Executive Officer for an initial term of five
(5) years, beginning on June 27, 2002 and expiring on June 26, 2007 ("Initial
Term"). Not less than six (6) months prior to the expiration of the Initial
Term, Resource's Board of Directors (the "Resource Board of Directors") shall
conduct and complete a review of Employee's performance.

     1.1   If the Resource Board of Directors determines upon such review that
Employee has performed in accordance with Resource's performance criteria, no
further action will be necessary, and Resource shall employ Employee for an
additional two-year period under the terms herein. Thereafter, this Agreement
shall automatically renew for successive two-year periods unless either party
gives three (3) months written notice prior to the expiration of any two-year
term.

     1.2   If the Resource Board of Directors determines upon such review that
Employee has not performed in accordance with Resource's performance criteria,
it shall so notify Employee in writing at least three (3) months prior to the
expiration of the Initial Term hereof that this Agreement will not be renewed
("Notice of Non-Renewal"), and this Agreement shall expire and the employment
created herein shall end at the conclusion of the Initial Term. Employee shall
also receive three additional month's regular base salary following expiration
pursuant to Resource's regular pay schedule.

     1.3   The regular base salary payable both prior to and following
expiration as provided in subparagraph 1.2 shall not be paid if Employee
competes with Resource as that term is used in subparagraphs 7.2 and 7.3 hereof.

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     1.4 Resource, in its sole discretion, shall have the option but not the
obligation of relieving Employee of actually performing any services following
the giving of a Notice of Non-Renewal. Employee shall nonetheless be paid as
provided in subparagraph 1.2 provided he neither seeks or accepts employment in
competition with Resource as provided in subparagraph 1.3 nor breaches any other
provision hereof.

2.   DUTIES: During the period of employment hereunder, Employee will devote his
best efforts and substantially his full time to the business and affairs of
Resource, perform such services not inconsistent with his position as are
designated by the Resource Board of Directors, and use his best efforts to
promote the interest of Resource. Employee pledges that during the term of this
Agreement, Employee shall not, directly or indirectly, engage in any business
that could detract from Employee's ability to apply his best efforts to the
performance of his duties hereunder. Employee further agrees to comply with all
rules, regulations and policies established or issued by Resource.

3.   COMPENSATION: Resource will pay Employee a regular base salary commensurate
with his position and performance, such salary to be determined from time to
time by the Resource Board of Directors, but to be not less than $342,000 per
year upon the initiation of this Agreement. Such salary will be payable in
periodic installments on the same basis as that of other employees of Resource
who hold executive positions. In addition, Employee will be eligible to
participate in Resource's Bonus Program as determined from time to time by the
Resource Board of Directors.

4.   BENEFITS: Employee will participate in the various employee benefit,
disability and retirement plans provided for similarly situated employees
according to the terms and conditions of those plans, as determined by the
Resource Board of Directors. During each full year of employment, Employee shall
have five weeks paid vacation. During Employee's employment with Resource,
Employee will be provided with a leased automobile and shall also receive such
other perquisites as are set forth on the Summary Sheet attached to this
Agreement. Resource reserves the right to modify, eliminate, or add to any of
the foregoing benefits as it deems appropriate.

5.   DEATH: If Employee should die during the term of this Agreement, Resource
will, in lieu of payments due under other provisions of this Agreement, pay to
Employee's estate for a period of 3 months, Employee's regular base salary at
the time of the Employee's death plus any previously accrued and unpaid base
salary. Thereafter, Resource will have no further obligation to Employee or his
estate under this Agreement.

6.   DISABILITY: In the event that Employee, by reason of physical or mental
incapacity or disability ("Disability"), is unable, with or without reasonable
accommodation, to perform his duties and responsibilities under this Agreement,
then Resource will pay to Employee his regular base salary for a six-month
period following the date on which the Disability first begins, after which time
it is intended that the payments under the disability insurance maintained by
Resource for Employee will be in effect. Thereafter, Resource will have no
obligation to pay Employee any compensation under this Agreement; provided,
however, that for a period of one (1) year following the date the Disability
first begins, Employee shall have the right to return to employment under this
Agreement if Employee, with or without reasonable accommodation, is

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again able to fully perform his duties. Upon such a return to employment,
Employee shall work as mutually agreed upon by Resource and Employee, and
Employee shall receive the same compensation and benefits as set forth in this
Agreement, subject to appropriate proration of compensation if Employee works
less than the same schedule he had previously worked.

7.   TERMINATION WITHOUT CAUSE; SEVERANCE PAY:

     7.1 Resource may terminate Employee's employment immediately and without
cause. However, if Resource terminates employee's employment pursuant to this
Section 7.1, Resource shall pay to Employee his regular base salary payable in
periodic installments on the same schedule as other executive employees of
Resource through the lesser of (i) the remainder of the Initial Term of this
Agreement or (ii) a period of thirty-six (36) months following the date on which
employment is terminated ("Severance Pay"). Notwithstanding the foregoing, in
the event Employee elects to compete with Resource as described below,
Resource's obligation to pay the Severance Pay shall terminate immediately.

     7.2 Employee agrees that in the event he competes, directly or indirectly,
with Resource in the Business (as defined in paragraph 7.3 below) within a
30-mile radius of any Resource office that exists on the date of such
termination he will forfeit any remaining Severance Pay from the first date of
such competition.

     7.3 It is the specific intent of the parties that as long as Employee is
receiving Severance Pay, Employee shall be restricted from competing directly or
indirectly within a thirty mile radius of any segment of the Business in which
Employee engaged prior to the termination of employment and from any segment of
the Business about which Employee acquired proprietary or confidential
information during the course of his employment. For purposes of this paragraph
7, (i) the Business shall mean the business of banking and mortgage lending and
(ii) Resource shall mean collectively Resource, Resource's parent corporation
Resource Bankshares Corporation and any of their direct or indirect subsidiaries
or any other entity that is an affiliate of Resource as the term affiliate is
defined under Rule 12b-2 (or any successor rule thereto) under the Securities
Exchange Act of 1934. Employee agrees that competition shall include engaging in
competitive activity, either as an individual, as a partner, as a joint venturer
with any other person or entity, or as an employee, agent, or representative of
any other person or entity, or otherwise being associated in a competitive
capacity with any business entity which directly or indirectly competes with
Resource in the Business. Employee further agrees that for as long as he
receives severance pay, he will not induce or attempt to induce any of the
employees of Resource to terminate their employment relationship with Resource.

     7.4 Resource and Employee have examined in detail this paragraph 7 and
agree that the restraint imposed upon Employee is reasonable in light of the
legitimate interests of Employer, and it is not unduly harsh upon Employee's
ability to earn a livelihood.

     7.5 Notwithstanding any provision of this Agreement to the contrary, any
payments made to Employee pursuant to this Agreement, or otherwise, are subject
to and conditional upon their compliance with 12 U.S.C. (S) 1828(k) and any
regulations promulgated thereunder.

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8.   TERMINATION FOR CAUSE: The Employee's employment may be terminated at any
time by Resource for "cause." As used in this Agreement, the term cause means
(i) personal dishonesty; (ii) gross neglect related to employment; (iii)
incompetence; (iv) willful misconduct; (v) breach of loyalty or fiduciary duty
to Resource; (vi) intentional failure to perform assigned or agreed upon duties;
(vii) willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses); or (viii) material breach of any provision of
this Agreement. Termination by Resource for cause shall be determined by the
vote of at least 51% of all of the members of the Resource Board of Directors.
If the employment is so terminated, Employee will be entitled to receive any
regular salary earned and employee benefits accrued as of the date of such
termination, but Resource will have no further obligation to Employee hereunder
from and after such date.

9.   TERMINATION BY EMPLOYEE: Employee may resign from the employment of
Resource at any time upon ninety (90) days prior written notice. Upon such
resignation, Employee shall have no rights to any further compensation or
benefits after the ninety (90) day notice period has expired. Resource reserves
the option but not the obligation to relieve Employee from performance of work
during this period, but absent subsequent breach hereof, Resource shall be
obligated to pay Employee the Employee's regular base salary for the entire
90-day notice period.

10.  CHANGE OF CONTROL: If there shall occur a "Change of Control of Resource
Bankshares Corporation" as defined below, the Employee may be assigned such
other duties, responsibilities and compensation as would be reasonably
equivalent under the circumstances and acceptable to the Employee in his
reasonable discretion. Upon such occurrence, if the Employee shall not be given
such reasonably equivalent duties, responsibilities and compensation, he may be
terminated or he may resign; and, in either such case, Employee shall receive in
lieu of any payments pursuant to paragraph 7, a one-time payment of 2.99 times
the average of the Employee's last three (3) years' reported W-2 income
attributable to employment by Resource. As used in this paragraph 10, a Change
of Control of Resource Bankshares Corporation ("Resource Bankshares") shall be
deemed to have occurred if any of the following occur:

     10.1 A person, entity, or group (other than Resource Bankshares, any
Resource Bankshares subsidiary, any Resource Bankshares benefit plan, or any
underwriter temporarily holding securities for an offering of such securities)
acquires ownership of more than 50% of the undiluted total voting power of
Resource Bankshares' then outstanding securities eligible to vote to elect
members of Resource Bankshares' Board of Directors ("Company Voting
Securities"); or

     10.2 The individuals (A) who, as of the date of this Agreement, constitute
the Board of Directors of Resource Bankshares (the "Original Directors") or (B)
who thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3) of
the Original Directors then still in office (such directors becoming "Additional
Original Directors" immediately following their election) or (C) who are elected
to the Board and whose election, or nomination for election, to the Board was
approved by a vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors also becoming
"Additional Original Directors" immediately following their election) cease for
any reason to constitute a majority of the members of the Board; or

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     10.3 Consummation of a merger or consolidation of Resource Bankshares into
any other entity unless the holders of the Company Voting Securities outstanding
immediately before such consummation, together with any trustee or other
fiduciary holding securities under a Resource Bankshares benefit plan, hold
securities that represent immediately after such merger or consolidation more
than 50% of the combined voting power of the then outstanding voting securities
of either Resource Bankshares or the other surviving entity or its parent; or

     10.4 The shareholders of Resource Bankshares approve (i) a plan of complete
liquidation or dissolution of Resource Bankshares or (ii) an agreement for
Resource Bankshares' sale or disposition of all or substantially all of Resource
Bankshares' assets, (i.e., 50% or more of the total assets of Resource
Bankshares) and such liquidation, dissolution, sale, or disposition is
consummated.

11.  REQUIRED PROVISIONS:

     11.1 If Employee is suspended and/or temporarily prohibited from
participating in the conduct of Resource's affairs by a notice served under the
Federal Deposit Insurance Act, Resource's obligations under this Agreement shall
be suspended as of the date of service. If the charges in the notice are
dismissed, Resource may, in its discretion, (i) pay Employee all or part of the
compensation withheld while its obligations under the Agreement were suspended,
and (ii) reinstate (in whole or in part) any of its obligations which were
suspended.

     11.2 If Employee is removed and/or permanently prohibited from
participating in the conduct of Resource's affairs by an order issued under the
Federal Deposit Insurance Act, all obligations of Resource under this Agreement
shall terminate as of the effective date of the order, but the Employee's vested
rights shall not be affected.

     11.3 If Resource is in default as defined in the Federal Deposit Insurance
Act, all obligations under this Agreement shall terminate as of the date of
default, but the operation of this subparagraph 11.3 shall not affect any of
Employee's vested rights.

12.  NONDISCLOSURE:

     12.1 Employee agrees to hold and safeguard any information about Resource
gained by Employee during the course of Employee's employment. Employee shall
not, without the prior written consent of Resource, disclose or make available
to anyone for use outside Resource's organization at any time, either during his
employment or subsequent to any termination of his employment, however such
termination is effected, whether by Employee or Resource, with or without cause,
or expiration or nonrenewal of this Agreement, any information about Resource or
its customers or suppliers, whether or not such information was developed by
Employee, except as required in the performance of Employee's duties for
Resource.

     12.2 Employee understands and agrees that any information about Resource or
Resource's customers is the property of Resource and is essential to the
protection of Resource's goodwill and to the maintenance of Resource's
competitive position and accordingly should be kept secret. Such information
shall include, but not be limited to, information containing

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Resource's promotional plans and strategies, pricing strategies, customers and
prospective customers, customer lists, identity of key personnel in the employ
of customers and prospective customers, computer programs, system documentation,
manuals, ideas, or any other records or information belonging to Resource or
relating to Resource's Business. As used in this paragraph 12, the terms
Business and Resource shall have the same meanings given to such terms in
paragraph 7.

     12.3 Notwithstanding anything in paragraph 12.1 or paragraph 12.2 to the
contrary, Resource agrees that the obligations of Employee set forth in
paragraphs 12.1 and 12.2 shall not apply to any information which (i) becomes
known generally to the public through no fault of the Employee; (ii) is required
by applicable law, legal process or any order or mandate of a court or other
governmental authority to be disclosed; or (iii) is reasonably believed by
Employee, based upon the advice of legal counsel, to be required to be disclosed
in defense of a lawsuit or other legal or administrative action brought against
Employee; provided, that in the case of clauses (ii) or (iii) Employee shall
give Resource reasonable advance written notice of the information intended to
be disclosed and the reasons and circumstances surrounding such disclosure in
order to permit Resource to seek a protective order or other appropriate request
for confidential treatment of the applicable information.

13.  NON-SOLICITATION OF EMPLOYEES: Employee agrees that during his employment
hereunder and for a period of one year following termination of Employee's
employment, whether such termination is voluntary or involuntary, effected by
Resource or by Employee, regardless of cause, Employee shall not, directly or
indirectly, hire, solicit or induce or attempt to hire, solicit or induce, any
employee of Resource to become employed by Employee or any other person or
entity or to perform services for remuneration for Employee or any other person
or entity regardless of the structure or nature of any such remunerative
relationship. For purposes of this paragraph 13, an employee of Resource shall
mean any individual who was employed by Resource at the time of Employee's
termination or at any time during the six-month period immediately preceding
such termination. As used in this paragraph 13, the term Resource shall have the
same meaning given to such term in paragraph 7.

14.  ENTIRE AGREEMENT: This Agreement [and the attached Summary Sheet] supersede
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Employee by Resource or any affiliate
of Resource (including without limitation the Original Employment Agreement) and
contains all the covenants and agreements between the parties with respect to
such employment. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement or promise not contained
in this Agreement [and the attached Summary Sheet] will be valid or binding. Any
modification of these Agreements will be effective only if it is in writing
signed by the party to be charged.

15.  BINDING EFFECT: This Agreement will be binding upon and inure to the
benefit of each of the parties and their successors.

16.  LAW GOVERNING AGREEMENT: This Agreement will be governed and construed in
accordance with the laws of the Commonwealth of Virginia.

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17.  CONFLICT WITH REGULATIONS: The requirements of 12 C.F.R. (S) 563.39(b) (the
"Employment Agreement Regulations") shall be made part of this Agreement and are
incorporated by reference. If any provision of this Agreement conflicts with the
Employment agreement Regulations, the Employment Agreement Regulations shall
govern.

18.  PARTIAL INVALIDITY: If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will nevertheless continue in full force and effect.

19.  SEVERABILITY: If any clause or provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, then the remainder of this Agreement shall not be affected
thereby, and in lieu of each clause or provision of this Agreement which is
illegal, invalid or unenforceable, and specifically including the restrictions
on competition in paragraph 7, there shall be added, as a part of this
Agreement, a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and as may be legal, valid,
and enforceable.

20.  NOTICES: Any notices to be given hereunder by either party to the other may
be effected either by personal delivery in writing or by mail, registered or
certified, postage prepaid, with return receipt requested. Mailed notices will
be addressed to the parties at the addresses appearing herein, but each party
may change his address by written notice in accordance with this paragraph.
Notices delivered personally will be deemed communicated as of actual receipt;
mailed notices will be deemed communicated as of five (5) days after mailing.

          TO:   Resource Bank
                Attention:  Debra C. Dyckman
                3720 Virginia Beach Boulevard
                Virginia Beach, Virginia 23452

          TO:   Lawrence N. Smith
                127 Pinewood Road
                Virginia Beach, VA 23451

21.  COUNTERPARTS: This Agreement may be executed in counterparts, together
which shall constitute one and the same instrument.

22.  ARBITRATION: Except for actions initiated by Resource to enjoin a breach
by, and/or recover damages from, Employee related to violation of any of the
restrictive covenants in paragraphs 7, 12 or 13, which Resource may bring in an
appropriate court of law or equity, any other unresolved dispute or controversy
arising under or in connection with Employee's employment and/or this Agreement
shall be settled or resolved exclusively by arbitration conducted in accordance
with the rules of the American Arbitration Association then in effect. This
includes any and all federal, state and/or local claims based upon statute,
common law and/or local ordinance, including, but not limited to claims under
Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, the Family and Medical Leave Act, and the Americans with
Disabilities Act. The arbitrator(s) shall not have the

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authority to add to, detract from or modify this Agreement except as permitted
by the Agreement. The arbitrator's decision shall be final and binding, and
judgment may be entered on the decision in any court having competent
jurisdiction. The arbitration shall be held in Norfolk or Virginia Beach,
Virginia, as selected by Resource. The direct expense of the arbitration shall
be borne by Resource but each party will bear its own expenses and legal fees;
provided, however, that from and after the date of a Change of Control of
Resource Bankshares (as defined in paragraph 10), Resource shall reimburse
Employee for up to (but not in excess of) $40,000 of Employee's documented legal
fees and expenses incurred by Employee in connection with any arbitration
pursuant to this paragraph 22 (it being the specific intent of the parties that
such reimbursement obligation of Resource shall apply only to arbitration
proceedings and not to any action by Resource to enforce the restrictive
covenants of paragraphs 7, 12 or 13 in a court of law or equity as contemplated
by the first sentence of this paragraph 22).

     IN WITNESS WHEREOF, Resource Bank has caused this Agreement to be executed
in its name and behalf by its proper officers, thereunto duly authorized, and
Employee has set his hand as of the date first above written.

EMPLOYEE'S NAME                             RESOURCE BANK

______________________________________      By: ________________________________
Signature                                        Thomas W. Hunt

         Lawrence N. Smith                  Its:     Chairman of the Board
--------------------------------------          --------------------------------
Printed Name

Date:_________________________________      Date________________________________

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                                  SUMMARY SHEET

                                Lawrence N. Smith

     During Employee's employment with Resource pursuant to the terms and
conditions of this Agreement, Employee shall be entitled to the following
additional benefits:

     1. Employee will participate in Resource's Senior Executive Retirement Plan
("SERP"), pursuant to which Employee will be eligible to receive a retirement
benefit of $90,000 per year for fifteen (15) years following Employee's
retirement from Resource. The SERP benefit (i) is contingent upon Employee being
employed by Resource for not less than ten (10) years, and (ii) will first be
paid upon the later of Employee's retirement from Resource or Employee reaching
sixty-seven (67) years of age. Terms and conditions of this plan are in the plan
document.

     2. Employee will be included in the supplemental disability insurance
program funded by the Bank for selected executives.

     3. Bank will pay dues and all business related expenses for Cedar Point
Country Club, Town Point Club and Commonwealth Club.

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