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                                                                    EXHIBIT 10.2


                              EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of October 1, 1999
(the "Effective Date"), is between STARNET FINANCIAL, INC., a Delaware
corporation (the "Company"), and EDWARD P. DAYTON ("Dayton"). The Company and
Dayton are collectively referred to in this Agreement as the "Parties."

                                   Background

The Company wishes to employ Dayton as its Executive Vice President--Operations,
and the Parties desire to provide for the employment of Dayton as of the
Effective Date in accordance with the terms of this Agreement.

                               Terms of Agreement

The Parties agree as follows:

1. EMPLOYMENT. The Company employs Dayton to devote his personal services to the
business and affairs of the Company, and Dayton accepts such employment, on the
terms and conditions stated in this Agreement.

   1.1. Duties. Dayton's title and position shall be Executive Vice
   President--Operations of the Company. Dayton's duties will be those
   customarily performed by persons acting in that capacity and those that may
   be designated by the Board of Directors, the Chief Executive Officer and the
   President of the Company consistent with the title and position of Executive
   Vice President--Operations of the Company. Dayton shall report directly to
   the Company's President. Dayton shall also serve, upon request and without
   additional compensation, as an officer or a director, or both, of any
   subsidiary, division, or affiliate of the Company or any other entity in
   which the Company holds an equity interest or which it sponsors.

   1.2. Full-Time Employee. Dayton shall devote his full time (except for
   reasonable vacation time and absence for any disability), attention, and best
   efforts to the performance of his duties described in Article 1.1.

2. TERM. The term of Dayton's employment under this Agreement (the "Term") shall
commence on the Effective Date and shall continue for five years (5) or until
terminated pursuant to Article 5.

3. COMPENSATION. As compensation for the services rendered by Dayton under this
Agreement, the Company shall, during the Term, pay or provide Dayton the
following:

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   3.1. Base Salary. The Company shall pay Dayton during the Term a base salary
   equal to Seventy Five Thousand Dollars ($75,000.00) per fiscal year of the
   Company ("Base Salary"). Base Salary shall be paid in equal installments
   every two weeks, in arrears, at the Company's regular and routine payroll
   dates, or at such intervals as may otherwise be agreed upon by the Parties,
   and in accordance with any other payroll procedures of the Company. Base
   Salary shall be prorated in any fiscal year during which Dayton is employed
   under this Agreement for less than the entire fiscal year, in accordance with
   the number of days in that fiscal year during which Dayton is so employed.
   Base Salary shall also be prorated (on a daily basis) for any partial payroll
   period of employment under this Agreement.

   3.2. Option. Dayton shall be eligible to participate in any stock option,
   performance share, phantom stock, or similar long-term stock-based incentive
   plan adopted by the Company for its employees in effect during the Term,
   including the Option Plan. The extent to which Dayton shall participate in
   any such plan will be determined by the Company's Board of Directors (the
   "Board") or the Compensation Committee of the Board.

   3.3. Savings and Retirement Plans. Dayton shall be eligible to participate in
   any bonus, savings, deferred compensation, retirement or pension, or death
   benefit plan adopted by the Company for its employees generally in effect
   during the Term.

   3.4. Welfare Benefit Plans. Dayton shall be eligible to participate in any
   life insurance, medical, dental, and hospitalization insurance, disability
   insurance benefit, or other similar employee welfare benefit plan or program
   adopted by the Company covering its employees generally in effect during the
   Term.

   3.5. Paid Time Off. Dayton shall be entitled to fifteen (15) days of paid
   vacation or time off ("PTO") per fiscal year of the Company, in accordance
   with the Company's PTO policies, practices, and procedures in effect during
   the Term. Such PTO shall, however, be prorated in any fiscal year during
   which Dayton is employed under this Agreement for less than the entire fiscal
   year, in accordance with the number of days in that fiscal year during which
   Dayton is so employed.

   3.6. Transportation Allowance. During the Term, the Company shall pay Dayton
   a transportation allowance equal to Five Hundred Dollars ($500.00) per month
   ("Transportation Allowance"). The Transportation Allowance shall be payable
   in equal installments together with the payments of Base Salary.

   3.7. Tax Withholding. The Company may deduct from any compensation or other
   amount payable to Dayton under this Agreement (including under Article 5)
   social

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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   security (FICA) taxes and all federal, state, municipal, and other taxes or
   governmental charges as may, in the Company's judgment, be required.

   3.8. Participation in Compensation and Benefit Plans. Dayton's participation
   during the Term in any or all of the plans or programs adopted by the Company
   described in Articles 3.2 through 3.4 ("Compensation and Benefit Plans") will
   be subject to the terms and conditions of those Compensation and Benefit
   Plans as they now exist or may hereafter be adopted, amended, restated, or
   discontinued by the Company, including the satisfaction of all applicable
   eligibility requirements and vesting provisions of those Compensation and
   Benefit Plans. The Company shall have no obligation under this Agreement to
   continue any or all of the Compensation and Benefit Plans that now exist or
   are hereafter adopted. To the extent that Dayton is eligible to participate
   in any Compensation and Benefit Plan existing on the date of this Agreement
   for which a plan description or plan materials are available, the Company has
   provided to Dayton, and Dayton hereby acknowledges receipt of, a copy of the
   correct and complete written plan description or plan materials distributed
   to participants or prospective participants.

4. EXPENSE REIMBURSEMENT. During the Term, Dayton may incur, and shall be
reimbursed by the Company for, reasonable, ordinary and necessary, and
documented business expenses to the extent that Dayton complies with, and
reimbursement is permitted by, the Company's policies, practices, and
procedures. Further, the Company agrees to reimburse Dayton for charges incurred
in connection with the use of one cellular phone.

5. EMPLOYMENT TERMINATION. Either Party may terminate Dayton's employment under
this Agreement by giving written notice of termination to the other Party. If
the Company is terminating, it shall include in that notice a statement whether
the termination is because of Disability or for Cause or without Cause. The
Parties' respective rights and obligations upon the termination of Dayton's
employment under this Agreement are as follows:

   5.1. Termination Generally. Upon any termination of Dayton's employment under
   this Agreement, the Company shall pay or provide Dayton the following:

        5.1.a. Any amount of Base Salary and Transportation Allowance earned by,
        but not yet paid to, Dayton through the effective date of termination of
        employment, as further described below (the "Termination Date");

        5.1.b. All benefits that have been earned by or vested in, and are
        payable to, Dayton under, and subject to the terms (including all
        eligibility requirements) of, the Compensation and Benefit Plans in
        which Dayton participated through the Termination Date;


EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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        5.1.c. All reimbursable expenses due, but not yet paid, to Dayton as of
        the Termination Date under Article 4; and

        5.1.d. An amount equal to all accrued and unused PTO, calculated in
        accordance with the Company's PTO policies, practices, and procedures
        (including authorized deductions and the deductions required by law),
        through the Termination Date.

   The amount of Base Salary and Transportation Allowance due under Section
   5.1.a shall be paid no later than thirty (30) business days after the
   Termination Date; the amounts or benefits due under Section 5.1.b shall be
   paid or provided in accordance with the terms of the Compensation and Benefit
   Plans under which such amounts or benefits are due to Dayton; and the amounts
   due under Sections 5.1.c and 5.1.d shall be paid in accordance with the terms
   of the Company's policies, practices, and procedures regarding reimbursable
   expenses and PTO, respectively. Except as expressly provided below in this
   Article 5, upon paying or providing Dayton the preceding amounts or benefits,
   the Company shall have no further obligation or liability under this
   Agreement for base salary or any other cash compensation or for any benefits
   under any of the Compensation and Benefit Plans. Upon termination of Dayton's
   employment, Dayton shall be deemed to have resigned from any position as an
   officer or director, or both, of any subsidiary, division, or affiliate of
   the Company or any other entity in which the Company holds an equity interest
   or which it sponsors that Dayton then holds; no written resignation need be
   given or delivered to the Company.

   In this Agreement, the Termination Date shall be (i) the date of Dayton's
   death, (ii) the third business day after the date on which the Company gives
   notice of termination because of Disability, or (iii) the date of termination
   specified in any other notice of termination, or if not specified in the
   notice of termination, the date that notice of termination is given.

   In this Agreement, "Disability" means Dayton's permanent and total
   disability, which shall be deemed to exist if he is unable reasonably to
   perform his duties under this Agreement because of any medically determinable
   physical or mental impairment which can be expected to result in death or
   which has lasted or can be expected to last for at least ninety (90)
   consecutive days. Any Disability shall be determined by the Board or an
   authorized committee or representative thereof ("Representative"), in its
   sole and absolute discretion, upon receipt of competent medical advice from a
   qualified physician selected by or acceptable to the Board or its
   Representative. Dayton shall, if there is any question about his Disability,
   submit to a physical examination by a qualified physician selected by the
   Board or its Representative.

   In this Agreement, "Cause" means any of the following: (i) Dayton's failure
   to substantially perform his duties under this Agreement, other than any such
   failure

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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   resulting from his incapacity due to physical or mental illness or
   Disability; (ii) Dayton's engaging in any action which, or omitting to engage
   in any action the omission of which, has been, is, or is reasonably expected
   to be substantially injurious (monetarily or otherwise) to the Company or its
   business or reputation; (iii) Dayton's performance of any act or omission
   constituting dishonesty that results, directly or indirectly, in significant
   gain or enrichment of Dayton or his family or affiliates at the expense of
   the Company; or (iv) any breach by Dayton of any obligation under any of
   Articles 6, 7, 8, and 9. Whether an event or circumstance constituting Cause
   exists will be determined in good faith by the Board or its Representative.
   If the Company believes that Cause for termination exists under clause (i)
   above in this paragraph, the Company shall notify Dayton of that belief, and
   that notice shall describe the event or circumstance believed to constitute
   Cause for termination. If that event or circumstance may reasonably be
   remedied or corrected, Dayton shall have thirty (30) days to effect that
   correction or remedy. If not corrected or remedied within that thirty (30)
   day period, Cause for termination shall immediately be deemed to exist, and
   Dayton's employment shall be deemed terminated. If the Company believes that
   Cause for termination exists under any of clauses (ii), (iii), and (iv) above
   in this paragraph, the Company shall notify Dayton of that belief, and that
   notice shall constitute immediate termination of Dayton's employment.

   Dayton may voluntarily terminate his employment under this Agreement only by
   giving at least thirty (30) days' prior written notice to the Company. Dayton
   shall not be liable to the Company for breach of this Agreement because of
   his termination of employment in accordance with the preceding sentence.

   5.2. Termination Without Cause or Upon Death or Disability. If Dayton's
   employment is terminated by death or by the Company because of Disability or
   without Cause, Dayton (or his legal representative, estate, or heirs) shall
   be entitled to receive from the Company, as liquidated damages:

        5.2.a. The continued payment of Base Salary, at the rate in effect at
        the Termination Date, and Transportation Allowance for twelve (12)
        consecutive months following the Termination Date (the "Severance
        Payments"); and

        5.2.b. if Dayton elects and maintains continued coverage under the
        Consolidated Omnibus Benefits Reconciliation Act of 1985 and
        corresponding regulations ("COBRA"), then for up to the twelve (12)
        consecutive months immediately after the Termination Date, payments in
        an amount equal to the difference between (i) the premiums paid or
        payable by Dayton for coverage under COBRA for himself and his
        dependents (if any) and (ii) the premiums that he would have paid for
        comparable coverage under the Company's then current group insurance
        plan or plans if his employment under this Agreement had not ceased (the
        "Insurance Payments"); except that the Insurance Payments shall expire
        or terminate

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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        immediately upon Dayton's becoming eligible for coverage under another
        employer's plan or policy.

   The Severance Payments shall be paid at the dates on which Dayton's Base
   Salary would have been payable if his employment under this Agreement had not
   been terminated. The Company will commence the Severance Payments and the
   Insurance Payments within ten (10) business days after the first business day
   on which the release executed and delivered in accordance with Section 5.3.a
   becomes irrevocable by Dayton (or his legal representative, estate, or
   heirs). The Company's obligations for the Insurance Payments are not intended
   to negate or impair any obligation of the Company or right of Dayton under
   COBRA. The Severance Payments and the Insurance Payments shall be in addition
   to the amounts or benefits to which Dayton is entitled under Article 5.1. Any
   Severance Payments or Insurance Payments (or both) under this Article 5.2
   shall not be deemed the continuation of Dayton's employment for any purpose.

   5.3. Conditions to Severance Payments. Except as provided in Section 5.2.b
   and below in this Article 5.3, none of the Severance Payments and the
   Insurance Payments under Article 5.2 will be subject to reduction as the
   result of future compensation earned or received by Dayton (including by
   self-employment), and Dayton shall have no duty to mitigate his damages. The
   Severance Payments and the Insurance Payments shall, however, be conditioned
   upon:

        5.3.a. The Company's receipt of a Settlement Agreement, General Release,
        and Covenant Not to Sue executed and performed by Dayton (or his legal
        representative, estate, or heirs) in substantially the form of Exhibit
        "A" to this Agreement (the "Release Agreement"); and

        5.3.b. the compliance by Dayton (or his legal representative, estate, or
        heirs) with Articles 6, 7, 8, and 9 after the Termination Date as
        specified in those Articles, as well as with the Release Agreement.

   The Company may cease or reduce the Severance Payments or the Insurance
   Payments (or both) if, and the Company shall be entitled to a return of the
   Severance Payments and the Insurance Payments (or both) made to the extent
   that, there is or has been any material violation by Dayton (or his legal
   representatives, estate, or heirs) of any of Articles 6, 7, 8, and 9 or of
   the Release Agreement.

   5.4. Termination for Cause or by Dayton. If Dayton's employment is terminated
   by the Company for Cause or is voluntarily terminated by Dayton, then Dayton
   shall not be entitled to any payments under this Agreement other than the
   amounts or benefits to which he is entitled under Article 5.1.


EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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   5.5. Post-Termination Survival. The provisions of this Article 5 shall
   survive the termination of Dayton's employment by the Company and its
   subsidiaries to the extent necessary to effect the post-termination payments
   or benefits to which Dayton is entitled under the terms of this Article 5.

6. CONFIDENTIAL INFORMATION. The Company shall provide to Dayton, during the
Term, access to various trade secrets, confidential information, and proprietary
information of the Company (which, in this Article 6 as well as in Articles 7,
8, and 9, shall include the Company's subsidiaries and affiliates) which are
valuable and unique to the Company ("Confidential Information"). Confidential
Information includes the Company's plans, policies, and procedures as well as
the plans, policies and procedures of other persons having relationships that
are material to the Company's business and affairs. Dayton shall not, either
while in the employ of the Company or at any time thereafter, (i) use any of the
Confidential Information, or (ii) disclose any of the Confidential Information
to any person not an employee of the Company or not engaged to render services
to the Company, except (in either case) to perform his duties under this
Agreement or otherwise with the Company's prior written consent. Nothing in this
Article 6 shall preclude Dayton from the use or disclosure of information
generally known to the public or not considered confidential by the Company or
from any disclosure to the extent required by law or court order (though Dayton
must give the Company prior notice of any such required disclosure and must
cooperate with any reasonable requests of the Company to obtain a protective
order regarding, or to narrow the scope of, the Confidential Information
required to be disclosed). All files, records, documents, information, data, and
similar items relating to the business or affairs of the Company, whether
prepared by Dayton or otherwise coming into his possession, shall remain the
exclusive property of the Company and shall not be removed from the premises
from the Company, except in the ordinary course of business as part of Dayton's
performance of his duties under this Agreement, and (in any event) shall be
promptly returned or delivered to the Company (without Dayton's retaining any
copies) upon the termination of employment under this Agreement.

7. NONCOMPETITION. Dayton acknowledges that, in addition to his access to and
possession of Confidential Information, during the Term he will acquire valuable
experience and special training regarding the Company's business and that the
knowledge, experience, and training he will acquire would enable him to injure
the Company if he were to engage in any business that is competitive with the
business of the Company. Therefore, Dayton shall not, at any time during the
Term and for the thirty-six (36) consecutive months immediately after the
Termination Date, directly or indirectly (as an employee, employer, consultant,
agent, principal, partner, shareholder, officer, director, or manager or in any
other individual or representative capacity), engage, invest, or participate in
any business in direct competition with the business of the Company within a
fifty (50)-mile radius of each location, or set or group of locations, (i) at,
from, or to which the Company conducts or has conducted business or renders,
provides, or delivers, or has rendered, provided, or delivered, services or
products during the Measurement Period (as defined below) or (ii) that is or has
been, during the Measurement Period, the subject of

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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a Proposal (as defined below) to conduct business or render, provide, or deliver
services or products thereat, therefrom, or thereto. "Measurement Period" means,
with respect to Dayton' activity (A) at any time during the Term, the Term, and
(B) at any time on or after the Termination Date, the six (6) consecutive months
preceding, and including, the Termination Date. "Proposal" means a written or
formal proposal, bid, arrangement, understanding, or agreement by the Company to
or with another person that reflects or contains negotiated or substantive
terms, but does not include any marketing contact by the Company where the other
person has not solicited that contact or indicated any interest in doing
business with the Company. (Dayton shall not be prohibited, however, from
owning, as a passive investor, less than five percent (5%) of the publicly
traded stock or other securities of any entity engaged in a business competitive
with that of the Company.) Dayton represents and agrees that (x) the Company has
agreed to provide him, and he will receive from the Company, special experience
and knowledge, including Confidential Information, (y) because the Confidential
Information is valuable to the Company, its protection (particularly from any
competitive business) constitutes a legitimate interest to be protected by the
Company by enforcement of the restriction in this Article 7, and (z) the
enforcement of the restriction in this Article 7 would not be unduly burdensome
to Dayton and that, in order to induce the Company to enter into this Agreement
(which contains various benefits to Dayton and obligations of the Company with
respect to Dayton's employment), Dayton is willing and able to engage, invest,
or participate in business after the Termination Date so as not to violate this
Article 7. The Parties agree that the restrictions in this Article 7 regarding
scope of activity, duration, and geographic area are reasonable; however, if any
court should determine that any of those restrictions is unenforceable, that
restriction shall not thereby be terminated, but shall be deemed amended to the
extent required to render it enforceable.

8. NONSOLICITATION. Dayton shall not, at any time within the thirty-six (36)
consecutive months immediately after the Termination Date, either directly or
indirectly:

   8.1. Disclose Contact Information. Make known to any person the names and
   addresses, or other contact information, of any of the customers, suppliers,
   or other persons having significant business relationships with the Company
   within the information technology industry, so that such person could affect,
   or attempt to affect, any of those relationships to the detriment of the
   Company; or

   8.2. Solicit Employees. Solicit, recruit, or hire, or attempt to solicit,
   recruit, or hire, any employee or consultant of the Company, or in any other
   manner attempt to induce any employee or consultant of the Company to leave
   the employ of the Company or cease his or her consulting or similar business
   relationship with the Company. References in this Article 8.2 to "any
   employee or consultant" shall include any person who was an employee or
   consultant of the Company at any time within the six (6) consecutive months
   preceding, and including, the Termination Date.


EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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9. DEVELOPMENTS. Dayton shall promptly disclose to the Company all inventions,
discoveries, improvements, processes, formulas, ideas, know-how, methods,
research, compositions, and other developments, whether or not patentable or
copyrightable, that Dayton, by himself or in conjunction with any other person,
conceives, makes, develops, or acquires during the Term which (i) are or relate
to the properties, assets, or existing or contemplated business or research
activities of the Company, (ii) are suggested by, arise out of, or result from,
directly or indirectly, Dayton's association with the Company, or (iii) arise
out of or result from, directly or indirectly, the use of the Company's time,
labor, materials, facilities, or other resources ("Developments").

Dayton hereby assigns, transfers, and conveys to the Company, and hereby agrees
to assign, transfer, and convey to the Company during or after the Term, all of
his right and title to and interest in all Developments. Dayton shall, from time
to time upon the request of the Company during or after the Term, execute and
deliver any and all instruments and documents and take any and all other actions
which, in the judgment of the Company or its counsel, are or may be necessary or
desirable to document any such assignment, transfer, and conveyance to the
Company or to enable the Company to file and process applications for, and to
acquire, maintain, and enforce, any and all patents, trademarks, registrations,
or copyrights with respect to any of the Developments, or to obtain any
extension, validation, re-issue, continuance, or renewal of any such patent,
trademark, registration, or copyright. The Company will be responsible for the
preparation of any such instrument or document and for the implementation of any
such proceedings and will reimburse Dayton for all reasonable expenses incurred
by him in complying with this Article 9.

10. INDEMNIFICATION. To the extent Dayton is an officer or director of the
Company, the Company shall include Dayton under any existing or future (i)
directors' and officers' liability insurance policy that the Company obtains and
maintains or (ii) indemnification agreements between the Company and other
executives of the Company. Subject to the foregoing sentence, the Company will
indemnify Dayton to the fullest extent permitted by the laws of the Company's
state of incorporation in effect at that time or by the articles or certificate
of incorporation and by- laws of the Company, whichever affords the greater
protection to Dayton.

11. CERTAIN REMEDIES. Any breach or violation by Dayton of any of Articles 6, 7,
8, and 9 shall entitle the Company, as a matter of right, to an injunction
issued by any court of competent jurisdiction, restraining any further or
continued breach or violation, or to specific performance requiring the
compliance with Dayton's covenants. This right to an injunction or other
equitable relief shall be in addition to, and not in lieu of, any other remedies
to which the Company may be entitled. The existence of any claim or cause of
action of Dayton against the Company, or any subsidiary or affiliate of the
Company, whether based on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of Dayton's covenants in any of
Articles 6, 7, 8, and 9. The covenants in Articles 6, 7, 8, and 9 and in this
Article 11 shall survive the termination of Dayton's employment under this
Agreement.

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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12. BINDING AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the Company and Dayton and their
respective legal representatives, heirs, executors, administrators, and
successors and assigns (as permitted by this Article 12), including any
successor to the Company by merger, consolidation, or reorganization and any
other person that acquires all or substantially all of the business and assets
of the Company. The Company shall have the right, without the need for any
consent from Dayton, to assign its rights, benefits, remedies, and obligations
under this Agreement to one or more other persons. The rights, benefits,
remedies, and obligations of Dayton under this Agreement are personal to Dayton,
however, and may not be assigned or delegated by him; except that this shall not
preclude (i) Dayton from designating one or more beneficiaries to receive any
amount or benefit that may be paid or provided after Dayton's death or (ii) the
legal representative of Dayton's estate from assigning any right or benefit
under this Agreement to the person or persons entitled thereto under Dayton's
will or the laws of intestacy applicable to Dayton's estate, as the case may be.

13. SEVERABILITY. If any provision of this Agreement is found to be invalid or
unenforceable for any reason, then (i) that provision shall be severed from this
Agreement, (ii) this Agreement shall be construed and enforced as if that
invalid or unenforceable provision never constituted a part of this Agreement,
and (iii) the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
applicable law. Further, in lieu of that invalid or unenforceable provision,
there shall be added to this Agreement a provision as similar in its terms to
that invalid or unenforceable provision as may be possible and be valid and
enforceable.





            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

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14. NOTICES. Any notice, request, or other communication to be given by either
Party under this Agreement by to the other shall be in writing and either (i)
delivered in person, (ii) delivered by prepaid same-day or overnight courier
service, (iii) sent by certified mail, postage prepaid with return receipt
requested, or (iv) transmitted by facsimile, in any case addressed to the other
Party as follows:

    If to the Company:         StarNet Financial, Inc.
                               1700 Preston Road
                               Suite 350
                               Dallas, Texas 75248
                               Attention: Daniel L. Jackson, Chief Executive
                                          Officer
                               Facsimile: (972) 239-2893

    With a copy (which shall
    not constitute notice) to: Gardere & Wynne, L.L.P.
                               1601 Elm Street, Suite 3000
                               Dallas, Texas 75201-4761
                               Attention: I. Bobby Majumder, Esq.
                               Facsimile: (214) 969-4667

    If to Dayton:              Edward P. Dayton

                               ----------------------------------

                               ----------------------------------

or to such other address or facsimile number as the Party to be notified may
have designated by notice previously given in accordance with this Article 14.
Communications delivered in person or by courier service or transmitted by
facsimile shall be deemed given and received as of actual receipt (or refusal)
by the addressee. Communications mailed as described above in this Article 14
shall be deemed given and received three (3) business days after mailing or upon
actual receipt, whichever is earlier.

15. CERTAIN DEFINED TERMS. In this Agreement, (i) "person" means an individual
or any corporation, partnership, trust, unincorporated association, limited
liability company, or other legal entity, whether acting in an individual,
fiduciary, or other capacity, and any government, court, or governmental agency,
(ii) "include" and "including" do not signify any limitation, (iii) "Article"
and "Section" means any Article and any Section, respectively, of this
Agreement, unless otherwise indicated, (iv) an "affiliate" of a person means any
other person controlling, controlled by, or under common control with that
person, and (v) "business day" means any Monday through Friday, other than any
such weekday on which the executive offices of the Company are closed. In
addition, the use in this Agreement of "year," "annual," "month," or "monthly"
(or similar terms) to indicate a measurement period shall not itself be deemed
to grant rights to Dayton for employment or compensation for that period.

16. ENTIRE AGREEMENT. This Agreement, with Exhibit "A", constitutes the entire
agreement between the Company and Dayton with respect to the subject matter
hereof and

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EDWARD P. DAYTON

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supersedes any prior agreement between the Company and Dayton with respect to
the same subject matter.

17. MODIFICATION AND WAIVER. No amendment to or modification of this Agreement,
or waiver of any term, provision, or condition of this Agreement, will be
binding upon a Party unless the amendment, modification, or waiver is in writing
and signed by the Party to be bound. Any waiver by a Party of a breach or
violation of any provision of this Agreement by the other Party shall not be
deemed a waiver of any other provision or of any subsequent breach or violation.

18. GENDER. Whenever the context requires in this Agreement, words denoting
gender in this Agreement include the masculine, feminine, and neuter.

19. GOVERNING LAW; VENUE. This Agreement, and the rights, remedies, obligations,
and duties of the Parties under this Agreement, shall be governed by, construed
in accordance with, and enforced under the laws of the State of Texas. The
exclusive venue of any action or proceeding relating to this Agreement or its
subject matter shall be in Dallas County, Texas.

20. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
constitutes an original, but all of which constitute one and the same document.





            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON

                                       12

<PAGE>   13

     The Parties have executed this Agreement to be effective as of the date
stated in the first paragraph.


                                           STARNET FINANCIAL, INC.,
                                           a Delaware Corporation



                                           By: /s/ Daniel L. Jackson
                                              ----------------------------------
                                                   DANIEL L. JACKSON,
                                                      Chief Executive Officer


                                              /s/ Edward P. Dayton
                                              ----------------------------------
                                                  EDWARD P. DAYTON


EMPLOYMENT AGREEMENT -
EDWARD P. DAYTON


                                       13