Exhibit 10.9

                      EMPLOYMENT AND COMPENSATION AGREEMENT



         This EMPLOYMENT AND COMPENSATION AGREEMENT  ("Agreement") is made as of
the 1st day of July,  1996, by and between  ALLSTATE  FINANCIAL  CORPORATION,  a
Virginia corporation having its principal place of business at 2700 South Quincy
Street, Suite 540, Arlington,  Virginia 22206 (the "Company"),  and Peter Matthy
of  Arlington,  Virginia  (the  "Employee").  The  Company  and the  Employee in
consideration  of the  mutual  premises  contained  herein,  mutually  agree  as
follows:

         1. EMPLOYMENT. The Company employs the Employee and the Employee agrees
to serve the Company as Executive Vice President.  The Employee shall devote the
Employee's  full  business  time and best efforts to the affairs of the Company,
except as may  otherwise  be consented  to by the Board of  Directors.  Employee
shall perform such other duties commensurate with the Employee's position as may
be specified from time to time by the President of the  corporation or the Board
of Directors.

     2. TERM.  The term of this  Agreement  shall commence on the date set forth
above,  and shall end at the close of business on June 30, 1998,  unless further
extended or sooner terminated as hereinafter provided (the "Term").

     3.  SALARY.  During the Term,  the Company  shall pay to the  Employee  the
Employee's  salary at an annual rate of One Hundred  Fifty  Thousand  and 00/100
Dollars ($150,000.00), which amount may


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be  increased  from time  to time at the discretion of the Board of Directors of
the Company.

         4. OTHER COMPENSATION.  The Company shall provide the Employee with the
following   additional   compensation:   (i)  Subject  to  meeting   eligibility
provisions,  any and all  general  Employee  benefit  plans,  including  without
limitation medical,  health, life and disability  insurance,  pension and profit
sharing plans,  now or hereafter  granted by the Company to the employees of the
Company as a group, shall be granted to the Employee.  If a disability insurance
plan is not  provided to all  employees,  the Company  will provide a reasonable
substitute  for Employee.  (ii) Employee shall be eligible to participate in any
employee  stock  option  plans  and any  performance  based  compensation  plans
(whether  cash,  stock or otherwise)  that may be adopted by the Company.  (iii)
Yearly  bonuses  to be  paid to  Employee  at the  discretion  of the  Board  of
Directors of the Company.  (iv) Use of a  Company-owned  automobile and coverage
under  customary  and  appropriate  Company-paid  hazard,  liability  and  other
insurance  (or receipt of an  automobile  allowance of not less than $350.00 per
month plus reimbursement for costs of insurance,  fuel,  maintenance and repairs
for one automobile).


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         5.  REIMBURSEMENT.  Usual and normal monetary  allowances for bona fide
business expenses incurred by the Employee in connection with the performance of
the  Employee's  duties  hereunder  shall be  reimbursed  by the  Company.  Such
allowances  shall,   without  limitation,   include  expenses  such  as  travel,
entertainment,  meals,  hotels,  telephone,  telegraph,  postage  and such other
normal and customary business expenses.

         6.  VACATION.  The  Employee  shall be  entitled to four (4) weeks paid
vacation  per year  during the term of  employment  hereunder.  The dates of any
vacation  periods  shall be arranged in order that such  vacation days shall not
materially hinder the normal functioning of the Company's business activities.

         7.  TRADE SECRETS; NON-COMPETITION.

     (a) In the course of the  Employee's  employment,  the  Employee  will have
access to confidential  records,  data, pricing information,  lists of customers
and prospective customers,  lists of vendors, books and promotional  literature,
leases and  agreements,  policies and similar  material and  information  of the
Company or used in the course of its business (hereinafter collectively referred
to as "confidential  information").  All such confidential information which the
Employee  shall use or come into contact with shall remain the sole  property of
the Company. The Employee will not, directly or indirectly,  disclose or use any
such  confidential  information,  except  as  required  in the  course  of  such
employment.  The Employee  shall not for a period of one (1) year  following the
end of the Term, disclose or


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use in any fashion  any  confidential  information  of the Company or any of its
subsidiaries  or  affiliates,  whether such  confidential  information is in the
Employee's memory or embodied in writing or other physical form, PROVIDED,  that
the foregoing requirements shall not apply to any information (i) that (prior to
disclosure by the Employee) has been disclosed by the Company or any third party
or  (ii)  that  Employee  discloses  (A) to any  branch,  agency  or  regulatory
authority of any federal,  state or local government to comply with any statute,
regulation,  rule,  order or  ordinance  or (B) to any  federal,  state or local
court, tribunal or other adjudicatory body in connection with any suit, claim or
question  arising  before such court,  tribunal  or other  adjudicatory  body or
otherwise.

         In the event of a breach or a threatened  breach by the Employee of the
provisions  of this  subparagraph  (a),  the  Company  shall be  entitled  to an
injunction  restraining the Employee from  disclosing any of the  aforementioned
confidential  information.  Nothing  contained  herein  shall  be  construed  as
prohibiting  the Company  from  pursuing  any other  remedies  available  to the
Company for such breach or threatened breach,  including the recovery of damages
from the Employee.

         Subject to  subparagraph  (c) below,  this provision  shall survive the
termination of this Agreement.

         (b) The  Employee  further  agrees  that,  during the Term (or,  if the
Employee's employment is terminated prior to the end of the Term (whether by the
Company or the Employee), during the


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period prior to such  termination)  and for a period of one (1) year thereafter,
the Employee  will not,  except with the prior  written  consent of the Board of
Directors,  (i) be  employed  either  as an  employee,  consultant,  officer  or
director,  by any other non-bank-owned  commercial finance company, (ii) solicit
any  business  from or have any  business  dealings  with,  either  directly  or
indirectly or through corporate or other entities or associates, any customer or
client of the Company (or any  subsidiary  or affiliate of the  Company),  (iii)
initiate any action, either directly or indirectly or through corporate or other
entities or  associates,  that would  reasonably  be expected to encourage or to
induce any  employee of the Company or of any  subsidiary  or  affiliate  of the
Company  to  leave  the  employ  of the  Company  or of any such  subsidiary  or
affiliate  or (iv)  solicit  any  business  from or have any  business  dealings
whatsoever with, either directly or indirectly or through corporate  entities or
associates,  any brokers or referral sources that have within the preceding year
referred transactions to the Company. The Employee specifically acknowledges the
necessity for this subparagraph (b), given the nature of the Company's business.
The Employee  agrees that the Company shall be entitled to injunctive  relief in
the event of a breach of the  provisions  of this  subparagraph  (b),  the legal
remedies being inadequate to fully protect the Company. Nothing contained herein
shall be construed as prohibiting the Company from pursuing any other


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remedies  available  to the Company for such breach,  including  the recovery of
damages from the Employee.

         Subject to  subparagraph  (c) below,  this provision  shall survive the
termination of this Agreement.

         (c) In the event of a Business  Combination  or Change of  Control  (as
defined  below)  involving the Company  (whether or not the  Company's  Board of
Directors recommends such Business Combination or Change of Control for approval
by the Company's  shareholders),  subparagraphs  (a) and (b) of this Paragraph 7
shall,  at  the  time  such  Business   Combination  or  Change  of  Control  is
consummated,  but only in the  event  Employee's  employment  is  terminated  in
connection  therewith  under the terms of  subparagraph  8(c) below, be null and
void  and of no  further  force  or  effect.  For  purposes  of this  Agreement,
"Business  Combination"  shall  mean (i) a  merger,  consolidation  or any other
business  combination  of the Company with any  non-affiliated  party,  (ii) the
disposition of all or substantially all of the securities, business or assets of
the Company or (iii) a joint venture,  reorganization  or other  transaction (or
series of  transactions)  as a result of which all or  substantially  all of the
business or assets of the Company are  transferred,  with or without a Change of
Control, or any other similar corporate combination or transaction (or series of
related  transactions).  For purposes of this  Agreement,  a "Change of Control"
shall mean a transaction (or series of  transactions)  or other event (or series
of events) that results in the acquisition of a


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controlling  interest  in the Company by a person or entity (or group of persons
and/or  entities) that did not have a controlling  interest in AFC prior to such
transaction (or series of transactions) or event (or series of events).  As used
in the preceding  sentence,  the term  "controlling  interest" means possession,
directly or indirectly,  of power to direct or cause the direction of management
or policies  (whether  through  ownership of voting  securities,  by contract or
otherwise);  provided  that,  in any  event,  any  person or entity (or group of
persons and/or entities) which  beneficially  acquires,  directly or indirectly,
25% or more (in number of votes) of the securities  having ordinary voting power
for the election of directors of the Company shall be  conclusively  presumed to
have a controlling interest in the Company. This provision shall be construed so
that if a Business  Combination or Change of Control (as defined  herein) occurs
on more than one  occasion,  the terms and  provisions of this  Agreement  shall
apply to the most recent Business Combination or Change in Control.

     8.  PAYMENTS UPON  TERMINATION.  The Company shall pay to the Employee upon
termination of employment during the Term, as follows:

         (a) If the  Employee's  employment is terminated by death,  the Company
shall  continue  to pay and provide to the estate of the  Employee  for a period
equal to one year,  Employee's  then  applicable  base  salary  pursuant  to the
provisions of Paragraph 3 for such period, in bi-monthly installments.

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         In addition,  the Company, as soon as reasonably possible, but not past
the end of the fiscal year of the death of the  Employee,  shall also pay to the
estate of the  Employee  (on a pro rata  basis up to the date of the  Employee's
death) compensation  otherwise due and unpaid to the Employee as of the date of,
or in  connection  with,  the  Employee's  death,  pursuant  and  subject to the
provisions of subparagraphs 4(i), 4(ii) and 4(iii) herein.

         (b) In the event the  Employee's  employment is  terminated  because of
permanent  disability  (as defined  below),  for a period equal to one year, the
Company shall  continue to pay and provide to the Employee the  Employee's  then
applicable  salary for such period in bi-monthly  installments,  pursuant to the
provisions  of  Paragraph  3  herein,  and  benefits  for such  period as if the
Employee  were  still  employed  to be paid not later  than the last day of such
period under  subparagraphs  4(i), 4(ii) and 4(iii) herein. As used herein,  the
Employee  shall be  deemed to be  permanently  disabled  in the  event  that the
Employee has not been able (due to mental or physical  illness or incapacity) to
render  services  required  by  this  Agreement  for a  period  of  ninety  (90)
consecutive days.

         Any salary  payments to be made by the Company under the  provisions of
this subparagraph (b) are to be offset by payments, if any, made to the Employee
under any disability insurance plan maintained by the Company.

     Payments of compensation to the Employee as set forth in this  subparagraph
(b) shall be made by the Company to the

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Employee only if the Employee is not otherwise  subject to termination for Cause
(defined below).

         (c) In the event that (i) the  employment of the Employee is terminated
by the Company other than under the provisions as set forth in Paragraph 8(a) or
(b) herein or (ii) following a Business  Combination  or Change of Control,  (A)
the Employee is not offered a position  with the Company that  involves  duties,
responsibilities,  powers  and  functions  comparable  to those  enjoyed  by the
Employee  immediately prior to such Business Combination or Change of Control at
an annual  rate of  compensation  at least equal to that annual rate paid to the
Employee immediately prior to such Business Combination or Change of Control and
(B) the  Employee's  employment  is  terminated  prior  to the  end of the  Term
(whether by the  Employee  or the  Company),  then the Company  shall pay to the
Employee in addition to any other amounts  otherwise  payable to the Employee as
of the date of, or in connection  with,  such  termination,  on the date of such
termination  a lump sum payment  equal to the  Employee's  base salary (on a pro
rata basis) for one year. In addition,  for one year,  the Company shall provide
to the Employee  benefits for such period as if the Employee were still employed
to be paid not later than the last day of such period under  subparagraphs 4(i),
4(ii) and 4(iii) hereof.

         Notwithstanding  anything else contained in this  subparagraph  (c), no
compensation shall be payable under this subparagraph (c) or subparagraph (b) if
the Employee's employment was or is

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terminated for Cause (as defined below). As used herein,  the term "Cause" shall
mean (i) the Employee's conviction of (or entry of a plea of nolo contendre with
respect to) a felony or other crime involving moral turpitude or (ii) a willful,
substantial and continual failure by the Employee in breach of this Agreement to
perform the duties,  responsibilities  or  obligations  assigned to the Employee
pursuant to the terms hereof and the failure to cure such breach  within 15 days
following  written notice from the Company  containing  specific findings by the
Board of Directors of the Company detailing such failures.

         9.  VALIDITY.  In the  event  that any  provision  or  portion  of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining  provisions and portions of this Agreement shall be unaffected thereby
and shall  remain in full force and effect to the fullest  extent  permitted  by
law.

     10. AMENDMENT AND WAIVER.  This Agreement  constitutes the entire agreement
between the parties as to  employment by the Company of the Employee and may not
be changed orally but only by a written document signed by both parties.

         No waiver by either party hereto at any time of any breach by the other
party hereto of any condition or provision of this  Agreement to be performed by
such other party  shall be deemed a waiver of any other  breach by such party at
that  time  or any  other  time.  No  agreements  or  representations,  oral  or
otherwise, express or implied, with respect to the subject matter hereof


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have been  made by  either  party  which  are not set  forth  expressly  in this
Agreement.

         11. ARBITRATION. Any dispute whatsoever relating to the interpretation,
validity,  or performance of this Agreement and any other dispute arising out of
this Agreement  which cannot be resolved by the parties to such a dispute shall,
upon  thirty  (30)  days  written  notice  by  either  party,  be  settled  upon
application of any such party by arbitration in Arlington County,  Virginia,  in
accordance  with  the  rules  then   prevailing  of  the  American   Arbitration
Association,  and judgment  upon the award  rendered by the  arbitrators  may be
entered  in any court of  competent  jurisdiction.  The cost of any  arbitration
proceedings  under this paragraph shall be shared equally by the parties to such
a dispute.

     12.  APPLICABLE  LAW. This Agreement  shall be governed by and construed in
accordance  with the laws of the  Commonwealth  of Virginia  (without  regard to
conflicts of law principles).

     13. BINDING  EFFECT.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns and shall become effective upon execution by the Company.

     14. NOTICE.  All notices,  and other  communications  made pursuant to this
Agreement  shall be made in  writing  and shall be deemed to have been  given if
delivered personally or mailed,  postage prepaid, to the applicable party hereto
at the applicable address first above written, or in either case, to such other


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address as the Company or Employee shall have specified by written notice to the
other party.

     15.  PARAGRAPH  HEADINGS.  All paragraph  headings are included  herein for
convenience  and  are  not  intended  to  affect  in  any  way  the  meaning  or
interpretation of this Agreement.

     16.   COUNTERPARTS.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall be deemed to be an original  but all of which
together will constitute one and the same instrument.

         17.  PRIOR  AGREEMENTS  SUPERSEDED.  In the event that the Employee has
heretofore  entered into an  employment  agreement  with the Company,  then this
Agreement hereby revokes, replaces and supersedes the prior employment agreement
between the Company and the Employee.


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         IN WITNESS  WHEREOF,  the parties have  executed  this  agreement,  the
Company  acting herein by its duly  authorized  officer,  the day and year first
above written.



                                        COMPANY:

                                        ALLSTATE FINANCIAL CORPORATION


                                        By:____________________________
                                           Craig Fishman, President


                                        EMPLOYEE:


                                        ________________________________
                                        Peter Matthy


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