<PAGE>   1
                        DEFERRED COMPENSATION AGREEMENT


         THIS DEFERRED COMPENSATION AGREEMENT (this "Agreement") is made,
entered into and effective for all purposes this 20th day of December, 1996, by
and between FRANKLIN NATIONAL BANK OF WASHINGTON, D.C., a national banking
association (the "Corporation"), and 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;

         WHEREAS, the Corporation desires to recognize the valuable and
meritorious services performed on behalf of the Corporation by Employee and to
offer him an incentive to remain as an employee of the Corporation; and

         WHEREAS, the parties hereto desire to set forth in writing the terms
and conditions of their understandings and agreements.

         NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants 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, hereby agree as follows:

         1.      Amount and Payment of Deferred Compensation.

                 A.       For and in consideration of Employee's services to
the Corporation, upon the occurrence of a Triggering Event, the Corporation
shall pay to Employee, or (in the event of Employee's death) to Employee's
Designated Beneficiary, an amount of deferred compensation (the "Deferred
Compensation"), determined as follows:

                          (1)     If the Triggering Event is Employee's death,
the amount of Deferred Compensation shall be equal to Fifty Thousand Dollars
($50,000), multiplied by the number of twelve (12)-month periods that have
elapsed from December 20, 1995 through the date of Employee's death.
<PAGE>   2
                          (2)     If the Triggering Event is any event other
than Employee's death, the amount of Deferred Compensation shall be determined
in accordance with that certain Schedule of Deferred Compensation, a copy of
which is attached hereto and made a part hereof as Exhibit A.  For purposes of
determining the amount of Deferred Compensation payable to Employee under
Exhibit A, "Years of Service" shall mean the number of twelve (12)-month
periods that have elapsed from December 20, 1995 through the date of the
Triggering Event.

                 B.       The Deferred Compensation described in Section 1A
hereof, as reduced by any appropriate Federal income or other withholding
taxes, shall be paid as follows:

                          (1)     If the Triggering event is Employee's death,
the Deferred Compensation shall be paid to Employee's Designated Beneficiary in
a single lump-sum payment within one hundred twenty (120) days after the date
of Employee's death.

                          (2)     If the Triggering Event is any event other
than Employee's death, the Deferred Compensation shall be paid to Employee or
(in the event of Employee's death after the Triggering Event) to Employee's
Designated Beneficiary in that number of annual installments as is equal to the
number of twelve (12)-month periods that have elapsed from December 20, 1995
through the date of the Triggering Event.  Such annual installments shall
include equal amounts of Deferred Compensation, plus interest on the unpaid
amount of Deferred Compensation at the prime rate of interest charged by the
Corporation on the date of the Triggering Event.  The first such installment
shall be paid on the first day of the calendar quarter that is at least thirty
(30) days after the date of the Triggering Event.  The remaining installments
shall be paid on successive anniversaries of the first installment payment.

                 C.       For purposes of Section 1A and 1B hereof, a
"Triggering Event" shall mean the occurrence of any of the following:

                          (1)     The death of Employee;

                          (2)     The involuntary termination by the
Corporation of Employee's employment with Cause;





                                     - 2 -
<PAGE>   3
                          (3)     The voluntary termination by Employee of
Employee's employment; provided, that such a termination of employment shall
not constitute a Triggering Event if it occurs prior to December 20, 2002 and
is preceded by a Change of Control; or

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

                 D.       For purposes of Section 1C 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.





                                     - 3 -
<PAGE>   4
                 E.       For purposes of Section 1C 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.

                 F.       Employee shall complete and execute the Designation
of Beneficiary, attached hereto as Exhibit B, specifying who shall receive any
amounts of Deferred Compensation payable following the death of Employee.





                                     - 4 -
<PAGE>   5
         2.      No Separate Fund.

                 A.       The Corporation shall continue, at all times and for
all purposes, to have an interest in the amount of Deferred Compensation
payable to Employee hereunder, and such amount shall continue to be part of the
general assets of the Corporation and shall remain subject to the claims of the
general creditors of the Corporation, up until the time of actual payment by
the Corporation to Employee or Employee's Designated Beneficiary.
Notwithstanding the foregoing, the Corporation may establish, in its name, one
or more accounts earmarked as holding the Deferred Compensation.

                 B.       No provisions or terms contained herein or the
establishment of any accounts or records on the books of the Corporation in
furtherance of carrying out the provisions of this Agreement shall be deemed to
create a trust or escrow arrangement of any kind, or to create a fiduciary
relationship, between the Corporation and Employee.

         3.      No Agreement to Be Employed.  This Agreement is solely to
provide deferred compensation for services rendered by Employee to the
Corporation and is neither an agreement or commitment by the Corporation to
employ Employee nor an agreement or commitment of Employee to serve the
Corporation in any capacity.

         4.      Termination of Agreement.

                 A.       The parties agree that at any time after December 20,
2002 the Corporation may terminate this Agreement upon written notice to
Employee.  In the event of such a termination, the amount of Deferred
Compensation shall be determined in accordance with Section 1A(2) hereof, as if
the termination of this Agreement were a Triggering Event; provided, that, if
the date of the termination of this Agreement occurs between June 20th and
December 20th of a calendar year, the amount of Deferred Compensation shall be
determined under Section 1A(2) hereof as if a Triggering Event occurred on
December 20th of such year.

                 B.       Any Deferred Compensation payable as a result of the
termination of this Agreement shall be distributed in accordance with Section
1B(2) hereof.





                                     - 5 -
<PAGE>   6
         5.      Amendment of Agreement.  This Agreement may not be amended,
altered or modified, except by a writing signed by each party to this
Agreement.

         6.      Payment of Benefits and Claims Procedure.  Upon the
termination of employment of Employee, the Deferred Compensation shall be
payable by the Corporation in accordance with Section 1 hereof.  In the event
that Employee desires to contest any decision of the Corporation regarding the
Deferred Compensation or any other 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 6B, the claim shall nonetheless
be deemed denied and Employee shall be permitted to proceed to the review stage
provided in Section 6C hereof.

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





                                     - 6 -
<PAGE>   7
                 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.

         7.      No Assignment.  The rights of Employee to any payments
hereunder are not subject to voluntary or involuntary transfer, alienation or
assignment and, to the fullest extent permitted by law, are not subject to
attachment, execution, garnishment, sequestration or other legal or equitable
process.

         8.      Benefits and Burdens.  This Agreement shall be binding upon,
and shall inure to the benefit of, (i) the Corporation and its successors and
assigns, and (ii) Employee and his executors or administrators, heirs, legatees
and personal and legal representatives.

         9.      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, and (ii) in the case of Employee,
to his address as shown on the Corporation's records.

         10.     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.

         11.     Headings.  The headings or other captions contained in this
Agreement are for convenience of reference only and shall





                                     - 7 -
<PAGE>   8
not be used in interpreting, construing or enforcing any of the provisions of
this Agreement.

         12.     Governing Law.  This Agreement shall be governed by the laws
of the District of Columbia, except to the extent pre-empted by Federal law.

         13.     Entire Agreement.  This Agreement sets 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.

         IN WITNESS WHEREOF, the Corporation 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:                                    EMPLOYEE:
                                            -------- 
                                            
                                            
                                            
Carol A. Few                                Robert P. Pincus                
---------------------------                 --------------------------------
Carol A. Few                                Robert P. Pincus
                                            




                                     - 8 -
<PAGE>   9
                                                                       EXHIBIT A

                       SCHEDULE OF DEFERRED COMPENSATION

                FOR PURPOSES OF COMPUTING DEFERRED COMPENSATION
                              UNDER Section 1A(2)


<TABLE>
<CAPTION>
        YEARS OF SERVICE                                        AMOUNT PAYABLE
        ----------------                                        --------------
               <S>                                                 <C>
               1                                                      0

               2                                                    12,493

               3                                                    60,715

               4                                                   110,636

               5                                                   162,342

               6                                                   216,039

               7                                                   274,024

               8                                                   336,642

               9                                                   404,132

               10                                                  476,722

               11                                                  550,000

               12                                                  600,000

               13                                                  650,000

               14                                                  700,000

               15                                                  750,000
</TABLE>





<PAGE>   10
                                                                       EXHIBIT B

                           DESIGNATION OF BENEFICIARY
                                     UNDER
                        DEFERRED COMPENSATION AGREEMENT


         The undersigned, Robert P. Pincus, has entered into a Deferred
Compensation Agreement with  Franklin National Bank (the "Bank"), effective
as of December 20, 1996 (the "Agreement"), which provides for the payment of
certain deferred compensation to me, subject to the terms and conditions of the
Agreement.

         In accordance with the terms of the Agreement, I hereby designate
Roxanne Little as the sole primary beneficiary of any amounts payable by
reason of my death under the Agreement.

         In the event that Roxanne Little shall predecease me, or shall die
before all of the deferred compensation that is payable under the terms of the
Agreement has been distributed, any such remaining deferred compensation shall
be payable to Liam Pincus .

         If none of the beneficiaries designated above survives me, any
remaining deferred compensation payable under the Agreement at the time of my
death shall be paid to my executor or other legal representative.  I further
understand that the designation of beneficiary set forth above may be changed
and revoked by me at any time, by delivering a new designation of beneficiary
to the Bank, at least ten (10) business days prior to the effective date of
such change.


WITNESS:



Carol A. Few                                    Robert P. Pincus             
----------------------------------              --------------------------------
Carol A. Few                                    Robert P. Pincus

Dated:  December 20, 1996