<PAGE>   1
                     SPLIT-DOLLAR LIFE INSURANCE AGREEMENT


         THIS SPLIT-DOLLAR LIFE INSURANCE AGREEMENT (this "Agreement") is made,
entered into and effective for all purposes this 20th day of December, 1996, by
and between (i) FRANKLIN NATIONAL BANK OF WASHINGTON, D.C., a national banking
association (the "Corporation"), (ii) THE ROBERT P. PINCUS FAMILY TRUST, a
Maryland trust, acting by and through its Trustees, RONALD D. ABRAMSON and
HAROLD PINCUS (the "Owner"), and (iii) ROBERT P. PINCUS ("Employee").

         WHEREAS, Employee is the President and Chief Executive Officer of the
Corporation;

         WHEREAS, Employee's past services to the Corporation have contributed
to the success of the Corporation; and

         WHEREAS, the Corporation desires to provide life insurance protection
for Employee's family in the event of Employee's death, subject to the terms
and conditions hereof.

         NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises hereinafter set forth and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, do hereby agree as follows.

         1.      Description of Policy.  The life insurance policy described in
and subject to the terms of this Agreement is that certain Policy attached
hereto and made a part hereof as Exhibit A.

         2.      Ownership of Policy.  The Owner shall be the sole and absolute
owner of the Policy and shall retain all rights and privileges of ownership
with respect to the Policy, except as otherwise provided in this Agreement.
Notwithstanding the foregoing, the Owner shall not borrow against the cash
surrender value of the Policy, as defined therein (the "Cash Surrender Value").

         3.      Payment of Premiums.

                 A.       On or before the due date of each premium on the
Policy, or within the grace period with respect thereto, the
<PAGE>   2
Corporation shall pay the full amount of such premium to the insurance company
issuing the Policy (the "Insurer").

                 B.       In addition to the payment of premiums described in
Section 3A hereof, the Corporation shall furnish to Employee an annual
statement of the amount of income reportable by Employee for Federal and state
income tax purposes as a result of the Corporation's payment of such premiums.

         4.      Collateral Assignment of Policy.  Simultaneously with the
execution of this Agreement, the Owner shall execute a Collateral Assignment of
the Policy to the Corporation (the "Collateral Assignment"), a copy of which
Collateral Assignment is attached hereto and made a part hereof as Exhibit B.

         5.      Death of Employee.

                 A.       Upon the death of Employee, the Corporation and the
Owner shall promptly take all actions necessary in order to collect the death
benefits payable under the Policy.  Such death benefits shall be distributable
as follows:

                          (1)     Pursuant to the terms of the Collateral
Assignment, the Corporation shall be entitled to receive that portion of the
death benefits payable under the Policy which is equal to the aggregate amount
of premiums paid by it under this Agreement, determined as of the date of
Employee's death.

                          (2)     The balance, if any, of the death benefits
provided under the Policy shall be paid directly to the beneficiary or
beneficiaries designated pursuant to the beneficiary designation provision of
the Policy.

                 B.       The payment from the Insurer to the Corporation of
the amount described in Section 5A(1) hereof shall constitute full and complete
satisfaction of the obligations of the Owner under this Agreement.  Upon
receipt of this amount, the Corporation shall execute any and all documents
required by the Insurer to effectuate a release of the Collateral Assignment.





                                     - 2 -
<PAGE>   3
         6.      Termination of Agreement.

                 A.       This Agreement shall terminate automatically upon the
occurrence of any of the following events:

                          (1)     The bankruptcy, insolvency or receivership of
the Corporation.

                          (2)     The cancellation or surrender of the Policy
by the Owner.

                          (3)     The involuntary termination by the
Corporation of Employee's employment with Cause.

                          (4)     The voluntary termination by Employee of
Employee's employment; provided, that such a termination of employment shall
not result in the termination of this Agreement if it occurs prior to December
20, 2002 and is preceded by a Change of Control.

                          (5)     The involuntary termination by the
Corporation of Employee's employment without Cause; provided, that such a
termination of employment shall not result in the termination of this Agreement
if it occurs prior to December 20, 2002 and is preceded by a Change of Control.

                          (6)     At any time by the Owner by giving written
notice of such termination to the Corporation.  Such termination shall take
effect upon the date of such written notice.

                          (7)     At any time after December 20, 2002 by the
Corporation by giving written notice of such termination to each of the Owner
and Employee, but only if such termination occurs after a termination by the
Corporation of the Deferred Compensation Agreement, dated December 20, 1996,
between Employee and the Corporation.  Such termination of this Agreement shall
take effect upon the date of the written notice to Employee and the Owner.

                 B.       Upon the termination of this Agreement, the
Corporation shall not be required to pay any further premiums on the





                                     - 3 -
<PAGE>   4
Policy, other than premiums that are due and unpaid as of the effective date of
the termination.

                 C.       If this Agreement is terminated pursuant to Section
6A(2), 6A(3), 6A(4), 6A(5) 6A(6) or 6A(7) hereof, the Corporation shall be
entitled to receive an amount from the Insurer, pursuant to the terms of the
Collateral Assignment, equal to the lesser of (i) the Cash Surrender Value or
(ii) the aggregate premiums paid by the Corporation on the Policy hereunder.
Upon the receipt thereof, the Corporation shall execute and deliver to the
Owner any and all documents required by Insurer to effectuate a release of the
Collateral Assignment.

                 D.       For purposes of Section 6A hereof, a termination of
Employee's employment by the Corporation shall be deemed to have been with
"Cause" if such termination shall occur after any one or more of the following
events:

                          (1)     Employee's conviction of a crime that is a
felony and/or a crime that involves moral turpitude;

                          (2)     Employee's use of alcohol, which materially
impairs the ability of Employee to effectively perform his duties to the
Corporation, or Employee's illegal use, possession or sale of a controlled
substance, or his materially impaired performance due to the illegal use of
such a substance, but only if the Corporation provides written notice of its
intention to terminate Employee for such use, possession or sale and Employee
is provided with a reasonable opportunity to cure;

                          (3)     Employee's willful and intentional failure to
perform his duties to the Corporation, but only if the Corporation provides
written notice of such failure to Employee and Employee is provided with a
reasonable opportunity to correct such failure; or

                          (4)     Conduct by Employee, which is unethical,
fraudulent or unlawful, and which is materially harmful to the business or
reputation of the Corporation, but only if the Corporation provides written
notice of such conduct by Employee and Employee is provided with a reasonable
opportunity to correct such conduct.





                                     - 4 -
<PAGE>   5
                 E.       For purposes of Section 6A hereof, a "Change of
Control" shall be deemed to have occurred if any of the following events shall
take place:

                          (1)     The Corporation is merged, consolidated or
reorganized into or with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization, less than 50% of the
combined voting power of the then-outstanding securities of such corporation or
person immediately after such transaction are held in the aggregate by the
holders of Voting Stock (as that term is defined in Section 6E(3) hereof) of
the Corporation immediately prior to such transaction;

                          (2)     The Corporation sells or otherwise transfers
all or substantially all of its assets to any other corporation or other legal
person;

                          (3)     There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"),
disclosing that any person as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the
term "beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 20%
or more of the combined voting power of the then-outstanding securities of the
Corporation entitled to vote generally in the election of members of the Board
of Directors of the Corporation ("Voting Stock"); or

                          (4)     The Corporation files a report or proxy
statement with the Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) that a strategic transaction of the
Corporation has or may have occurred or will or may occur in the future
pursuant to any then-existing contract or transaction.

         7.      Insurer Not a Party.  Insurer shall be fully discharged from
any and all liability under the Policy upon payment of the death benefits
payable under the Policy or performance of its other obligations in accordance
with the terms and conditions of





                                     - 5 -
<PAGE>   6
the Policy.  In no event shall Insurer be deemed to be a party to this
Agreement, or any modification or amendment hereof.

         8.      Named Fiduciary and Funding Policy.

                 A.       The Corporation is hereby designated as the named
fiduciary under this Agreement.  The named fiduciary shall have the authority
to manage and control the operation and administration of this Agreement.

                 B.       Consistent with the objectives of this Agreement, the
funding policy hereunder provides that all premiums on the Policy must be
remitted to Insurer when due.

         9.      Payment of Benefits and Claims Procedure.  In the event of the
death of Employee prior to his termination of employment, benefits shall be
payable in accordance with Section 5A hereof.  In the event that Employee
desires to contest any decision of the Corporation regarding any matter arising
hereunder, he shall file a claim in accordance with the following procedure:

                 A.       Such claim must be made in writing to the
Corporation.

                 B.       If such claim is wholly or partially denied, the
Corporation shall, within ninety (90) days after receipt of such claim, notify
Employee in writing of the denial of the claim. Such notice of denial shall be
in writing, shall be expressed in a manner calculated to be understood by
Employee, and shall contain (i) the specific reason or reasons for denial of
the claim, (ii) a specific reference to the pertinent provisions of the
Agreement upon which the denial is based, (iii) a description of any additional
material or information necessary for Employee to perfect the claim and an
explanation of why such material or information is necessary, and (iv) a
description of the claim review procedure under this Agreement.  If notice of
the denial of a claim is not furnished by the Corporation to Employee in
accordance with the provisions of this Section 9B, the claim shall nonetheless
be deemed denied, and Employee shall be permitted to proceed to the review
stage provided in Section 9C hereof.

                 C.       If a claim by Employee is denied, Employee may
request that the Corporation conduct a full and fair review of





                                     - 6 -
<PAGE>   7
the denial of the claim, review any documents pertinent to such request, and
submit issues and comments in writing.  Such request shall be in writing and
delivered to the Corporation within sixty (60) days after the receipt by
Employee of the written notice of denial of the claim, or such later date as
shall be reasonable, taking into account the nature of the claim and any other
attendant circumstances.

                 D.       The Corporation shall deliver to Employee a written
decision on any claim filed hereunder within sixty (60) days after the receipt
of the aforesaid request for review.  Such decision shall (i) be expressed in a
manner calculated to be understood by Employee, (ii) include specific reasons
for the decision, and (iii) contain specific references to the pertinent
provisions of the Agreement upon which the decision is based.  If the
Corporation fails to furnish its decision on review within the applicable time
period to Employee, the claim shall nonetheless be deemed denied on review.

                 E.       The Corporation shall have the right and power
reasonably to interpret and construe the provisions of this Agreement in good
faith and to decide all claims made hereunder.

         10.     Amendment of Agreement.  This Agreement may not be amended,
altered or modified, except by a writing signed by all of the parties to this
Agreement.

         11.     Assignment of Agreement.

                 A.       Subject to the Collateral Assignment and the
provisions of paragraph 2 hereof, the Owner shall have the right at any time to
assign or transfer any or all of its interest in the Policy and this Agreement
to any person or entity, by execution of a written assignment delivered to the
Corporation and to Insurer.

                 B.       The Corporation shall not surrender or assign any of
its rights in the Policy to anyone other than the Owner.

         12.     Benefits and Burdens.  This Agreement shall be binding upon,
and shall inure to the benefit of, (i) the Corporation and the Owner, and their
successors and assigns (pursuant to paragraph 11 hereof), and (ii) Employee,
and his executors or admin-





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<PAGE>   8
istrators, heirs, legatees, assigns and personal and legal representatives.

         13.     Notices.  Any and all notices provided for herein shall be
sufficient if in writing, and sent by recognized overnight courier or hand
delivery (with receipt therefor)or by certified or registered mail (return
receipt requested and first-class postage prepaid), as follows:  (i)  in the
case of the Corporation, to its principal office, (ii) in the case of Employee,
to his address as shown on the Corporation's records, and (iii) in the case of
the Owner, to Harold Pincus, Trustee, 11317 Burger Terrace, Potomac, Maryland
20854, and to Ronald D. Abramson, Trustee, 1776 K Street, N.W., Washington,
D.C. 20036.

         14.     Severability.  The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions hereof shall not affect the validity and enforceability of the
other provisions hereof.

         15.     Headings.  The headings or other captions contained in this
Agreement are for convenience of reference only and shall not be used in
interpreting, construing or enforcing any of the provisions of this Agreement.

         16.     Governing Law.  This Agreement shall be governed by the laws
of the District of Columbia, except to the extent preempted by Federal law.

         17.     Entire Agreement.  This Agreement and the Exhibits hereto set
forth all of the promises, agreements and understandings of the parties hereto
with respect to the matters described herein, and there are no promises,
agreements or understandings, oral or written, express or implied, between them
with respect to such matters other than as set forth herein.  Any and all prior
promises, agreements and understandings between the parties hereto with respect
to the matters described herein are hereby revoked.

         18.     Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.





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<PAGE>   9
         IN WITNESS WHEREOF, the Corporation, the Owner and Employee have
executed this Agreement as of the day and year first above written.

                                           CORPORATION:
                                           ----------- 
                                           
ATTEST:                                    FRANKLIN NATIONAL BANK OF
                                             WASHINGTON, D.C., a national
                                             banking association
                                           
                                           
                                           
Linda B. Johnson                           By:Diane M. Begg                    
---------------------------                   ---------------------------------
Linda B. Johnson, Secretary                   Diane M. Begg, Senior Vice
                                                President and Chief Financial
                                                Officer
[Corporate Seal]                           
                                           
                                           
WITNESS:                                   OWNER:
                                           ----- 
                                           
                                           THE ROBERT P. PINCUS FAMILY TRUST
                                           
                                           
                                           
Parlena Johnson                            By:Ronald D. Abramson              
-------------------------                     --------------------------------
ParLena Johnson                               Ronald D. Abramson, Trustee
                                           
                                           
                                           
                                           By:Harold Pincus, Trustee           
-------------------------                     ---------------------------------
                                              Harold Pincus, Trustee
                                           
                                           
                                           EMPLOYEE:
                                           -------- 
                                           
                                           
                                           
Carol A. Few                               Robert P. Pincus                 
-------------------------                  ---------------------------------
Carol A. Few                               Robert P. Pincus





                                     - 9 -
<PAGE>   10
                                   EXHIBIT A


                             Life Insurance Policy

                               (To be attached.)





<PAGE>   11
                        COLLATERAL ASSIGNMENT AGREEMENT



         THIS COLLATERAL ASSIGNMENT AGREEMENT (this "Agreement") is made,
entered into and effective for all purposes this 20th day of December, 1996, by
and between (i) FRANKLIN NATIONAL BANK OF WASHINGTON, D.C., a national banking
association (the "Assignee") and (ii) THE PINCUS FAMILY TRUST, a Maryland
trust, acting by and through its Trustees, RONALD D. ABRAMSON and HAROLD PINCUS
(the "Owner").

         WITNESSETH:

         WHEREAS, the Owner is the owner of that certain life insurance Policy
No. 9906841, issued by Massachusetts Mutual Life Insurance Company (the
"Insurer") and any supplemental contracts issued in connection therewith (such
policy and contracts being hereinafter collectively referred to as the
"Policy");

         WHEREAS, the Owner and the Assignee have entered into a Split-Dollar
Life Insurance Agreement (the "Split-Dollar Agreement"), dated as of even date
herewith; and

         WHEREAS, in consideration of the Assignee agreeing to pay the premiums
on the Policy and making certain other promises, the Owner agrees to grant the
Assignee an interest in the Policy as collateral security for the satisfaction
of the conditions contained in this Agreement and the Split-Dollar Agreement.

         NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises hereinafter set forth and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, do hereby agree as follows.

         1.      The Owner hereby assigns, transfers and sets over to the
Assignee, its successors and assigns, the following specific rights in the
Policy set forth in paragraph 3 hereof, subject to the terms and conditions
hereinafter set forth.

         2.      The assignment of the Policy is made, and the Policy is to be
held, as collateral security for any and all obligations of the Owner to the
Assignee, either now existing or hereafter
<PAGE>   12
arising, pursuant to this Agreement or pursuant to the terms of the
Split-Dollar Agreement.

         3.      It is understood and agreed that the Assignee shall have all
of the following rights:

                 A.       The Assignee shall have the right to be repaid the
amount of its unreimbursed premium payments on the Policy or, if lesser, the
entire cash surrender value of the Policy, if the Policy is surrendered or
cancelled by the Owner or the Owner's transferee, or if the Split-Dollar
Agreement is terminated, as provided in paragraph 6 of the Split-Dollar
Agreement.

                 B.       The Assignee shall have the right to be repaid the
amount of its unreimbursed premium payments on the Policy if the Owner dies, as
provided in Section 5A of the Split-Dollar Agreement.

         4.      The Owner hereby acknowledges and agrees that the Assignee's
right of repayment set forth in paragraph 3 of this Agreement shall not in any
way be reduced or offset by any obligation or liability which the Assignee
shall or may have to the Owner.

         5.      The Insurer is hereby authorized (and, in furtherance thereof,
is hereby absolved from any liability whatsoever) to recognize the Assignee's
claims to rights under this Agreement without in any manner investigating (a)
the reason for any action taken by the Assignee, (b) the validity or amount of
any of the liabilities of the Owner to the Assignee under the Split-Dollar
Agreement, (c) the existence of any default under the Split-Dollar Agreement,
(d) the giving of any notice required under the Split-Dollar Agreement, or (e)
the application to be made by the Assignee of the amounts received.  A written
application by the Assignee shall be sufficient, in and of itself, for the
exercise of any rights under the Policy assigned under this Agreement to the
Assignee, and the written receipt of the Assignee for any sums received by it
shall constitute and be a full discharge and release therefor to the Insurer.

         6.      Except as expressly granted to the Assignee in this Agreement,
the Owner shall retain all incidents of ownership in the Policy, subject to the
provisions of the Split-Dollar Agreement.





                                     - 2 -
<PAGE>   13
         7.      Upon full payment of the amounts due to the Assignee under
paragraph 3 of this Agreement and under the Split-Dollar Agreement, the
Assignee shall execute any and all documents required by the Insurer to
effectuate a release to the Owner of the Policy.

         8.      In the event of any conflict between the provisions of this
Agreement and the provisions of the Split-Dollar Agreement, the provisions of
this Agreement shall prevail.

         9.      This Agreement shall not be amended, altered or modified,
except by a writing signed by both of the parties hereto.  This Agreement shall
be binding upon the Owner and the Insurer, and their respective successors and
assigns, and shall inure to the benefit of the Assignee, and its successors and
assigns.

         10.     This Assignment shall be governed by the laws of the District
of Columbia, except to the extent pre-empted by Federal law.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       ASSIGNEE:
                                       -------- 

ATTEST:                                FRANKLIN NATIONAL BANK OF
                                         WASHINGTON, D.C., a national
                                         banking association
                                       
                                       
                                       
Linda B. Johnson                       By:  Diane M. Begg                
---------------------------                 ------------------------------
Linda B. Johnson, Secretary                 Diane M. Begg, Senior Vice
                                             President and Chief Financial
                                             Officer

[Corporate Seal]





                                     - 3 -
<PAGE>   14
WITNESS:                               OWNER:
                                       ----- 
                                       
                                       THE PINCUS FAMILY TRUST
                                       
                                       
                                       
                                       
ParLena Johnson                        By:  Ronald D. Abramson
-------------------------                   ------------------------------
ParLena Johnson                             Ronald D. Abramson, Trustee
                                            
                                            
                                            
                                       By:  Harold Pincus
-------------------------                   ------------------------------
                                            Harold Pincus, Trustee





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